11-001670BID K And M Pine Straw vs. Department Of Corrections Status: Closed Recommended Order on Friday, July 1, 2011.

Summary: Evidence did not demonstrate that omitted copy of back side of boilerplate form that DOC already had was material even though technically required by bid specs. since signatures were contained on the front side that was submitted.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

K AND M PINE STRAW , )

)

Petitioner , )

)

vs. ) Case No. 11 - 1670BID

)

DEPARTMENT OF CORRECTIONS , )

)

Respondent . )

)

RECOMMENDED ORDER

Pursuant to N otice, this cause came on for formal hearing

before the Division of Administrative Hearings by Diane

Cleavinger, a duly - designated Administrative Law Judge, on

May 2, 2011, in Tallahassee , Florida.

APPEARANCES

For Petitioner: Kurt Eldridge , pro se

K & M Pine Straw

20583 John G. Bryant Road

Blountstown, Florida 32424

For Respondent: Edith Mc Kay

Susan P. Stephens

Assistant s General Counsel

Florida Depart ment of Corrections

501 South Calhoun Street

Tallahassee, Florida 32399 - 2500

STATEMENT OF THE ISSUE

The issue in this proceeding is whether the award of a bid

for the sale of scrap m etal to Cumbaa Enterprises, Inc. was

arbitrary, capricious, clearly erroneous, or contrary to

competition or the bid specifications .

PRELIMINARY STATEMENT

On March 14, 2011, K & M Pine Straw (K & M or Petitioner )

filed a Notice of Intent to Protest the Department of

Correction Ó s ( Department o r Respondent ) award of Invitation to

Bid No. 10 - Apalachee - 8252 (ITB) to Cumbaa Enterprises, Inc.

(Cumbaa). On March 23, 2011, Petitioner timely filed a formal

written protest. Later, the matter was referred to the Division

of Administrative Hearings.

A t the hearing, R espondent offered the testimony of three

witnesses . Petitioner offered the testimony of its owner . Both

parties introduced four joint exhibits into evidence.

Additionally, both parties agreed to proceed with the hearing

without the prese nce of a court reporter.

After the hearing, Petitioner filed a Proposed Recommended

Order on May 12, 2001. Similarly, Respondent filed a Proposed

Recommended Order on May 12, 2001.

FINDINGS OF FACT

1. On January 19, 2011, the Department issued Invitat ion

to Bid ( ITB ) #10 - Apalachee - 8252 . The ITB was a revenue -

generating contract for the sale of scrap metal at Apalachee

Correctional Institution in Sneads, Florida. Since the contract

would generate revenue to the State , the Department Ós purpose

was to a ward the contract to the highest responsive bid and

developed bid specifications and criteria to accomplish that

goal .

2. The specification s for the ITB stated in relevant part:

1.5 Material Deviations : The Department

has established certain requiremen ts with

respect to bids to be submitted by bidders.

The use of shall, must or will (except to

indicate simple futurity) in this ITB

indicates a requirement or condition which

may not be waived by the Department except

where the deviation therefrom is not

material . [ emphasis add ed ]. A deviation is

material if, in the DepartmentÓs sole

discretion, the deficient response is not in

substantial accord with this ITBÓs

requirements, provides an advantage to one

bidder over other bidders, has a potentially

signifi cant effect on the quantity or

quality of items bid, or on the cost to the

Department. Material deviations cannot be

waived and shall be the basis for rejection

of a bid.

1.6 Minor Irregularity : A variation from

the ITB terms and conditions which does not

affect the price of the bid or give the

bidder an advantage or benefit not enjoyed

by other bidders or does not adversely

impact the interests of the Department.

1.10 Responsive Bid : A bid submitted by a

res ponsive and responsible vendor that

confor ms in all material respects to the

solicitation.

* * *

4.3.1 Submission of Bids

Each bid shall be prepared simply and

economically, providing a straightforward,

concise delineation of the bidderÓs

capabilities to satisfy the requirements of

this IT B, f ancy bindings, colored displays,

and promotional material are not desired.

