91-000848BID Murphy Construction Company vs. Department Of Transportation Status: Closed Recommended Order on Tuesday, March 12, 1991.

Summary: Nonresponsive bid did meet rule requirements for showing Disadvantaged Business Enterprise participation. Next lowest bidder got award but also did not meet rule. All bids rejected

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

THE MURPHY CONSTRUCTION CO., )

)

Petitioner, )

)

vs. ) CASE NO. 91- 0848BID

)

DEPARTMENT OF TRANSPORTATION, )

)

Respondent. )

___________________________________)

RECOMMENDED ORDER

On February 19, 1991, a formal administrative hearing was held in this case

in Tallahassee, Florida, before J. Lawrence Johnston, Hearing Officer, Division

of Administrative Hearings.

APPEARANCES

For Petitioner: Randy Cropp

Project Manager

The Murphy Construction Co.

1615 Clare Avenue

West Palm Beach, Florida 33402

For Respondent: Paul J. Martin, Esquire

Assistant General Counsel

Department of Transportation

605 Suwannee Street, MS-58

Tallahassee, Florida 32399-0458

STATEMENT OF THE ISSUE

The issue in this case is whether the Respondent, the Department of

Transportation (DOT), should award State Project No. 89030-3528 to The Cone

Corporation, notwithstanding the bid protest filed by the Petitioner, The Murphy

Construction Co., alleging that its bid was responsive and lower than The Cone

Corporation's bid or, in the alternative, if its bid was nonresponsive, that The

Cone Corporation's bid also was nonresponsive, and that the project should be

re-bid. 1/

PRELIMINARY STATEMENT

The Petitioner, The Murphy Construction Co., and three others bid on State

Project No. 89030-3528 in Martin County. Upon the opening of the bids on or

about December 5, 1990, the Petitioner was the apparent second low bidder.

The bid of the Tom Quinn Company, Inc., the apparent low bidder, was

reviewed by the DOT's Good Faith Efforts Committee of the DOT's Minority

Programs Office for compliance with the project's Disadvantaged Business

Enterprise ( DBE) goals and was found to be nonresponsive. The Tom Quinn Company

did not meet the project's ten percent DBE participation goal and did not

explain its efforts to meet the goal.

The Good Faith Efforts Committee then reviewed the bid of the Petitioner,

as apparent second low bidder, and also found the Petitioner's goal to be

nonresponsive as not meeting the DBE goal. The Petitioner's bid alleged DBE

participation in the amount of 10.75% of the total bid, but the Good Faith

Efforts Committee rejected $26,571 worth of alleged DBE participation as not

meeting pertinent bidding requirements. Without the $26,571, the level of DBE

participation in the Petitioner's bid dropped to 8.16%.

The Good Faith Efforts Committee then reviewed the next bid, the bid of The

Cone Corporation, which was $57,450 higher than the Petitioner's and which

proposed 10.01% DBE participation. The Good Faith Efforts Committee found The

Cone Corporation's bid to be responsive.

The findings and recommendations of the Good Faith Efforts Committee were

submitted to the DOT's Technical Review Committee. The Technical Review

Committee concurred with the Good Faith Efforts Committee that the apparent low

bid and the apparent second low bid were nonresponsive and that the project

should be awarded to The Cone Corporation.

On December 5, 1990, the findings and recommendations of the Technical

Review Committee were submitted to the DOT's Contract Awards Committee. On

December 21, 1990, the Awards Committee met and concurred with the Good Faith

Efforts Committee and the Technical Review Committee that the apparent low bid

and the apparent second low bid were nonresponsive but disagreed that the

project should be awarded to The Cone Corporation, instead recommending that the

DOT reject all bids and re-bid the project due to the low number of responsive

bidders and low level of competitive bidding.

The Secretary of the DOT rejected the recommendation of the Awards

Committee, instead concurring with Technical Review Committee, and caused to be

issued, on January 17, 1991, notice of the DOT's intention to award the contract

on the project to The Cone Corporation. The Petitioner timely filed its bid

protest. No other bidder protested.

