15-001101 Straight And Narrow Striping, Inc. vs. Department Of Transportation Status: Closed Recommended Order on Friday, September 4, 2015.

Summary: Petitioner's failure to complete the work order, after repeated extensions of time given by the Department, leads to the conclusion it is a non-responsible contractor. Petitioner should be suspended for a period not to exceed one year.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

STRAIGHT AND NARROW STRIPING,

INC.,

Petitioner,

vs. Case No. 15 - 1101

DEPARTMENT OF TRANSPORTATION,

Respondent.

_______________________________/

RECOMMENDED ORDER

A final hearin g was held in this matter before Robert S.

Cohen, Administrative Law Judge with the Division of

Administrative Hearings (Division) , on June 22, 2015, by video

teleconferencing at sites located in Lauderdale Lakes and

Tallahassee, Florida.

APPEARANCES

For P etitioner: Broderick Smith , pro se

Straight and Narrow Striping, Inc.

Suite 225

1830 North University Drive

Plantation, Florida 33322

For Respondent: Kimberly Clark Menchion, Esquire

Department of Transportation

Mail Station 58

605 Suwannee Street

Tallahassee, Florida 32399 - 0450

STATEMENT OF THE ISSUE

The issue is whether the Department of Transportation

(Department) properly issued a Notice of Intent to Declare

Non - R esponsible (Notice) to Straight and Narrow Striping, Inc.

(S&NS).

PRELIMINARY STATEMENT

The Department issued a Notice to Broderick Smith of S&NS on

September 30, 2014. A d eclaration of n on - r esponsibili ty

prohibits S&NS from bidding on any Department construction or

maintenance contract and would prohibit S&NS from acting as a

subcontractor, consultant, or material supplier on any Department

contract or project during the period of non - responsibility. T he

Department issued the Notice based upon a Declaration of Contract

Default issued to S&NS , regarding Department Contract E4M99 , for

failure of the company to perform its contract obligations.

S&NS filed a p etition for a dministrative h earing on

October 22, 2014. The petition and accompanying documents were

filed with the Division on March 2, 2015. The matter was

assigned to the undersigned and was scheduled for hearing on

June 22, 2015.

At the hearing, Broderick Smith, Petitioner Ós president,

testified on behalf of Petitioner . The Department presented the

testimony of Chi - Yu She u , a contract manager for Broward County

O perations with the Department, and Mike Sprayberry, s tate

a dministrator for maintenance contracting for the Department, as

witnesses, a nd offered 14 exhibits, all of which were admitted

into evidence.

A one - volume T ranscript of the final hearing was filed on

July 9, 2015 . T he Department filed its proposed findings of fact

and conclusions of law on July 20, 2015 . Petitioner requested a n

extension of time to file its post - hearing submittal on August 6,

2015. Despite the lateness of the request, the time for filing

was extended to August 17, 2015. Petitioner filed its papers on

August 18, 2015. Despite the tardiness of PetitionerÓs fil ing,

the post - hearing submittals of both S&NS and the Department have

been fully considered for preparation of this Recommended Order.

References to statutes are to Florida Statutes (201 4 ) ,

unless otherwise noted.

FINDING S OF FACT

1. The Department is the state agency responsible for

coordinating the planning of a safe, viable, and balanced state

transportation system. The Department relies on qualified

contractors to provide services in order to meet FloridaÓs

transportation needs.

2. Broderick Smith owns S&NS, a company that provides

maintenance services for the Department and has been a contractor

for the Department since 1999 . Mr. Smith entered into

C ontract E4M99 with the Department for sign replacement on

interstate and primary roads. The date of the contract was

May 4, 2012, with an award amount maximum of $250,000.

3. Contract E4M99 incorporates the 2010 edition of the

DepartmentÓs standard specifications for road and bridge

construction , a s amended , in accordance with a specification

package .

4. Pursuant to C ontract E4M99, the Department issues work

orders. The Department issue d Work Order 358 to S&NS on

February 24, 2014, with a completion due date of April 10, 2014,

to remove and replace post signs. The signs to be removed and

replaced w ere identified as Southbound Flamingo at Red Road split

WO - 13 - 21 - AM (Flamingo Signs).

