13-000414BID Vaastu Design Engg And Construction Services, Inc. vs. Department Of Agriculture And Consumer Services Status: Closed Recommended Order on Tuesday, March 26, 2013.

Summary: Bid proposals arriving minutes late to agency as a result of third party courier service constituted minor irregularity within agency discretion to waive.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

VAASTU DESIGN ENGG AND )

CONSTRUCTION SERVICES, INC., )

)

Petitioners, )

)

vs. ) Case No. 13 - 0414BID

)

DEPARTMENT OF AGRICULTURE AND )

CONSUMER SERVICES, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was conducted in this

case on February 27, 2013, in Tallahassee, Florida, bef ore

Barbara J. Staros, Administrative Law Judge with the Division of

Administrative Hearings.

AP PEARANCES

For Petitioner: Stephen M. Donelan , Esquire

Florida Department of Agriculture

And Consumer Services

Room 509, Mayo Building

407 South Calhou n Street

Tallahassee, Florida 323 99

For Respondent: Sanjeev Mangoli

V AASTU Design Engineering

a nd Construction Service s , Inc.

Post Office Box 222155

West Palm Beach , Florida 33 422

STATEMENT OF THE ISSUE

Whether Respondent's intention to award the contract arising

out of Invitation to Bid 12/13 - 44 (the ITB) to Paragon

Constru ction is contrary to RespondentÓs governing statutes,

RespondentÓs rules on policies, or the ITB specifications .

PRELIMINARY STATEMENT

On November 16 , 20 12 , the Department of Agriculture and

Consumer Services ( the Department or the Agency ) posted the ITB

f or demolition and r enovation at the Pompano State F armers Ó

Market. The Solicitation Tabulation Sheet (the tabulation

sheet) , showing the Department's intention to award a contract to

Paragon Con struction , was posted on January 7, 2013. Petitioner

timely filed a Petition challenging the Agency's intended

decision , alleging that the intention to award the bid to Paragon

Construction was erroneous because it violated the terms and

conditions specified in the ITB in that late bids were opened,

and was in viol ation of section 255.0525, Florida Sta tutes. The

Petition was forwarded to the Division of Administrative Hearings

on or about January 2 8 , 20 13 . A Notice o f Hearing was issued on

January 29, 2013, scheduling the final hearing for February 27,

2013. The hearing was held as scheduled.

The parties filed a Joint Pre - hearing Stipulation. The

parties stipulated to the admission of Joi nt Exhibits numbered 1

through 12 . At hearing, Petitioner and Respondent presented the

testimony of Christie Hutchinson and Ti na Peacock .

A t ranscript was not ordered or filed. The parties timely

filed Proposed Recommended Orders which have been considered in

the preparation of this Recommended Order. All citations are to

Florida Statutes (20 12 ) unless otherwise indicated.

F INDINGS OF FACT

Stipulated Facts

1. On November 16, 2012, the Department posted its ITB for

demolition and renovation at the Pompano State Farmers Market .

2. The ITB specified that bids were to be sub mitted to the

Respondent at 407 South Calh oun Street, Mayo Building, Room SB - 8,

Tallahassee, Florida .

3. The bid opening for the ITB was scheduled for 2:00 p.m.

on December 21, 2012.

4. Petitioner's response was receive d by the Department on

December 21, 2012 , at 11:07 a.m.

5. Three other responses , from B i - Tech Construction, Inc.,

JW Anthony Builders, Inc. , and Eagle Enterprises, were received

by Respondent prior to 2:00 p.m. on December 21, 2012.

6. Five responses , from Paragon Construction, West

Construction, State Contracting and Engineering Corporatio n, Real

Concepts, and Anzco, Inc., were delivered by FedEx to the

Department's ma ilroom at 2:02 p.m. on December 21, 2012. Each

was tendered to Fed Ex on December 20, 2012 , for delivery to the

Department by 8:30 a.m. on December 21, 2012.

7. The five resp onses were logged in by the Department's

employees on December 21, 2012, between 2:03 p.m. and 2:04 p.m.

8. Petitioner's response and the responses of Bi - Tech

Construction, Inc., JW Anthony Builders, Inc., and Eagle

Enterprises were opened at approximatel y 2: 10 p.m. by

Tina Peacock, assistant to the Department's purchasing d irector,

Christie Hutchinson.

