11-001431BID Bedrock Industries, Inc. vs. Osceola County School Board Status: Closed Recommended Order on Tuesday, August 16, 2011.

Summary: School Board had authority to award all or part of the contract for concrete.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

BEDROCK INDUSTRIES, INC. , )

)

Petitioner , )

)

vs. ) Case No. 11 - 1431BID

)

OSCEOLA COUNTY SCHOOL BOARD , )

)

Respondent . )

)

RECOMMENDED ORDER

Pursu ant to notice, a final hearing was held in this case

on July 20, 2011, in Kissimmee, Florida, before Susan Belyeu

Kirkland, f/n/a as Susan B. Harrell, an Administrative Law Judge

of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Robert Bernard Worman, Esquire

Worman and Sheffler, P.A.

2707 W est Fairbanks Avenue, Suite 200

Winter Park, Florida 32789

For Respondent: Michael Vernon Hammond, Esquire

Brown, Garganese, Weiss & D'Agresta, P.A.

111 North Orange Avenue, Suite 2000

Orlando, Florida 32801 - 2316

STATEMENT OF THE ISSUE

The issue in this case is whether Respondent's intended

contract award pursuant to Invitation to Bid No. SDOC - 11 - B - 049 -

CJ for ready - mix concrete is contrary to Respondent's governing

statutes, Respondent's rules or policies, or the solicitation

specifications.

PRELIMINARY STATEMENT

On December 10, 2010, the School District of Osceola County

(School District) issued a rebid for ready - mix concrete,

Invitation to Bid No. SDOC - 11 - B - 049 - CJ (the rebid ITB).

Petitioner, Bedrock Industries, Inc. (Bedrock), among others,

filed a response to the rebid ITB. On March 1, 2011,

Responde nt, Osceola County School Board (School Board), voted to

award the contract for ready - mix concrete to Prestige AB

Management Co., LLC (Prestige). Bedrock timely filed a protest

to the intended award, and the case was forwarded to the

Division of Administr ative Hearings on March 18, 2011.

With agreement of the parties, the final hearing was

scheduled for May 24, 2011. On May 23, 2 011 , the parties filed

a Stipulated Emergency Motion for Continuance. The final

hearing was rescheduled for July 20 and 21, 201 1.

On July 13, 2011, the parties filed an Amended Pre - hearing

Stipulation in which the parties agreed to certain facts

contained in section (e) of the Amended Pre - hearing S tipulation.

To the extent those stipulated facts are relevant, they have

been incor porated in this Recommended Order.

On July 19, 2011, the School Board filed Respondent,

Osceola County School Board's Motion in Limine. The motion was

heard at the final hearing and denied.

At the final hearing, Bedrock called the following

witnesses: L ou DeBeradinis, Michael Grego, Scott Stegall,

Cheryl Olson, and Deborah Pace. Petitioner's Exhibits 1

through 12 were admitted in evidence. The School Board called

the following witnesses: Clyde Wells, Cindy Hartig, and Thomas

Long. Respondent's Exhibi ts 1 through 4 were admitted in

evidence.

Neither of the parties ordered a transcript of the final

hearing. On August 1, 2011, the parties filed their p roposed

r ecommended o rders, which have been considered in the

preparation of this Recommended Order.

FI NDINGS OF FACT

1. In October 2010, the School District issued an

invitation to bid for ready - mix concrete ( the original ITB).

The only bidder who submitted a bid in response to the original

ITB was Bedrock. Bedrock had had the concrete contract with the

School District for the prior three years and had used a front

discharge delivery method.

2. On December 7, 2010, Cindy Hartig (Ms. Hartig) and

Michael Grego (Mr. Grego) , who at the time was the

superintendent of the School District, had a conversation

concerning the award of the concrete contract to Bedrock

pursuant to the original ITB. Mr. Grego testified that

Ms. Hartig told him that the School Board would not support a

recommendation to award the contract to Bedrock. Mr. Grego

further testified tha t when he asked Ms. Hartig how she knew

that the School Board would not support an award to Bedrock, she

did not say how she knew. Ms. Hartig testified that Mr. Grego

told her that he had polled the School Board members and that

they advised they would no t support an award of a contract to

Bedrock. Having considered the testimony of Mr. Grego and

Ms. Hartig, the testimony of Mr. Grego is more credible.