On or about February 6, 1991, the DOT referred the Petitioner's bid protest

to the Division of Administrative Hearings. Final hearing was scheduled and

held on February 19, 1991. The Petitioner appeared through its Project Manager,

Randy Cropp, who gave testimony, elicited the testimony of three DOT employees,

and had three exhibits introduced in evidence. In its case, the DOT recalled

one of the DOT employees to testify and had four exhibits introduced in

evidence.

Neither party ordered the preparation of a transcript of the final hearing.

The Petitioner submitted written final argument, and the DOT submitted a

proposed recommended order. Explicit rulings on the proposed findings of fact

contained in the parties' submissions may be found in the attached Appendix to

Recommended Order, Case No. 91- 0848BID.

FINDINGS OF FACT

1. State Project No. 89030-3528 (the project) is for work on SR

Bridge No. 890941 over Warner Creek in Martin County. The DOT solicited bids

for the work and established December 5, 1990, as the deadline for submission of

bids.

2. The DOT established, as its Disadvantaged Business Enterprise ( DBE)

goal for the project, a goal of ten percent participation by DBEs.

3. The Petitioner, The Murphy Construction Co., submitted a bid for the

work in the amount of $1,026,222.96. It was the apparent second lowest bid.

The Tom Quinn Company, Inc., was the apparent low bidder, at $846,216.87, but it

did not meet the ten percent DBE goal and did not demonstrate good faith efforts

to achieve the goal. The next lowest bidder, after the Petitioner, was The Cone

Corporation's bid of $1,083,672.95. There was one other bidder.

4. The Petitioner asserted that $110,360, or 10.75%, of the work would be

done by DBEs. The Petitioner alleged in its bid that $26,571 worth of DBE work

would be done by Advance Barricades & Signing, Inc. (Advance Barricades). The

Petitioner's DBE Utilization Form for Advance Barricades & Signing, Inc.,

identified the DBE by name but left blank the parts of the form designated "Item

No." and "Description (note if item qualifies for SUPPLIER)".

5. As a matter of agency policy, the DOT has required that the portion of

the form designated as "Description (note if item qualifies for SUPPLIER)" be

completed. A description of the work to be performed by the DBE has been

considered essential. The DOT has required the description of the work to be

performed by the DBE because: first, the DOT interprets the applicable rules to

require it; and, second, because the purpose of the rule and policy is to enable

the DOT's Minority Programs Office to monitor the performance of the contract to

be sure that the representation as to DBE participation is carried out--i.e.,

not only that the representation as to the percentage of DBE work is met but

also that the DBE does the work the contractor represents that the DBE will do.

Monitoring is significant because it can prevent the bidder, if successful, from

trying to take advantage of the DBE by asking the DBE to do work that the DBE is

not prepared or equipped to do or by asking the DBE to do more work for the

money than contemplated by the DBE at the time of the bid. It also can insure

that bidders will not, in essence, pay a DBE for doing nothing.

6. Although the Petitioner's DBE Utilization Form gave the name of the

DBE, it did not purport to describe the work the DBE was going to do. Although

listing the name Advance Barricades and Signing, Inc., identified some of the

work Advance Barricades does, it did not identify all of the work Advance

Barricades does and, more importantly, did not identify the work the Petitioner

was proposing that Advance Barricades was to do on the project in question. The

DOT could have assumed what work Advance Barricades would do for the Petitioner,

but it could not effectively monitor based on the assumption.

7. Sometimes a DBE subcontractor will complete and sign the DBE

Utilization Form for the bidder. Sometimes, the DBE will telephone the bidder

with its price, and the bidder will complete the form. In the latter case, if

the form is completed, the DOT Good Faith Efforts Committee will, as a matter of

policy, telephone the DBE to confirm the information. In this case, Advance

Barricades provided the Petitioner with a written price for the work, but the

Petitioner itself prepared and submitted a form for inclusion in its bid on the

project and did not include Advance Barricades's written price. Because the

Petitioner left blank the parts of the form designated "Item No." and

"Description (note if item qualifies for SUPPLIER)", the Good Faith Efforts

Committee did not telephone Advance Barricades to confirm or supplement the

information submitted by the Petitioner with its bid.