9. Ms. Hutchinson advised Petitioner at 2:15 p. m. on

December 21, 2012 , via e - mail that Petitioner had provided the

apparent low bid of $114,500.

10. At 2:30 p.m. on December 21, 2012, the Department's

mailroom personnel delivered the five additional responses to the

Dep artment's purchasing bureau in r oom SB - 8 and left them

unopened on Ms. Peacock's desk. Ms. Peacock had already left for

the day.

11 . Ms. Hutchinson discovered the responses and opened them

at approximately 2:40 p.m. on December 21, 2012.

12. At 2:56 p.m. , Ms. Hutchinson advised Petitioner that

Petitioner was no longer the apparent low bidder and that the

apparent low bidder was P aragon Co nstruction , with a bid of

$98,873.

13. The Department was initia lly advised by FedEx on

January 9, 2013 , that the delay in delivering the five responses

was due to weather delays in FedEx's Tennessee processing center.

FedEx later confirmed that the dela y was caused by their internal

package sorting network and not due to weather conditions.

14. The tabulation sheet showing the Department's intention

to award a contract to Paragon Con struction was posted on

January 7, 2013.

15. Petitioner timely filed i ts Petition challenging the

Department's intended award.

Findings of Fact Based on the Evidence of the Record

16. Under ÐSpecial Terms, Conditions and Specifications,Ñ

t he ITB states in the "Purpose" section that the "project budg et

is estimated to be $12 0,000.Ñ

17 . All m ail and express courier deliveries addressed to

the Department are delivered to the Department's central

mailroom , which is located in a differ ent part of the building

from Ms . Hutchinson's office. Mailroom personnel log in the

delivered item , then deliver the mail or item to the room

specified on the envelope or package .

18 . The normal bid opening procedure used by the Department

is for bids to be opened by Ms. Peacock in Ms. Hutchinson's

office. In this instance, both Ms. Peacock and Ms. Hutchinson

were present for the opening of the first four bids that were

received before 2:00 p.m. Bid responders are notified in the ITB

that they may, but are not required to , attend th e bid opening,

which is public.

19 . At approximately 2:33 p.m. on December 21, 2012,

Ms. Hutchinson received an e - mail from one of the bidders, West

Construction, inquiring if the Department received their bid

package by the deadline. She sent the t ab ulation s heet to West

Construction .

20 . Ms. Hutchinson went to Ms . Peacock's desk at

approximately 2:40 p.m. to return the file with the tabulation

sheet, and discovered the additional envelopes on Ms. Peacock's

desk. She went to the mailroom to find out when the packages

were received by the Department, then sought adv ice from the

Department's legal counsel . U pon receiving that advice,

Ms. Hutchinson proceeded to open the late arrivals. By that

time, Ms. Peacock had gone home, so Ms . Hutchinson personally

opened them. There is nothing in the record to indicate that

a nyone else was in the room with Ms. Hutc hinson when she opened

the late - arriving bid responses. Betwee n the time of delivery of

the responses to the Department, and the opening of the same, the

five bid responses remained sealed.

21 . Ms. Hutchinson testi fied that p rior to the opening of

the fiv e late bids, she did not know what comprised the contents

of each bid and had no way of knowing whether the late bids were

higher or lower than those already opened. Her testimony in this

regard was credible and is accepted.

22 . Paragraph 16 of the General Instructions to Respondents

reads as follows :

Minor Irregularities - Right to Reject. The

buyer reserves the right to accept or reject

any and all bids, or separable portions

thereof, and to waive any minor ir regularity,

technicality, or omission if the Buyer

determines that doing so will serve the

State's best interests. The Buyer may reject

any response not submitted in the manner

specified in the manner specified by the

solicitation documents.

T he Ð Evaluati on and Award Ñ section of the ITB a lso informs the

bidders that "[a]s the best interests of the state may require,

the right is reserved to reject any and all bids or waive any

minor irregularity or technicality in bids received."

2 3 . The ITB contains the following language regarding late

bids:

LATE BIDS

Bids received after the bid opening time and

date will be rejected as untimely and will

not be opened. A late bid notice will be

sent to the bidder upon the posting of award

notice with instructions for it s return.

Unclaimed late bids will be destroyed after

45 days. Offers from vendors listed on the

Department's posted award notice are the only

offers received timely in accordance with the

Department's bid opening time and date.

