87-003599BID
Midwest Industrial Painting Of Florida, Inc. vs.
Department Of Transportation
Status: Closed
Recommended Order on Tuesday, September 15, 1987.
Recommended Order on Tuesday, September 15, 1987.
1STATE OF FLORIDA
4DIVISION OF ADMINISTRATIVE HEARINGS
8MIDWEST INDUSTRIAL PAINTING )
12OF FLORIDA, INC. , )
16)
17Petitioner , )
19)
20vs. )
22)
23DEPARTMENT OF TRANSPORTATION , )
27) CASE NO. 87-3599B1D
31Respondent , )
33and )
35)
36CONE CONSTRUCTORS, INC. , )
40)
41Intervenor-Respondent. )
43____________________________________)
44RECOMMENDED ORDER
46Pursuant to notice, the above matter was heard before the Division of
58Administrative Hearings by its duly designated Hearing Officer, Donald R.
68Alexander, on August 31, 1987 in Tallahassee, Florida.
76APPEARANCES
77For Petitioner: Mark A. Linsky, Esquire
831509 Sun City Center Plaza, Suite B
90Sun City, Florida 33570
94For Respondent: James W. Anderson, Esquire
100Department of Transportation
103Haydon Burns Building, Mail Station 58
109Tallahassee, Florida 32399-0450
112For Intervenor John A. Radey, Esquire
118Respondent: Mark Freund, Esquire
122Post Office Box 11307
126Tallahassee, Florida 32302
129BACKGROUND
130On August 3, 1987, respondent, Department of Transportation (DOT), issued
140proposed agency action advising all bidders on State Job Number 90030-3539 that
152intervenor-respondent, Cone Constructors, Inc. (CCI), had submitted the lowest
161and most responsive bid, and would be awarded the contract on the project.
174Thereafter, petitioner, Midwest Industrial Painting of Florida, Inc. (Midwest),
183timely filed its notice of protest. A formal protest was later filed on August
19712, 1987. In its protest petitioner generally alleged that a certificate of
209qualification authorizing the contractor to perform bridge painting was required
219as a prerequisite to filing a bid, and that DOT had awarded the contract to the
235apparent low bidder even though that bidder did not possess a certificate of
248qualification. Petitioner contends this action was erroneous, and asks that it
259be awarded the bid as well as attorney fees and costs.
270The matter was referred to the Division of Administrative Hearings by DOT
282on August 18, 1987, with a request that a hearing officer be assigned to conduct
297a hearing. By notice of hearing dated August 19, 1987, a final hearing was
311scheduled for August 31, 1987 in Tallahassee, Florida.
319On August 26, 1987 intervenor-respondent, Cone Constructors, Inc., filed a
329petition to intervene. This petition was granted at the conclusion of a
341telephonic motion hearing held on August 28, 1987.
349At final hearing petitioner presented the testimony of William F. Ventry,
360Robert D. Buser, Murray Yates, John Fikaris, Charles Goodman, J. Ted Barefield
372and Louis Songer and offered petitioner's exhibits 1-4 which were received in
384evidence. Intervenor-respondent presented the testimony of Michael L. Cone and
394offered intervenor's exhibits 1-4. Only exhibits 1 and 2 were received in
406evidence. In addition, the parties stipulated into evidence joint exhibits 1-9.
417Petitioner's ore tenus motion at final hearing to strike the protest of CCI was
431denied.
432This Recommended Order has been prepared without the benefit of a
443transcript of hearing. Proposed findings of fact and conclusions of law were
455filed by the parties on September 10, 1987. A ruling on each proposed finding
469of fact has been made in the Appendix attached to this Recommended Order.
482The issue herein is whether respondent was correct in awarding the bid on
495State Job No. 90030-3539 to Cone Constructors, Inc., and if not, what action
508should be taken by the agency.
514Based upon all of the evidence, the following findings of fact are
526determined:
527FINDINGS OF FACT
530A. Introduction
5321. On an undisclosed date, respondent, Department of Transportation (DOT),
542gave notice to qualified and interested contracting firms that it was accepting
554bids from firms interested in providing various services on State Job No. 90030-
5673539. Such bids were due on or before June 24, 1987. In general terms, the
582project required the successful bidder to perform various maintenance services
592on the Old Seven Mile Bridge between Pigeon Key and Knight Key just southwest of
607Marathon in Monroe County, Florida. The parties have stipulated that the
618project involves the following classes of work:
625Bridge painting 82 percent
629Restoration of spalled areas 6 percent
635Miscellaneous concrete and steel 9 percent
641Maintenance of traffic 3 percent
6462. In response to this offer, three contractors submitted timely bids.
657These included petitioner, Midwest Industrial Painting of Florida, Inc.
666(Midwest), intervenor-respondent, Cone Constructors, Inc. (CCI), and J. D.