3. On December 7, 2010, prior to the School Board meeting

in which the School Board considered the orig inal ITB,

Ms. Hartig sent an email to Mr. Grego and Cheryl Olson

(Ms. Olson) , who was the director of purchasing for the School

District. The email stated:

Team,

An ex board member works for bedrock

An ex board member is building the house for

the owner of bedrock

Bedrock is only one of two companies that

have front discharge trucks

And reality is the front discharge is not

needed, most CM's will not use them

Please re look at the requirements for this

bid prior to rebid

Also make sure that each company is getting

the vendor request and that it is not in

their spam

thank you

cindy lou

The former board member to whom Ms. Hartig was referring was

John McKay (Mr. McKay) . There had been friction between

Ms. Hartig and Mr. McKay in the past.

4. At the Scho ol Board meeting on December 7, 2010, the

School Board voted to reject all bids for the original ITB. The

reasoning for rejecting all bids was not apparent from the

minutes of the School Board meeting. There was no evidence

presented that the School Boar d, as a whole, was biased against

Bedrock or that Ms. Hartig had influenced the School Board to

reject all bids.

5. On December 10, 2010, the School District issued the

rebid ITB, which allowed the vendors to bid front and rear

discharge methods of delive ry. It was felt that having both

front and rear delivery would give the maintenance staff an

opportunity to cho o se the method they wanted to use on a job - by -

job basis.

6. The rebid ITB includes a bid submittal form on which

the bidders are to submit thei r prices. There are 15 separate

line items on which the bidders may submit a bid. Line items 1

and 2 are for delivery of ready - mix concrete using a front

discharge cement truck. Line items 3 and 4 are for delivery of

ready - mix concrete using a rear disc harge cement truck. The

rebid ITB did not specify whether the bidders had to submit a

price for each line item in order to be deemed responsive.

7. Paragraph 25, on page 2 of 29 of the rebid ITB states:

AWARD: As the best interests of the School

Board m ay require, the School Board reserves

the right to make award(s) by individual

item, group of items, all or none, or a

combination thereof; on a geographical basis

and/or on a district wide basis with one or

more supplier(s) or provider(s); to reject

any a nd all offers or waive any minor

irregularity or technicality in offers

received. Offerors are cautioned to make no

assumptions unless their offer has been

evaluated as being responsive. Any and all

award(s) made as a result of this invitation

shall conf orm to applicable School Board

Rules, State Board Rules, and State of

Florida Statutes.

8. Page 3 of 39 of the rebid ITB provides: "THE SCHOOL

BOARD RESERVES THE RIGHT TO REJECT ANY OR ALL OFFERS, TO WAIVE

ANY INFORMALITIES, AND TO ACCEPT ALL OR ANY PAR T OF ANY OFFER AS

MAY BE DEEMED TO BE IN THE BEST INTEREST OF THE SCHOOL BOARD."

9. Section 2.09 of the rebid ITB provides:

The School Board reserves the right to award

the contract to the bidder(s) that the Board

deems to offer the lowest responsive and

responsible bid(s), as defined elsewhere in

this solicitation. The Board is therefore

not bound to accept a bid on the basis of

lowest price. In addition, the Board has

the sole discretion and reserves the right

to cancel this Bid, to reject any and all

bids to waive any and all information and/or

irregularities, or to re - advertise with

either the identical or revised

specifications, if it is deemed to be in the

best interest of the Board to do so. The

Board also reserves the right to make

multiple award s based on experience and

qualifications or to award only a portion of

the items and/or services specified, if it

is deemed to be in the Board's best

interest.

10. Section 2.42 of the rebid ITB provides: "The School

Board reserves the right to award one or more contracts to

provide the required services as deemed to be in the best

interest of the School Board."

11. Section 2.11 of the rebid ITB defines "responsive and

responsible" as follows:

Each bid submittal shall be evaluated for

conformance as resp onsive and responsible

using the following criteria:

A. Proper submittal of ALL documentation as

required by this bid. (Responsive)

B. The greatest benefits to the School

District as it pertains to: (Responsible)

1. Total Cost.

2. Delivery .

3. Past Performance. In order to evaluate

past performance, all bidders are required

to submit:

a. A list of references with the bid and;

b. A list of relevant projects completed

within the last 3 years that are the same or

similar to the magnitude of th is ITB.

4. All technical specifications associated

with this bid.

5. Financial Stability: Demonstrated

ability, capacity and/or resources to

acquire and maintain required staffing.

Bidders are reminded that award may not

necessarily be made to the lo west bid.

Rather, award will be made to lowest

responsive, responsible, bidder whose bid

represents the best overall value to the

School District when considering all

evaluation factors.

12. Two vendors, Bedrock and Prestig e, submitted bids in

response to the rebid ITB. Bedrock does not have the capability

to provide concrete with rear delivery trucks. Therefore,

Bedrock did not submit a bid for concrete delivered by rear

discharge trucks. Bedrock submitted a bid for concrete

delivered with front disc harge trucks. Bedrock's t otal bid

price was $74,887.50.

