E. M. Watkins & Co., Inc. v. Board of Regents, AL-32

• Decision Date: 12 May 1982
• Docket Number: No. AL-32,AL-32
• Citation: 414 So.2d 583
• Court: Florida District Court of Appeals
• Parties: E. M. WATKINS & COMPANY, INC., Appellant, v. BOARD OF REGENTS and Winchester Construction & Engineering, Appellees.

Page 583

414 So.2d 583

E. M. WATKINS & COMPANY, INC., Appellant, v. BOARD OF REGENTS and Winchester Construction & Engineering, Appellees.

No. AL-32.

District Court of Appeal of Florida,

First District.

May 12, 1982.

Rehearing Denied June 17, 1982.

John A. Barley, Tallahassee, for appellant.

Judith A. Brechner, Gen. Counsel and Herbert D. Sikes, Counsel, State Board of Educ., Tallahassee, for Board of Regents, appellee.

Gary P. Sams and Frank E. Matthews, of Hopping, Boyd, Green & Sams, Tallahassee, for Winchester Const. & Engineering, appellee.

PER CURIAM.

E. M. Watkins & Company, Inc. (Watkins) appeals from a final order of the Board of Regents (BOR) awarding the construction contract for the Northwest Regional Data Center (NRDC) at Florida State University to Winchester Construction and Engineering Company, Inc. (Winchester) and finding that Watkins lacked the requisite standing to protest Winchester's bid. We affirm.

On November 16, 1981, BOR, through its architect/agent, published certain bidding documents to solicit sealed bids for the performance of work required to complete construction on the NRDC. The bidding documents were amended on three occasions by three separate addenda prepared by BOR's architects. The first, dated December 10, 1981, changed the bid opening date from December 22, 1981, to January 12, 1982, and contained notice that the pre-bid conference would be conducted on January 4, 1982, in Tallahassee at a place to be announced at a later date. The second addenda, dated December 31, 1981, contained notice that the pre-bid conference would be held in Room 201 of the Westcott Building at FSU. Watkins, however, did not receive the second addendum until January 5th, one day later than the date of the conference. During this pre-bid conference, one of the other contractor's representatives in attendance suggested that the bidding documents fail to indicate which subcontractors were to be identified in the list to be furnished in response to paragraph B-15 ¹ of the bidding document. As a result of this inquiry, the architect issued a third addendum on January 6, 1982. Couched in mandatory language, this addendum informed the contractors that they should list the mechanical, electrical, roofing, masonry, and access flooring subcontractors. Watkins received this addendum prior to submitting its bid on January 12, 1982.

At approximately 2 p. m. on January 12, 1982, twelve sealed bids were received and opened by BOR. When the bids were tabulated, it was determined that Watkins had submitted the apparent low bid and that Winchester had submitted the second low bid. Upon reading Watkins' list of subcontractors submitted with the bid, it became apparent that Watkins had failed to list three of the five major subcontractors required by the third addendum. Winchester, however, had submitted a complete list of major subcontractors. Watkins' omission was brought to the attention of the firm by telephone, and by 4 p. m. that same day Watkins supplied a supplemental list of subcontractors. As a result of the post-bid discussion by the staff of BOR, its assistant general counsel directed the architect to inform Watkins that its supplemental list of subcontractors was accepted and that it had received the contract.

The next day, the president of Winchester contacted BOR's staff and expressed his concern about the staff's decision to recommend for acceptance a bid which was incomplete at the time of the bid opening. Upon further review, the staff then concluded that the omission of the required subcontractors was material and necessitated the rejection of Watkins' bid as nonresponsive and incomplete. The staff then notified Watkins that the contract would be delivered to Winchester. Acting upon the recommendation of its staff and the submission by Winchester of its evidence to provide a performance and payment bond and a builder's risk insurance policy, BOR decided to award the contract to Winchester subject to a final determination of any protest filed by Watkins. That same day, January 15, 1982, attorneys for Watkins filed a letter with the staff protesting the rejection of its bid and alleging that Winchester's bid was defective.