675Abrams, Inc. Their respective bids were $1,746,390, $1,122,000 and $2,149,345.
691The parties have stipulated that the bids of both CCI and Midwest are below the
706DOT budget estimate and preliminary estimate for the project.
7153. On August 3, 1987 DOT posted its intent to award the project to CCI,
730which submitted the lowest dollar bid. Thereafter, petitioner timely filed a
741protest challenging the award of the contract to CCI. In its formal protest,
754Midwest contended that CCI was ineligible to submit a bid since it was not
768prequalified by DOT to perform bridge painting, a service required for this job.
781The filing of the protest prompted the instant proceeding.
790B. The Project
7934. The Old Seven Mile Bridge, once a vital link in the Florida Keys
807highway network, was replaced in the early 1980s with a new Seven Mile Bridge.
821Since its replacement, the old bridge has had very little, if any, traffic and
835is no longer in service as a state highway. Indeed, its center span has been
850removed, and it is used primarily as two fishing piers by avid anglers and for
865access to Pigeon Key where a University of Miami research facility is located.
8785. The legislature recently mandated that the old bridge be turned over to
891the Department of Natural Resources (DNR). So that DNR receives the bridge in
904good condition, DOT intends to perform all necessary maintenance and
914rehabilitation prior to its turnover. The project has been identified as State
926Job 90030-3539. The job includes painting the exposed structural steel, doing
"937corrective measures" to portions of the structural members, and other
947miscellaneous work. The project will be funded wholly with state funds, and is
960not considered a critical job.
9656. Although at hearing DOT personnel considered the structural work to be
977the most important aspect of the project, and the painting to be incidental, DOT
991did not prepare the bid specifications in this manner. Rather, it elected to
1004prepare the specifications listing bridge painting as normal work. By
1014categorizing the work in this manner, DOT did not contravene any statute, rule
1027or standard. Had DOT categorized painting as "specialty" or incidental work on
1039the project, painting would have been considered an incidental aspect of the
1051job, and bidders would not have to be prequalified in bridge painting. However,
1064DOT did not assert its specifications were in "error," or that this might serve
1078as a ground to reject all bids. Indeed, there is no evidence that any bidder
1093was confused or had any doubt as to the services required under the contract.
1107C. Prequalification Requirements
11107. DOT requires that, on projects exceeding a cost of $250,000, bidders
1123obtain a certificate of qualification setting forth the areas (classes) in which
1135they are qualified to perform work. This is commonly known as prequalification.
1147One of these classes of competency is bridge painting, which constituted
1158approximately 82 percent of the work to be done on Old Seven Mile Bridge. The
1173parties have stipulated that CCI's certificate of qualification did not include
1184bridge painting as an area in which it had been qualified. Despite several
1197post-June 24 requests by DOT to furnish additional information, CCI had not yet
1210supplied such data at the time of hearing as would enable it to qualify. On the
1226other hand, Midwest was conditionally qualified in this area, but, because of
1238certain DOT reservations, its certificate was due to expire on June 15, 1987.
1251However, Midwest requested a Section 120.57(1) hearing to contest this
1261expiration date, and Midwest has, with DOT's acquiescence, continued to use its
1273certificate for bidding purposes until an adjudication of the claim is made.
12858. Without a certificate of qualification, DOT rules provide that a
1296contractor not be given bid documents that would enable it to submit a bid.
1310Further, DOT witnesses confirmed that no bidder has ever been authorized to
1322become prequalified after it had submitted a bid, nor has a nonqualified bidder
1335been awarded a contract. The agency does have a "policy" of allowing
1347contractors who are qualified in the major work class of minor bridge work (but
1361who are not qualified in bridge painting) to receive bid documents on certain
1374major projects. Even so, this policy, however applied in the past, has never
1387been used on a project such as this, and DOT officials confirmed that this was
1402the first time bid documents had been erroneously sent to a nonqualified bidder.
1415D. DOT's Reaction to the Bids
14219. Through "inadvertence" or "error," DOT furnished bid documents to CCI.
1432Thereafter, CCI, Midwest and a third contractor submitted bid proposals. When
1443the bids were opened, DOT discovered that the lowest dollar bidder (CCI) had not
1457been prequalified on bridge painting. The bids were then routed to the DOT
1470technical review committee, a five person committee that reviews projects where
1481the bids do not conform with award criteria. This committee made no
1493recommendation and was "uncommitted." The matter was then reviewed by the DOT
1505awards committee which unanimously recommended that the contract be awarded to
1516CCI even though it had not prequalified on one segment of the work.