5. S&NS was not making progress on the Flamingo Signs work

order, and the Department reached out to S&NS on multiple

occasions regarding the lack of progress.

6. In Mar ch 2014, Mr. Smith discussed Work Order 358 with

Courtney Drummond, the DepartmentÓs District Director of

Operations, and, as a result, the work order was modified with a

new start date of March 11, 2014, and a completion due date of

April 25, 2014.

7. On April 3, 2014, Chi - Yu Sheu , a contract manager for

the DepartmentÓs Broward County operations, reaffirmed the terms

of the contract by sending Mr. Smith an email. The email

reminded Mr. Smith of the modified start and completion dates and

that all other terms and conditions of the contract remained in

full force and effect. The contract provided 45 days for

completion of the work and further clarified that an extension of

time to complete the work beyond the 45 days was denied.

8. Mr. Sheu sent addition al correspondence to Mr. Smith on

April 23, 2014, two days before the completion deadline,

inquiring about the status of the work and reminding him the work

was due on April 25 . As of that date, the existing overhead sign

panels had not been removed.

9. J ames Wolf, the DepartmentÓs District Four Secretary at

th at time, sent Mr. Smith a letter on May 1, 2014, regarding a

previous letter received fro m him on April 21. Mr. WolfÓs letter

again reaffirmed the terms of the contract and specificity of the

work order.

10. On May 20, 2014, the overhead signs had still not been

removed, and Mr. Sheu sent correspondence to Mr. Smith telling

him the W ork O rder 358 had been due to be completed on April 25

and inquiring about his intentions to finish the work.

11. On June 11, 2014, Francis Lewis, the DepartmentÓs

Broward Operations Engineer, sent a pre - notice of default to

Mr. Smith informing him that the D epartment was considering

default due to a lack of progress on Work Order 358. The

pre - notice stated that as of the date of the letter , no work had

been performed, even though the modified due date had been

April 25. S&NS was advised that the D epartment would proceed

with defaulting S&NS under the contract if the work was not

completed by June 21, 2014.

12. The Department issued a Notice of Intent to Default to

S&NS on July 7, 2014, for failure to commence and complete Work

Order 358 within the required time period, as amended, therefore

violating Standard Specification 8 - 9.1. S&NS was given an

additional ten d ays to demonstrate completion of the signs.

13. After proof of completion was still not received by the

Department, it issued a Declaration of Default on July 31, 2014,

for failure to commence and complete Work Order 358. S&NS was

informed it had committ ed acts or omissions that constitute

default under Standard Specification 8 - 9.1. The specific acts or

omissions specified were that Petitioner had failed to begin the

work under the c ontract within the time specified , had failed to

ensure prompt completio n of the c ontract , and for any cause

whatsoever had failed to carry on the work in an acceptable

manner.

14. Pursuant to the Takeover Agreement, the surety company,

Travelers Insurance Company of America (Travelers Insurance),

assumed financial responsibi lity for the contractavelers

Insurance procured another contractor, Florida Safety

Corporation, to complete Work Order 358. The work was completed

on December 24, 2014.

15. The Department issued a Notice to S&NS on September 30,

2014. When a contra ctor is found to be non - responsible, it is

prohibited from bidding, subcontracting, or supplying material on

any Department project for a specified period of time.

16. S&NS filed a p etition in response to the Notice.

During the pendency of this proceedin g, Petitioner has had the

ability to bid on Department projects, and Mr. Smith testified at

hearing that it had bid on projects in April 2015.

17. S&NS took the position at hearing that the Department

failed to provide the proper sign specifications to co mplete the

w ork o rder, yet provided no evidence about how the specifications

differed from what is required either by industry or the

DepartmentÓs standards.

18. Despite the Department continuously informing S&NS that

it was moving towards a default on the contract and despite the

numerous extensions given, Petitioner still failed to commence

the sign project prior to the completion date as extended by the

series of communications from Department personnel to S&NS.

19. Petitioner made repeated reference to Ðproof given to

the department from numerous sign manufacturers stating they

would not be able to manufacturer [ sic ] the sign due to their

back log.Ñ Petitioner, however, failed to offer any of this

proof into evidence at the hearing other than throug h Mr. SmithÓs

testimony , and, therefore, this line of proof is discredited.

