11-000538BID Blue Chip Energy Llc vs. University Of Central Florida Status: Closed Recommended Order on Friday, April 8, 2011.

Summary: Petitioner's bid was not responsive to the ITB specification, and the letter purporting to be a notice of protest did not comply with UCF rules.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

BLUECHIP ENERGY LLC , )

)

Petitioner , )

)

vs. ) Case No. 11 - 0538BID

)

UNIVERSITY OF CENTRAL FLORIDA , )

)

Respondent . )

)

RECOMMENDED ORDER

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

on February 18, 2011, in Orlando, Florida, before Susan B.

Harrell, a n Administrative Law Judge of the Division of

Administrative Hearings.

APPEARANCES

For Petitioner: Thomas Gregory, Qualified Representative

Dimitri Nikitin

BlueChip Energy, LLC

400 Rinehart Road, No. 1060

Lake Mary, Florida 32746

For Respondent: Jordan P. Clark, Esquire

University of Central Florida

4000 Central Florida Boulevard

Post Office Box 160015

Orlando, Florida 32816

Richard E. Mitchell, Esquire

GrayRobinson, P.A.

Post Office Box 3068

Orlando, Flo rida 32802

STATEMENT OF THE ISSUE

The issue in this case is whether Respondent's intended

decision to reject Petitioner's bid for University of Central

Florida (UCF) Invitation to Bid No. 1030LCSAR (ITB) was

arbitrar y, unreasonable, or capricious.

PRELI MINARY STATEMENT

Respondent, U C F, issued ITB No. 1030LCSAR for photovoltaic

systems for emergency systems. Petitioner, BlueChip , LLC

(BlueChip) , submitted a bid. By letter dated November 19, 2010,

U C F notified BlueChip that its bid was being rejected. B y

letter dated November 20, 2010, BlueChip advised UCF that

BlueChip was concerned that its bid was rejected and wanted a

clear explanation for the reasons for rejection. The letter did

not indicate that it was a notice of protest . By letter dated

Novemb er 24, 2010, BlueChip wrote to UCF and addressed each of

the grounds set forth in UCF's letter dated November 19, 2010.

The second letter did not specifically request an administrative

hearing, but stated: "[W]e insist UCF immediately reinstate and

recon sider our bid."

By letter dated January 26, 2011, UCF sent the two letters

to the Division of Administrative Hearings and requested that

the Division of Administrative Hearings conduct a bid protest

hearing. However, UCF specifically preserved any objecti ons to

the letters, including whether the letters constituted a bid

protest in conformance with UCF regulations.

At the final hearing, the following witnesses were

presented by BlueChip: Andrew N. White, D i mitri Nikitin, and

Thomas Gregory. Petitioner's Exhibits 1, 2, 3, 4, 6, 8, 9, 11,

and 12 were admitted in evidence. Petitioner's Exhibits 5, 7,

and 10 were not accepted in evidence. UCF called the following

witnesses: Luis Aviles, Mary C. Huggins, and David K. Click .

Respondent's Exhibits 1, 2, 3, 5, 6, 7, 8, 9, 10, 11, 17, 21,

22, 23, 24, and 29 were admitted in evidence.

The two - volume Transcript was filed on March 8, 2011. On

March 18, 2011, the parties filed their Proposed Recommended

Orders, whic h have been considered in the preparation of this

Recommended Or der.

FINDINGS OF FACT

1. UCF received a grant for $10,000,000.00 through the

United States Department of Energy pursuant to the American

Recovery and Reinvestment Act (ARRA) for, among other things,

the construction and installation of turnkey 10kW PV systems

wi th battery back up at schools located in Florida and designated

as emergency shelters. Part of the grant money was to be used

for administration and for education of Florida school chil dren

concerning renewable energy sources and energy efficiency.

2. In order to procure the construction and installation

of the PV systems, UCF issued the ITB. This was the second

invitation to bid issued for PV systems. The first invitation

to bid was issued during the summer of 2010, and all the bids

received were over budget.