152910. In proposing that the contract be awarded to CCI, DOT acknowledges
1541that this is not its normal practice. Indeed, it concedes that this is probably
1555the first occasion that it has proposed to award a contract to a nonqualified
1569bidder. However, it considers the project "unique" in the sense that the bridge
1582will be turned over to DNR immediately after the work is completed. In
1595addition, by using CCI, it can save around $624,000 in state funds which can be
1611used to claim almost another $6 million in matching federal funds for other
1624state work. Finally, DOT is fully satisfied that CCI is capable of performing
1637the work on the project, particularly since it considers the structural repairs
1649the most important aspect of the job. If CCI's bid is rejected, DOT's
1662preference is to reject all bids and relet the project.
167211. The agency's nonrule policy is that, for projects valued at more than
1685$250,000, a contract will be awarded if the lowest bid is no more than seven
1701percent above DOT's estimate of the project's value. In this case, both CCI and
1715Midwest submitted bids below DOT's budget and preliminary estimates.
1724E. The Bidders
172712. Midwest, which is located in Tarpon Springs, Florida, has been in the
1740bridge painting business for many years, and has worked on DOT projects since
17531974. This is the first occasion the firm has filed a protest. The firm is
1768capable of performing the required work. Although its certificate of
1778qualification was supposed to expire on June 15, or before the June 24 bid
1792opening day, Midwest challenged this action and the certificate continues to be
1804used for bidding purposes.
180813. The apparent low bidder (CCI) is located in Tampa, Florida and has
1821been engaged in a number of DOT projects since it was formed approximately five
1835years ago. It is now working on three other DOT bridge projects. The firm was
1850prequalified in the bridge painting class in 1983 and 1984, but for some reason,
1864allowed its qualification to lapse. Its present certificate is valid until
1875April 30, 1988 and qualifies CCI to bid on several types of major bridge
1889projects. CCI stands by its bid proposal, and is fully confident the work can
1903be done for $600,000 less than proposed by Midwest. The firm has access to the
1919necessary equipment and manpower to perform the job.
1927CONCLUSIONS OF LAW
193014. The Division of Administrative Hearings has jurisdiction of the
1940subject matter and the parties thereto pursuant to Subsection 120.57(1), Florida
1951Statutes (Supp. 1986).
195415. On bid projects such as this, Subsection 337.11(3)(a), Florida
1964Statutes (1987), vests in DOT the following discretion:
1972(a) The department may award the proposed
1979work to the lowest responsible bidder, or it
1987may reject all bids and proceed to
1994readvertise the work or otherwise perform the
2001work.
2002Also relevant is Subsection 337.14(1), Florida Statutes (1987) which reads in
2013pertinent part:
2015(1) Any person desiring to bid for the
2023performance of any construction contract in
2029excess of $250,000 which the department
2036proposes to let must first be certified by
2044the department as qualified pursuant to this
2051section and rules of the department.
2057(Emphasis added)
2059To implement the latter statute, DOT has promulgated Chapter 14- 22, Florida
2071Administrative Code, which sets forth the procedure for contractors to obtain a
2083certificate of qualification.
208616. In their post-hearing filings, the parties have suggested that several
2097different results be reached. On the one hand, petitioner contends that DOT's
2109action in awarding the bid to CCI, an unqualified bidder, was erroneous, and
2122that DOT is now obliged to award the contract to Midwest, the next lowest
2136bidder. Conversely, both the agency and CCI contend that the project is
"2148unique" from other state jobs, that the circumstances herein warrant a
2159deviation from the normal agency practice of rejecting a bid from a non-
2172prequalified bidder, that CCI is qualified to perform the work even though a
2185certificate of qualification has not been formally obtained, and that the state
2197can save over $600,000 plus matching federal funds by utilizing CCI. In the
2211alternative, they urge that all bids be rejected, and that the project be relet.
2225CCI also contends that Midwest (a) is not qualified to submit a bid because its
2240certificate expired on June 15, 1987 and (b) has no standing to bring this
2254action since it was not certified, and even if it was, it failed to post a bond
2271as required by Subsection 337.11(3)(d), Florida Statutes (1987). Finally, CCI
2281contends that the bid specifications contained an error, and that, by virtue of
2294certain state action, the agency is now estopped from taking away its contract.