20. Mr. Smith testified that sign manufacturers informed

him that the subject signs could not be available for

installation in less than 65 days from the date of the order.

Had the signs been ordered on February 24, 2014, the commencement

date of the contract, they would have been ready for installation

by May 1, 2014. This would have been within the numerous grace

periods created by the DepartmentÓs notices prior to the actual

Declaration of Contract Default on July 31, 2014, which was not

issued until two weeks after the Notice of Intent to Default

(giving S&NS one final ten - day period to perform) was issued on

July 7, 2014. Petitioner had ample time to complete the project

wi thin the contract period as extended by the various steps taken

by the Department prior to determining S&NS to be non -

responsible.

21. In order to avoid the possibility of a suspension due

to a finding of non - responsibility, Petitioner could have

requeste d a self - imposed or voluntary suspension from the

Department. Had this been done, the Department has, in some

instances, considered this like Ðtime servedÑ when determining

whether a suspension is to be imposed and how long that

suspension should last. P etitioner did not affirmatively request

or offer to undergo a suspension during the pendency of these

proceedings.

22. Mr. SmithÓs testimony lends supports that for a

non - specified period of time from PetitionerÓs challenge on

October 22, 2014, to the N otice until sometime in April 2015 ,

when he bid on one or two Department contracts, he believed he

was not permitted to bid on contracts due to the Notice being

issued. The evidence is not clear on this point, but Mr. Smith

testified he became aware in Ap ril 2015, he was still permitted

to bid on contracts and that he did at that time. He was not

awarded any Department contracts at that time or at any time

subsequent to that date.

23. Despite the p etition to challenge the Notice being

filed with the Dep artment on October 22, 2014, the matter was not

referred to the Division until March 2, 2015, more than four

months later. No explanation was given for this delay.

CONCLUSIONS OF LAW

24. The Division has jurisdiction over the parties to and

subject ma tter of this proceeding. §§ 120.569 and 120.57(1),

Fla. Stat. (2015).

25. Proceedings under the jurisdiction of the Division are

de novo in nature. § 120.57(1)(k), Fla. Stat.

26. The Department has the authority to enter into

contracts for the construc tion and maintenance of all roads

designated as part of the State Highway System, of the State Park

Road System, or of any roads placed under its supervision by law.

§ 337.11, Fla. Stat.

27. As the party asserting the affirmative of an issue, the

Departm ent bears the duty to go forward and the burden of proof

by a preponderance of the evidence. Fla . DepÓt of Transp. v.

J.W.C. Co . , Inc. , 396 So. 2d 778, 788 (Fla. 1st DCA 1981).

28. Section 337.11, Florida Statutes, gives the Department

the authority to a dminister and enter into maintenance contracts.

An agency is afforded wide discretion in the interpretation of

statutes which it administers. Republic Media, Inc. v. DepÓt of

Transp. , 714 So. 2d 1203, 1205 (Fla. 5th DCA 1998); Atlantic

Outdoor Adver . v. DepÓt of Transp. , 518 So. 2d 384, 386 (Fla. 1st

DCA 1987), rev. den. , 525 So. 2d 876 (Fla. 1988); and Natelson v.

DepÓt of Ins. , 454 So. 2d 31, 32 (Fla. 1st DCA 1984); rev. den. ,

461 So. 2d 115 (Fla. 1985).

29. Section 337.16(2) states , Ð For reasons other than

delinquency in progress, the department, for good cause, may

determine any contractor not having a certificate of

qualification nonresponsible for a specified period of time or

may deny, suspend, or revoke any certificate of qualification. Ñ

30. Flor ida Administrative Code Rule 14 - 22.014 1 states:

(1) Contractors who do not possess a

Certificate of Qualification shall be

determined non - responsible if the Department

determines that good cause exists. Good

cause shall exist when any one of the

circumst ances specified in subsection 14 -

22.012(1), F.A.C., occurs.

(2) Determination of Contractor Non -

Responsibility. The Contractor will be

determined to be non - responsible based upon

good cause as set forth in subsection 14 -

22.012(1), F.A.C., for a specific period of

time based on the factors specified in

subsection 14 - 22.012(5), F.A.C.