3. The introduction in the ITB provides:

As part of the Florida SunSmart Schools

Emergency Shelter Program, the University of

Central Florida intends to purchase at lea st

ninety (90) turnkey installations of 10 kWdc

(minimum) grid - tied photovoltaic (PV)

systems with battery backup for specified

Florida schools designated as EHPA (Enhanced

Hurricane Protection Area) emergency

shelters. This program provides for

emergency electrical power for critical

loads and provides ongoing educational

programs for students. UCF/Florida Solar

Energy Center will select the schools at

which the PV systems will be installed. It

is expected that at least one system will be

installed in e ach County in the State of

Florida.

It is anticipated that multiple Bidders will

be selected for participation in this

program. One bidder will be selected for

each Region, as defined in the Bid Document.

A Bidder may be awarded more than one

Region.

A ll PV modules and systems must be certified

by the Florida Solar Energy Center as

specified in the bid document.

4. The Florida Solar Energy Center (FSEC) is a statutory

affiliate of UCF which "develop[s] and promulgate[s] standards

for solar energy sys tems manufactured or sold in this state

based on the best currently available information and shall

consult with scientists, engineers, or persons in research

centers who are engaged in the construction of, experimentation

with, and research of solar energ y systems to properly identify

the most reliable designs and types of solar energy systems."

§ 377.705(4)(a), Fla. Stat. (2010). 1/ All solar equipment that

is sold or manufactured in the S tate of Florida must be

certified by FSEC. § 377.705(4)(d).

5. Bl ueChip was among the 19 bidders, which submitted bid s

in response to the ITB. On November 19, 2010, UCF posted the

intent to award the contract for all regions to Vergona - Bowersox

Electric, Incorporated (Vergona - Bowersox). By letter dated

November 19, 20 10, UCF notified BlueChip that its bid was

rejected for a number of deficiencies. The Sunny Island

inverter, which BlueChip included in the system it bid, is not

made in America, and, therefore, does not comply with the Buy

America provision of the ITB. Sunny Boy inverters, which

BlueChip included in the system it bid, are undersized and do

not meet the specifications of the ITB. The batteries used in

BlueChip's bid do not meet the specifications of the ITB. FSEC

did not receive a PV System Certificatio n Application from

BlueChip as required by the ITB. BlueChip does not hold a solar

contractor license, nor does it hold an electrical contract or

license as required by the ITB.

6. By letter dated November 20, 2010, Dimitri Ni k itin

(Dr. Nikitin) , presiden t of BlueChip, wrote to UCF concerning

the rejection of BlueChip's bid. The letter stated in part:

On behalf of BlueChip Energy, LLC, which

submitted a bid for the SunSmart Emergency

Shelters project on November 8, I would like

to express my concerns and ask for

clarification regarding the Intent to Award

notice for UCF Bid 1030lcsar posted on the

UCF Purchasing website on November 19.

First, we would like a written explanation

why UCF rejected BlueChip Energy's bid. Our

bid followed the requirements of the ITB to

the letter, including compliance with the

Buy America Act and ability t o provide a

payment and performance bond.

* * *

We would like to receive a clear explanation

of why the only solar panel manufacturing,

engineering and Installation Company in

Florida with first hand PV module

manufacturing experience and multi - Megawatt

international install base was simply

rejected as a bidder. To find out the

reasons for your decision we will initiate a

media investigation and congressional and

Fl orida Energy Commission inquiry into the

administration of UCF bid 1030LCSAR, and the

possible conflict of interests of UCF

employees and related parties.

Your timely response to our questions and

concerns is very much appreciated.

7. The BlueChip lette r dated November 20, 2010, did not

state that it was intended to be a Notice of Protest. By letter

dated November 24, 2010, BlueChip responded to each of the

deficiencies listed in UCF's letter to BlueChip dated

November 19, 2010. BlueChip's letter dated November 24, 2010,

did not state that the letter was supposed to be a formal

protest, but did state:

Due to the spurious and baseless nature of

the issues raised by your November 19 letter

we insist UCF immediate ly reinstate and

reconsider our bid. In the absence of that

we will have no choice but to initiate a

media investigation and congressional and

Florida Energy Commission inquiry into the

administration of ECF [sic] bid 1030LCSAR

and the possible conflict o f interest of UC F

employees and related parties.