230717. Before addressing the parties' arguments, several broad principles
2316regarding the bidding process should be noted. First, the challenging party
2327carries the burden of demonstrating that the agency's action was arbitrary and
2339capricious, or was otherwise improper. Cf. Capeletti Brothers, Inc. v. State,
2350Department of General Services, 432 So.2d 1359, 1363-64 (Fla. 1st DCA 1983)(no
2362error in requiring challenging party to bear burden of proving agency action
2374incorrect). To do this, the challenger must show that the agency was not
"2387proceeding rationally within the bounds of discretion," Couch Construction Co.,
2397Inc. v. Department of Transportation, 361 So.2d 172, 175 (Fla. 1st DCA 1978),
2410and that the agency's decision was not based on facts which reasonably support
2423its decision. Mayes Printing Company v. Flowers, 154 So.2d 859, 864 (Fla. 1st
2436DCA 1963). At the same time, it is well-established that the agency is accorded
"2450wide discretion in soliciting and accepting bids for public improvement, and
2461its decision, when based on an honest exercise of this discretion, will not be
2475overturned by a court even if it may appear erroneous and even if reasonable
2489persons may disagree." Liberty County v. Baxter's Asphalt and Concrete, Inc.,
2500421 So.2d 505, 507 (Fla. 1982). Even so, this discretion is not unlimited, and
2514must be exercised in a fair and evenhanded manner. Groves-Watkins Constructors
2525v. State, Department of Transportation, 12 FLW 1465 (Fla. 1st DCA June 11, 1987)
2539reh. denied 12 FLW 1869 (Fla. 1st DCA August 4, 1987). Finally, a bidder
2553cannot be permitted to change its bid after the bids have been opened, except to
2568cure minor irregularities Harry Pepper & Associates, Inc. v. The City of Cape
2581Coral, 352 So.2d 1190.1192 (Fla. 2nd DCA 1977). Where a bidder submits a bid
2595containing a "material variance," the bid is unacceptable. Robinson Electrical
2605Co., Inc. v. Dade County, 417 So.2d 1032, 1034 (Fla. 3rd DCA 1982).
261818. In the case at bar, both the general law [s. 337.14(1), F.S.] and
2632agency rules promulgated thereunder (Chapter 14-22) explicitly require that a
2642bidder be prequalified in all relevant classes of work before it can submit a
2656bid. Since CCI was not prequalified to perform bridge painting, a major
2668component of the contract, it was ineligible to submit a bid. Therefore, CCI
2681was not a qualified or responsible bidder, and its bid should have been
2694rejected. Robinson Electrical Co., supra; E. M. Watkins & Company, Inc. v.
2706Board of Regents, 414 So.2d 583 (Fla. 1st DCA 1982). In addition, CCI could not
2721qualify after the bids were submitted since this would give CCI an unfair
2734advantage over those who had to prequalify. See, for example, City of Opa-Locka
2747vustees of the Plumbing Industry Promotion Fund, 193 So.2d 29, 32 (Fla. 3rd
2760DCA 1966). Notwithstanding CCI's nonconforming bid, DOT and CCI argue that
2771because of the "unique" nature of the project, and the intended savings, DOT had
2785the discretion to award CCI the contract. But, by failing to honor applicable
2798statutes and rules, which clearly held CCI unqualified to bid, DOT acted in an
2812arbitrary and capricious manner. Further, by simply characterizing the project
2822as unique, DOT did not have a sufficient factual basis to reasonably support its
2836decision to ignore the clear language in Subsection 337.14(1), Florida Statutes
2847(1987). Moreover, by failing to give advance notice to other vendors that the
2860project was "unique," and that prequalification requirements might be waived,
2870DOT allowed the bidding process to become tainted, and ultimately gave
2881preferential treatment to CCI to the detriment of others. Therefore, it is
2893concluded the agency acted arbitrarily and capriciously in awarding the contract
2904to CCI.
290619. With the case in this posture, the parties still disagree as to the
2920proper action to be taken by DOT. Petitioner contends that DOT's only
2932alternative is to award the contract to Midwest, the next lowest and most
2945responsive bidder, particularly since its bid was below DOT's budget estimate
2956for the project. Conversely, DOT and CCI contend that the agency may now reject
2970all bids and relet the project, relying principally upon Subsection
2980337.11(3)(a), Florida Statutes (1987), which provides that "the department may
2990award the proposed work to the lowest responsible bidder, or it may reject all
3004bids and readvertise the work." (e.s.) CCI, but not DOT, also suggests that the
3018specifications contained an error, thereby requiring the reletting of the
3028project. The issue, then, is whether DOT may initially award a contract to an
3042obviously unqualified bidder, and if such action is challenged in a de novo
3055hearing, to then have the right to reject all bids and relet the contract.
