88-006296BID Dickerson Florida, Inc. vs. Department Of Transportation Status: Closed Recommended Order on Friday, February 17, 1989.

Summary: Bidder's failure to include description of work MBE was to perform was con- trary to terms of ITB & not minor irregularity since affected DOT's interest

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DICKERSON FLORIDA, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 88-6296BID

)

DEPARTMENT OF TRANSPORTATION, )

)

Respondent. )

_________________________________)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly

designated Hearing Officer, William J. Kendrick, held a formal hearing in the

above-styled case on January 3, 1989, in Tallahassee, Florida.

APPEARANCES

For Petitioner: Robert N. Ervin, Esquire

Wilfred C. Varn, Esquire

Ervin, Varn, Jacobs, Odom

& Ervin

305 Gadsden Street

Tallahassee, Florida 32301

For Respondent: J. Marleen Ahearn, Esquire

Department of Transportation

Haydon Burns Building, MS-58

Tallahassee, Florida 32399-0458

PRELIMINARY STATEMENT

These proceedings arose as a result of an invitation to bid (ITB) issued by

Respondent, Department of Transportation (Department), for road work on SR-76

(Kanner Highway) in Martin County, Florida (State Project No. 89060-3523). The

Department proposed to reject the bid of petitioner, Dickerson Florida, Inc.

(Dickerson), the apparent low bidder, as non-responsive for failure to achieve

the disadvantaged business enterprise (DBE) goal, and to award the contract to

Ranger Construction Industries, Inc. (Ranger), the next apparent low bidder.

Dickerson protested the Department's proposed action.

At final hearing, Dickerson called as witnesses: James R. Widmann, John

T. Barfield, and Dennis F. Davis. Dickerson's exhibits 1-17 were received into

evidence. The Department called as witnesses: Donnie Alford, Brant L.

Hargrove, Aldric Borders Keith O. Pitchford, and Thomas Kindred. The

Department's exhibits 1 and 2 were received into evidence.

The transcript of hearing was filed January 18, 1989, and the parties were

granted leave until January 30, 1989, to file proposed findings of fact. The

parties' proposals have been addressed in the appendix to this recommended

order.

FINDINGS OF FACT

Background

1. In September 1988, Respondent, Department of Transportation

(Department), issued an invitation to bid (ITB), State Project NO. 89 060-3523,

for road work on SR-76 (Kanner Highway) in Martin County, Florida. By October

26, 1988, the bid opening date, four bids had been filed with the Department.

2. On December 5, 1988, the bid results were posted by the Department.

The bid results revealed that Petitioner, Dickerson Florida, Inc. (Dickerson),

was the lowest bidder at $1,057,464.71 and that Ranger Construction Industries,

Inc. (Ranger) at $1,145,177.61 was the second lowest bidder. The bid results

further revealed that the bid of Dickerson had been rejected as non-responsive

because it purportedly did not achieve the disadvantaged business enterprise

(DBE) goal of 12 percent established by the ITB, and that the Department

proposed to award the contract to Ranger.

3. Dickerson timely filed a written notice of protest and formal written

protest contesting the Department's decision, and the matter was referred to the

Division of Administrative Hearings for formal hearing.

The Bid Documents

4. Pertinent to this case, the ITB contained the following provisions:

SPECIAL PROVISIONS

DISADVANTAGED BUSINESS ENTERPRISES

2-5.3.2 Submittals for Contracts with Goals:

For all contracts for which DBE contract

goals have been established, each contractor

shall meet or exceed or demonstrate that it

could not meet, despite its good faith

efforts, the contract goals set by the

Department. The DBE participation information

shall be submitted with the Contractor's bid

proposal. Award of the Contract shall be

conditioned upon submission of the DBE

participation information with the bid proposal

and upon satisfaction of the contract goals or,

if the goals are not met, upon demonstrating

that good faith efforts were made to meet the

goals.