Additionally, the November 24, 2010, letter did not include a

protest bond.

8. Appendix II, section 13 , of the ITB provides:

13. Compliance with the Buy America

Recovery Act Provisions (Section 1605 of

Title XVI) --

By accepting funds under this Agreement

[State of Florida Grant Assistance Pursuant

to American Recovery and Reinvestment Act],

the Grantee [UCF] agrees to comply with

sections [sic] Section 1605 of the American

Recovery and Reinvestment Act (ARRA)." The

Grantee should review the provisions of the

Act to ensure that expenditures made under

this Agreement are in accordance with it.

The Buy American provision in the American

Recovery and Reinvestment Act of 2009

(section 1605 of title XVI), pr ovides that,

unless one of the three listed exceptions

applies (nonavailability, unreasonable cost,

and inconsistent with the public interest),

and a waiver is granted, none of the funds

appropriated or otherwise made available by

the Act may be used for a project for the

construction, alteration, maintenance, or

repair of a public building or public work

unless all the iron, steel, and manufactured

goods are produced in the United States.

9. On September 30, 2010, the United States Department of

Energy granted a limited waiver of the Buy America provision of

ARRA with respect to certain PV equipment. The waiver provided:

This amended public interest determination

waives the Buy American requirements of

EERE - funded Recovery Act projects for the

purchase of the following solar PV

equipment: (1) Domestically - manufactured

modules containing foreign - manufactured

cells, (2) foreign - manufactured modules,

when completely comprised of domestically -

manufactured cells, and (3) any ancillary

items and equipment (in cluding but not

limited to, charge controllers, combiners,

and disconnect boxes, breakers, fuses,

racks, lugs, wires, cables and all otherwise

incidental equipment with the exception of

inverters and batteries) when utilized in a

solar installation involvi ng a U.S.

manufactured PV module or a module

manufactured abroad but comprised

exclusively of domestically - manufactured

cells. ( e mphasis added ) .

10. BlueChip's bid specifies inverters manufactured by SMA

America Solar Technologies, Inc. (SMA), specifica lly SMA's Sunny

Boy 4000US inverter and Sunny Island 5048US inverter. SMA's

Sunny Island 5048US inverter is made in Germany, not the United

States. The United States Office of Management and Budget (OMB)

has issued interim final guidance , directing that the Buy

American provision shall not be applied where the iron, steel,

or manufactured goods used in the project are subject to an

international agreement. The recipient of ARRA funds is to

treat the goods subject to an international agreement the same

as domestic goods and services. In Florida, only executive

branch agencies may invoke the United States' international

trade agreement s . State of Florida universities may not

participate in the international trade agreements.

11. The total bid of BlueChip was $6,383,811.00. The

value of the contract awarded to Vergona - Bowersox pursuant to

the ITB was $6,720,896.70.

12. Appendix 1, section 2(C)(8) , of the ITB states: "The

battery bank shall have a minimum usable capacity (at C/100) of

25kWh. " BlueChip's bid specifies a battery bank capable of

producing and delivering a maximum energy output of 24 volts to

its specified Sunny Island 5048US inverter. In order to turn on

and function, the Sunny Island 5048US inverter requires a

minimum energy input of 41 v olts from the battery bank. The

24 volts produced by the battery bank specified by BlueChip is

insufficient to turn on the inverter. Therefore, the PV system

bid by BlueChip would not be functional and would not meet the

minimum usable capacity required by the ITB , because the

inverter could not be activated by the battery bank.

13. Appendix 1, section 2(C)(8) , of the ITB provides the

following requirements:

PV systems must be capable of parallel

operation with the utility supplied

electrical service to the facility. The

entire PV system must also be capable of

stand - alone operation, providing backup

power to a critical load panel when the

utility supplied electrical service is

unavailable. Systems will be grid -

interactive, providing power to a collecti on

of pre - determined critical loads.