(a) This rule does not limit the

DepartmentÓs ability to reject a bid or

cancel an award for a particular contract

based upon the contractor being non -

responsible.

(b) A det ermination of non - responsibility

shall prohibit a contractor from bidding,

subcontracting, or acting as a material

supplier on any Department contracts or

projects during the period of non -

responsibility.

(c) If a contractor is declared non -

responsible an d the contractor receives an

additional determination of non -

responsibility, the time periods shall run

consecutively.

31. Rule 14 - 22.012 states:

(1 ) As provided in Section 337.16(2), F.S.,

the Department, for good cause, may deny,

suspend, or revoke a contractorÓs Certificate

of Qualification. A suspension, revocation,

or denial for good cause pursuant to this

rule shall prohibit the contractor from

bidding on any Department construction

contract for which qualification is required

by Section 337.14, F.S., shall constitute a

determination of non - responsibility to bid on

any other Department construction or

maintenance contract, and shall prohibit the

contractor from acting as a material supplier

or subcontractor on any Department contract

or project du ring the period of suspension,

revocation, or denial. Good cause shall

include the following:

* * *

(d) The contractor or its affiliate

defaulted on any contract or a contract

surety assumed control of financial

responsibility for any contract of t he

contractor.

* * *

(5) The revocation, denial, or suspension of

a contractorÓs Certificate of Qualification

under this Section shall be for a specific

period of time based on the seriousness of

the deficiency.

Examples of factors affecting the ser iousness

of a deficiency are:

(a) Impacts on project schedule, cost, or

quality of work,

(b) Unsafe conditions allowed to exist,

(c) Complaints from the public,

(d) Delay or interference with the bidding

process,

(e) The potential for repetition,

(f) Integrity of the public contracting

process,

(g) Effect on the health, safety, and

welfare of the public.

32. The DepartmentÓs Standard Specification (2010) states:

8 - 9 . 1 Determination of Default: The

following acts or omissions constitute acts

of default and, except as to subparagraphs (i

and k), the Department will give notice, in

writing, to the Contractor and his surety for

any delay, neglect, or default, if the

Contractor:

(a) fails to begin the work under the

C ontract within the time specifie d in the

Notice to Proceed;

(b) fails to perform the work with

sufficient workmen and equipment or with

sufficient materials to ensure prompt

completion of the Contract;

(c) performs the work unsuitably, or

neglects or refuses to remove materials or

perf orm anew such work that the Engineer

rejects as unacceptable and unsuitable;

(d) discontinues the prosecution of the

work, or fails to resume discontinued work

within a reasonable time after the Engineer

notifies the Contractor to do so;

(e) becomes inso lvent or is declared

bankrupt, or files for reorganization under

the bankruptcy code, or commits any act of

bankruptcy or insolvency, either voluntarily

or involuntarily;

(f) allows any final judgment to stand

against him unsatisfied for a period of ten

c alendar days;

(g) makes an assignment for the benefit of

creditors;

(h) fails to comply with Contract

requirements regarding minimum wage payments

or EEO requirements;

(i) fails to comply with the EngineerÓs

written suspension of work order within the

t ime allowed for compliance and which time is

stated in that suspension of work order; or

(j) for any cause whatsoever, fails to carry

on the work in an acceptable manner, or if

the surety executing the bond, for any

reasonable cause, becomes unsatisfactor y in

the opinion of the Department.

(k) fails to comply with 3 - 9.

33. As a maintenance contractor who bids on projects less

than $250,000, S&NS does not possess a certificate of

qualification , but may be determined non - responsible and

prohibited from bi dding, subcontracting, or supplying materials

for Department projects.

34. Credible evidence was presented by the Department to

establish that S&NS defaulted on Contract E4M99 and that a surety

company, Travelers Insurance, assumed financial responsibilit y

for the contract. Defaulting on a contract constitutes a basis

for the Department determining a contractor to be non - responsible

pursuant to r ule 14 - 22.012(1)(d).

35. Mr. Smith neither denies the default or that the surety

company assumed financial res ponsibility for the contract.

