Groves-Watkins Constructors v. State, Dept. of Transp.

Decision Date11 June 1987
Docket NumberGROVES-WATKINS,No. BR-163,BR-163
Citation12 Fla. L. Weekly 1465,511 So.2d 323
Parties12 Fla. L. Weekly 1465, 12 Fla. L. Weekly 1869 CONSTRUCTORS, Appellant, v. STATE of Florida, DEPARTMENT OF TRANSPORTATION, Appellee.
CourtFlorida District Court of Appeals

David S. Dee of Carlton, Fields, Ward, Emmanuel, Smith, Cutler & Kent, P.A., Tallahassee, for appellant.

Robert I. Scanlan, Deputy General Counsel, Dept. of Transp., Tallahassee, for appellee.

SMITH, Judge.

We must determine in this contract bid dispute whether the original low bidder on a highway construction project is entitled to award of a contract for the project where the Department of Transportation, after receipt of the initial bids, rejected all bids as excessive and directed that the project be rebid. An administrative hearing officer assigned to hear the case found that the original low bidder, appellant, was entitled to award of the contract; but the department in its final order declined to adopt the decision of the hearing officer, and denied the award. We reverse.

Appellant, Groves-Watkins Constructors (G-W), contends that the Department of Transportation (DOT) erred in two respects in dismissing its administrative bid protest. First, G-W contends that DOT violated section 120.57(1)(b)9, Florida Statutes (1985), by reweighing the evidence, rejecting the hearing officer's findings of fact, and substituting its own findings of fact even though the hearing officer's findings are supported by competent, substantial evidence in the record. Next, G-W contends that DOT committed reversible error when it based its decision to dismiss G-W's bid protest on new legal and factual issues raised by DOT for the first time in its final order.

G-W is a joint venture comprised of two large corporations which joined together for the purpose of bidding on certain DOT projects, among them "Package U", at issue in this case. Package U involves the construction of a complex highway interchange in Broward County which includes a substantial amount of embankment and many bridges, six of which will be built with pre-cast concrete segments. Three joint ventures bid on Project U, and G-W's bid of $54,472,335.15 was the lowest.

DOT's non-rule policy dictates that, for projects valued at more than $250,000, a contract will be automatically awarded if the lowest bid is no more than seven percent (7%) above DOT's estimate of the project's value. If the lowest bid is more than seven percent (7%) above the DOT estimate, the bidding process is reviewed by DOT, and DOT may or may not award the contract, depending on the circumstances. In this case, DOT's bid estimate for Package U was approximately $41.5 million, making G-W's bid twenty-nine percent (29%) over the bid estimate. When DOT notified G-W of its intent to reject G-W's bid because it was too high and more than seven percent above DOT's estimate, G-W filed a formal bid protest, contending that DOT's bid estimate was arbitrarily and unreasonably low. G-W petitioned for and was granted a formal administrative hearing. Thereafter, the hearing officer entered a comprehensive recommended order setting forth extensive findings of fact substantially establishing the correctness of G-W's contentions, and concluding that G-W was entitled to award of the contract. DOT rejected these findings and conclusions and denied the relief sought by G-W. This appeal followed.

The parties agree that there are three items which accounted for most of the discrepancy between DOT's estimate and G-W's bid: (1) the embankment material; (2) the pre-cast concrete bridge segments; and (3) mobilization costs. These discrepancies, in the aggregate, amount to approximately $12.2 million, and account for approximately 95% of the difference between G-W's bid and DOT's estimate.

At the outset, the hearing officer found that G-W has a substantial amount of experience in performing the work involved in Project U and has unique experience in the design, construction, estimating and bidding involving segmented, precast concrete bridges. By contrast, the hearing officer found that DOT had very little experience with segmented bridge construction, especially with regard to the complex-curved segmented bridge construction involved in Package U.

The hearing officer found that G-W arrived at its bid on the embankment fill by using historical data and site-specific data, which was acquired by personally contacting suppliers and subcontractors in the surrounding area of the job site and which was verified only one to two days before the bid submittal. In contrast, the hearing officer found that in arriving at its bid estimate, DOT used historical cost data which involved noncomparable projects, and site-specific data which was outdated. The hearing officer noted that the bids received for embankment on a project known as Package M, a substantially identical interchange located fifteen miles from Package U, were higher than G-W's bid for embankment in Project U, thus corroborating G-W's showing that its embankment bid on Package U was a reasonable one, and based upon the most current market prices, and further, that DOT's estimate was based on out-of-date, not entirely comparable cost information, and is inaccurate. Based on the evidence presented the hearing officer found that DOT underestimated the embankment material costs by $6,000,000.

