09-002149BID Fbm General Contracting vs. Department Of Children And Family Services Status: Closed Recommended Order on Friday, August 21, 2009.

Summary: Petitioner failed to demonstrate that the Intervenor should not be awarded the ITB as the lowest responsive bidder. Recommend dismissal of the bid protest and award costs to the agency.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FBM GENERAL CONTRACTING )

CORPORATION, )

)

Petitioner, )

)

vs. ) Case No. 09-2149BID

)

DEPARTMENT OF CHILDREN AND )

FAMILY SERVICES, )

)

Respondent, )

)

and )

)

LEO PREMIER HOMES, LLC, d/b/a )

LEO ROOFING AND CONSTRUCTION, )

f/k/a LEO DEVELOPMENT, )

)

Intervenor. )

________________________________)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case

on May 13, 2009, by video teleconference with connecting sites

in Miami and Tallahassee, Florida, before Errol H. Powell, an

Administrative Law Judge of the Division of Administrative

Hearings.

APPEARANCES

For Petitioner: Michael Falls, pro se

FBM General Contracting Corporation

750 East Sample Road, Building 3 S-222

Pompano Beach, Florida 33064

For Respondent: Javier A. Ley-Soto, Esquire

Department of Children and Family Services

401 Northwest Second Avenue, Suite N-1014

Miami, Florida 33128

For Intervenor: Frank A. Leo, pro se

Leo Premier Homes, LLC

15634 98th Trail North

Jupiter, Florida 33478

STATEMENT OF THE ISSUE

The issue for determination is whether the Intervenor was

properly qualified to complete the construction project

contemplated by Invitation to Bid No. DCF-03211120 (ITB)

PRELIMINARY STATEMENT

The Department of Children and Family Services (Department)

issued the ITB for the re-roofing of two of its buildings. FBM

General Contracting Corporation (FBM) and Leo Premier Homes,

LLC, d/b/a Leo Roofing and Construction, f/k/a Leo Development

(Leo Development) were two of several bidders on the ITB. The

Department excluded FBM from the bid tabulation. The Department

determined that Leo Development was the lowest responsive bidder

and awarded the ITB to Leo Development. Afterwards, FBM filed a

protest of its exclusion from the bid tabulation. The

Department dismissed FBM’s protest by final order. No appeal

was taken by FBM of the Department’s final order. Subsequently,

FBM filed the instant matter alleging that Leo Development was

not licensed by the Department of Business and Professional

Regulation (DBPR) at the time of the bidding and, therefore, was

not qualified to complete the work contemplated by the ITB. On

April 22, 2009, this matter was referred to the Division of

Administrative Hearings.

The parties waived the 30-day requirements. Prior to

hearing, the parties filed a Joint Pre-hearing Stipulation,

which included limited admitted facts. Official Recognition was

taken of Section 865.09, Florida Statutes (2008), regarding

fictitious names.

At hearing, Leo Development requested the dismissal of

FBM’s challenge on the basis that FBM was not on the ITB’s

tabulation sheet and, therefore, has no interest in this matter,

i.e., FBM lacked standing. The request for dismissal was denied

by this tribunal on the basis that a recommendation would be

made to the Department as to what final action the Department

should take in this matter and that, in order to do so, an

evidentiary hearing was necessary; and that, however, a request

for dismissal would be permitted to be made in post-hearing

submissions.

Further, at hearing, FBM presented the testimony of one

witness (Michael Falls, its owner) and offered one exhibit

(Petitioner’s Exhibit numbered 1) into evidence, which was

rejected. 1 The Department presented the testimony of three

witnesses (Bill Bridges, an architect; Terry Holt, an architect;

and Frank A. Leo, Leo Development’s owner) and entered five

exhibits (Respondent’s Exhibits numbered 1 through 5) into

evidence. Intervenor presented the testimony of one witness

(Frank A. Leo) and entered no exhibits into evidence.

A transcript of the hearing was ordered. At the request of

the parties, the time for filing post-hearing submissions was

set for 20 days following the filing of the transcript. The

Transcript, consisting of one volume, was filed on June 9, 2009.

The parties timely filed their post-hearing submissions.

Subsequently, on July 6, 2009, the Department filed a Motion to

Tax Costs, with invoices attached, in the amount of $1,311.05.

No response was filed to the Department’s motion. The parties’

post-hearing submissions have been considered in the preparation

of this Recommended Order.

FINDINGS OF FACT

1. The Department issued the ITB for a construction

project, involving the re-roofing of Buildings 1 and 2 at 12195

Quail Roost Drive, Miami, Florida. The ITB was published in the

Florida Administrative Weekly on December 24, 2008.