Rather, Mr. Smith contends that the contract terms were not to

his satisfaction and testified that the companies with whom he

worked to create the sign under Work Order 358 would not perform

within the contractual timeframe. Further, he argued that the

sign did not meet unspecified national standards and could not be

made by the compan ies . Mr. Smith failed to provide any specific

standards that could not be met or any credible evidence from the

sign compan ies that the signs could not be constructed in a

timely manner to meet the terms of the contract.

36. The fact that Travelers Insurance, acting as the surety

for Petitioner, was able to take over the contract and deliver

and install the sign under Work Order 358 within the 45 - day time

period specified, makes S&NSÓ argument even less credible. No

credible explanation was given for the excessive delay in having

the sign fabricated when it was in the hands of S&NS. The fact

that the work was never even begun within the extend ed timeframe

given P etitioner by the Department further erodes the case

presented by S&NS.

37. Mr. SmithÓs argument that the design of the sign was

faulty, without concrete evidence or testimony from the sign

compan ies , is not appropriate for this proceed ing. This issue

was not raised in the p etition for an administrative hearing and

is not relevant to whether S&NS should be found non - responsible.

Without concrete evidence of communications between Mr. Smith and

the Department to prove attempts were made to either modify the

design of the sign or formally request additional time to have

the sign created and installed, Petitioner falls short of the

type of evidence required to rebut the Notice. The only

conclusion that can be reasonably drawn in this matt er is that

S&NS did not complete Work Order 358 in a timely fashion and,

therefore, defaulted under Contract E4M99.

38. Except for the four - month delay in referring the

petition for administrative hearing to the Division, the

Department gave S&NS mult iple opportunities to complete the work

order, discuss and eliminate any work issues, and proceed through

the administrative process. The Department gave no explanation

for the delay in referring the case , which cost Petitioner at

least three to four mont hs in bringing the administrative process

to a close.

39. The Department provided credible evidence and met its

burden of proving by a preponderance of the evidence that it

followed the statutes and rules governing responsiveness to the

terms and conditio ns of a work order pursuant to the contract

entered into by S&NS. The Department must rely on its

contractors to meet the publicÓs transportation needs within the

time frames of the contracts and work orders between the two

parties. After providing S&NS several opportunities to complete

the work, S&NS chose not to do so and should be deemed a non -

responsible contractor for a specified period of time.

40. While ordinarily, the case presented by the Department

would support Petitioner being deemed a non - re sponsible

contractor for one year, the Department might consider the impact

of the delay in referring the p etition to the Division on

Petitioner. The three - to - four month delay adds to the time this

case took to go to hearing and be resolved through recomm ended

and, ultimately, final order. This delay does not appear to be

caused by actions of S&NS. Accordingly, the Department might

want to consider shortening the time of non - responsibility by at

least three months.

RECOMMENDATION

Based on the foregoing F indings of Fact and Conclusions of

Law, it is RECOMMENDED that the Department of Transportation

enter a final order upholding its determination of n on -

r esponsibility for a period not to exceed one year for Straight &

Narrow Striping , Inc .

DONE AND ENTERE D this 4th day of September , 2015 , in

Tallahassee, Leon County, Florida.

S

ROBERT S. COHEN

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 4th day of September , 2015 .

COPIES FURNISHED:

Kimberly Clark Menchion, Esquire

Department of Transportation

Mail Station 58

605 Suwannee Stre et

Tallahassee, Florida 32399 - 0450

(eServed)

Broderick Smith

Straight and Narrow Striping, Inc.

Suite 225

1830 North University Drive

Plantation, Florida 33322

Trish Parsons, Clerk of Agency Proceedings

Department of Transportation

Haydon Burns Buildin g

605 Suwannee Street , Mail Station 58

Tallahassee, Florida 32399 - 0450

(eServed)

Tom Thomas, General Counsel

Department of Transportation

Haydon Burns Building

Mail Station 58

605 Suwannee Street

Tallahassee, Florida 32399 - 0450

(eServed)

James C. Bo xold, Secretary

Department of Transportation

Haydon Burns Building

Mail Station 5 7

605 Suwannee Street

Tallahassee, Florida 32399 - 0450

(eServed)

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 day s 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.