Fairbanks, Inc. v. State, Dept. of Transp.

• Court: Florida District Court of Appeals
• Writing for the Court: WEBSTER
• Citation: Fairbanks, Inc. v. State, Dept. of Transp., 635 So.2d 58 (Fla. App. 1994)
• Decision Date: 14 January 1994
• Docket Number: No. 92-2356,92-2356
• Parties: 19 Fla. L. Weekly D168 FAIRBANKS, INC., Appellant, v. STATE of Florida, DEPARTMENT OF TRANSPORTATION, Appellee.

Page 58

635 So.2d 58

19 Fla. L. Weekly D168

FAIRBANKS, INC., Appellant, v. STATE of Florida, DEPARTMENT OF TRANSPORTATION, Appellee.

No. 92-2356.

District Court of Appeal of Florida First District.

Jan. 14, 1994.

F. Alan Cummings and Mary M. Piccard, of Cummings, Lawrence & Vezina, P.A., Tallahassee, for appellant.

Thornton J. Williams, Gen. Counsel, Gregory G. Costas, Asst. Gen. Counsel, Dept. of Transp., Tallahassee, for appellee.

OPINION ON REHEARING

WEBSTER, Judge.

Upon consideration of appellee's motion for rehearing, the original opinion, filed on November 17, 1993, is withdrawn and the following opinion substituted therefor. In all other respects, appellee's motion for rehearing is denied.

Appellant seeks review of a final administrative order entered by appellee (the Department) denying appellant's request, made pursuant to section 120.57, Florida Statutes (1991), for a formal hearing. We agree with appellant that, given the peculiar facts of this case, it was error to deny the request. Accordingly, we reverse.

Appellant's petition to initiate formal proceedings alleged the following. Appellant manufactures and sells truck weighing scales. Toledo Scales (Toledo) is a competitor. The Department awarded a contract to build two weigh stations (on opposite sides of a highway) with static scale systems to D.A.B. Constructors, Inc. (D.A.B.). Each station is to have two static scale systems, which are the mechanisms that actually weigh the vehicles. The contract specification for the static scale systems requires that they include " '[f]ourteen load cells Toledo Scale Model DigiTOL Power Cell or equal.' " Shop drawings submitted by D.A.B. included "a static scale system manufactured by [appellant] which was in accordance with and met the requirements of [the specification]." Nevertheless, the Department rejected the drawings on the ground that appellant's static scale system is "not 'equal' to the Toledo product ... because it [does] not include Toledo's DigiTOL Power Cell." "Toledo's DigiTOL Power Cell is exclusively the property of Toledo" and, therefore, cannot be incorporated into appellant's static scale system. However, the lack of this component "does not diminish the efficacy of" appellant's system. Moreover, "[t]he costs of Toledo's scale system for the project will exceed that [sic] of [appellant] by more than $215,000.00." Appellant attempted to convince the Department that its system meets the contract specifications and that the Department's interpretation of the specifications amounted to a prohibited " 'sole source' specification," to no avail. The Department "intends to construct many more weigh stations in Florida ... [using] specifications ... identical to that which is contained in D.A.B.'s contract." Because of the manner in which the Department has interpreted the specification, it has violated its duty under Florida law "to ensure the competitive procurement of components such as static scales for weigh stations."

In its order denying the request for a formal hearing, the Department concluded that appellant has no interest of the type that the applicable statute is intended to protect and that, therefore, appellant lacks standing. In essence, the Department concluded that the contract with D.A.B. is a "construction contract"; that, therefore, section 337.11, Florida Statutes (1991), is controlling; and that section 337.11, Florida Statutes (1991), is controlling; and that section 337.11 is intended to protect only the interests of bidders and potential bidders for contracts, extending no protection to suppliers such as appellant.