306920. In Groves-Watkins, supra, the court cautioned that DOT does not have
3081unbridled discretion to reject any and all bids with or without cause. The
3094reason for this is that rejection of all bids "then becomes a means of allowing
3109a favored bidder another chance to submit a low bid." Wood-Hopkins Contracting
3121Co. v. Roger J. Au & Son, Inc., 354 So.2d 446, 450 (Fla. 1st DCA 1978). Here
3138DOT's preference to reject all bids is ostensibly premised on the hope that the
3152new Successful bidder will submit a bid comparable in amount to CCI's first bid,
3166or a $624,000 savings over Midwest's proposal. The testimony also supports an
3179inference that the bid specifications may be restructured so that painting will
3191be classified as specialty work, thereby allowing CCI to rebid without having to
3204prequalify in that class. However, in light of DOT's nonrule policy that a
3217vendor shall be awarded a contract if its bid proposal is not seven percent
3231above DOT's budget estimate, and there being no compelling reason to deviate
3243from this policy, the contract should be awarded to Midwest. 1/ Moreover, by
3256reletting the bid, it would give the favored bidder an opportunity to qualify,
3269or allow DOT to restructure the specifications so that CCI might not have to
3283prequalify. This is precisely the type of action which the courts have sought
3296to prevent. Wood-Hopkins, 354 So.2d at 450. Therefore, the contract on State
3308Job 90030-3539 should be awarded to Midwest, the lowest responsive bidder on the
3321project.
332221. The contention by CCI that Midwest is not qualified to bid on the
3336project is rejected. Since Midwest has sought review of DOT's action to
3348withdraw its certification as of June 15, 1987, the withdrawal of the
3360certification is not effective until Section 120.57(1) proceedings have been
3370concluded. See Subsection 120.60(6), F.S. (1985).
337622. Intervenor also contends petitioner lacks standing to bring this
3386action for two reasons. It first points out that Subsection 337.11(3)(d),
3397Florida Statutes (1987), requires a person to be certified on a project in order
3411to file a protest. But, as noted above, Midwest's certification remains valid
3423pending its administrative appeal of DOT's conditional rating. Secondly, by
3433post-hearing argument, CCI points out for the first time that Midwest failed to
3446prove at hearing that it posted a bond with DOT prior to filing its protest as
3462required by Subsection 337.11(3)(d), Florida Statutes (1987). However, this
3471matter was not raised in the pretrial stipulation or at final hearing.
3483Accordingly, the issue is deemed to have been waived. Further, it is not
3496essential to a resolution of the merits of this case.
350623. CCI next contends the bid specifications contained an "error" in that
3518bridge painting was classified as normal work, and not an incidental aspect of
3531the job. However, there is no evidence that the parties misunderstand the
3543specifications, Capeletti Brothers, Inc. v. State Department of General
3552Services, 432 So.2d 1359, 1363 (Fla. 1st DCA 1983), or that DOT's classification
3565of painting as regular work violated any DOT standard, rule or statute. Rather,
3578DOT had the choice to categorize painting as either regular or incidental work,
3591and chose the former. The argument is accordingly rejected.
360024. Finally, CCI contends the doctrine of estoppel applies, and that DOT
3612is estopped from awarding the contract to Midwest. It posits, inter alia, that
3625by giving bid documents to CCI, DOT made a representation, which CCI relied
3638upon, that CCI was qualified to bid on the project. However, an error by DOT
3653officials in initially issuing the bid documents cannot be used to apply
3665estoppel against the state. Greenhut Construction Company, Inc. v. Henry A.
3676Knott, Inc., 247 So.2d 517, 524 (Fla. 1st DCA 1971)(state cannot be estopped by
3690the unauthorized acts or representations of its officers); Cf. Austin v. Austin,
3702350 So.2d 102, 105 (Fla. 1st DCA 1977) cert. denied, 357 So.2d 184 (Fla.
37161978)(administrative officers of state cannot estop the state through mistaken
3726statements of the law). CCI also contends that DOT's long-standing policy is to
3739allow contractors qualified in major bridge work (but not qualified in bridge
3751painting) to receive bid documents involving painting work. But, this argument
3762is irrelevant since the "policy" applies only to major projects (unlike this)
3774and has never been used to justify awarding a contract to a nonqualified bidder
3788on this type of project.
3793RECOMMENDATION
3794Based on the foregoing findings of fact and conclusions of law, it is
3807RECOMMENDED that a Final Order be entered rejecting the bid of Cone
3819Constructors, Inc. on the ground it was unqualified and non-responsive, and
3830instead awarding the contract on State Job 90030-3539 to Midwest Industrial
3841Painting of Florida, Inc., which submitted the lowest responsive bid.
3851DONE AND ORDERED this 15th day of September, 1987, in Tallahassee, Leon
3863County, Florida.
3865_________________________________
3866DONALD R. ALEXANDER
3869Hearing Officer
3871Division of Administrative Hearings
3875The Oakland Building
38782009 Apalachee Parkway
3881Tallahassee, Florida 32399-1550
3884(904) 488-9675
3886Filed with the Clerk of the
3892Division of Administrative Hearings
3896this 15th day of September, 1987.
3902ENDNOTE
39031/ CCI's contention that Midwest is unqualified because of a DOT delinquency
3915determination on another job is rejected. This factor played no role whatever in
3928DOT's decision to use CCI rather than Midwest.
