21-003153BID Dbe Management, Llc D/B/A Dbe Utility Services vs. City Of Cape Coral Status: Closed Recommended Order on Tuesday, January 18, 2022.

Summary: Bid protester did not prove that City's proposed award was contrary to the City's Code of Ordinances or the solicitation specifications.

S TATE OF F LORIDA

D IVISION OF A DMINISTRATIVE H EARINGS

D BE M ANAGEMENT , LLC D/B/A DBE

U TILITY S ERVICES ,

Petitioner ,

vs. Case No. 21 - 3153BID

C ITY OF C APE C ORAL ,

Respondent .

/

R ECOMMENDED O RDER

Pursuant to notice, the final hearing was held on November 22, 2021,

before the Honorable Francine M. Ffolkes, a duly designated Administrative

Law Judge with the Division of Administrative Hearings (DOAH).

A PPEARANCES

For Petitioner: Cindy A. Laquidara, Esquire

Ronnie Graham, Esquire

Akerman LLP

Suite 3100

50 North Laura Street

Jacksonville, Florida 32202

Neda Ghomeshi, Esquire

Akerman LLP

Suite 1600

350 East Las Olas Boulevard

Fort Lauderdale, Florida 33301

For Respondent: Mark Moriarty, Esquire

Richard DeVall, Esquire

City of Cape Coral

1015 Cultural Park Blvd.

Cape Coral, Florida 33990

S TATEMENT OF T HE I SSUE

Whether the bid received from DBE Management, Inc. , after the

corporation converted to DBE Management , LLC , was non - responsive to the

requirements set forth in the I nvitation to Bid (ITB) , and , thus , properly

rejected by the City of Cape Coral (City).

P RELIMINARY S TATEMENT

This action derives from a formal written protest by DBE Management,

LLC d/b/a DBE Utility Services (DBE) , to the City in protest of the City's

Notice of Intent (NOI) to Award Bid N o. BUT2175KR , Reclaimed Water

Transmission Main Caloosahatchee River Crossing (Bid BUT2175KR), to the

second lowest bidder, The HDD Company, Inc. ( HDDCO ) , on August 3, 2021.

T he parties agreed that the protest was timely.

On October 13 , 2021, the City referred the p rotest to DOAH , which was

assigned to the undersigned to conduct a n administrative hearing. T he

hearing is to determine whether the City's NOI is contrary to Chapter 2,

Article VII, Division 1, Purchasing of Goods and Service s of the Code of

Ordinances of the City of Cape Coral, Florida , or the solicitation

specifications pursuant to s ection 120.57 (3)(f), Florida Statutes.

At the final hearing, Exhibits 1 through 20 and 22 through 32 , were

admitted as joint exhibits by stipulation of the parties. DBE presented the

testimony of Dustin Ertle, p resident and chief executive officer of DBE. The

City and DBE presented the testimony of Wanda Roop, the City's d irector of

p rocurement .

The one volu me T ranscript of the final hearing was filed with DOAH on

December 3, 2021. The parties timely filed p roposed recommended o rders

that were duly considered in preparing this Recommended Order.

F INDINGS OF F ACT

The following Findings of Fact are based on the stipulations of the parties,

the joint exhibits, and the facts adduced at the hearing.

Background

1. In 2018, the instant Cit y and the City of Fort Myers entered into an

interlocal agreement to construct a pipeline across the Caloosahatchee River

to transmit reclaimed water from Fort Myers to Cape Coral. The recla imed

water transmission main would reduce discharges to the r iver while

providing more reclaimed water to the City, which would help to maintain

freshwater canal levels during the dry season. This water would be used for

irrigation purposes and for fire protection purposes. The pipeline would be

installed with no disturbance to the river bottom, avoiding harm to the

environment.

2. On November 4, 2020, the City issued a Request for Pre - Quali fication

for specialty contractors to perform the work ( RFQ RUT2113KR) . Responses

were due on December 8, 2020. Five contractors responded. Four were pre -

qualified in a notice issued on March 9, 2021 , one of which was DBE

Management , Inc.