8. The Cone Corporation's bid also included the representation that

Advance Barricades would be doing work on the job that would qualify towards the

DBE goal. Under the part of the form designated "Description (note if item

qualifies for SUPPLIER)," The Cone Corporation stated, "SEE ATTACHED." Attached

to the form was a proposal from Advance Barricades giving specific item numbers

and descriptions of temporary barricades and signing, advance warning arrow

panels, flashing lights, temporary pavement markings, and special detour signing

to be furnished at a price of $20,805.45. In this case, The Cone Corporation's

bid included a copy of the Advance Barricades proposal, which provided an

adequate description, including item numbers, of the work Advance Barricades

would do for The Cone Corporation.

9. Despite the reasons for the DOT policy described in the preceding

finding, the DOT has slipped into a practice of not requiring that the portion

of the DBE Utilization Form designated "Item No." be completed. In addition,

one-word generalizations--such as "pipe" or "trucking"--in the part of the form

designated "Description (note if item qualifies for SUPPLIER)"are accepted by

the DOT even though they may be insufficient to enable the DOT's Minority

Programs Office to determine what kind of pipe or trucking is meant. Indeed,

the DOT would have accepted description "barricades and signing" in the

Petitioner's case. But these descriptions are inadequate to serve the purpose

of the rule that the DBE work be described in the bid documents. For example,

the word "pipe," without item numbers, does not identify the type or quantity of

pipe to be provided. Indeed, the DOT's DBE Utilization Form gives evidence that

more of a description initially was contemplated by the DOT. The form provides

a space designated "Item No." In addition, the part of the form provided for

the description of the DBE work also states: "(note if item qualifies for

SUPPLIER)." (Emphasis added.) The form infers that the description will

include the item number. Otherwise, it would be very difficult, and in some

cases impossible, for the Minority Programs Office to effectively monitor the

progress of construction.

10. In this case, The Cone Corporation's bid included a copy of the

Advance Barricades proposal, which provided an adequate description, including

item numbers, of the work Advance Barricades would do for The Cone Corporation.

But its DBE Utilization Form for H.S. Thompson described $85,702 worth of DBE

work as "concrete, rebar and pipe." Under the column marked "Item No.," The

Cone Corporation put, "various." If H.S. Thompson were going to do all of the

"concrete, rebar and pipe" on the project, it would have been doing more like

$540,000 worth of work for The Cone Corporation. Like the Petitioner's DBE

Utilization Form for Advance Barricades, the H.S. Thompson form was inadequate

to serve the monitoring purposes of the DOT's policy.

11. The DOT now is in the process of considering whether to amend its

rules, perhaps to provide that all proposed DBE participation be confirmed by

telephone in order to avoid outcomes like the one its Good Faith Efforts

Committee, Technical Review Committee, and Contract Awards Committee recommended

in this case--the rejection of a bid as nonresponsive in favor of a higher bid

that proposes a smaller percentage of DBE participation.

CONCLUSIONS OF LAW

A. Pertinent Statute and Rule.

12. Section 339.0805, Fla. Stat. (1989), provides in pertinent part:

(1)(a) Except to the extent that the head

of the department determines otherwise, not

less than 10 percent of the amounts expended

from the State Transportation Trust Fund shall

be expended with small business concerns owned

and controlled by socially and economically

disadvantaged individuals as defined by the

Surface Transportation and Uniform Relocation

Assistance Act of 1987.

(b) In fulfilling this mandate, the

department shall utilize every means available

to it, including, but not limited to, goals

and set-asides for competitive bidding and

contracting only by, between, and among those

firms which are certified by the department

as socially and economically disadvantaged

business enterprises and which are

prequalified as may be appropriate. It is

the policy of the state to meaningfully assist

socially and economically disadvantaged

business enterprises through a program that

will provide for the development of skills

through business management training, as well

as financial assistance in the form of bond

guarantees, to primarily remedy the effects of

past economic disparity. Such competitive

bids may be the result of joint ventures

between small business concerns which are

owned and controlled by socially and

economically disadvantaged individuals and

other subcontractors.

* * *

(5) The department shall promulgate rules

for implementing the directives contained in

this Section.