3936APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-3338BID
3943Petitioner: *
394520. Covered in finding of fact 1.
395221. Covered in finding of fact 8.
395922. Covered in finding of fact 8.
396623. Rejected as unnecessary.
397024. Rejected as unnecessary.
397425. Rejected as unnecessary.
397826. Rejected as unnecessary.
398227. Covered in finding of fact 13.
398928. Covered in finding of fact 13.
399629. Rejected as being unnecessary.
400130. Covered in finding of fact 9.
400831. Covered in finding of fact 9.
401532. Covered in finding of fact 11.
402233. Rejected as being unnecessary.
402734. Rejected as irrelevant.
403135. Rejected as irrelevant.
403536. Rejected as irrelevant.
403937. Rejected as irrelevant.
404338. Covered in finding of fact 7.
405039. Rejected as being unnecessary.
405540. Rejected as irrelevant.
4059* Proposed findings 1-19 are a recitation of stipulated facts, a list of
4072exhibits admitted into evidence, and the names of witnesses who testified at
4084final hearing. These matters are covered in background and in numerous
4095findings.
409641. Rejected as irrelevant.
410042. Rejected as irrelevant.
410443. Rejected as irrelevant.
410844. Covered in finding of fact 7.
411545. Covered in finding of fact 7.
412246. Covered in finding of fact 7.
412947. Covered in finding of fact 7.
4136Respondent:
41371. Covered in numerous findings.
41422. Covered in finding of fact 13.
41493. Covered in finding of fact 13.
41564. Covered in finding of fact 13.
41635. Rejected as being unsupported by the evidence.
41716. Rejected Since the undersigned has concluded, as a matter of law, that
4184the agency's action was arbitrary and capricious.
4191Intervenor: *
41931. Covered in finding of fact 7.
42002. Rejected as unnecessary to the resolution of issues.
42093. Covered in findings of fact 1 and 2.
42181. Covered in finding of fact 5.
42252. Covered in finding of fact 4.
42323. Covered in finding of fact 2.
4239* Intervenor submitted alternative sets of proposed findings, hence the
4249duplicative numbers.
42514. Covered in finding of fact 3.
42585. Covered in finding of fact 10.
42656. Covered in background.
42697. Rejected as irrelevant to the resolution of issues.
42788. Covered in background and finding of fact 3.
42879. Covered in finding of fact 8.
429410. Partially used in findings of facts 1 and 6. The remainder is
4307rejected as being contrary to the evidence. Specifically, DOT did not award the
4320bid to CCI because, once it opened the bids, it discovered it had made an "error
4336in failing to classify the painting work . . . as specialty work." Further, DOT
4351has never contended it wishes to relet the project because the specifications
4363contain an error.
436611. Rejected as being irrelevant since the parties have stipulated bridge
4377painting constitutes 82 percent of the work.
438412. Covered in finding of fact 6.
439113.-15. Rejected as irrelevant since the doctrine of estoppel does not
4402apply.
440316. Rejected as being both unnecessary and irrelevant.
441117. Covered in finding of fact 13.
441818. Covered in finding of fact 7.
442519. Rejected as irrelevant to a resolution of the issues.
443520. Covered in finding of fact 13.
444221. Covered in finding of fact 13.
4449COPIES FURNISHED:
4451Mark A. Linsky, Esquire
44551509 Sun City Center Plaza
4460Suite B
4462Sun City, Florida 33570
4466James W. Anderson, Esquire
4470Haydon Burns Building, MS-58
4474Tallahassee, Florida 32399-0450
4477John A. Radey, Esquire
4481Mark Freund, Esquire
4484Post Office Box 11307
4488Tallahassee, Florida 32302
4491Kaye N. Henderson, P.E.
4495Secretary
4496Department of Transportation
4499Haydon Burns Building
4502Tallahassee, Florida 32399-0450
4505Thomas H. Bateman, III, Esquire
4510General Counsel
4512Haydon Burns Building, MS-58
4516Tallahassee, Florida 32399-0450
4519=================================================================
4520AGENCY FINAL ORDER
4523=================================================================
4524STATE OF FLORIDA
4527DEPARTMENT OF TRANSPORTATION
4530MIDWEST INDUSTRIAL PAINTING
4533OF FLORIDA, INC.,
4536Petitioner,
4537vs. CASE NO. 87-3599BID
4541FLORIDA DEPARTMENT OF
4544TRANSPORTATION,
4545Respondent,
4546and
4547CONE CONSTRUCTORS, INC.,
4550Intervenor.
4551_______________________________/
4552FINAL ORDER
4554The record in this proceeding has been reviewed along with the Recommended
4566Order of the Hearing Officer, copy attached. Respondent, Florida Department of
4577Transportation (hereinafter referred to as "FDOT") and Intervenor, Cone
4587Constructors, Inc. (hereinafter "Cone"), have filed exceptions to the
4597Recommended Order which are considered and addressed in this Order. Petitioner,
4608Midwest Industrial Painting of Florida, Inc., shall be referred to hereinafter
4619as "Midwest".