Next, the hearing officer accepted the expert testimony of Richard Kelly, the executive vice president of Groves, that on a scale of 1 to 10, the bridgework on Package U would rate at least a "9" in difficulty of execution. DOT arrived at its estimate for the bridge segment portion of this project after retrieving historical price data from its computer concerning other Florida bridge construction projects such as the Sunshine Skyway Bridge and the bridges in the Florida Keys. However, the hearing officer found that these bridges did not present difficulties in construction comparable to the bridges in Package U, in that they were built over water, under conditions of light traffic, and were relatively straight bridges as opposed to the curved bridge surfaces in Project U. On the other hand, G-W's bid price for bridge segments was based on actual quotes from local materialman, suppliers and subcontractors and these quotes were evaluated in light of the historical data and experience that G-W has accumulated in working on other segmental bridge projects. G-W based its price for the bridge segments on: (1) the cost of manufacturing the segments, including labor and equipment; (2) the cost of storing and transporting segments once they were cast; (3) the cost of erecting, grouting, and posttensioning the segments; and (4) the cost involved in subcontracting the painting and finishing work on the bridge surfaces after the segments were erected. The hearing officer found that:

The use of these four factors in Groves' arriving at its price for the segmental portion of the project was thus demonstrated to be reasonable and appropriate. DOT did not challenge the propriety of including these four factors in the estimate of the direct cost for the bridge work and offered no evidence suggesting that the costs assigned to these four elements were inappropriate.

He also found:

The evidence does not clearly reveal the specific manner in which DOT formulated its estimate for the bridge segment portion of this project other than its reliance upon historical pricing information for other bridge-interchange construction projects. That reliance on historical price data, or at least the data relied upon was shown to be inappropriate for the bridge construction involved in this proceeding. Package U involves a complex segmental bridge which is a unique type of construction and design and of which there are few comparable examples thus far in Florida.... The complexities of casting and erecting so many differently configured segments [in Package U] causes substantial increase in manufacturing costs and erection time and difficulty, all of which renders the project substantially more expensive and significantly dissimilar to those projects relied upon by the Department for its historic cost and price examples.

The hearing officer found in his recommended order that DOT had underestimated the precast bridge segment portion of the job by about $5,000,000.

For comparison purposes, the hearing officer received and considered evidence noting that DOT had grossly underestimated the cost of Package M, which was the only other project identified at the hearing that involved complex, segmental bridge construction. At the first bid letting for Package M, DOT received only one bid, that of G-W, which was approximately $20 million over DOT's estimate of approximately $41 million. DOT rejected G-W's bid, and again solicited bids after raising its estimate to $50 million. Seven bids were received on rebidding, but the lowest bidder was still more than $10 million over DOT's estimate. Although the lowest bid was more than twenty percent above DOT's estimate, DOT awarded the contract in that case. The hearing officer found that:

[DOT's] problems with Package M corroborate the remainder of [G-W's] proof, in showing that the Department erred in estimating the cost of Package U involved herein and relied upon historical price information not shown to be applicable to the unique, complex project like the instant one.

Finally, the hearing officer found, and DOT does not dispute, that DOT's estimate of mobilization costs did not include the costs for the pre-casting yard in the amount of $1.2 million.

The hearing officer summarized the evidence as follows:

[I]t has been established that DOT underestimated the value of Package U in the following manner: (1) embankment was underestimated by about $6,000,000. (2) The pre-cast bridge segment portion of the job was underestimated by about $5,000,000. (3) The cost of...

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4 cases
  • Bayonet Point Regional Medical Center v. Department of Health and Rehabilitative Services
    • United States
    • Florida District Court of Appeals
    • November 24, 1987
    ...directed the agency to issue the disputed contract or permit to the affected party. See, e.g., Groves-Watkins Constructors v. State, Department of Transportation, 511 So.2d 323 (Fla. 1st DCA), on rehearing, 511 So.2d 334 (1987). Gar-Con Development, Inc. v. State, Department of Environmenta......
  • Caber Systems, Inc. v. Department of General Services
    • United States
    • Florida District Court of Appeals
    • July 13, 1988
    ...v. Florida Governor's Council on Indian Affairs, Inc., 495 So.2d 790 (Fla. 1st DCA 1986); Groves-Watkins Constructors v. State, Department of Transportation, 511 So.2d 323 (Fla. 1st DCA 1987); Baxter's Asphalt & Concrete, Inc. v. Liberty County, 406 So.2d 461 (Fla. 1st DCA 1981), reversed o......
  • Department of Transp. v. Groves-Watkins Constructors
    • United States
    • Florida Supreme Court
    • August 18, 1988
    ...Mastin, Asst. Co. Atty., Miami, for Dade County, amicus curiae. BARKETT, Justice. We review Groves-Watkins Constructors v. Department of Transportation, 511 So.2d 323 (Fla. 1st DCA 1987), because of asserted conflict with our decision in Liberty County v. Baxter's Asphalt & Concrete, Inc., ......
  • Mercedes Lighting and Elec. Supply, Inc. v. State, Dept. of General Services
    • United States
    • Florida District Court of Appeals
    • April 16, 1990
    ...allow persons affected by intended decisions of state agencies to change the agency's mind. Groves Watkins Constructors v. State, Department of Transportation, 511 So.2d 323, 329 (Fla. 1st DCA 1987), rev. on other grounds, 530 So.2d 912 (Fla.1988). Following this line of reasoning Mercedes ......
1 books & journal articles
  • APA: legislative reform of disputed competitive procurement decisions.
    • United States
    • Florida Bar Journal Vol. 71 No. 3, March 1997
    • March 1, 1997
    ...findings of fact and substituting its own findings on the issues presented." Groves-Watkins Constructors v. Dept. of Transportation, 511 So. 2d 323, 328 (Fla. 1st DCA 1987). In reversing DOT's final order, the First District Court of Appeal's decision recognized several well-settled adminis......

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