Bid Specifications

3. The ITB , Bid BUT2175KR , was sent to the four pre - qualified

contractors on May 26, 2021 , with a response due date of July 13, 2021 , for

sealed bid packages .

4. Article 3.02 of Specification Section 00100 , Instructions to Bidders,

s etting forth the Qualification of Bidders states:

The Bidder must provide evidence that he/she is

licensed to provide general construction services in

the State of Florida as described per the construction

plans and/or Work description. This evidence should

include verifiable proof as a State of Florida

Licensed Contractor under the same name as listed

in Specification Section 00300, Bid Form and as

li sted in Section 4 of the Bidder' s Information

Statement and Questionnaire f orm (Specification

Section 00301). A Bidder officially changing their

name any time during the five (5) year period prior

to the Bid submittal date should provide verifiable

documentation of the name change and verifiable

evidence as State of Florida Licen sed Contractor.

Bidders not meeting this requirement may be deemed

as being non - responsive and their bid rejected . The

Bidder will be required to identify the Contractor ' s

license number, expiration date and name of the

primary qualifying agent of the Bidd er. If the

primary qualifying agent is not the owner, an officer,

partner, a member, a joint venture managing

partner, etc., the Bidder will be required to describe

the relationship to the company and provide

verifiable evidence of such relationship and/or

license use agreement. A Bidder responding to this

Invitation to Bid (ITB) as a joint venture is required

to obtain bid authority under Rule 61G4 - 15.0022,

Florida Administrative Code and include evidence of

such bid authority in its response to this ITB. This

information and the required submittal

requirements are to be included as a part of

Spec ification Section 00301, Bidder' s Information

Statement and Questionnaire and submitted as a

part of the Bid package. EACH member of a

partnership or qualifying joint venture must

complete and submit, as a part of the Bid package, a

completed Bidder' s Information Statement and

Questionnaire (Specification Section 00301).

( e mphasis added).

5. Article 19.04 of Specification Section 00100 , Instructions to Bidders,

st ates:

In evaluating whether a Bidder is responsible,

Owner will consider the qualifications of the Bidder

and may consider the qualifications and experience

of Subcontractors and Suppliers proposed for those

portions of the Work for which the identity of

S ubcontractors and Suppliers must be submitted as

provided in the Bidding Documents. In addition, to

price the following may be considered in

determining a responsible bidder: A. The Horizontal

Directional Drilling (HDD) Specialty Contractors for

the Cape C oral Reclaimed Water Transmission

Main, Caloosahatchee River Crossing will have been

pre - qualified by the City of Cape Coral for this

project. B. The ability, capacity, skill and sufficiency

of resources of the bidder to perform the contract.

C. Whether bidder can perform the contract by

providing the service promptly, or within time

specified, without delay or interference. D. The

character, integrity, reputation, judgement,

experience and efficiency of the bidder. E. The

quality of performance of the bi dder in previous city

contracts. F. The previous and existing compliance

by the bidder with laws and ordinance relating to the

contract. G. The quality, availability and

adaptability of the supplies or professional or

contractual services to the particular use required;

and, H. The ability of the bidder to provide future

maintenance, service or warranty work, if

applicable. ( e mphasis added).

6. Article 16 of Specification Section 0 0100, Instructions to Bidders

specifies, "[a]fter bids are opened, correction s or modifications to bids are not

permitted."

7 . DBE M anagement, Inc., timely submitted a sealed bid package on

July 13, 2021 . The City did not have any knowledge , however, that 14 days

prior , on June 29, 2021, DBE Management , Inc., converted to DBE

Management LLC. DBE's bid package did not " provide verifiable

documentation of the name change " as required by Specification Section

0 0100. The requirement to inform the City of any name change is

accomplished by providing a "com ple ted Bidder ' s Information Statement and

Questionnaire (Specification Section 00301). "

8 . In the completed Bid Form, Specification Section 0 0300, DBE

represented that it meets "the minimum qualifications as set forth in

Specification Section 0 0100" and that "all required verifiable documentation

is contained in Specification Section 00301, Bidder's Information Statement

and Questionnaire." However, DBE completed and submitted the Bid Form,

Bidder's Information Statement and Questionnaire, and all other requir ed

certifications in the name of DBE Management, Inc.