13. F.A.C. Rule 14-78.003 provides in pertinent part:

(2) To implement its DBE goal program the

Department may:

* * *

(b) establish contract goals on each

contract with subcontracting opportunites for

certified DBEs.

1. In setting contract goals, the

Department shall consider the following

factors:

a. the type of work required by the

contract to be let;

b. the subcontracting opportunities in the

contract to be let;

2. For contracts with an estimated total

dollar amount of $1,000,000 or less, the

contract goals shall not exceed 50 percent of

the identified potential for DBE participation.

For contracts with an estimated total dollar

amount of $1,000,000, the contract goals shall

not exceed 75 percent of the identified

potential for DBE participation.

3. 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 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 of 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, sufficient

information to demonstrate that the contractor

made good faith efforts to meet the goals.

B. Nature of 120.53(5) Bid Protests.

14. The nature of bid protests under Section 120.53(5), Fla. Stat. (1989),

was explained in Capeletti Bros., Inc., v. Dept. of General Services, 432 So. 2d

1359, 1363-1364 (Fla. 1st DCA 1983), it was held:

Capeletti also contends that the hearing

officer erred in not imposing upon Bergeron

the burden at hearing to prove that DGS'

previously announced intention to reject all

bids was arbitrary, capricious and

unreasonable. Capeletti misconceives the

purpose of the s. 120.57 hearing. The

rejection of the bids never became final

agency action. As we have previously held,

APA hearing requirements are designed to give

affected parties an opportunity to change the

agency's mind. Couch Const. Co. v. Department

of Transp., 361 So. 2d 172, 176 (Fla. 1st DCA

1978); McDonald v. Department of Banking and

Finance, 346 So. 2d 569, 584 (Fla. 1st DCA

1979 [sic]).

"Section 120.57 proceedings are intended to

formulate final agency action, not to review

action taken earlier and preliminarily."

McDonald, supra at 584.

This explanation is consistent with other conventional expressions of the nature

of proceedings before DOAH hearing officers under Section 120.57(1), Fla. Stat.

(1989).

15. At the same time, the law has been equally clear that the appellate

standard of review of final agency decisions to award a competitive bid requires

that the courts defer to the agency's decision, except in limited circumstances,

and not substitute its judgment for that of the agency. See generally Liberty

County v. Baxter's Asphalt and Concrete, Inc., 421 So. 2d 505, 507 (Fla. 1982);

Couch Constr. Co., Inc. v. Dept. of Transp., 361 So. 2d 172, 175 (Fla. 1st DCA

1978); Systems Dev. Corp. v. Dept. of Health, etc., 423 So. 2d 433, 434 (Fla.

1st DCA 1982).

16. In Dept. of Transp. v. Groves-Watkins Constructors, 530 So. 2d 912

(Fla. 1988), a case involving an agency's decision to reject all bids, the Court

held:

Thus, although the APA provides the procedural

mechanism for challenging an agency's decision

to award or reject all bids, the scope of the

inquiry is limited to whether the purpose of

competitive bidding has been subverted. In

short, the hearing officer's sole

responsibility is to ascertain whether the

agency acted fraudulently, arbitrarily,

illegally, or dishonestly.

Id. at 914. The Court did not explain the conflict between its decision and the

First District's decision in Capeletti, supra.

17. Although the Groves-Watkins case involved an agency's decision to

reject all bids, the language of the Court's opinion might suggest that the

Court also was saying a case involving an announced agency intention to award a

bid, as in this case, should be treated like cases involving announced agency

intention to reject all bids. However, it is concluded that what the Court may

have been saying regarding cases involving announced agency intention to award a

bid was dicta that went beyond the precise holding in the case.

C. Waiver of Irregularities.

18. "[A] lthough a bid containing a material variance is unacceptable, not

every deviation from the invitation to bid is material. It is only material if

it gives the bidder a substantial advantage over the other bidders and thereby

restricts or stifles competition. . . .. [T]he purpose of competitive bidding

is to secure the lowest possible responsible offer and minor irregularities can

be waived in effectuating this purpose." Tropabest Foods, Inc., v. Dept. of

General Services, 493 So. 2d 50, 52 (Fla. 1st DCA 1986).