14. BlueChip's electrical schematic is non - conforming to

the ITB , because it does not properly allow for the required

operation with the utility supplied electrical service to the

facility and is not capable of a stan d - alone operation,

providing backup power to a critical load panel when the utility

supplied electrical service is unavailable.

15. BlueChip's bid specifies a PV array capable of

producing and delivering a maximum energy output of

approximately 90 volts t o its specified Sunny Boy 4000US

inverter. In order to turn on and function, the Sunny Boy

4000US inverter requires a minimum energy input of 295 volts

from the PV array. Therefore, the system bid by BlueChip cannot

turn on the Sunny Boy 4000US inverter included in BlueChips's

system, which makes the system nonfunctional.

16. BlueChip's bid contains a schematic showing a Sunny

Boy 4000US inverter with two DC inputs and two AC outputs.

Sunny Boy 4000US inverters have only one DC input connection and

one AC output connection. Based on the schematic submitted by

BlueChip, the system is nonfunctional.

17. The ITB provides that UCF may waive "any minor

irregularity." BlueChip contends that any technical issues with

the system bid could be corrected by FSEC during the

certification process after the bids were opened and the

intended award was announced.

18. Appendix 1 , section 1(C)(1) , of the ITB provides:

Bidders will serve as the prime contractor

and must be licensed to install photovoltaic

systems in the State of Florida. Bidder

must hold a valid license as a certified

solar contractor or electrical contractor,

per Chapter 489, Florida Statutes. General

Contractors may not serve as a prime

contractor for the installation of a

photovoltaic system due to the limitations

provided in Section 489.113(3), Florida

Statutes. Bidders may include

subcontractors as deemed necessary, but

subcontractors must be iden tified in the bid

response, with a description of the work to

be performed by each subcontractor. A

successful Bidder will be solely responsible

for fulfilling the terms of award.

19. BlueChip submitted the bid and identified itself as

the prime contrac tor in its bid. In its bid , BlueChip

identified Advanced Solar Photonics and Complete Electrical

Contractors as wholly - owned subsidiaries of BlueChip. BlueChip

purchased Complete Electric Contractors, Inc., and the name was

changed to Complete Electric C ontractors, LLC. On January 5,

2010, Complete Electric Contractors, LLC , registered to do

business under the fictitious name of BlueChip Energy.

20. No evidence was presented at the final hearing that

BlueChip was a certified solar contractor or that Bl ueChip was

registered or certified pursuant to section 489.521, Florida

Statutes.

21. BlueChip contends that BlueChip me e ts the requirement

as an electrical contractor , because Complete Electrical

Contractors, Inc. , was registered as a business performing

electrical contracting with Andrew White (Mr. White) as the

qualifying agent and is a wholly - owned subsidiary of BlueChip.

Complete Electrical Contractors, LLC, is the wholly - owned

subsidiary of BlueChip and is a separate legal entity from

BlueChip . The bid was not submitted by Complete Electrical

Contractors, LLC, or by Complete Electrical Contractors, Inc.

Additionally, Mr. White is the qualifying agent for Complete

Electrical Contractors, Inc., not Complete Electrical

Contractors, LLC.

22. BlueChip did not list Complete Electrical Contractors,

LLC, as a subcontractor in its bid.

23. Appendix 1, section 1(D) , of the ITB provides that , if

a bidder chooses not to use a PV system that is not already

certified by FSEC, the bidder is responsible for submi tting an

application for system certification. There is a special

application process in FSEC for applications that are being made

as part of a bid solicitation process. The applications are

submitted, but the processing fee is not required at the time o f

the submittal of the application , and only the applications for

bidders selected for a contract will be certified.