2. The ITB outlined the terms and conditions for

responsive bids.

3. The ITB indicated, among other things, that all sealed

bids were required to be submitted at 401 NW 2nd Avenue, S-714,

Miami, Florida 33128, by January 15, 2009, at 2:00 p.m.

4. Leo Development submitted its sealed bid at the

location and by the date and time, in accordance with the ITB.

5. FBM submitted its sealed bid by the date and time, but

at a different location—the offices of Russell Partnership—

contrary to the ITB.

6. All other bidders submitted their sealed bids at the

location and by the date and time, in accordance with the ITB.

7. The Department’s architect of record on the project,

Russell Partnership, and one of its principals, Terry Holt,

performed the examination and bid tabulation. Mr. Holt, a

registered architect for approximately 36 years, was very

familiar with the procurement process and had extensive

experience in determining whether a bidder was licensed by DBPR

in order to complete the work contemplated for a project.

8. The sealed bids submitted at 401 NW 2nd Avenue, S-714,

Miami, Florida 33128, on or before January 15, 2009, at

2:00 p.m. were as follows:

All Time Roofing, with a bid of $73,400.00;

Taylor Roofing, with a bid of $59,708.00;

Leo Development, with a bid of $54,109.00;

John W. Hunter Enterprises, with a bid of

$75,000.00; and

Trintec Construction, with a bid of

$75,500.00.

9. FBM’s bid was $71,600.00.

10. Mr. Holt determined that Leo Development was the

lowest bidder.

11. FBM’s bid was not considered as being non-responsive.

12. Additionally, Mr. Holt reviewed Leo Development’s

website to ascertain as to whether any factors existed to

disqualify Leo Development. The website failed to reveal any

basis for Mr. Holt to disqualify Leo Development.

13. Having discovered no basis to disqualify Leo

Development as the lowest bidder, Mr. Holt submitted the list of

bidders, with their bids, to Bill Bridges, the Department’s

senior architect and a registered architect for approximately 25

years. Mr. Bridges was the person responsible for oversight of

the ITB process.

14. As Leo Development was the lowest bidder, Mr. Bridges

reviewed the website of the Florida Department of State,

Division of Corporations (Division of Corporations) in order to

ensure that Leo Development was registered with the Division of

Corporations. His review revealed that Leo Development was a

fictitious name properly registered to Leo Premier Homes, LLC.

15. Further, Mr. Bridges performed a license background

check on Leo Development in order to ensure that Leo Development

was licensed by DBPR. Mr. Bridges reviewed DBPR’s website,

which revealed that Frank Anthony Leo was the owner of Leo

Development and that the following licenses were issued by DBPR:

Qualified Business Organization License

#QB50182 to Leo Premier Homes, LLC, Leo

Development;

Certified Building Contractor License

#CBC1254723 to Frank Anthony Leo, Leo

Development; and

Certified Roofing Contractor License

#CCC1328402 to Frank Anthony Leo, Leo

Development.

16. Mr. Bridges confirmed and was satisfied that Leo

Development was properly licensed to complete the work

contemplated by the ITB.

17. Mr. Bridges recommended that Leo Development be

awarded the ITB as the lowest responsive bidder.

18. FBM filed a written protest (Initial Protest) of “its

exclusion from the bid tabulation.” The Department issued a

Final Order Rejecting Bid Protest (Final Order) on February 19,

2009. The Final Order provided in pertinent part:

FBM was determined non-responsive because

the bid was not presented at the time and

place specified in the ITB. . . FBM’s formal

written protest alleges that FBM, on the

date of the bid submission/bid opening, was

misdirected as to the location of the bid

opening. . . .

FBM’s protest must be rejected because it

does not state a claim that could entitle it

to relief. . . In the context of a bid

protest proceeding . . . the protest must

adequately allege that the protestor could

obtain the contract award or otherwise

benefit should the protest be

successful. . . Assuming all of FBM’s

factual allegations are true and that those

facts entitle FBM to have its bid

considered, FBM would still be entitled to

no relief. Had FBM’s bid been accepted, FBM

would have been the third lowest of six

bidders. FBM’s formal protest does not

allege that the lowest and second lowest

bids were deficient in any manner. FBM was

not injured in fact, because it still would

not have received the contract award.

Accordingly, FBM’s formal written protest is

REJECTED.

19. No appeal was taken by FBM of the Department’s Final

Order rejecting FBM’s Initial Protest.