D. The Irregularities in the Petitioner's Bid.

19. Under the particular facts of this case, the Petitioner's bid was

irregular in that the Petitioner's DBE Utilization Form had no information in

the space designated "Description (note if item qualifies for SUPPLIER)."

20. The irregularity in the Petitioner's bid was material for two reasons:

first, the irregularity was a violation of DOT rules which provide on their face

that a violation will result in a bid being nonresponsive, and the DOT

interprets the rule to mean what it says; second, by requiring a description of

the work, the DOT's Minority Programs Office is able to monitor construction to

determine whether the DBE does the work the bidder represents that the DBE will

do. Monitoring is significant because it can prevent the bidder, if successful,

from trying to take advantage of the DBE by asking the DBE to do work that the

DBE is not prepared or equipped to do or by asking the DBE to do more work for

the money than contemplated by the DBE at the time of the bid. It also can

insure that bidders will not, in essence, pay a DBE for doing nothing.

21. It was not good enough for the Petitioner to have given the name of

the DBE, as required by the rule. The rule also required the Petitioner to

describe the work the DBE was going to do. Although listing the name Advance

Barricades and Signing, Inc., identified some of the work Advance Barricades

does, it did not identify all of the work Advance Barricades does and, more

importantly, did not identify the work the Petitioner was proposing that Advance

Barricades was to do on the project in question. The DOT could have assume what

work Advance Barricades would do for the Petitioner, but it could not

effectively monitor based on the assumption.

E. The Cone Corporation's Bid.

22. The DOT has slipped into the practice of accepting, without

accompanying item numbers, general and vague descriptions of the DBE work being

proposed. One word descriptions such as "pipe" and "trucking" have been

accepted. But these descriptions are inadequate to serve the purpose of the

rule that the DBE work be described in the bid documents. For example, the word

"pipe," without item numbers, does not identify the type or quantity of pipe to

be provided. Indeed, the DOT's DBE Utilization Form gives evidence that more of

a description was contemplated by the rule. The form provides a space

designated "Item No." In addition, the part of the form provided for the

description of the DBE work also states: "(note if item qualifies for

SUPPLIER)." (Emphasis added.) The form infers that the description will

include the item number. Otherwise, it would be very difficult, and in some

cases impossible, for the Minority Programs Office to effectively monitor the

progress of construction, as the rule is intended to enable it to do.

23. In this case, The Cone Corporation's bid included a copy of the

Advance Barricades proposal, which provided an adequate description, including

item numbers, of the work Advance Barricades would do for The Cone Corporation.

But its DBE Utilization Form for H.S. Thompson described the work as "concrete,

rebar and pipe." Under the column marked "Item No.," The Cone Corporation put,

"various." Like the Petitioner's DBE Utilization Form for Advance Barricades,

this was inadequate to serve the monitoring purposes of the rule, and The Cone

Corporation's bid also should have been rejected as nonresponsive for not

providing the description of the work called for in the rule and form.

F. The Petitioner's Standing.

24. The DOT contends that, because the Petitioner's bid was nonresponsive,

it does not have standing to protest in the alternative that all bids should be

rejected. It could be argued that the decision in Westinghouse Electric Corp.

v. Jacksonville Transp. Auth., 491 So. 2d 1238 (Fla. 1st DCA 1986), supports

this contention. But the fact in Westinghouse are distinguishable from the

facts of this case.

25. In Westinghouse, the petitioner's "bid" was a "ruse, namely a box

weighted with papers marked 'Price Proposal' on the outside," through the use of

which "Westinghouse effectively enticed [its competitor] into submitting its

best, good faith, bonded bid." Id. at 1241. The Court stated: "This

'sandbagging,' if permitted, would erode the integrity of the public bidding

process." Id.

26. In this case, in contrast, the Petitioner alleges initially that its

bid is the lowest responsive bid. While the Petitioner's initial position is

rejected, the Petitioner submitted a good faith bid that was nonresponsive for

essentially the same reason The Cone Corporation's bid is determined to be

nonresponsive. Under these circumstances, it is concluded that the Petitioner

has standing to complain, in the alternative, that The Cone Corporation's bid

also is nonresponsive and that all bids should be rejected and the project re-

bid.