9. Article 8 of Specification Section 0 0300, Bid Form, requests the "correct

legal entity name of bidding entity." Specification Section 00301, Bidder's

Information Statement and Questionnaire, requires , on page 00301 - 6,

evidence that the bidding legal entity "currently has an active registration

filed with Division of Corporation in the State of Florida (Sunbiz

registration)." DBE submitted the 2020 corporate annual report for DBE

Management, Inc., showing a filing date of March 24, 2020, with the Division

of Corporations. No other evidence of currently active registration was

submitted with DBE's bid package.

10 . Article 8 of the Bid Form, S pecification Section 0 0300 , requests the

"correct legal entity name of the bidding entity . " In accordance with Article 5

of Specification Section 0 0100, Instructions to Bidders, a ny errors are the

responsibility of the Bidder . DBE comple ted and submitted the Bid Form and

Bidder's Information Statement and Questionnaire in the name of DBE

Management, Inc.

Opening and Evaluation of Bids

11 . The sealed bid packages received on July 13, 2021, were opened

publicly. DBE's Bid Form reflected that DBE listed the total construction cost

as $6,739,928.00, and was the lowest bidder. HDDCO's total bid was

$9,173,179.00. HDDCO did not intervene in this bid protest to attempt to

maintain its position as the intended awardee. As far as price, DBE was the

lowest bidder by nearly $2.5 million.

1 2 . The City's evaluation began with verifying the minimum qualifications

of the Bidders. Article 19.05 of the ITB provides that the City "m ay conduct

such investigations as [it] deems necessary to establish the responsibility,

qualifications, and financial ability of Bidders and any proposed

Subcontractors or Suppliers. " The Article further provides that the City " may

waive any irregularities or requirements requested and may request any

additional information deemed necessary t o satisfy its evaluation of bidders."

Thus, the City may go outside the contents of a bid package and check the

current Sunbiz registration of the Bidders.

13. DBE Management, Inc.'s current registration status on the Florida

Division of Corporation ' s is " INACTIVE. " Thus, DBE Management, Inc.'s bid

was non - responsive. Pursuant to the bid specifications and s ection 2 -

144(12)a. 1. of the City Code of Ordinances , no further action was taken on

DBE Management Inc.'s bid because the corporation's inactive status affected

the corporation's legal ability and capacity to enter into and perform the

contract.

14. The City continued evaluating the bid packages of the responsive

Bidders and on August 3, 2021, issued notice of its intention to award the

contract to HDDCO . Although the City has discretion to waive requirements

and request additional information, it cannot do so in a manner that is unfair

and gives any Bidder a competitive advantage. At this stage of the City's

evaluation , the contents of DBE's bid package, and the check of its Sunbiz

status, showed that DBE Management, Inc., was an inactive B idder .

DBE's Protest

1 5 . The City first learned of DBE Management , Inc. 's conversion to DBE

Management , LLC , after the City issued an NOI to award the contract to

HDD CO on August 3, 2021. Dustin White, as a representative of DBE

Management , LLC , telephoned Ms. Roop, the p rocurement m anager for the

City , to informally object to the NOI to award the contract to HDDCO and

advise the City for the first time of the corporate conversion .

16. DBE submitted its formal written protest on August 11, 2021 , in which

it alleges that DBE Management , Inc. , converted to DBE Management , LLC ,

under Florida law and therefore maintained an a ctive status in accordance

with relevan t provisions of Florida corporate law and was the qualified low

bidder. Throughout this bid protest proceeding, DBE did not deny that it

never informed the City of the corporate conversion and name change prior to

or within the sealed bid package it submit ted on July 13, 2021.