4622The Recommended Order is considered correct in fact and is considered
4633correct in law with the exception of ITB reliance upon Groves-Watkins
4644Constructors v. State, Department of Transportation, 12 F.L.W. 1465 (Fla. 1st
4655DCA June 11, 1987), reh. denied, 12 F.L.W. 1869 (Fla. 1st DCA August 4, 1987),
4670pet. for rev. pending, No. 71,081. Groves-Watkins involved a contract bid
4682dispute giving rise to the issue of whether the original low bidder on a highway
4697construction project was entitled to award of a contract for the project where
4710FDOT, after receipt of the initial bids, rejected all bids as excessive and
4723directed that the project be rebid. Unlike the case at bar, the lowest bid in
4738Groves-Watkins was sole 29 percent over the bid estimate. Here, however, the
4750dispute centered upon FDOT's allegedly erroneous award of the contract to the
4762apparent low bidder who did not possess the appropriate certificate of
4773qualification. Accordingly, Groves-Watkins is readily distinguishable from, and
4781therefore wholly inapposite to, the instant case. The Recommended Order, with
4792this exception, is incorporated as part of this Final Order.
4802On September 28, 1987, FDOT filed Exceptions to the Recommended Order. The
4814first exception seeks to avoid the operation of the prequalification requirement
4825on the basis of the contention that the contract in issue is really a
4839maintenance contract as opposed to a construction contract. This line of
4850argument was not timely raised at the hearing and is deemed waived. Moreover,
4863since Rule 14-22.003(2)(g), Fla. Admin. Code provides for prequalification of
4873contractors wishing to perform incidental classes of work such as bridge
4884painting, FDOT's exception is rejected as contrary to the letter and spirit of
4897the rule.
4899By stipulation the parties agreed that bridge painting constituted 82
4909percent of the work. The Hearing Officer found that the specifications listed
4921bridge painting as normal work; found that prequalification in the area of
4933bridge painting was required; and found that waiver of prequalification had
4944never been used on a project of this type. Therefore the first exception is
4958without merit.
4960FDOT's second exception pertains to interpretation of 337.14(5), Fla.
4969Stat., in terms of permissive as opposed to mandatory language. This exception
4981is rejected because Rules 14-22.002, 14-22.003, and 14-22.008, Fla. Admin.
4991Code, read in pari materia clearly require prequalification in "bridge painting"
5002for purposes of bidding on the instant contract. Rule 14-22.008(1) clearly
5013states:
5014Proposal documents for a specific project
5020shall be issued only to a prospective
5027bidder who has been issued a qualification
5034certificate covering one or more classes of
5041work which, in the aggregate, comprises 50
5048percent or more of the total value of normal
5057work included in the proposal documents.
5063FDOT's final exception is rejected because it has already been covered
5074in the amendment to the Hearing Officer's Conclusions of Law regarding his
5086reliance upon Groves-Watkins, supra.
5090Cone filed ITB exceptions to the Recommended Order on September 25, 1987.
5102Cone's exceptions going to the Hearing Officer's Findings of Fact and rejection
5114of Cone's proposed factual findings are rejected in their entirety due to Cone's
5127failure to provide a transcript of the hearing in this cause, which necessarily
5140precludes conducting the review necessary to effect a substitution of Cone's
5151findings for those of the Hearing Officer. Florida Dept. of Corrections v.
5163Bradley, 510 So.2d 1122 (Fla. 1st DCA 1987). Since it is the Hearing Officer's
5177function to consider all the evidence presented, resolve conflicts, judge
5187credibility of witnesses, draw permissible inferences from the evidence and
5197reach ultimate findings of fact based on competent, substantial evidence; FDOT
5208is in no position in this case to address the disputes Cone has raised with the
5224Hearing Officer's Findings of Fact and ultimate factual conclusions. See
5234Heifetz v. Department of Business Regulation, 475 So.2d 1277 (Fla. 1st DCA
52461985).
5247Additionally, Cone's argument concerning ITB proposed finding going to the
5257absence of a bid protest bond is entirely devoid of merit, since the Hearing
5271Officer found that this issue was waived by Cone's failure to raise the issue by
5286pretrial stipulation or by evidence at the final hearing and because FDOT's
5298records indicate that a bond was filed on August 13, 1987. FDOT would not have
5313forwarded the matter to DOAH if the protest had not been perfected by the filing
5328of a protest bond.
5332Each of Cone's exceptions concerning FDOT's exercise of discretion have
5342been addressed by the Hearing Officer and have been rejected or distinguished.