24. The directions for submittal of the applications for

certification are contained in Appendix 1, section 1(4) , of the

ITB, which provid es:

4. IMPORTANT : The Florida Solar Energy

Center has established a modified

application process for certifying PV

systems for this program only. The

following process should be followed

carefully to qualify for this offer.

a. On or before the deadli ne date of the

ITB, Bidder must complete and electronically

submit (see ii below) the Photovoltaic

System Certification -- SunSmart E - Shelter

Program Application form available at:

http://www.fsec.ucf.edu/en/education/

sunsmart/e - shelters/documents/

EShelter Application.pdf . Applications

submitted under previous solicitations will

not be considered under this program. Only

certification applications submitted through

the current bid process will be considered.

i. Only fully completed applications will

be accepted for consideration under this

program. The application must include all

required documentation to be considered

complete. All materials must be submitted

electronically to FSEC in a single email.

FSEC will not accept partial submissions.

All em ail attachments must be in PDF format.

ii. All certification applications must be

sent to [e-mail] . A complete

electrical schematic that includes the

following information is required as part of

the system certification package. (This

lis t is provided for guidance and assistance

only and is not the only information

required in the certification application.)

1) Modules labeled and shown in correct

array configuration (source circuits)

2) Size, type, and location of all

conductors ( c, - dc, L1, L2, L3, N, G,

etc.) in the system

3) Complete circuit paths shown

4) Size, current rating, voltage rating,

and location of all over - current protection

devices

5) Inverter/Charger/Controller equipment

correctly identified

6) Data acquisition system (DAS)

[monitoring equipment] identified

7) Battery wiring and cables labeled and

shown in correct bank configuration

8) Complete details of the system grounding

in compliance with NEC 690 V. Grounding

9) Point of interconnection sp ecified and

in compliance with NEC 690.64(B)(7)

10) Ratings and locations of all

disconnects

iii. Incomplete applications will be

rejected and the applicant's system and bid

may be ineligible for an award under this

program. The applicant will be so n otified

but application materials will not be

returned to the applicant.

25. The system bid by BlueChip had not been certified by

FSEC. BlueChip was required to submit an application to FSEC as

part of the bid process. BlueChip had submitted applicatio ns to

FSEC as part of the previous solicitation for PV systems for

emergency systems, which had been cancelled in October 2010. At

the final hearing, Dr. Nikitin testified that he had submitted

other applications for the ITB; however, the only receipt tha t

he could produce was for a n email delivery dated August 23,

2010, which was before the ITB was issued. The totality of the

evidence does not establish that BlueChip sent an application by

email to FSEC for the ITB. BlueChip did include with its bid

two applications submitted in response to the previous

invitation to bid. One application was dated

July 28, 2010, and one was dated August 19, 2010. Because

BlueChip submitted no application to FSEC for the ITB by email,

FSEC evaluated the technical aspect of BlueChip's bid based on

the application submitted with the bid.

26. BlueChip asserted in its letters to UCF, dated

November 20, 2010, and November 24, 2010, that there had been a

conflict of interest concerning a member of the Policy Advisory

Board of FSEC and Vergona - Bowersox. However, no evidence was

presented to support this assertion.

CONCLUSIONS OF LAW

27. The Division of Administrative Hearings has

jurisdiction over the parties to and the subject matter of this

proceeding. § 120.65(7), Fla. S tat.

28. UCF Regulation 7.130(5) sets forth the procedures for

solicitation and provides:

(5) Solicitation Protest Procedures

(a) Any qualified offeror who is adversely

affected by the university's decision may

file a written notice of intent to protes t

within 72 hours after university posting of

award or intent to award notice. The

protesting firm must reduce its complaint to

a written protest and file it with the

department that issued the solicitation

within ten (10) calendar days from

registration of the original complaint. The

bond shall be included with the formal

written protest.

(b) The notice of protest shall contain the

following information:

1. The notice must be addressed to the

department that issued the solicitation or

that made a decision that is intended to be

protested;

2. The notice must identify the

solicitation by number and title and any

other language that will allow for

identification; and

3. The notice must state that the person

intends to protest the decision.