17. Instead, DBE argues that the City could hav e contacted DBE to

investigate the " INACTIVE " status it discovered on Sunbiz since the next line

also contained the word "CONVERTED." DBE further argues that since it

was the lowest bidder, it was in the City's best interests to both investigate

and waive the requirement in order to save approximately $2.5 million.

18. Ms. Roop expressed surprise and quickly negated the idea that she or

her staff would make a telephone call or reach out to a bidder once the sealed

bids are publicly opened. In her opinion, such action would show favoritism.

She further testified that in her 14 years of experience in handling or

supervising over 300 compet itive bid processes, she could not remember an

instance of reaching out to any bidder during the bidding process.

Conclusion s

19. DBE's bid package did not comply with the above - described bid

specifications. Thus, DBE's bid was non - responsive , and it did not meet the

minimum qualifications of a responsible bidder.

20. The City's investigation of DBE's minimum qualifications regarding

its current Sunbiz registration was reasonable under the circumstances.

Those circumstances, as described above, included a lack of notice and

verifiable documentation of DBE 's corporate and name change before and

during the bidding process. Any further action in DBE's favor during the

bidding process would have resulted in a competitive disadvantage to the

other Bidders, and t hus be contrary to competition.

21. Therefore, the City's August 3, 2021, NOI is not contrary to the City's

Code of Ordinances , or the solicitation specifications .

C ONCLUSIONS OF L AW

22 . DOAH has jurisdiction over the parties and the subject matter of th is

proceeding. See § 2 - 150(a ) (3) , Cape Coral Code of Ord .

23. DBE has standing to bring this bid protest. See § 2 - 150(a) (3) , Cape

Coral Code of Ord .

24. DBE has the burden of proving that the City's NOI is contrary to the

City's Code of Ordinances or the solicitation specifications . See § 120.57(3)(f),

Fla. Stat. (2021).

25 . DBE's bid package did not comply with the bid specifications outlined

in the Findings of Fact . Thus, DBE's bid was non - responsive and it did not

meet the minimum qualifications of a responsible bidder.

26 . The City's investigation of DBE's minimum qualifications regarding

its current Sunbiz registration was reasonable under the circumstances.

Those circumstances, outlined in the Findings of Fact, included a lack of

notice and verifiab le documentation of DBE's corporate and name change

before and during the bidding process. Any action by the City in DBE's favor

during the bidding process would have resulted in a competitive

disadvantage to the other Bidders, and thus be contrary to comp etition.

27 . Therefore, the City's August 3, 2021, NOI is not contrary to the City's

Code of Ordinances, or the solicitation specifications. Id.

R ECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is

R ECOMMENDED that the City Council reject DBE's bid and approve the

August 3, 2021, NOI.

D ONE A ND E NTERED this 1 8 th day of January , 2022 , in Tallahassee, Leon

County, Florida.

S

F RANCINE M. F FOLKES

Administrative Law Judge

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 1 8 th day of January , 2022 .

C OPIES F URNISHED :

Cindy A. Laquidara, Esquire Mark Moriarty, Esquire

Akerman LLP City of Cape Coral

Suite 3100 1015 Cultural Park Boulevard

50 North Laura Street Cape Coral, Florida 33990

Jacksonville, Florida 32202

Neda Ghomeshi, Esquire

Ronnie Graham, Esquire Akerman LLP

Akerman LLP Suite 1600

Suite 3100 350 East Las Olas Boulevard

50 North Laura Street Fort Lauderdale, Florida 33301

Jacksonville, Florida 32202

Richard DeVall, Assistant City Attorney

City of Cape Coral

1015 Cultural Park Boulevard

Cape Coral, Florida 33990

N OTICE OF R IGHT T O S UBMIT E XCEPTIONS

All parties have the right to submit written exceptions within 1 0 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.