13. Prestige's bid was for concrete delivered by rear

discharge trucks. Prestige did not submit a price for concrete

delivered by front discharge trucks. Prestige's total bid price

was $70,300.00.

14. The bid tabulation was posted on January 18, 2011.

15. Staff of the School District made a recommendation to

the School Board to award the front discharge portion of the

rebid ITB to Bedrock and to award the rear discharge portion to

Prestige. The recommendation was placed on the agenda for the

School Board meeting scheduled for February 1, 2011.

16. There was a discussion among the School Board members

concerning notification to the vendors. Thomas Long (Mr. Long)

became a School Board member in November 2010. He was concerned

by the lack of response to the original ITB and, on January 27,

2011, requested Ms. Olson to send him a list of local vendors

who did not respond to the rebid ITB. The purpose of the

communication was to learn why vendors were not submitting bids.

He contacted one vendor who did not submit a bid, but he did not

contact either Bedrock or Prestige. The communication would

have had to have been made after he received the list of vendors

on January 28, 2011 .

17. Section 7.70 I. G. of the School Board Policy Manual

provides:

Vendors, contractors, consultants, or their

representatives shall not meet with, speak

individually with, or otherwise communicate

with School Board members, the

Superintendent, or School District Staff,

o ther than the designated purchasing agent,

and School Board members, the

Superintendent, or School District staff,

other than the designated purchasing agent

shall not meet with, speak individually

with, or otherwise communicate with vendors,

contractors, consultants, or their

representatives, about potential contracts

with the School Board once an invitation to

bid, request for quote, request for

proposal, invitation to negotiate, or

request for qualification has been issued.

Any such communication shall disqualify the

vendor, contractor, or consultant from

responding to the subject invitation to bid,

request for quote, request for proposal,

invitation to negotiate, or request for

qualifications.

18. At the February 1, 2011, School Board meeting, the

Sch ool Board voted to appoint Scott Stegall (Mr. Stegall) as the

new chief facilities officer for the School District. The

School Board also voted to table the issue of the concrete

contract in order to give Mr. Stegall an opportunity to review

the procureme nt.

19. Mr. Stegall did review the procurement and recommended

that the contract award be split between Bedrock and Prestige.

There was no difference between the quality of the concrete

whether it was delivery by a front discharge truck or a rear

dischar ge truck. Whether it would be more efficient to use a

front discharge versus a rear discharge method of delivery would

depend on the job for which the concrete was ordered.

20. The recommendation to split the award of the concrete

contract was placed on the agenda for the School Board meeting

scheduled for March 1, 2011. Five School Board members were

present for the School Board meeting of March 1, 2011. Four

School Board members voted to reject the staff recommendation

and to award the contract to Pre stige. One School Board member

voted against awarding the contract to Prestige. Thus, the

School Board's intended award of the contract was to Prestige.

CONCLUSIONS OF LAW

21. The Division of Administrative Hearings has

jurisdiction over the parties to and the subject matter of this

proceeding. §§ 120.569 & 120.57, Fla. Stat. (2010) . 1/

22. Section 120.57(3)(f) provides that , in a protest to a

proposed contract award pursuant to an invitation to bid:

[u]nless 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 competi tion,

arbitrary, or capricious.

23. The court in Colbert v. Department of Health , 890 So.

2d 1165, 1166 (Fla. 1st DCA 2004), defined the clearly erroneous

standard to mean " the interpretation will be upheld if the

agency ' s constructio n falls within the permissible range of

interpretations. If however, the agency ' s interpretation

conflicts with the plain and ordinary intent of the law,

judicial deference need not be given to it. " ( c itations

omitted) .

24. An agency action is " contrary to competition " if it

unreasonably interferes with the purposes of competitive

procurement, which has been described in Wester v. Belote , 138

So. 721, 722 (Fla. 1931), as follows:

The object and purpose of competitive

bidding is to protect the public aga inst

collusive contracts; to secure fair

competition upon equal terms to all bidders;

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 at the

lowest possible expense; and to afford an

equal advantage to all desiring to do

business with the public authorities, by

providing an opportunity for an exact

comparison of bids.

25. A capricious action has been define d as an action,

" which is taken without thought or reason or irrationally. "

Agrico Chem. Co. v. Dep ' t of Envtl. Reg. , 365 So. 2d 759, 763

(Fla. 1st DCA 1978), cert. denied , 376 So. 2d 74 (Fla. 1979).