(c) T he "formal written protest" required

by BOG regulation 18.002 is a petition that

states with particularity the facts and law

upon which the protest is based. The formal

protest shall be filed with the office

issuing the competitive solicitation within

ten (10) calendar days of the notice of

intent to protest. The formal written

protest shall con tain the following

information:

1. The name of the protestor;

2. A statement of when and how the

protestor received notice of the

University's action or propos ed action;

3. An explanation of how the protestor's

substantial interests are or will be

affected by the action or proposed action;

4. A statement of all material facts

disputed by the protestor or a statement

that there are no disputed facts;

5. A s tatement of the facts alleged,

including a statement of the specific facts

the protestor contends warrant reversal or

modification of the university's proposed

action;

6. A statement of the specific regulations

or statutes that the protestor contends

req uire reversal or modification of the

university's proposed action, including an

explanation of how the alleged facts relate

to the specific regulations or statutes;

7. A statement of the relief sought by the

protestor, stating precisely the action

protes tor wishes the agency to take with

respect to the proposed action.

(d) The failure to adhere to filing

deadlines will result in the rejection of

the protest.

29. UCF Regulation 7.130(4)(c) requires that a protest

bond be submitted with the formal written protest and states:

Solicitation Protest Bond. Any contractor

that files a formal written protest pursuant

to the protest procedures of BOG Regulation

18.002 and this regulation (see section (5)

below) protesting a decision or intended

decision pe rtaining to a solicitation, shall

at the time of filing of the formal protest,

post with the University a bond payable to

the University in an amount equal to 10% of

the estimated value of the protestor's bid

or proposal; 10% of the estimated

expenditure d uring the contract term;

$10,000; or whichever is less. The bond

shall be conditioned upon payment of all

costs which may be adjudged against the

contractor filing the protest action. In

lieu of a bond, the University may accept a

cashier's check or mone y order in the amount

of the bond. Failure to file a protest in

accordance with BOG regulation 18.002 or

failure to po s t the bond or other security

as required by the BOG regulation 18.003,

shall const itute a waiver of proceedings.

30. BlueChip's letter dated November 20, 2010, did not

advise UCF that BlueChip was intending to protest the notice of

the award of the contract for PV systems to Vergona - Bowersox.

The letter asked for an explanation of why BlueChips's bid was

rejected and cited various conce rns about the rejection of

BlueChip's bid. The letter was not sufficient to put UCF on

notice that BlueChip was protesting the intended award. UCF

Regulation 7.130 clearly requires that the notice of protest

state that the bidder intends to protest the d ecision.

31. If the letter dated November 19, 2010, were deemed to

be the notice of protest and the letter dated November 24, 2010,

were deemed to be the formal written protest, BlueChip did not

submit the required protest bond with the November 24, 2010,

letter as required by UCF Regulation 7.130(4) and has thus

waived any protest.

32. Assuming arguendo that BlueChip's letter of

November 19, 2010, is deemed to be sufficient as a notice of

protest and a bid protest bond had been included with the

November 24, 2010, letter, BlueChip's bid fails to meet the

requirements of the ITB in numerous respects.

33. The ITB provides that the bidders must abide by the

Buy America requirement of the A R RA. BlueChip 's bid included

SMA's Sunny Island 5048US inverter, whi ch is made in Germany.

Although the ARRA provides for a Buy American requirement, it

also provides that the Buy American requirement be applied in a

manner consistent with United States' obligations under

international agreements. Thus, goods purchased p ursuant to an

international agreement are to be considered the same as

domestic goods and services. Two C.F.R. section 176.90

provides:

The Buy American requirement set out in

§ 176.70 shall not be applied where the

iron, steel, or manufactured goods used in

the project are from a Party to an

international agreement, listed in paragraph

(b)(2) of this section, and the recipient of

is required under an international

agreement, described in the appendix to this

subpart, to treat the goods and services of

tha t Party the same as domestic goods and

services. This obligation shall only apply

to projects with an estimated value of

$7,443,000 or more and projects that are not

specifically excluded from the application

of those agreements.