To establish entitlement to a section 120.57 formal hearing, one must show that its "substantial interests will be affected by proposed agency action." Secs. 120.52(12), 120.57, Fla.Stat. (1991). This, in turn, requires a showing that (1) the proposed action will result in injury-in-fact which is of sufficient immediacy to justify a hearing; and (2) the injury is of the type that the statute pursuant to which the agency has acted is designed to protect. Agrico Chemical Co. v. Department of Environmental Regulation, 406 So.2d 478 (Fla. 2d DCA 1981), review denied sub nom. Freeport Sulphur Co. v. Agrico Chemical Co., 415 So.2d 1359 (Fla.), and Sulphur Terminals Co. v. Agrico Chemical Co., 415 So.2d 1361 (Fla.1982). Accord Town of Palm Beach v. Department of Natural Resources, 577 So.2d 1383 (Fla. 4th DCA 1991); International Jai-Alai Players Ass'n v. Florida Pari-Mutuel Comm'n, 561 So.2d 1224 (Fla. 3d DCA 1990); Boca Raton Mausoleum, Inc. v. Department of Banking & Finance, 511 So.2d 1060 (Fla. 1st DCA 1987). On appeal, the Department does not contend that appellant has failed to satisfy the first prong of the Agrico test. The disagreement is with regard to whether the second prong has been satisfied.

The contract for construction of the weigh stations was advertised for bids pursuant to section 337.11, Florida Statutes (1991). Among other things, that section delineates the scope of the Department's authority to negotiate for and enter into construction contracts. As the Department correctly points out, contracts entered into pursuant to section 337.11 are exempt from the "competitive sealed bidding" requirements generally applicable to state procurement. Section 287.057(3)(f)12., Fla.Stat. (1991). Appellant does not contend otherwise. Rather, appellant argues that it is entitled to a formal hearing notwithstanding the fact that, as a general rule, section 337.11 is intended to protect only bidders and potential bidders for contracts, because it has alleged that the Department's action has permitted the Department to circumvent the legislature's overriding intent to ensure the integrity and the economic efficiency of the public contracting process. In other words, it has alleged that the Department has frustrated competition by specifying, without justification, a static scale system that only one manufacturer can supply; and that such action will result in injury to it, and to the public in general. We agree that appellant's allegations are sufficient to satisfy the second prong of the Agrico test and, therefore, to entitle it to a formal hearing.

We believe that, in focusing only upon section 337.11, and arguing that that section was not intended to protect suppliers making the type of allegations made by appellant, the Department has too narrowly focused its attention. That the legislature intended that, in general, the integrity and the economic efficiency of the public contracting process be ensured is manifest from several statutory provisions. E.g., Secs. 255.29 (relating to state construction contracts generally), 287.001 (relating to public procurement generally), Fla.Stat. (1991). In fact, such an intent is found expressed in chapter 337, itself. Section 337.164, Florida Statutes (1991), "[r]ecogniz[es] that the preservation of the integrity of the public contracting process of the [D]epartment is vital to the development of a balanced and efficient transportation system and is a matter of interest to all people of the state"; and that "[t]he procedures of the [D]epartment for bidding and qualification of bidders on [D]epartment contracts exist to secure the public benefits of free and open competition and to secure the quality of public works."

The courts of this state have held on numerous occasions that the legislative intent behind such statutes is protection of the public. E.g., Department of Transportation v. Groves-Watkins Constructors, 530 So.2d 912 (Fla.1988); Hotel China & Glassware Co. v. Board of Public Instruction, 130 So.2d 78 (Fla. 1st DCA 1961). Given such an intent, such statutes "should be construed to advance their purpose and to avoid their being circumvented." Marriott Corp. v. Metropolitan Dade County, 383 So.2d 662, 665 (Fla. 3d DCA 1980).

In Groves-Watkins, the supreme court noted the salutary purposes behind competitive bidding statutes as follows: "In addition to providing a means by which goods or services required by public authorities may be acquired at the lowest possible cost, ... the system of competitive bidding...