Emphasis in each bid must be on completeness

and clarity of content. In order to

expedite the review of bids, it is essential

that bidders follow the format and

instructions c ontained in the Bid Submission

Requirements (Section 5), with particular

emphasis on the Mandatory Responsiveness

Requirements.

4.3.6 Rejection of Bids

The Department shall reject any and all

bids containing material deviations. The

following def initions are to be utilized in

making these determinations.

4.3.6.1 Material Deviations

The Department has established certain

requirements with respect to bids to be

submitted by bidders. The use of shall,

must or will (except to indicate simple

f uturity) in this ITB indicates a

requirement or condition which may not be

waived by the Department except where the

deviation therefrom is not material. A

deviation is material if, in the

DepartmentÓs sole discretion, the deficient

response is not in sub stantial accord with

the ITBÓs requirements, provides an

advantage to one bidder over other bidders,

has a potentially significant effect on the

quantity or quality of items bid, o r on the

cost to the Department. Material deviations

cannot be waived and s hall be the basis for

rejection of a bid.

4.3.6.2 Minor Irregularities

A variation from the ITB terms and

conditions which does not affect the price

of the bid or give the bidder an advantage

or benefit not enjoyed by other bidders or

does not ad versely impact the interests of

the Department.

3. As indicated, Section 5 of the specifications outlined

the contents of the bid. Section 5 stated in relevant part:

SECTION 5 - CONTENTS OF BID

This section contains instructions that

describe the required format for the

submitted bid. Bids shall be submitted in a

sealed envelope, clearly marked Ð Bid - ITB# -

Apalachee - 8252Ñ.

. . . . [ T ] he following paragraphs contain

instructions that describe the required

format for bid responses.

5.1 Responsive ness Requirements

The following terms, conditions , or

requirements must be met by the bidder to be

considered responsive to this ITB. Failure

to meet these responsiveness requirements

may cause rejection of a bid. [emphasis

added].

5.1.1 Bidder shall complete, sign and

return the ITB Bidder Acknowledgement Form

(page 1 & 2). The bidder must return either

the original or a copy of both pages with an

original signature on page one (1).

5.1.2 The bidder shall complete, sign,

date, and return (all) pric ing pages,

entitled Cost Information Sheet, which

consists of page 28. By submitting a bid or

bids under this ITB, each bidder warrants

its agreement to the prices submitted. The

Department objects to and shall not consider

any additional terms or condit ions submitted

by a bidder, including any appearing in

documents attached as part of a bidderÓs

response. In submitting its bid, a bidder

agrees that any additional terms or

conditions, whether submitted intentionally

or inadvertently, shall have no force or

effect. Any qualifications, counter - offers,

deviations, or challenges may render the bid

un - responsive . . . .

* * *

5.3 Certificate of Insurance

Bidders shall return a fully executed

Certificate of Insurance . . . .

4. In this case, Section 5.1 contains two bid

specifications essential to a bid's responsiveness. Those two

requirements were submission of a signed and completed, original

or copy, of the bidder acknowledgement form and submission of a

completed Cost Information Sheet . The Cost In formation S heet is

no t at issue here.

5 . The bidder acknowledgement form is a double - sided

Department of Management Services form containing general

boilerplate contractual language. The back of the form is a

continuation of standard contractual terms from the front.

Oddly, s ignatures acknowledging these terms and the terms of the

ITB are on the front page (page 1) of the form. By signing the

front page of t he bidder acknowledgement form the bidder agrees

to abide by all conditions of the bid.

6. T he remainder of Section 5 of the ITB contains bid

specifications that are not considered essential to determine

the initial responsiveness of the bid at the bid opening, but

are to be returned at some later point in time after the bid's

are opened. Howeve r, the language of Section 5 effecting that

intent is unclear. In particular, the bid specification

contained in Section 5.3 requires the bidder to "return" an

"executed" Certificate of Insurance. T he Certificate of

Insurance provides the Department with proof of a variety of

required insurance coverage of the vendor. However, later in

the ITB Section 7.14 clarifies that the Certificate of Insurance

need only be supplied with the later - signed contract documents.