24 . After leaving work shortly afte r 2:00 p.m. on Friday,

December 21, 2012, Ms. Peacock did n ot return to work until

January 2, 2013. She then contacted FedEx to inquire about the

reason for the delay in the delivery of the late responses .

Initially, she was informed that the delay was due to weathe r.

However, by letters dated Jan uary 29, 2013, the Department was

informed by FedEx that the delay was caused by their package

sorting network. Whether the delay was caused by the weath er or

the package sorting network is of no co nsequence. In either

event, the lateness of the five bids which arrived at the

Department two minutes after the posted bid opening time was due

to problems of the courier, and was not caused by the bidders.

25 . The January 29, 2013 , letters also informed the

Department that the late packages, including the one containing

the bid from Paragon Construction , were tendered to the courier

service for morning deli very on December 21, 2012.

CONCLUSIONS OF LAW

2 6 . The Division of Administrative Hearings has

jur isdiction over the parties and subject m atter in this case

pursuant to s ections 120.569, 120.57(1) and (3), Florida

Statutes.

27 . Petitioner has challenged the Department's proposed

agency action to award the ITB contract to Paragon Construction .

28 . T he burden of proof resides with the Petitioner. The

standard of proof in this proceeding is whether the agency action

was clearly erroneous, contrary to competitio n, arbitrary, or

capricious. § 120.57(3)(f), Fla. Stat.

29 . The underlying findings of fac t in this case are based

on a preponderance of the evidence. § 120.57(1)(j), Fla. Stat.

30 . This de novo proceeding was conducted for the purpose

of evaluating the act ion that was taken by the Department in an

attempt to determine whether that action is contrary to the

Department 's governing statutes, the Department 's rules or

policies, or the solicitation specifications. 1 / See

§ 120 .57(3)(f), Fla. Stat., and State Contracting and Eng ' g Corp .

v. Dep ' t of Transp . , 709 So. 2d 607 (Fla. 1st DCA 1998).

31 . Petitioner argues that the Department erroneously

misused the ITB language relating to minor irregularities and the

right to reject bids by opening the late - arriving responses after

the timely ones were opened and the lowest apparent bidder

(Petition er) had been notified of the tabulation results. Courts

have addressed the distinction of major versus minor

irregularities. The court in Harry Pepper & Associates v. City

of Cape Coral , 352 So. 2d 1190 , 1193 (Fla. 2d DCA 1977) ,

described the test for me asuring whether an irregularity is

material:

The test for measuring whether a deviation in

a bid is sufficiently material to destroy its

competitive character is whether the

variation affects the amount of the bid by

giving the bidder an advantage or benef it no t

enjoyed by the other bidders.

32 . Applying the Harry Pepper rationale to the instant

case, the amount s of the late - arriving bids were not affected by

the late delivery caused by a third party. See also Liberty

Cnty. v . Baxter's Asphalt & Concrete , Inc. , 421 So. 2d 505

(Fla. 1982)(county's waiver of a relatively minor irregularity in

the technical bidding requirements upheld).

33 . An agency has the discretion to waive the irregularity

of a late bid. Hewitt Contracting Co. v. Melbourne Reg ' l Airp ort

Auth . , 528 So. 2d 122 (Fla. 5th DCA 1988).

34 . Accordingly, it is concluded that the acceptance of the

bids received by the Department a few minutes after the posted

deadline , when the delay was caused by a third party, constitute s

a minor irregu larity which may be waived at the discretion of the

Department . The bidders whose responses were delivered late had

no opportunity to adjust their bid proposals and therefore did

not ha ve a competitive advantage over any other proposed vendor.

Petitioner Ós argument that the late bids were not delivered to

the purchasing office, the room specified in the ITB , is

unpersuasive. All mail and other deliveries are delivered to a

central mailroom which then distributes items to the appropriate

room .

35 . In it s Petition, Petitioner asserts that the Department

violated section 255.0525, Florida Statutes. Petitioner's

reliance on this statute is misplaced. Section 255.0525 requires

advertisement in the Florida Administrative Weekly in the

solicitation of compet itive bids or proposals for any

construction project that is projected to co st more than

$200,000. The ITB states in the "Purpose" section that the

project budget is estimated to be $120,000. Petitioner's bid i s

$114,500; the bid from Paragon Constructio n is $98,873. Thus,

section 255.0525 is not applicable in this case.

