91-002703BID Dooley And Mack Constructors, Inc. vs. Board Of Regents Status: Closed Recommended Order on Thursday, June 27, 1991.

Summary: Failure to comply with Minority Business Enterprise participation requirements was a material defect in bid response.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DOOLEY & MACK CONSTRUCTORS, INC. )

)

Petitioner, )

)

vs. ) CASE NO. 91- 2703BID

)

FLORIDA BOARD OF REGENTS, )

)

Respondent. )

)

NORWOOD INDUSTRIAL CONSTRUCTION )

COMPANY, INC., )

)

Intervenor. )

_________________________________)

RECOMMENDED ORDER

Pursuant to notice, Don W. Davis, a duly designated Hearing Officer of the

Division of Administrative Hearings, held a formal hearing in the above-styled

case on May 17, 1991, in Tallahassee, Florida.

APPEARANCES

For Petitioner: William R. Dooly, Esquire

2070 Ringling Blvd.

Sarasota, Florida 34237

For Respondent: Jane Mostoller, Esquire

Florida Board of Regents

Suite 1522

325 West Gaines Street

Tallahassee, Florida 32399-1950

For Intervenor: Alfred J. Malefatto, Esquire

777 South Flagler Drive

Suite 310-East

West Palm Beach, Florida 33401

STATEMENT OF THE ISSUES

The primary issue for determination is whether Petitioner's bid, in

response to Respondent's invitation to bid, is responsive; and, if so, whether

Petitioner should be awarded the bid.

Determination of this issue requires resolution of other issues; whether

Petitioner complied with "good faith requirements" related to advertising for

minority business enterprise ( MBE) participation, or whether failure to comply

with those requirements constitutes a material defect in Petitioner's bid

response.

PRELIMINARY STATEMENT

On February 27, 1991, Petitioner was advised by Respondent that Petitioner

was the apparent low bidder on a project known as BR-198, Veterinary Medicine

Teaching Hospital Expansion Phase II.

Bidders were required to have an expenditure of at least 15 per cent of the

base bid with certified MBE's, or provide evidence of good faith efforts to meet

this goal. Since only approximately 11 per cent of Petitioner's bid called for

MBE participation, Respondent requested Petitioner to submit evidence of good

faith efforts for review.

Petitioner complied. On March 1, 1991, Respondent advised Petitioner that

Petitioner had not met the good faith requirements. On March 18, 1991,

Respondent tentatively awarded the project to Intervenor.

Petitioner filed a formal bid protest dated March 27, 1991. Thereafter the

matter was transferred to the Division Of Administrative Hearings for conduct of

a formal administrative hearing pursuant to Section 120.57(1), Florida Statutes.

At the final hearing, Petitioner presented the testimony of one witness.

Testimony of two witnesses were presented on behalf of Respondent. Intervenor

presented testimony of one witness. Together, the parties presented 28 joint

evidentiary exhibits.

A transcript of the final hearing was filed with the Division of

Administrative Hearings on June 12, 1991. Proposed findings of fact were

submitted by the parties and are addressed in the appendix to this recommended

order.

FINDINGS OF FACT

The parties stipulated to findings of fact set forth in paragraphs 1.-10.,

below.

Stipulated Facts

1. A call for bids was published by Respondent, Florida Board of Regents,

for BR-198, Veterinary Medicine Teaching Hospital Expansion - Phase II (BR-198),

located at the University of Florida, Gainesville, Florida, in the publication

known as the Florida Administrative Weekly.

2. Sealed bids were received on February 21, 1991, at which time the bids

were publicly opened and read aloud.

3. On February 27, 1991, Dooley and Mack Constructors, Inc. (Petitioner)

was informed by the University of Florida that the first and second apparent low

bidders for the project did not meet MBE requirements, and that Petitioner was

now the apparent low bidder for the project. The University requested that

Petitioner submit its MBE good faith efforts for review.

4. On March 1, 1991, Petitioner was informed by the University of Florida

that it failed to meet the MBE good faith effort requirements, and therefore,

its bid was rejected. The reason for rejection of Petitioner's bid was that

Petitioner's advertisement for MBE participation, as part of its demonstration

of good faith effort, did not appear in the media at least seven days prior to

bid opening.

5. Intervenor, the next apparent low bidder, submitted good faith efforts

for review by the University and was determined to be the lowest responsive

bidder. Intervenor was awarded the project by the Chancellor of the Florida

Board of Regents on March 18, 1991.