The Contractor's bid submission shall

include the following information (Submitted on

Forms Nos. 275-020-002-DBE Utilization

Affirmative Action Certification, 275-020-003-

DBE Utilization Summary and 275-020-004-DBE

Utilization Form):

(1) The names and addresses of certified

DBE firms that will participate in the

contract. Only DBEs certified by the

Department at the time the bid is

submitted may be counted toward DBE goals.

(2) A description of the work each named

DBE firm will perform.

(3) The dollar amount of participation by

each named DBE firm.

(4) If the DBE goal is not met, suffi-

cient information to demonstrate that the

contractor made good faith efforts to meet

the goals. (Emphasis added)

5. Accompanying the ITB were three DBE utilization forms which, pertinent

to this case, provided the vehicle for complying with the foregoing special

provisions, and which the bidder was required to complete and include in its

bid. Among these was form 275-020-004, the DBE Utilization Form, which

required, consistent with the special provisions, that the bidder provide the

name, address, and telephone number of the DBE subcontractor, as well as the

item number and description of the work the subcontractor was to perform. One

utilization form, signed by the bidder (prime contractor), was to be submitted

for each DBE utilized on the project. Significantly, the utilization form to be

signed by the bidder contained the following provision:

(Signature and submission with the prime

contractor's bid signifies acceptance of the

quote and an obligation to subcontract the work

to the DBE as indicated).

6. The other two DBE utilization forms that were to be included in the bid

were form 275-020-003, the DBE Utilization Summary, and form 275-020-002, the

DBE Utilization Affirmative Action Certification. The DBE Utilization Summary

provided the vehicle for the bidder to submit the dollar amount of participation

by each DBE firm, and to derive a DBE percentage participation for the total

project. It also requested that the bidder provide the following information:

Number of DBE Utilization Forms attached _____

NOTE: Sign and attach all Utilization

Forms which you are using toward the DBE

goal.

By submittal of the DBE Utilization Form and the DBE Utilization Summary, the

bidder could comply with the special provisions of the ITB regarding DBE

utilization.

7. The final DBE utilization form that was to be included in the bid, the

DBE Utilization Affirmative Action Certification, required the bidder to certify

the existence of an approved DBE Affirmative Action Program Plan or that it was

submitting a plan for approval with its bid. The certification form, which was

to be signed by the bidder, contained the following conspicuous notation:

The Florida Department of Transportation

requires the Disadvantaged Business Enterprise

Utilization Form(s) to accompany the bid

documents....

FAILURE TO SUBMIT THE DISADVANTAGED BUSINESS

ENTERPRISE UTILIZATION FORM(S) REFLECTING FULL

COMPLIANCE WITH THE CONTRACT GOAL, OR IF THE

DISADVANTAGED BUSINESS ENTERPRISE UTILIZATION

FORM(S) DO NOT REFLECT FULL COMPLIANCE WITH THE

CONTRACT GOAL, FAILURE TO SUBMIT SUFFICIENT

DOCUMENTATION TO DEMONSTRATE GOOD FAITH EFFORTS

TO MEET THE GOAL WILL BE JUST CAUSE TO CONSIDER

THE BID NONRESPONSIVE AND TO REJECT THE BID.

THESE DOCUMENTS MUST BE SUBMITTED WITH THE BID

PROPOSAL.

Dickerson's Bid

8. The bid submitted by Dickerson included the DBE Utilization Affirmative

Action Plan Certification and a DBE Utilization Summary evidencing a DBE

percentage participation for the total project of 13.39 percent. As submitted,

the utiliza- tion summary listed Dickerson's DBE subcontractors and the amount

of their participation as follows:

A. Highway Valets, Inc. -- $ 6,473.35

B. Temple's Heavy Hauling -- $44,536.25

C. Highway Valets, Inc. -- $ 6,730.00

D. Pary, Inc. -- $ 5,264.00

E. Siboney Contracting Co. -- $45,938.55

F. Advance Barricades and

Signing, Inc. -- $32,599.80

9. Accompanying Dickerson's bid were DBE Utilization Forms for Highway

Valets, Inc. and Temple's Heavy Hauling, signed by the DBE subcontractor and

Dickerson, which contained the item number and description of the work to be

performed by those subcontractors, as well as a DBE Utilization Form for Siboney

Contracting Company, signed only by Dickerson, which contained the item number

and description of the work to be performed by that subcontractor. No DBE

Utilization Form was submitted for Pary, Inc. or Advance Barricades and Signing,

Inc., and Dickerson's bid contained no information to demonstrate the item

number or work those firms were to perform on the project.