RECOMMENDATION

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

recommended that the Respondent, the Department of Transportation, enter a final

order rejecting all bids on State Project No. 46090-3511.

RECOMMENDED this 12th day of March, 1991, in Tallahassee, Florida.

___________________________

J. LAWRENCE JOHNSTON

Hearing Officer

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the

Division of Administrative

Hearings this 12th day of

March, 1991.

ENDNOTES

1/ The DOT contends that, if the Petitioner's bid is nonresponsive, it has no

has no standing to raise, in the alternative, the issue whether the DOT should

reject all bids. This contention is rejected. See Conclusions of Law.

APPENDIX TO RECOMMENDED ORDER

To comply with the requirements of Section 120.59(2), Fla. Stat. (1989),

the following rulings are made on the parties' proposed findings of fact:

Petitioner's Proposed Findings of Fact.

(The Petitioner's post-hearing submission was not in the form of a proposed

recommended order and did not contain proposed findings of fact identified as

such. However, the submission does contain proposed findings of fact, and an

attempt will be made to rule on the proposed findings of fact by treating each

unnumbered paragraph of the submission as a separate proposed finding of fact

and by consecutively numbering each paragraph after the colon for purposes of

this Recommended Order.)

1. Second half of the last sentence, rejected as not proven. The rest is

rejected in part as argument, but otherwise accepted and incorporated to the

extent not subordinate or unnecessary.

2. Accepted and incorporated to the extent not subordinate or unnecessary.

3. Last sentence, rejected as contrary to facts found and not proven. The

DOT has slipped into the practice of accepting inadequate descriptions, but it

is found and concluded that the DOT rule and policy contemplate that item

numbers should be included to make the descriptions adequate. Otherwise,

accepted and incorporated to the extent not subordinate or unnecessary.

However, although "pipe" does not necessarily identify the item number or the

type of pipe, it does serves to narrow the possible work to be given to the DBE

to some kind of pipe.

4. Although the Thompson form may have been illegible, at least in part,

to some people, rejected as not proven that it was objectively illegible or that

the DOT admitted that it was illegible. Otherwise, accepted and incorporated.

5. Last sentence, rejected in part as conclusion of law in that the DOT's

first obligation is to follow the applicable statutes and rules. Otherwise,

accepted and incorporated to the extent not subordinate or unnecessary.

6. Last sentence, in that it proposes that the two situations are the

same, rejected as not proven and as contrary to the greater weight of the

evidence, and in that it proposes that the bid was not "materially affected,"

rejected in part as conclusion of law and in part as not proven and as contrary

to the greater weight of the evidence. Otherwise, accepted but subordinate and

unnecessary.

7.-8. Accepted and incorporated.

9.-10. Accepted and subordinate to facts found.

11. Rejected in large part as argument. The issue in this case is

compliance with the rules, as interpreted by the DOT.

12. The facts are accepted and incorporated to the extent not subordinate

or unnecessary. The argument is rejected.

Respondent's Proposed Findings of Fact.

1.-3. Accepted and incorporated to the extent not subordinate or

unnecessary.

4. Rejected as conclusion of law and unnecessary.

5. First sentence, rejected as conclusion of law and unnecessary. Second

sentence, accepted and incorporated.

6. Accepted and incorporated.

7. Accepted but subordinate and unnecessary. (Covered in the Preliminary

Statement.)

8. Accepted and incorporated. However, based on the Findings of Fact and

Conclusions of Law, it is recommended that the DOT reject all bids.

COPIES FURNISHED:

Randy Cropp

Project Manager

The Murphy Construction Co.

1615 Clare Avenue

Post Office Box 3768

West Palm Beach, Florida 33402

Paul J. Martin, Esquire

Assistant General Counsel

Department of Transportation

605 Suwannee Street, MS-58

Tallahassee, Florida 32399-0458

Ben G. Watts

Secretary

Department of Transportation

Haydon Burns Building

605 Suwannee Street

Tallahassee, Florida 32399-0458

Thornton J. Williams, Esquire

General Counsel

Haydon Burns Building, Room 562

605 Suwannee Street

Tallahassee, Florida 32399-0458

=================================================================

AGENCY FINAL ORDER

=================================================================

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

THE MURPHY CONSTRUCTION CO.