6. By letter dated March 19, 1991, Petitioner was advised that the

Chancellor had awarded the contract to Intervenor. Petitioner was provided an

opportunity to file a notice of protest pursuant to Section 120.53(5), Florida

Statutes.

7. Petitioner filed a timely notice of protest with Respondent on March

22, 1991.

8. Petitioner timely filed a formal bid protest in regard to this project

which was received by Respondent on March 27, 1991.

9. By facsimile (FAX) letter dated February 13, 1991, Petitioner requested

that the Gainesville Sun, a newspaper in Gainesville, Florida, run an

advertisement for one day to solicit bids from qualified MBE companies for BR-

198. The advertisement was published in the February 18, 1991 edition of the

newspaper.

10. The Project Manual, Section 1-3 of 1-10 Pages, Special Conditions

section, paragraph 1.7.2.2., provides that advertisements for minority business

enterprises must run or be published on a date at least seven days prior to bid

opening.

Other Facts

11. The Project Manual is an assembled volume which contains instructions

to bidders, bidding requirements, sample forms, and contract conditions and

specifications for BR-198.

12. A special condition of the bid requires that at least 15 percent of

the project contract amount be expended with MBEs certified by the Department of

General Services. 1/ In the absence of compliance with this requirement, a

bidder must demonstrate that good faith efforts were expended to comply.

13. A contractor desiring to demonstrate that a good faith effort was

undertaken to meet the 15 percent goal is required by the bid's special

conditions to have advertised to inform MBEs of subcontracting opportunities.

The importance of advertising is to alert the minority community regarding

projects that are out for bid and are available to subcontractors. The

advertisements must have been run in trade association, or minority-focus media,

or a local newspaper with a minimum circulation of 25,000. Advertisements must

be run or published a minimum of seven days prior to bid opening.

14. Petitioner's advertisement in a local newspaper, the Gainesville Sun,

was not published until February 18, 1991, only three days prior to the February

21, 1991 bid-opening. Further, the advertisement was not faxed to the newspaper

until February 13, 1991, and then with the written request to "please place as

soon as possible and run for one day." A letter from the newspaper to

Petitioner stated that the legal notice advertisement was published on February

18, 1991, as opposed to February 16, 1991, due to a date error on their FAX

machine. The latter date, even if publication had occurred, would not have

complied with bid requirements.

15. Petitioner also submitted a project notice published in the

construction industry bulletins F.W. Dodge Reports, dated February 1, 1991; CMD

Reports, dated February 18, 1991; and the Mid State Notifier, dated February 1,

1991. The notices listed Petitioner as well as other bidding contractors.

However, it is specifically found that no direct admissible evidence supports

Petitioner's responsibility for initiating publication of these notices, a

requirement of the good faith effort. Specifically, the notices were published

as the result of information received by the publications from the University of

Florida. Therefore, good faith efforts on Petitioner's behalf may not be

established by either publication, regardless of publication date.

16. Moreover, the F.W. Dodge Reports, CMD Reports, and the Mid State

Notifier are private subscription publications directed toward the construction

industry in general as opposed to any particular trade in the construction

industry. Further, these publications are not directed to or focused on

minority businesses. A trade association publication is generally published by

not-for-profit associations, such as the Association of General Contractors, and

various trade unions.

17. Petitioner did not comply with advertising requirements related to a

good faith effort, a prerequisite for bid award. Petitioner's failure to comply

with constitutes a material defect in Petitioner's bid response.

CONCLUSIONS OF LAW

18. The Division of Administrative Hearings has jurisdiction over the

parties and the subject matter. Section 120.57(1), Florida Statutes.

19. Facilities in the university system of the State of Florida are

maintained and constructed in accordance with rules adopted and administered by

Respondent. Section 240.209(3)(o), Florida Statutes.

20. Respondent has adopted Rule 6C-14.021(5), Florida Administrative Code,

which requires, in pertinent part, that:

a bid which is incomplete or not in

conformance with requirements of the

specifications shall be determined to be

nonresponsive and shall be rejected.

21. In the absence of compliance with the 15 percent requirement,

Petitioner was required by the special conditions of the bid request to

demonstrate "good faith efforts" in order for its bid to be considered

responsive.

22. Respondent has promulgated Rule 6C-14.025(3), Florida Administrative

Code, which reads as follows:

Factors which shall be considered in

determining whether a contractor has made

"good faith efforts" to use the services or

commodities of a minority business enterprise

are set forth in Paragraph 287.0945(3)(b),

F.S.