10. Upon noting the absence of any DBE Utilization Forms for Pary or

Advance Barricades, or any other documentation from which the item numbers and

work description for these DBE's could be ascertained, the Department reduced

the dollar value of Dickerson's DBE participation by the amount allocated to

these firms, and recalculated a DBE percentage for Dickerson of 9.8 percent,

well below the DBE goal of 12 percent. Thereafter, upon concluding that

Dickerson's failure to include the item number and description of the work to be

performed by the DBE's was not a minor irregularity that could be waived,

discussed infra, and that Dickerson had submitted no documentation with its bid

to demonstrate that it could not in good faith achieve the goal, the Department

proposed to reject Dickerson's bid as non-responsive for its failure to achieve

the DBE goal of 12 percent established by the ITB. 1/

11. On December 12, 1988, some seven days after the Department posted the

bid result, Dickerson submitted to the Department a DBE Utilization Form for

Pary and Advance Barricades which contained the item number and description of

the work to be performed by those firms. Notably, neither form was signed by

Dickerson, as required by the ITB, and the quotation of Advance Barricades was

for $53,208, some $20,618.20 more than the participation allotted to that firm

in the utilization summary submitted with Dickerson's bid.

A Minor Irregularity?

12. Minor irregularity is defined by Rule 13A-1.002(10), Florida

Administrative Code, as:

... a variation from the invitation to bid

... which does not affect the price of the bid

or give the bidder ... an advantage or

benefit not enjoyed by other bidders ..., or

does not adversely impact the interests of the

agency. Variations which are not minor can not

be waived.

In the instant case, the proof demonstrated that Dickerson's failure to include

a description of the work Pary and Advance Barricades were to perform on the

project would adversely affect the interests of the agency.

13. The Department has experienced significant problems in the past in its

administration of the DBE program, particularly in the reliability of the DBE

participations contained in bid documents. The purpose of the special

provisions of the ITB, which parrot Rule 14-78.003(2)(b)3, Florida

Administrative Code, relating to the name, amount of participation, and work to

be performed by the DBE subcontractors are designed to assist the Department in

achieving the goals established by the DBE program by increasing the reliability

of the bid documents.

14. Historically, bids have been submitted to the Department with inflated

DBE participations and with the names of DBE's who had never been contacted by

the prime contractor to perform any work on the project. Absent a description

of the work the DBE subcontractor had agreed to perform, the Department has been

frustrated in its efforts to confirm, post bid, that the DBE subcontractor is

doing the type and amount of work for which it contracted. Consequently, DBE

participation on a project has frequently differed significantly from that

stated in the bid documents, and as contemplated by the Department

15. By requiring compliance with the special provisions of the ITB, and

its rule, the Department essentially forces the solidification of a contract

between the prime contractor and the DBE subcontractor, and gains reliability in

the DBE participation specified in the bid documents, and achieves a binding

commitment that can be verified post bid. Under such circumstances, a bid's

failure to include a description of the work a DBE subcontractor is to perform

on the project is a variation that would adversely impact the interests of the

agency and cannot be waived.

CONCLUSIONS OF LAW

16. The Division of Administrative Hearings has jurisdiction over the

parties to, and the subject matter of, these proceedings.