5354The concern with award to Midwest and the added cost is addressed herein with
5368regard to the 7 percent award policy. Cone's contention in ITB third exception
5381that FDOT had a policy of allowing contractors qualified in minor bridge to bid
5395on painting contracts was rejected by the Hearing Officer. The Hearing Officer
5407concluded this policy "has never been used on a project such as this. See Page
54227 of the Recommended Order.
5427The arguments concerning errors in the bid documents, estoppel, Midwest's
5437qualifications, and FDOT's error in providing bid documents to Cone are
5448thoroughly addressed by the Hearing Officer in the Recommended Order.
5458Finally, Cone's "exceptions" to the Hearing Officer's Conclusions of Law,
5468viewed in their actual light, are really nothing more than proposed fact
5480findings "thinly disguised as conclusions of law." Cf. South Fla. Water
5491Management Dist. v. Caluwe, 459 So.2d 390, 395 (Fla. 4th DCA 1984).
5503Consequently, they too must be rejected due to the absence of the transcript and
5517the concomitant inability of the Department to conduct the requisite record
5528review. Florida Dept. of Corrections v. Bradley, supra.
5536It is clear from the Hearing Officer's Recommended Order, Section
5546337.14(1), Fla. Stat., and FDOT's rules that prequalification is required to bid
5558on a bridge painting contract which exceeds $250,000.00. Cone was not
5570prequalified in the area of bridge painting, so Cone's bid must be rejected as
5584nonresponsive. The remaining bids must then be viewed as if Cone's bid were
5597never submitted.
5599As found by the Hearing Officer, it is FDOT's nonrule policy to award a
5613project if the lowest bid is no more than seven percent above FDOT's estimate of
5628the project's cost. The parties stipulated that Midwest Industrial Painting of
5639Florida, Inc. submitted a bid below the FDOT budget estimate and preliminary
5651estimate for the project. Applying FDOT's nonrule policy to the facts in this
5664case requires the acceptance of Midwest's bid.
5671Though Cone attempts to provide a basis in ITB exceptions for the rejection
5684of all bids through ITB argument concerning the discretion of FDOT to award or
5698reject bid, FDOT is cognizant of the requirements of Section 120.68(12), Fla.
5710Stat. (1985). Section 120.68(12) requires the reversal of a final order if the
5723agency exercises ITB discretion inconsistent with an agency rule or inconsistent
5734with an officially stated agency policy or prior agency practice. To award the
5747contract to Cone in violation of the prequalification statute and rules or to
5760reject all bids in violation of the 7 percent award criteria would be an abuse
5775of discretion and provide the appearance of favoritism, whether intended or not.
5787ACCORDINGLY, IT IS ORDERED, that the bid of Cone Constructors, Inc. is
5799rejected and the contract for State Job No. 90030-3539 is AWARDED to Midwest
5812Industrial Painting of Florida, Inc.
5817DONE AND ORDERED this 4th day of December, 1987, at Tallahassee, Florida.
5829______________________________
5830KAYE N. HENDERSON, P.E.
5834Secretary
5835Department of Transportation
5838Haydon Burns Building
5841605 Suwannee Street
5844Tallahassee, Florida 32399
5847Judicial review of agency final order may be
5855pursued in accordance with Section 120.68,
5861Florida Statutes, and Florida Rules of
5867Appellate Procedure 9.030(b)(1)(c) and 9.110.
5872To initiate an appeal, a Notice of Appeal
5880must be filed with the Department's Clerk
5887of Agency Proceedings, Haydon Burns Building,
5893605 Suwannee Street, Mail Station 58,
5899Tallahassee, Florida 32399-0458, and with the
5905appropriate District Court of Appeal within 30
5912days of the filing of this Final Order with
5921the Department's Clerk of Agency Proceedings.
5927The Notice of Appeal filed with the District
5935Court of Appeal should be accompanied by the
5943filing fee specified in Section 35.22(3),
5949Florida Statutes.
5951Copies furnished to:
5954DONALD ALEXANDER, Hearing Officer
5958Division of Administrative Hearings
5962The Oakland Building
59652009 Apalachee Parkway
5968Tallahassee, Florida 32399-1550
5971MARK FRUEND, ESQUIRE
5974JOHN RADEY, ESQUIRE
5977101 North Monroe Street
5981Tallahassee, Florida 32302
5984MARK A. LINSKY, ESQUIRE
59881509 Sun City Center Plaza
5993Suite B
5995Sun City Center, Florida 33570
6000JAMES W. ANDERSON, ESQUIRE
6004Department of Transportation
6007Haydon Burns Building, Mail Station 58
6013605 Suwannee Street
6016Tallahassee, Florida 32399-0458
6019J. TED BAREFIELD
6022Bureau of Contracts Administration
6026Haydon Burns Building, Mail Station 55
6032Tallahassee, Florida 32399