23. Section 287.0945(3)(b), Florida Statues, states that whether a good

faith effort has been made by a contractor includes a determination of whether

the contractor advertised in "general circulation, trade association, and/or

minority-focus media concerning the subcontracting opportunities."

24. Respondent determined that Petitioner did not meet good faith effort

requirements relating to advertisement of the project to minorities. Although

the Chancellor of the Board of Regents is authorized by Rule 6C-14.021(5),

Florida Administrative Code, to waive "informalities" in a bid, the failure to

provide prospective MBE subcontractors with a minimum of required notice (seven

days) prior to a bid opening is not a mere informality which may be waived.

Instead, such failure to advertise for MBE participation in accordance with bid

requirements is a material variance and the bid should be deemed nonresponsive.

To do otherwise would undermine the competitive bid process and provide an

unfair advantage to Petitioner, as opposed to Intervenor who was deemed to have

complied with good faith effort requirements, and was thereby determined to have

been the lowest responsible bidder.

25. Petitioner has not met its burden of establishing entitlement to the

relief sought in this proceeding. Florida Department of Transportation v.

J.W.C. Company, Inc., 396 So.2d 778 (Fla. 1st DCA 1981). The facts established

in this proceeding demonstrate that Respondent's rejection of Petitioner's bid

was based upon Petitioner's failure to comply with good faith requirements, a

material component of the bid.

26. However, contrary to argument of counsel for Respondent, this case is

unlike the situation in Department of Transportation v. Groves-Watkins

Constructors, 530 So.2d 912 (Fla. 1988), and the scope of the Hearing Officer's

inquiry is not limited to determining whether the agency acted fraudulently,

arbitrarily, illegally, or dishonestly. All bids were not rejected in this

case. Instead, only nonresponsive bids were rejected.

27. It is essential to remember that the purpose of competitive bidding is

to secure the lowest responsible offer, Robinson Electrical Co., v. Dade Co.,417

So.2d 1032 (Fla. 3rd DCA 1982); Tropabest Foods, Inc. v. Department of General

Services, 493 So.2d 50 (Fla. 1st DCA 1986). Respondent has achieved that goal

in this case.

28. The facts established at the final hearing demonstrate that

Petitioner's bid was facially and in fact nonresponsive, as supported by

competent substantial evidence.

RECOMMENDATION

Based on the foregoing, it is hereby

RECOMMENDED that a Final Order be entered granting the award of the bid in

BR-198 to Intervenor as the lowest responsible bidder.

DONE AND ENTERED this 27th day of June, 1991, in Tallahassee, Leon County,

Florida.

___________________________

DON W. DAVIS

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 27th day of

June, 1991.

APPENDIX TO RECOMMENDED ORDER CASE NO. 91- 2703BID

The following constitutes my specific rulings, in accordance with Section

120.59, Florida Statutes, on findings of fact submitted by the parties.

Petitioner's Proposed Findings.

1.-10. Adopted in substance, although not verbatim

11.-14. Rejected, unnecessary.

15. Adopted in substance, though not verbatim.

16. Rejected, unnecessary.

17. Rejected, unnecessary, argumentative

18. Adopted.

Intervenor's Proposed Findings.

1.-16. Adopted in substance, though not verbatim.

17-18. Rejected, unnecessary. Respondent's Proposed Findings.

1.-10. Adopted in substance.

11.-22. Adopted in substance, though not verbatim.

23.-24. Rejected, unnecessary.

25.-40. Adopted in substance, though not verbatim.

COPIES FURNISHED:

William R. Dooley, Esq.

2070 Ringling Blvd.

Sarasota, FL 34237

Jane Mostoller, Esq.

Florida Board of Regents

Suite 1522

325 West Gaines St.

Tallahassee, FL 32399-1950

Alfred J. Malefatto, Esq.

777 South Flagler Drive

Suite 310-East

West Palm Beach, FL 33401 Chancellor

Charles B. Reed

State University System of Florida

107 West Gaines St.

Tallahassee, FL 32399-1950

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to this Recommended

Order. All agencies allow each party at least 10 days in which to submit

written exceptions. Some agencies allow a larger period within which to submit

written exceptions. You should contact the agency that will issue the final

order in this case concerning agency rules on the deadline for filing exceptions

to this Recommended Order. Any exceptions to this Recommended Order should be

filed with the agency that will issue the final order in this case.