20. Among other findings, the Department’s Final Order on

FBM’s Initial Protest found that, taking FBM’s allegations as

true, FBM would have been the third lowest bidder. FBM would

not have been the second lowest bidder.

21. The parties agree that the holder of a certified

building contractor’s license and a certified roofing contractor

license would be permitted to complete the work contemplated by

the ITB.

22. Subsequent to the opening of the sealed bids, Leo

Premier Homes, LLC, registered the fictitious name of Leo

Roofing & Construction with the Division of Corporations.

23. After the registration with the Division of

Corporations and after the Department’s Final Order, licenses

were issued by DBPR. As to the licenses issued, the record of

the instant case provides 2 :

Qualified Business Organization License

#QB50182 to Leo Premier Homes, LLC, Leo

Roofing & Construction;

Certified Building Contractor License

#CBC1254723 to Frank Anthony Leo, Leo

Roofing & Construction; and

Certified Roofing Contractor License

#CCC1328402 to Frank Anthony Leo, Leo

Roofing & Construction.

The licenses reflect the same license numbers, as before, and

only the fictitious name is different on each license to

indicate Leo Roofing & Construction. 3

24. The contract for the ITB was entered into between the

Department and Leo Development.

25. In these proceedings, the Department incurred costs in

the amount of $1,311.05.

CONCLUSIONS OF LAW

26. The Division of Administrative Hearings has

jurisdiction over the subject matter of these proceedings and

the parties thereto pursuant to Section 120.569 and Subsections

120.57(1) and (3), Florida Statutes (2009).

27. Subsection 120.57(3), Florida Statutes (2009),

provides in pertinent part:

(f) In a protest to an invitation to bid or

request for proposals procurement, no

submissions made after the bid or proposal

opening which amend or supplement the bid or

proposal shall be considered. . . . Unless

otherwise provided by statute, the burden of

proof shall rest with the party protesting

the proposed agency action. In a

competitive-procurement protest, other than

a rejection of all bids, proposals, or

replies, the administrative law judge shall

conduct a de novo proceeding to determine

whether the agency's proposed action is

contrary to the agency's governing statutes,

the agency's rules or policies, or the

solicitation specifications. The standard

of proof for such proceedings shall be

whether the proposed agency action was

clearly erroneous, contrary to competition,

arbitrary, or capricious. . . .

28. FBM, as the protestor, has the burden of proof.

29. FBM must sustain its burden of proof by a

preponderance of the evidence. Department of Transportation v.

J.W.C. Co., Inc. , 396 So. 2d 778, 787 (Fla. 1st DCA 1981);

§ 120.57(1)(j), Fla. Stat. (2008).

30. The hearing conducted by the undersigned was a de novo

a de novo hearing in the context of the instant case is found in

State Contracting and Engineering Corporation v. Department of

Transportation , 709 So. 2d 607, 609 (Fla. 1st DCA 1998):

In this context, the phrase " de novo

hearing" is used to describe a form of

intra-agency review. The [administrative

law] judge may receive evidence, as with any

formal hearing under section 120.57(1), but

the object of the proceeding is to evaluate

the action taken by the agency.

(citations omitted)

31. Not only must FBM show that the Department’s action is

contrary to the Department’s governing statutes, rules or

policies, or the bid or proposal specifications, but FBM must

also show, pursuant to the standard of proof, that the

Department’s action is clearly erroneous, contrary to

competition, arbitrary, or capricious.

32. FBM failed to timely challenge the specifications and,

therefore, could not challenge the specifications at hearing.

Hence, any challenge presented at this juncture is limited to

substantive application of the specifications.

33. A decision is considered to be clearly erroneous when,

although evidence supports the decision, after review of the

entire record, the tribunal is left with the definite and firm

conviction that a mistake has been committed. U.S. v. U.S.

Gypsum Co. , 333 U.S. 364, 395, 68 S. Ct. 525, 542, 92 L. Ed.

746, 766 (1948). An agency’s decision is arbitrary if it is not

supported by facts or logic. See Agrico Chemical Company v.

State Department of Environmental Regulation , 365 So. 2d 759,

763 (Fla. 1st DCA 1978). An agency’s action is capricious if

the agency takes the action without thought or reason or with

irrationally. Id. An agency decision is contrary to

competition if it unreasonably interferes with the objectives of

competitive bidding. See Webster v. Belote , 103 Fla. 976, 138

So. 721, 723-34 (1931).