" An arbitrary decision is one that is not supported by facts or

logic. " Id. The inquiry to be made in determining whether an

agency has acted in an arbitrary or capricious manner involves

consideration of " whether the agency: (1) has considered all

relevant factors; (2) given actual, good faith considerati on to

the factors; and (3) has used reason rather than whim to

progress from consideration of these factors to its final

decision. " Adam Smith Enter. v. Dep ' t of Envtl. Reg. , 553 So.

2d 1260, 1273 (Fla. 1st DCA 1989). The standard has also been

formulate d by the court in Dravo Basic Materials Co. v.

Dep artment of Transp ortation , 602 So. 2d 632, 632 n.3 (Fla. 2d

DCA 1992), as follows: " If an administrative decision is

justifiable under any analysis that a reasonable person would

use to reach a decision of similar importance, it would seem

that the decision is neither arbitrary nor capricious. "

26. Bedrock has the burden to establish the allegations in

the protest by a preponderance of the evidence. Dep ' t of

Transp. v. Groves - Watkins , 530 So. 2d 912, 913 - 914 (Fla. 1988).

Bedrock has alleged that Ms. Hartig was biased against Bedrock,

that Mr. Long had improperly contacted vendors while the rebid

ITB was open , and that the School Board rejected staff's

recommendation to award the delivery of concrete by fr ont

discharge truck to Bedrock and the delivery of concrete by rear

discharge truck to Prestige.

27. Bedrock has demonstrated that Ms. Hartig was not

inclined to award a contract to Bedrock because of the

relationship between Bedrock and Mr. McKay; howeve r, no evidence

was presented that any other School Board member may have been

biased against Bedrock or that Ms. Hartig influenced the vote of

any School Board member regarding the award of the contract for

concrete. The decision to award the contract to Prestige was a

decision based on the vote of School Board members present at

the March 1, 2011, meeting and not a decision of a single School

Board member. If Ms. Hartig's vote had not been considered, the

School Board would have awarded the contract to P restige on a

three - to - one vote. Any bias on the part of Ms. Hartig did not

affect the vote to award the contract. Thus, the award to

Prestige was not contrary to competition.

28. Bedrock claims that Mr. Long violated School Board

P olicy 7.70 I . G. Tech nically, Mr. Long did violate the policy;

however, it is a violation without consequences. Mr. Long

contacted a concrete vendor after the bids were submitted and

tabulated to determine why the vendor did not bid. The remedy

for the violation is to disqua lify the vendor with whom the

School Board member communicated from submitting a bid to

invitation to bid to which the communication was addressed. It

was too late to disqualify the vendor because the bids were

already submitted. Mr. Long did not contact either Bedrock or

Prestige; thus, they were not subject to disqualification.

29. Bedrock claims that the School Board should have

followed the recommendation of the staff of the School District

to split the award. The ITB clearly gives the School Board

discretion to award all or part of the contract. Thus, the

decision to award to Prestige was not clearly erroneous.

30. Prestige submitted the lowest bid. It was neither

arbitrary nor capricious to award the rear discharge portion of

the contract to the low bidder. It is also clear that the

School Board gave consideration to its decision. The contract

award was discussed at length at two School Board meetings.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMME NDED that a f inal o rder be entered finding

that the intended award to Prestige was not contrary to the

School Board's governing statutes, the School Board's policies

or rules, or the rebid ITB and that the intended award to

Prestige was not clearly erroneo us, arbitrary, capricious, or

contrary to competition.

DONE AND ENTERED this 16th day of August, 2011 , in

Tallahassee, Leon County, Florida.

S

SUSAN B ELYEU KIRKLAND

Administrative Law Judge

Division of Administrative Hear ings

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 16th day of August , 2011 .

ENDNOTE

1/ Unl ess otherwise indicated, all references to the Florida

Statutes are to the 2010 version.

COPIES FURNISHED :

Robert Bernard Worman, Esquire

Worman and Sheffler, P.A.

2707 West Fairbanks Avenue, Suite 200

Winter Park, Florida 32789

Michael Vernon Hammond, Esquire

Brown, Garganese, Weiss & D'Agresta, P.A.

111 North Orange Avenue, Suite 2000

Orlando, Florida 32801 - 2316

Lois Tepper, Interim General Counsel

Department of Education

Turlington Building, Suite 1244

325 West Gaines Street

Tallahassee, Florida 3 2399 - 0400

Gerard Robinson, Commissioner

Department of Education

Turlington Building, Suite 1514

325 West Gaines Street

Tallahassee, Florida 32399 - 0400

Terry Andrews, Superintendent

School District of Osceola County, Florida

817 Bill Beck Boulevard

Kissi mmee, Florida 34744

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.