17. Section 120.53(5), Florida Statutes, and Rule 14- 25.024(1), Florida

Administrative Code, establish specific procedures to protest a bid solicitation

requirement. The proper procedure for contesting the special provisions of the

ITB that required the bidder to include a description of the work each named DBE

firm was to perform on the project as part of its bid, as well as the provision

that failure to include such a description would result in disqualification of

the bid, was by filing a bid solicitation protest prior to the date the bids

were to be received. Rule 14-25.024(1), Florida Administrative Code. Since

Dickerson did not file a timely protest of the ITB, it has waived its right to a

Chapter 120 proceeding to contest the propriety of these provisions. Section

120.53(5), Florida Statutes, and Capeletti Bros., Inc. v. Department of

Transportation, 499 So.2d 855 (Fla. 1st DCA 1986). 2/

18. Notwithstanding its waiver of any right to protest the propriety of

these provisions, Dickerson contended at hearing that its bid was responsive to

the ITB even though it did not include a description of the work to be performed

by Pary and Advance Barricades. The gravamen of Dickerson's contention is that

by naming Pary and Advance Barricades on its Utilization Summary, along with the

dollar amount of their participation, it had submitted a "quotation" to the

Department that conformed with existing law, and that any rule or ITB

requirement that its bid include a description of the work these subcontractors

were to perform was unenforceable.

19. Pertinent to this case are the provisions of Section 337.125, Florida

Statutes, and Rule 14-78.003(2)(b)3, Florida Administrative Code. Section

337.125 provides:

(1) Any form documenting the utilization

of certified socially and economically

disadvantaged business enterprises by a prime

contractor shall be signed by the socially and

economically disadvantaged business enterprise

and the prime contractor. In lieu thereof, the

prime contractor shall submit the written or

oral quotation of the socially and economically

disadvantaged business enterprise, and the

department shall confirm the contents of the

submission by contacting the socially and

economically disadvantaged enterprise.

(4) The department shall promulgate rules

for implementing the directives contained in

this section.

Implementing section 337.125 is Rule 14-78.003(2)(b)3, Florida Administrative

Code. That rule provides:

For all contracts for which DBE contract

goals have been established, each bidder shall

meet or exceed or demonstrate that it could not

meet, despite its good faith efforts, the

contract goals set by the Department. The DBE

participation information shall be submitted

with the contractor's bid proposal. Award of

the contract shall be conditioned upon

submission of the DBE participation information

with the bid proposal and upon satisfaction of

the contract goals or, if the goals are not

met, upon demonstrating that good faith efforts

were made to meet the goals. Failure to

satisfy these requirements shall result in a

contractor's bid being deemed nonresponsive and

the bid being rejected.

a. The contractor's bid submission shall

include the following information:

i. The current names, telephone numbers,

and addresses of certified DBE firms that will

participate in the contract;

ii. A description of the work each named

DBE firm will perform;

iii. The dollar amount or participation by

each named DBE firm;

iv. Any documentation required by the

contract or applicable rules as evidence of DBE

participation.

v. If the DBE goal is not met, suffi-

cient information to demonstrate that the

contractor made good faith efforts to meet the

goals.

b. In order to count the DBE subcontract

amount toward the DBE goal, the documents

confirming utilization shall be signed by both

a representative of the DBE firm and the prime

contractor. In lieu thereof, the prime

contractor shall submit the quotation and the

Department will attempt to confirm the contents

of the submission by contacting the DBE firm by

telephone or by certified letter, return

receipt requested, within two workdays after

the date of the letting. (Emphasis added)

20. Dickerson contends that its inclusion of the names of Pary and Advance

Barricades, along with the dollar amount of their participation, on its

Utilization Summary constituted the submission of an "oral quotation" of a DBE

which, pursuant to section 337.125, Florida Statutes, the Department was

obligated to confirm. So reasoning, Dickerson contends it was not obligated to

submit a description of the work the subcontractors were to perform, and that

any ITB requirement or rule to the contrary is unenforceable. Dickerson's

contention is unpersuasive.

21. Contrary to Dickerson's contention, there are no inconsistencies

between the statute and the rule. The term "quotation" is not defined by

section 337.125, and is therefore to be accorded its commonly accepted meaning.