34. An agency has wide discretion when it comes to

soliciting and accepting bids for public contracts, and an

agency’s decision, when based upon an honest exercise of such

discretion, will not be set aside even where it may appear

erroneous or if reasonable persons may disagree. Liberty County

v. Baxter’s Asphalt and Concrete, Inc. , 421 So. 2d 505, 507

(Fla. 1982); Emerald Correctional Management v. Bay County Board

of County Commissioners , 955 So. 2d 647, 651 (Fla. 1st DCA

2007); Baxter’s Asphalt and Concrete, Inc. v. Department of

Transportation , 475 So. 2d 1284, 1287 (Fla. 1st DCA 1985);

Capeletti Brothers, Inc. v. Department of General Services , 432

So. 2d 1359, 1363 (Fla. 1st DCA 1983).

35. At hearing, Leo Development contested the standing of

FBM and requested a dismissal of FBM’s challenge. The request

was denied without prejudice in order to provide for a full

evidentiary hearing. In its post-hearing submission, the

Department argues, among other arguments, that FBM lacks

standing in this matter.

36. FBM alleges that this matter affects its substantial

interests. See § 120.52(13)(b), Fla. Stat. (2009) for

definition of party.

37. In resolving the issue of standing, the undersigned

finds the case of Menorah Manor, Inc. v. Agency for Health Care

Administration , 908 So. 2d 1100 (Fla. 1st DCA 2005) instructive

and persuasive as to whether one’s substantial interests are

affected by administrative action. The First District Court of

Appeal applied the “two-prong test” for determining whether

substantial interests have been affected. The court held that

both prongs must be satisfied and what must be shown is:

(1) that [the party] will suffer injury in

fact which is of sufficient immediacy to

entitle [the party] to a section 120.57

hearing, and (2) that [the party’s]

substantial injury is of a type or nature

which the proceeding is designed to protect.

Ybor II, Ltd. v. Florida Housing Fin. Corp. ,

843 So. 2d at 346, quoting Agrico Chem. Co.

v. Dep’t of Envtl. Reg’l , 406 So. 2d 478,

482 (Fla. 2d DCA 1981).

Id. at 1104. Further, the court held that:

The first [prong] involves the degree of the

injury and the second concerns the nature of

the injury at stake. . . With respect to the

second prong, this factor usually requires

that ‘the injury is of the type that the

statute pursuant to which the agency has

acted is designed to protect.’ Fairbanks,

Inc. v. State Dep’t of Transp. , 635 So. 2d

58, 59 (Fla. 1st DCA 1994).

Id.

38. FBM has failed to demonstrate that its substantial

interests have been affected by the Department’s action of

awarding the bid to Leo Development. Hence, FBM has failed to

demonstrate that it has standing.

39. The Department’s Final Order on FBM’s Initial Protest

determined, among other things, that FBM was a non-responsive

bidder and that, even if FBM was a responsive bidder, it would

have been the third, not the second, lowest bidder. The

Department’s Final Order was not appealed by FBM.

40. “A second lowest bid establishes [a] substantial

interest.” Preston Carroll Company, Inc. v. Florida Keys

Aqueduct Authority , 400 So. 2d 524, 525 (Fla. 3rd DCA 1981). A

“third low bidder [is] unable to demonstrate that it [is]

substantially affected; it therefore lack[s] standing to protest

the award of the contract to another bidder.” Ibid.

41. Assuming that FBM could demonstrate that it has

standing, based on the totality of the evidence presented, FBM

failed to meet its burden. The evidence fails to demonstrate

that the Department’s action of awarding the ITB to Leo

Development is in contradiction to any of the Department’s

statutory or rule provisions, or policies, or specifications.

Furthermore, the evidence fails to demonstrate that the

Department’s action of awarding the ITB to Leo Development is

clearly erroneous, contrary to competition, arbitrary, or

capricious.

42. The evidence demonstrates that, at the time of the

bidding and the bid award, Leo Premier Homes, LLC, properly

registered Leo Development as a fictitious name with the

Division of Corporations. The evidence further demonstrates

that, at the time of bidding and the bid award, Leo Development

was properly licensed by DBPR as a qualified business

organization, certified building contractor, and certified

roofing contractor. Moreover, the evidence demonstrates that,

at the time of bidding and the bid award, Leo Development was

properly qualified to complete the work contemplated by the ITB.

43. Furthermore, the evidence demonstrates that,

subsequent to the bid award, Leo Premier Homes, LLC, properly

registered Leo Roofing & Construction with the Division of

Corporations; that, subsequent to the bid award, Leo Roofing &

Construction was properly licensed by DBPR as a qualified

business organization, certified building contractor, and

certified roofing contractor; and that, subsequent to the bid

award, Leo Roofing & Construction was properly qualified to

complete the work contemplated by the ITB.