Petitioner,

vs. CASE NO. 91- 0848BID

DEPARTMENT OF TRANSPORTATION

Respondent.

______________________________/

FINAL ORDER

Pursuant to Notice, these matters came to be heard on February 19, 1991, in

Tallahassee, Florida, before J. Lawrence Johnston, Hearing Officer, Division of

Administrative Hearings. This Order is entered by the Secretary of the

Department of Transportation, pursuant to Section 120.59, Florida Statutes,

following a review of the record and Recommended Order entered in this cause by

the Hearing Officer.

The parties were represented at hearing as follows:

Petitioner: Mr. Randy Cropp, Project Manager

The Murphy Construction Co.

1615 Clare Avenue

West Palm Beach, Florida 33402;

Respondent: Paul J. Martin, Esquire

Assistant General Counsel

Florida Departments of Transportation

605 Suwannee Street, MS-58

Tallahassee, Florida 32399-0458;

The Department herein adopts the Findings of Fact made by the hearing

officer as stated in his Recommended Order dated March 12, 1991, except as

specifically noted below. In making reference to various portions of the record

in this case, the letter P refers to pace number of the transcript, and the

letter L refers to a line number on that page.

1. The hearing officer's Recommended factual findings Nos. 1-5 are

adopted herein by the Department.

6. The hearing officer's recommended Finding of Fact No. 6 is adopted in

part. The last sentence is rejected as not being based on competent substantial

evidence. (P 45, L 10-12) The Department could not assume what type of work

Advanced Barricades, Inc. would do simply by its name, because Advanced

Barricades performs work other than barricade work. (P 57, L 19- 25; P 58, L

1.)

7. The hearing officer's Recommended Findings of Fact Nos. 7 and 8 are

adopted herein.

8. One word descriptions of the proposed work are acceptable and

sufficient to enable the minority programs office to monitor contract compliance

by prime contractors. (P 49, L 22-25; P 50, L 1, L 19-25; P 51, L 1; P 75, L 8-

10, 25; P 76, L 1-25; P 77 L 1-8.)

9. The hearing officer's Recommended Finding of Fact No. 10 is adopted in

part. The last sentence is rejected as not being based on competent substantial

evidence. (See record citations in No. 9 above.)

10. Recommended Finding of Fact No. 11 is adopted.

CONCLUSIONS OF LAW

1. The Division of Administrative Hearings has jurisdiction of the parties

and the subject matter of this proceeding. Section 120.57(1), Florida Statutes.

2. Section 339.0805, Florida Statutes (1989), provides in part:

(1)(a) Except to the extent that the head of

the department determines otherwise, not less

than 10 percent of the amounts expended from

the State Transportation Trust Fund shall be

expended with small business concerns owned

and controlled by socially and economically

disadvantaged individuals as defined by the

Surface Transportation and Uniform Relocation

Assistance Act of 1987.

(b) In fulfilling this mandate, the

department shall utilize every means

available to it, including, but not limited

to, goals and set-asides for competitive

bidding and contracting only by, between, and

among those firms which are certified by the

department as socially and economically

disadvantaged business enterprises and which

are prequalified as may be appropriate. It

is the policy of the state to meaningfully

assist socially and economically

disadvantaged business enterprises through a

program that will provide for the development

of skills through business management

training, as well as financial assistance in

the form of bond guarantees, to primarily

remedy the effects of past economic

disparity. Such competitive bids may be the

result of joint ventures between small

business concerns which are owned and

controlled by socially and economically

disadvantaged individuals and other

subcontractors.

* * *

(5) The Department shall promulgate rules for

implementing the directives contained in this Section.

3. Rule 14-78.003, F.A.C., provides in pertinent part:

(2) To implement its DBE goal program the Department may:

* * *

(b) establish contract goals on each contract with subcontracting

opportunities for certified DBEs.