Section 7.14 states , in relevant part :

7. 14 Contractor's Insurance

The contractor shall not commence any work

in connection with this ITB . . . until he

has obtained all of the . . . types of

insurance and such insurance has been

approved by the Department. The Department

shall be furnished pr oof of coverage of

insurance by Certificates of Insurance . . .

accompanying the contract documents and

shall name the Department as an additiona l

named insured [emphasis add ed ] .

7. Indeed, the evidence demonstrated that the Department

has long interpr eted these provisions to require a winning

bidder to provide Certificate s of Insurance at the time a

contract is entered into and not as part of the essential

requirements of the bid due at bid opening. While the

Department could (and probably should ) cla rify this provision,

its interpretation of its bid specifications is not unreasonable

under these facts.

8. In this case, f ive bids were timely submitted in

res ponse to the ITB, including those of K & M and Cumbaa. On

March 8, 2011, the Department opened bids for the ITB.

9 . Cumbaa su bmitted the highest bid for the contract, at

$22,197.48. K & M submitted the next highest bid at $20,001.00.

10 . At the bid opening , Cumbaa 's bid included a Cost

Information S heet, a copy of the signed front page of the bidder

acknowledge ment form, and the Contact for Contract

Administration form known as Attachment 1 . However, the bid did

not contain the second side of the bidder acknowledgement form

or a Certificate of I nsurance form at the time the bid was

opened . K & M's bid contained the same documents as Cumbaa's

bid , as well as the second side of the bidder acknowledgement

form and a number of certificates of insurance for K & M.

11. The evidence showed that Cumb aa did not include the

Certificate of Insurance f orm in its sealed bid upon the advice

of the Department that the form was not required at bid opening.

However, Cumbaa had insurance coverage in place at the ti me of

the bid opening and faxed its certificates of insurance to the

Department on March 10, 20 11. Given these facts and the

Department's reasonable interpretation of its ITB , the omission

of Cumbaa's certificate of insurance was neither required at the

time of the bid opening, nor material to the award of the bid.

12. T he omission of the second p age of the bidder's

acknowledgement form was not noticed by anyone reviewing the

bids until it s omission was pointed out by K and M in this bid

protest . Cumbaa faxed a copy of the back side of the document

to the Department on April 11, 2011. Clearly, th is lack of

notice demonstrates the immateriality of the back side of the

bidder's acknowledgement form. Additionally, since the

signatures of both bidders were on the front page of the form

submitted by them and those signatures bound the bidders to the

t erms of the ITB, there was no evidence that demonstrated why

submission of a copy of the back side of the form was material

to the award of this bid.

13 . Ultimately, t he Department reviewed the bids for

responsiveness and determined that Cumbaa w as the hi ghest

responsive bid. On March 11, 2011, the Department posted its

intent to award the bid to Cumbaa Enterprises, Inc.

14. As indicated, there was no evidence that the omission

of these two documents from the Cumbaa bid were material

deviation s from the bid specifications since neither omission

impact ed the ultimate contract requirements and did not

materially impact the integrity of the bid process. Indeed, the

insurance certification was not required for responsiveness

under Section 5.1 of the bid und er a long - standing and

reasonable interpretation of that requirement by the Department.

For these reasons, this bid protest should be dismissed.

CONCLUSIONS OF LAW

15 . The Division of Administrative Hearings has

jurisdiction over the parties to and the s ubject matter of this

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

16 . Petitioner, K & M , has standing to challenge the

proposed action of the Department in this proceeding. Section

120.57(1), Florida Statutes (2010).

1 7 . Sectio n 120.57(3)( f) , governs bid protest hearings.