44. As to the taxing of costs, the Department filed a

Motion to Tax Costs subsequent to the conclusion of the hearing.

No response was filed to the Department’s Motion to Tax Costs.

Section 287.042(2), Florida Statutes (2009), provides in

pertinent part:

The department [Department of Management

Services] shall have the following powers,

duties, and functions:

(2) . . . .

* * *

(c) Any person who files an action

protesting a decision or intended decision

pertaining to contracts administered by the

department, a water management district, or

an agency pursuant to s. 120.57(3)(b) shall

post with the department, the water

management district, or the agency at the

time of filing the formal written protest a

bond payable to the department, the water

management district, or agency in an amount

equal to 1 percent of the estimated contract

amount. For protests of decisions or

intended decisions pertaining to exceptional

purchases, the bond shall be in an amount

equal to 1 percent of the estimated contract

amount for the exceptional purchase. The

estimated contract amount shall be based

upon the contract price submitted by the

protestor or, if no contract price was

submitted, the department, water management

district, or agency shall estimate the

contract amount based on factors including,

but not limited to, the price of previous or

existing contracts for similar commodities

or contractual services, the amount

appropriated by the Legislature for the

contract, or the fair market value of

similar commodities or contractual services.

The agency shall provide the estimated

contract amount to the vendor within 72

hours, excluding Saturdays, Sundays, and

state holidays, after the filing of the

notice of protest by the vendor. The

estimated contract amount is not subject to

protest pursuant to s. 120.57(3). The bond

shall be conditioned upon the payment of all

costs and charges that are adjudged against

the protestor in the administrative hearing

in which the action is brought and in any

subsequent appellate court proceeding. In

lieu of a bond, the department, the water

management district, or agency may, in

either case, accept a cashier's check,

official bank check, or money order in the

amount of the bond. If, after completion of

the administrative hearing process and any

appellate court proceedings, the department,

water management district, or agency

prevails, it shall recover all costs and

charges which shall be included in the final

order or judgment, excluding attorney's

fees. This section shall not apply to

protests filed by the Office of Supplier

Diversity. Upon payment of such costs and

charges by the protestor, the bond,

cashier's check, official bank check, or

money order shall be returned to the

protestor. If, after the completion of the

administrative hearing process and any

appellate court proceedings, the protestor

prevails, the protestor shall recover from

the department, water management district,

or agency all costs and charges which shall

be included in the final order or judgment,

excluding attorney's fees.

45. The amount of the taxable costs submitted and

requested by the Department is $1,311.05, which does not include

attorney’s fees. The Department is the prevailing party in this

matter. The Department should be awarded costs in the amount of

$1,311.05.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that the Department of Children and Family

Services enter a final order dismissing FBM General Contracting

Corporation’s Protest and awarding costs in the amount of

$1,311.05 to the Department of Children and Family Services.

DONE AND ENTERED this 21st day of August 2009, in

Tallahassee, Leon County, Florida.

___________________________________

ERROL H. POWELL

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 21st day of August, 2009.

ENDNOTES

1/ Petitioner’s Exhibit numbered 1 was the project manual for

the ITB. FBM failed to submit the project manual to this

tribunal for inclusion as an exhibit.

2/ Leo Development attached to its Petition to Intervene the

documents from the Division of Corporations and DBPR. Further,

Mr. Leo provided uncontradicted testimony at hearing regarding

registering Leo Roofing & Contracting with the Division of

Corporations and licensing issued by DBPR to Leo Roofing &

Contracting, except for the license numbers.

3/ Id.

COPIES FURNISHED:

Michael Falls

FBM General Contracting Corporation

750 East Sample Road, Building 3 S-222

Pompano Beach, Florida 33064

Javier A. Ley-Soto, Esquire

Department of Children and Family Services

401 Northwest Second Avenue, Suite N-1014

Miami, Florida 33128

Frank A. Leo

Leo Premier Homes, LLC

15634 98th Trail North

Jupiter, Florida 33478

George H. Sheldon, Secretary

Department of Children and Family Services

Building 1, Room 202

1317 Winewood Boulevard

Tallahassee, Florida 32399-0700

John J. Copelan, General Counsel

Department of Children and Family Services

Building 2, Room 204

1317 Winewood Boulevard

Tallahassee, Florida 32399-0700

Gregory Venz, Agency Clerk

Department of Children and Family Services

Building 2, Room 204B

1317 Winewood Boulevard

Tallahassee, Florida 32399-0700

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

10 days from the date of this recommended order. Any exceptions

to this recommended order should be filed with the agency that

will issue the final order in this case.