See e.g. Gardner v. Johnson, 451 So.2d 477 (Fla. 1984). In commerce, a

"quotation" or "quote" is to state the price of something. Webster's New

Twentieth Century Dictionary, Unabridged, Second Edition, 1979. By requiring

the bidder to submit with its bid a description of the work each DBE

subcontractor is to perform and the dollar amount of participation by each DBE

subcontractor, the rule is therefore consistent with the statute it implements

because it requires the submittal of a "quotation."

22. Dickerson's failure to include a description of the work Pary and

Advanced Barricades were to perform on the project, an essential element of any

quotation, compels the conclusion that it failed to submit a "quotation". Under

the circumstances, the Department had no "quotation" to confirm, and it properly

excluded Pary and Advanced Barricades when computing Dickerson's DBE

participation. Rule 14-78.003(2)(b)3, Florida Administrative Code.

23. In reaching this conclusion I have not overlooked the fact that the

Department could have called the subcontractors and, perhaps, ascertained from

them what work they had agreed to perform on the project for the stated price.

It is not, however, the Department's obligation to compile quotations, but to

confirm them. It is the bidder's obligation to submit a binding quotation that

is capable of verification.

24. Dickerson further contends that its failure to include a description

of the work the subcontractors were to perform was a minor irregularity that

should be waived by the Department. Again, Dickerson's contentions are not

persuasive.

25. Rule 13A-1.002(10), Florida Administrative Code, addresses the issue

of minor irregularities in a bid as follows:

The agency shall reserve the right to

waive any minor irregularities in an otherwise

valid bid ... A minor irregularity is a

variation from the invitation to bid ... which

does not affect the price of the bid ..., or

give the bidder ... an advantage or benefit not

enjoyed by other bidders ..., or does not

adversely impact the interests of the agency.

Variations which are not minor cannot be

waived.

26. Since Dickerson's failure to include a description of the work to be

performed by the DBE subcontractors was a variation from the ITB that could, for

the reasons set forth in the findings of fact, adversely impact the interests of

the agency, such failure is not a minor irregularity and is not subject to

waiver.

27. Dickerson's attempt to "supplement" its bid after the bid opening did

not and cannot cure its failure to comply with the ITB. Rule 13A-1.001(13),

Florida Administrative Code, provides:

Valid Bid/Proposal - a responsive offer in

full compliance with the bid/proposal

specifications and conditions by a

responsible person or firm. The

responsiveness of the bid ... will be

determined as of the time the

bids/proposals are made public. (Emphasis

added).

See: Palm Beach Group v. Department of Insurance and Treasurer, 10 FALR 5627

(1988)

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is

RECOMMENDED that a final order be entered dismissing the formal protest

filed by Dickerson Florida, Inc.

DONE and ENTERED in Tallahassee, Leon County, Florida, this 17th day of

February, 1989.

___________________________________

WILLIAM J. KENDRICK

Hearing Officer

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

[phone]

Filed with the Clerk of the

Division of Administrative Hearings

this 17th day of February, 1989.