Section 120.57(3)(f), provides in pertinent part:

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 tha n

a rejection of all bids, proposals , or

replies, the administrative law judge shall

conduct a de novo proceeding to determine

whether the agencyÓs proposed action is

contrary to the agencyÓs governing statutes

the agencyÓs rules or policies, or the

solici tation specification.

Thus, Petitioner , K & M , has the burden to demonstrate that

R espondent Ó s bid award did not comply with the bid

specifications or is otherwise arbitrary, capricious or against

the competitive bidding process.

18 . A capricious action is one taken without thought or

reason or irrationally. An arbitrary decision is one not

supported by facts or logic. Agrico Chemical Co. v. DepÓt of

Env tÓ l Reg . , 365 So. 2d 759, 763 (Fla. 1st DCA 1978).

19 . An act is contrary to competition when it of fends the

purpose of competitive bidding. That purpose has been

articulated as follows:

[T]o protect the publ ic against collusive

contracts; to secure fair competition upon

equal terms to all bidders; to remove not

only collusion but temptation for collus ion

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 [public] at the lowest

possible expense; and to afford an equal

advantage to all desiring to do business

wi th the [government], by affording an

opportunity for an exact comparison of bids.

Wester v. Belote , 103 Fla. 976, 138 So. 721, 723 - 4 (1931).

Harry Pepper & Assoc. v. City of Cape Coral , 352 So. 2d 1190,

1192 (Fla. 2d DCA 1977).

20 . In this case, t he e vidence did not demonstrate that

the DepartmentÓs acceptance o f the certificates of insurance

after the bid openi ng but before th e bid award, or the later

acceptance of the second side of the bidder acknowledgement

form, afforded Cumbaa any sort of advanta ge over other bidders.

The Cumbaa price was set at the time of the bid opening, as were

all work requirements of the bid. It is undisputed that Cumbaa

had the necessary insurance in place prior to the bid opening.

However, even if it had not, the Depart ment does not require

certificates of insurance to be submitted until a contract is

awarded .

21 . Likewise , the evidence did not demonstrate any

prejudice to the integrity of the bid process in the omission of

CumbaaÓs insurance documents and the second s ide of the bidder

acknowledgement form at the time of the bid opening.

22 . Cumbaa agreed to comply with the requirements of the

ITB, just as K & M did and as their signatures on the front side

of the bidder acknowledgement form bound them to do . In

gener al, documents meeting the essential requirements of a bid

should not be accepted after bid opening and the Department

should be extremely cautious in permitting such a submission.

However, in this case, t o reject a bid for the late submitted

second side o f the bidder acknowledgement form would put form

over substance since submitting a copy of the back part of a

form which the Department already ha s makes no mater ial

contribution to the legitimacy or legality of the bids

submitted . Under the evidence, t he lack of the second page of

the bidder acknowledgement form at the time of t he bid opening ,

was clearly not a material deviation from the bid specifications

and had no impact on the award of the bid to Cumbaa. Given

these facts, this protest should be dis missed.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that Respondent, Department of Corrections,

enter a fin al order dismissing the Protest of K & M Pine Straw .

DONE AND ENT ERED this 1st day of July , 2011, in

Tallahassee, Leon County, Florida.

S

DIANE CLEAVINGER

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax F iling (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 1st day of Ju ly , 2011 .

COPIES FURNISHED :

Kurt Eldridge

K and M Pine Straw

20583 John G Bryant Road

Blountstown, Florida 32424

Edith McKay , Esquire

Department of Corrections

2601 Blair Stone Road

Tallahassee, Florida 32399 - 2500

Edwin G. Buss, Secretary

Department of Corrections

2601 Blair Stone Road

Tallahassee, Florida 32399 - 2500

Jennifer Parker, General Counsel

Department of Correcti ons

2601 Blair Stone Road

Tallahassee, Florida 32399 - 2500

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to sub mit written exceptions within

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

to this recommended order sho uld be filed with the agency that

will issue the final order in this case.