34. Article IX, s ection 7 , of the Florida Constitution

provides that there shall be a single state university system

that is comprised of all public universities, which includes

UCF. The state university system is not include d in the

executive branch of government. Appendix to subpart B of

2 C.F.R . part 176 lists the state entities that are subject to

United States obligations under international agreements. Only

the executive agencies of the State of Florida are subject to

the World Trade Organization Government Procurement A greement,

which includes Germany. Thus, UCF is not exempt from the Buy

America provision of ARRA because of an international agreement.

35. Even if UCF were considered to be obligated to abide

by international agreements, the project amount is less than

$7,443,000 .00 . BlueChip contends that the project amount is the

entire grant amount of $10,000,000 .00 . The project is

considered to be the construction, alteration, maintenance, or

repair of a public building. 2 C.F.R. § 176.70(a). The project

at issu e is the alteration of school buildings to include PV

systems for schools designated as emergency shelters. A school

building is a public building. Therefore, the project amount is

insufficient to exempt UCF from the Buy America provision s of

the ARRA.

3 6. BlueChip did not meet several technical requirements

of the ITB. The battery bank and the Sunny Island 5048US

inverter bid by BlueChip are not compatible because the battery

bank does not have sufficient energy output to start the

inverter ; therefore, the system bid will not function.

37. The electrical schematic submitted by BlueChip does

not properly allow for the operation with the utility supplied

electrical service to the facility as required by the ITB. The

electrical schematic does not show th at the system is capable of

stand - alone operation, with backup power to a critical load

panel when the utility supplied electrical service is

unavailable as required by the ITB.

38. BlueChip stated that its system was capable of

producing a maximum energy output of 90 volts to the Sunny Boy

4000US inverter, which BlueChip included in its system.

However, the Sunny Boy 4000US inverter requires a minimum of

285 volts in order to turn on and work. Additionally, the Sunny

Boy 4000US inverter does not have th e number of DC inputs and AC

outputs as specified in BlueChip's bid. Essentially, the use of

the Sunny Boy 4000US inverter as set forth in BlueChip's bid

will result in a nonfunctional system.

39. BlueChip contends that these errors could be corrected

by FSEC during the certification process after the bids were

opened and the intended award was announced. BlueChip's

contention is without merit. In Wester v. Belote , 138 So. 721,

723 - 24 (Fla. 1931), the court described the object and purpose

of fundamental policies underlying competitive procurement and

stated:

[T]he object and purpose of [the policies

underlying competitive procurement] is to

protect the public against collusive

contracts; to secure fair competition upon

equal terms to all bidde rs; to remove not

only collusion but temptation for collusion

and opportunity for gain at public expense;

to close all avenues to favoritism and fraud

in its various forms; to secure the best

values for the [governmental agency] at the

lowest possible expe nse, and to afford an

equal advantage to all desiring to do

business with the [governmental agency] by

affording an opportunity for an exact

comparison of bids.

40. The ITB provides that UCF may waive "any minor

irregularities." A variance from the bid specifications is

considered minor if it does not give a bidder a competitive

advantage over another bidder. See Intercontinental Properties,

Inc. v. Dep ' t of HRS , 606 So. 2d 380 (Fla. 3d DCA 1992);

Trobabest Foods, Inc. v. Dep ' t of Gen . Servs . , 493 So. 2d 50

(Fla. 1st DCA 1986); and Robinson Electrical Co., Inc. v. Dade

C nty . , 417 So. 2d 1032 (Fla. 3d DCA 1982).

41. The failure to bid a system that would work is not a

minor irregularity. To allow BlueChip to bid a nonfunctional

system and make corrections to the system after the bids were

opened in order to make the system functional would give

BlueChip an unfair advantage over the other bidders.