ENDNOTES

1/ The Department has in place a multi-stage review process to evaluate the

responsiveness of bids. After the bids are opened, the DBE certification

coordinator determines whether the DBE goal has been obtained. To ascertain

whether the DBE goal has been met, the coordinator reviews the Utilization

Summary to ascertain the dollar participation of each DBE subcontractor and the

relationship the total DBE participation bears to the bid price. The coordinator

then reviews the DBE Utilization Form or equivalent documentation to assure that

the prime contractor and the DBE subcontractor have agreed to the work to be

performed for the price indicated on the Utilization Summary. If any of the DBE

utilization forms have not been signed by the DBE, the coordinator will contact

the DBE to confirm that it has agreed to perform the work indicated at the

stated price. Where, as here, the bid contains no utilization form or

equivalent documentation to delineate the work the subcontractor is to perform,

the coordinator does not contact the DBE because there is no quotation or

agreement accompanying the bid which can be confirmed, recalculates the DBE

participation without such DBE firms and ascertains whether the bid then meets

the DBE goal. If it does not meet the DBE goal, as recalculated, the

coordinator refers the matter to the Good Faith Efforts Review Committee to

ascertain whether the bid contains documentation to excuse the bidder's failure

to meet the DBE goal. Here that committee found no such documentation,

recommended that the bid be declared non- responsive, and referred the matter to

the Technical Review Committee to ascertain whether Dickerson's failure to

include the DBE utilization forms or equivalent documentation for Pary and

Advance Barricades was a minor irregularity that could be waived. The Technical

Review Committee concluded, for reasons discussed in further findings of fact,

that such failure was not a minor irregularity and could not be waived. On

review of the work performed by the Good Faith Efforts Committee, the Contract

Award Committee agreed with their conclusions and declared the bid of Dickerson

to be non-responsive for failure to meet the DBE goal.

2/ Although Dickerson's formal protest did not raise the issue, it did raise at

hearing the constitutionality of those portions of Chapter 337, Florida

Statutes, relating to DBE participation goals or quotas. Since jurisdiction to

determine the validity of a state statute under either the United States

Constitution or the Constitution of the State of Florida is not vested in the

Division of Administrative Hearings, that issue will not be resolved by this

order, nor will the timeliness of Dickerson's contention be addressed.

APPENDIX

Dickerson's proposed findings of fact are addressed as follows:

1-3. Addressed in paragraph 1.

4-5. Addressed in paragraph 2.

6-9. Addressed in paragraph 10 and footnote 1.

10. Addressed in paragraph 2.

11. To the extent necessary, addressed in paragraph 3.

12 Addressed in paragraph 8.

13. Addressed in paragraphs 8 and 9.

14. Addressed in paragraph 10 and footnote 1.

15. Addressed in paragraph 11.

16. To the extent necessary, addressed in paragraphs

1 and 10.

17. Accepted, but not necessary to result reached.

18. Not relevant.

19. Not relevant.

20. Addressed in footnote 1.

21. Not relevant. Dickerson was accorded a Section

120.57(1), Florida Statutes, hearing.

22. To the extent pertinent, addressed in paragraphs

4-7, and 12-15.

23. To the extent pertinent, addressed in paragraph

7. Otherwise rejected as not relevant.

24. Addressed in paragraph 3.

The Department's proposed findings of fact are addressed as follows:

1-3. Addressed in paragraphs 1 and 2.

4-7. Addressed in paragraph 10 and footnote 1.

8. Addressed in paragraph 9.

9. Addressed in paragraph 5.

10. To the extent pertinent, addressed in paragraphs

4-9.

11. Addressed in paragraphs 12-15.

12-13. Addressed in paragraphs 4-7.

14-15. Addressed in paragraph 10.

16. Addressed in paragraphs 10, 12-15 and footnote 1.

17. Not necessary to result reached or not relevant.

18. Not relevant.

COPIES FURNISHED:

ROBERT M. ERVIN, ESQUIRE

WILFRED C. VARN, ESQUIRE

ERVIN, VARN, JACOBS, ODOM

& ERVIN

305 GADSDEN STREET

TALLAHASSEE, FLORIDA 32301

J. MARLEEN AHEARN, ESQUIRE

DEPARTMENT OF TRANSPORTATION

HAYDON BURNS BUILDING, M.S. 58

605 SUWANNEE STREET

TALLAHASSEE, FLORIDA 32399-0458

KAYE N. HENDERSON, SECRETARY

DEPARTMENT OF TRANSPORTATION

HAYDON BURNS BUILDING, M.S. 58

605 SUWANNEE STREET

TALLAHASSEE, FLORIDA 32399-0458

THOMAS H. BATEMAN, III, ESQUIRE

GENERAL COUNSEL

DEPARTMENT OF TRANSPORTATION

HAYDON BURNS BUILDING, M.S. 58

605 SUWANNEE STREET

TALLAHASSEE, FLORIDA 32399-0458