36. At hearing and in the Joint Pre - hearing Stipulation ,

Petitioner alleged that the Agency 's intent to award the contract

to Paragon Construction is also arbitrary and capricious. An

agen cy action is capricious if the a gency takes the action

without thought , reason , or rationality. An agency decision is

arbitrary if it is not supported by facts or logic. Agrico Chem.

Co. v. State Dep't of Envtl. Reg. , 365 So. 2d 759, 763 (Fla. 1st

DCA 1978).

37. The Agency 's decision to open the late bids was based

on the number of late responses received by the Agency at the

same time by the same courier, the fact that the lateness of the

delivery was not the fault of the bidders, and the fact t hat the

delivery occurred within minutes of the stated time. Petitioner

has not shown that the Agency 's intended action is arbitrary or

capricious.

38. I n its Proposed Recommended Order, Petitioner stated

that in addition to section 255.0525, the Agency violated

sections 255.0518 and 286.111, Fl orida Statutes.

Section 255.0518 reads as follows:

Public bids; b id opening. Notwithstanding

s. 119.07(1)(b), the state or any county or

municipality thereof or any department or

agency of the state, county, or municipality ,

or any other public body or institution

shall:

(1) When opening sealed bids or the portion

of any sealed bids that include the

prices submitted that are received

pursuant to a competitive solicitation

for construction or repairs on a public

buil ding or public work, open the sealed

bids at a public meeting conducted in

compliance with s. 286.011.

(2) Announce at that meeting the name of

each bidder and the price submitted in

the bid.

(3) Make available upon request the name of

each bidder and th e price in the bid.

39 . Section 255.072(2) defines construction services to

include demolition, reconstruction , and any other improvements to

real property. The ITB is for the demolition and renovation of

the Pompano State F armer's Market. The effective date of

section 255.0518 was May 4, 2012. C h. 2012 - 211, § 3, Laws of

Fla. It appears, then, that the provisions of section 255.0518

apply to this bid opening.

40. However, Petitioner did not plead a violation of

255.0518 in its Petition challenging the intend ed contract award.

It was not included in the Joint Pre - hearing Stipulation.

See Fla. Admin. Code R. 28 - 106.201 (requires a statement of the

specific rules or statutes P etitioner contends warrant reversal

or modification). The Department , therefore, was not on notice

that this was one of the grounds of the challenge prior to

hearing or that it must prepare to defend any such allegations .

41 . Accordingly, Peti tioner has not shown that the

Department 's proposed action is contrary to the Department 's

gove rning statutes, rules or policies, or the ITB specifications.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of

Law set forth herein, it is

RECOMMENDED:

That the Department of Agriculture and Consumer Services

enter a final order dismissing the bid protest filed by

Petitioner .

DONE AND ENTERED this 26 th day of March, 2013, in

Tallahassee, Leon County, Florida.

S

BARBARA J. STAROS

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Park way

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 26 th day of March, 2013.

ENDNOTE

1 / The Department 's reliance on the standards set forth in

Department of Transportation v. Groves - Watkins , 530 So. 2d 912

(Fla. 1988) is misplaced. Since the 1996 amendments to the

Administrative Procedures Act, the standard of review is set forth

clearly in section 120.57(3)(f), Florida Statutes. Moreo ver, that

section specifies that the standard of review of whether the

agency's action is illegal, arbitrary, dishonest, or fraudulent

applies to only cases in which the agency's intended action is to

reject all bids , which is not the circumstance of the i nstant

case .

COPIES FURNISHED :

Stephen M. Donelan, Esquire

Florida Department of Agriculture

and Consumer Services

Room 509, Mayo Building

407 South Calhoun Street

Tallahassee, Florida 32399

Sanjeev Mangoli

VAASTU Design Engineering

and Constru ction Services, Inc.

Post Office Box 222155

West Palm Beach, Florida 33422

Lorena Holley, General Counsel

D epartment of A griculture

and C onsumer S ervices

407 South Calhoun Street, Suite 520

Tallahassee, Florida 32399

Honorable Adam Putnam

Commissioner of Agriculture

D epartment of A griculture

and C onsumer S ervices

The Capitol, Plaza Level 10

Tallahassee, Florida 32399

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit exceptions within 10 days

from the date of the Recommende d Order. Any exceptions to this

Recommended Order should be filed with the agency that will issue

the final order in this case.