1. In setting contract goals, the Department shall consider the following

factors:

a. The type of work required by the contract to be let;

b. The subcontracting opportunities in the contract to be let;

2. For contracts with an estimated total dollar amount of $1,000,000 or

less, the contract goals shall not exceed 50 percent of the identified potential

for DBE participation. For contracts with an estimated total dollar amount of

$1,000,000, the contract goals shall not exceed 75 percent of the identified

potential for DBE participation.

3. 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 of 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,

sufficient information to demonstrate that

the contractor made good faith efforts to

meet the goals.

4. The clear language of the rule cited supra mandates that a bid

submission include evidence that the DBE goal is met, or evidence of good-faith

effort to meet the goal; failure to include such evidence will cause the bid to

be rejected. Murphy failed to include the description of the work which

Advanced Barricades would perform on the project. Without the participation

level of Advanced Barricades in its bid, Murphy's proposal did not meet the 10%

goal requirement of the project. The Department was required as a matter of law

to reject Murphy's bid because it did not conform with bid specifications in a

material respect, and was non-responsive. C. H. Barco Contracting Company v.

State of Florida Department of Transportation, 483 So.2d 796 (Fla. 1st DCA

1986). Because the defect in Murphy's bid affected the dollar amount of the

bid, it was material, as it gave Murphy an advantage not enjoyed by other

bidders. Harry Pepper & Associates v. City of Cape Coral, 352 So.2d 1190 (Fla.

2d DCA 1978).

5. Murphy's bid was non-responsive and as such was a non- bid. Murphy

does not have standing to challenge the responsiveness of Cone Corporation's

bid. Westinghouse Electric Corporation v. Jacksonville Transportation

Authority, 491 So.2d 1238 (Fla. 1st DCA 1986).

6. The scope of inquiry in a bid protest is to ascertain whether the

agency acted fraudulently, arbitrarily, illegally, or dishonestly in rejecting a

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

912, (Fla. 1988). The Department followed its published rule 14-78.003 and

therefore did not act fraudulently, arbitrarily, illegally or dishonestly in

determining Murphy's bid non-responsive.

ORDER

Upon consideration of the Findings of Fact and the Conclusions of Law

reached

IT IS ORDERED, that the State of Florida, Department of Transportation

dismiss the bid protest filed herein by Petitioner, Murphy Construction Company.

It is further ordered that Cone Corporation, as the lowest responsive bidder, is

hereby awarded State Project No. 89030-3528.

DONE AND ORDERED this __10th__ day of May, 1991, in Tallahassee, Leon

County, Florida.

_________________________

BEN G. WATTS, P.E.

SECRETARY

Florida Department of Transportation

Haydon Burns Building

605 Suwannee Street

Tallahassee, Florida 32399

RIGHT TO APPEAL

This Order constitutes final agency action and may be appealed by

Petitioner pursuant to Section 120.68, Florida Statutes, and Rule 9.110, Florida

Rules of Appellate Procedure, by filing a Notice of Appeal conforming to the

requirements of Rule 9.110(d), Florida Rules of Appellate Procedure, both with

the appropriate district court of appeal accompanied by the appropriate filing

fee, and with the Department's Clerk of Agency Proceedings, Haydon Burns

Building, 605 Suwannee Street, M.S. 58, Tallahassee, Florida 32399-0458, within

thirty (30) days of rendition of this Order.

Copies furnished to:

J. Lawrence Johnston

Hearing Officer

Division of Administrative Hearings

The DeSoto Building, 1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

Randy Cropp, Project Manager

The Murphy Construction Company

1615 Clare Avenue

Post Office Box 3768

West Palm Beach, Florida 33402

Paul J. Martin, Esquire

Florida Department of Transportation

603 Suwannee Street, MS-58

Tallahassee, Florida 32399-0458

Susan P. Stephens

Assistant General Counsel

Florida Department of Transportation

605 Suwannee Street

Haydon Burns Building, MS-58

Tallahassee, Florida 32399-0458

J. Ted Barefield, Manager

Contract Administration Office

Florida Department of Transportation

605 Suwannee Street, MS-55

Tallahassee, Florida 32399-0458