42. BlueChip did not meet the ITB requirement that it hold

a valid license as a certified solar con tractor or electrical

contractor. No evidence was presented that BlueChip was

registered or certified as a business conducting electrical

contracting as required by section 489.521 or that it held a

valid license as a certified solar contractor. BlueChip relied

upon the electrical contractor license of Mr. White as the

qualifying agent for Complete Electric Contractors, Inc., as

meeting the license requirement for a certified electrical

contractor. BlueChip's contention is without merit. Complete

Electr ical Contractors, Inc., for whom Mr. White is the

qualifying agent, no longer exists and was changed to a limited

liability corporation. Complete Electrical Contractors, LLC, is

a separate legal entity from BlueChip, did not submit the bid,

and was not li sted as a subcontractor in BlueChip's bid.

43. BlueChip did not submit an application for

certification to FSEC as required by the ITB. It did submit an

application for the previous invitation to bid. However, the

ITB provides that applications submitte d for previous

procurements would not be acceptable. FSEC did evaluate the

applications submitted with the bid, which were the applications

submitted for the previous invitation to bid, and found that

BlueChip's bid was nonresponsive.

44. In Sutron Corp . v. Lake County Water Authority , 870

So. 2d 930, 932 - 933 (Fla. 5th DCA 2004), the court stated:

It is well established in Florida that a

public entity's rejection of contract bids

will be affirmed when challenged in court,

unless the action of the public b ody was

arbitrary, unreasonable or capricious. Even

if the public entity makes an erroneous

decision about which reasonable people may

disagree, the discretion of the public

entity to solicit, accept and or reject

contract bids should not be interfered wi th

by the courts, absent a showing of

dishonesty, illegality, fraud, oppression or

misconduct. See Scientific Games v. Dittler

Brothers, Inc. , 586 So. 2d 1128 (Fla. 1st

DCA 1991); City of Cape Coral v. Water

Services of America , 567 So. 2d 510 (Fla. 2d

DCA 1990); Capeletti Brothers v. State Dept.

of General Services , 432 So. 2d 1359 (Fla.

1st DCA 1983).

45. A decision is arbitrary if it is not supported by fact

or logic. A decision is capricious if it is taken without

thought or reason. In determinin g whether an agency has acted

arbitrarily or capriciously, consideration should be given to

the following factors: (1) has the agency considered all

relevant factors; (2) has the agency given actual, good faith

consideration to those factors; and (3) has the agency used

reason rather than whim to progress from consideration of those

factors to its final decision. Adam Smith Enterprises, Inc. v.

State Dep ' t of Envtl . Reg . , 553 So. 2d 1260, 1273 (Fla. 1st DCA

1989). A decision is neither arbitrary nor capricious if the

decision is justifiable under any analysis that a reasonable

person would use to reach a decision of similar importance.

Dravco Basic Materials Co., Inc. v. State Dep ' t of Tra nsp . , 602

So. 2d 632, 634 n.3 (Fla. 2nd DCA 1992).

46. UCF's decision to reject BlueChip's bid is not

arbitrary or capricious. BlueChip's bid was evaluated and found

nonresponsive. The decision to reject BlueChip's bid is

reasonable based on BlueChip's failure to adhere to the

specifications of the ITB.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that a final order be entered finding

that BlueChip failed to submit a notice of protest in accordance

with UCF Regulation 7.130 ; finding that the rejection of

BlueChip's bid is not arbitrary, unreasonable, or capricious ;

and rejecting BlueChip's bid.

DONE AND ENTERED this 8th day of April , 2011 , in

Tallahassee, Leon County, Florida.

S

SUSAN B. HARRELL

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 8th day of April , 2011 .

ENDNOTE

1/ Unless otherwise stated, all references to the Florida

Statutes are to the 2010 version.

COPIES FURNISHED :

Thomas Gregory

Dimitri Nikitin

BlueChip Energy, LLC

400 Rinehart Road, No. 1060

Lake Mary, Florida 32746

Jordan P. Clark, Esquire

University of Central Florida

4000 Central Florida Boulevard

Post Office Box 160015

Orlando, Florida 32816

Richard E. Mitchell, Esquire

GrayRobinson, P.A.

Post O ffice Box 3068

Orlando, Florida 32802

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.