Ten days later, Watkins filed a petition for a formal administrative hearing pursuant to Section 120.57(1), Florida Statutes. It listed as disputed issues of material fact the following: (1) Whether the bid submitted by Watkins was responsive and was the lowest and best bid for the construction project; and (2) Whether Winchester's bid was responsive and was the lowest and best bid for the project. BOR assigned its general counsel to be the hearing officer for this matter. Prior to the hearing on the merits, the hearing officer entered an order denying Watkins' request for a Section 120.57(1) hearing and granting Winchester's motion for a 120.57(2) hearing. The order also granted leave to either party to request a Section 120.57(1) hearing during the informal hearing should disputed issues of material fact arise. As a result of the informal hearing held on March 5, 1982, the hearing officer issued an order recommending that the contract be awarded to Winchester because its bid was the lowest complete bid conforming to bid requirements and that Watkins be considered to lack the necessary standing to protest Winchester's bid because Watkins' bid was nonconforming. On March 29, 1982, prior to the entry of a final order by BOR, Watkins filed its notice of administrative appeal. The final order of BOR was subsequently rendered on April 6, 1982. ²

In its appeal Watkins raises a multiplicity of issues: (1) Whether its failure to list the major subcontractors was a material variance to the invitation to bid and thus could not be subsequently amended by Watkins; (2) Whether BOR's policy and practice of requiring contractors to list certain subcontractors is a rule and, as such, is invalid and unenforceable; (3) Whether Section 255.0515, Florida Statutes (1978) and any agency rule which purports to implement that statute constitutes an unconstitutional impairment of Watkins' right to contract, and unlawful delegation of legislative authority, or an unconstitutional denial of equal protection under the law; (4) Whether BOR abused its discretion in failing to afford Watkins a formal administrative hearing and in utilizing its general counsel as the hearing officer; and (5) Whether Watkins had the standing to protest the award of the contract to Winchester and, conversely, whether Winchester had standing to contest the bid.

By its first issue on appeal Watkins argues that its failure to list the subcontractors to this contract cannot be deemed a material omission because Florida Administrative Code Rule 6C-14.21(3) ³ allows the submission of such information at the time of the bid opening or within 48 hours thereafter. We disagree. Certainly, the rule, as BOR admits, is rather inartfully drawn. However, to give it the construction sought by Watkins would directly contravene the provisions of Section 255.0515, Florida Statutes, which provides in relevant part that "the contractor shall not remove or replace subcontractors listed in the bid subsequent to the list being made public at the bid opening, except upon good cause shown." If the rule purports to allow the contractor not to submit a list of subcontractors by the time of the bid opening, then the statute serves no useful purpose and is a nullity. Since agency rules cannot contravene Florida Statutes, such a construction must be rejected. See Seitz v. Duval County School Board, 366 So.2d 119 (Fla. 1st DCA 1979). Further, the transcript of the legislative committee hearings on Section 255.0515 clearly indicates that one of the major purposes of that legislation was to prevent bid shopping by contractors after a bid was awarded. It has long been held that legislative intent is the polestar by which the court should be guided in construing a statute. State v. Webb, 398 So.2d 820, 824 (Fla.1981). One method of ascertaining the legislative intent is by tracing the legislative history of the act, the evil to be corrected, and the purpose of the enactment. State ex rel. Register v. Safer, 368 So.2d 620, 624 (Fla. 1st DCA 1979). Since the legislative history of a statute is strongly indicative of the legislative intent in enacting that statute, Watkins' proposed construction would also run counter to that intent, i.e., that substituting subcontractors ("bid shopping") be discouraged by requiring the contractor to list its subcontractors prior to the bid opening. The policy reasons behind requiring a list of subcontractors are evident, as noted by the hearing officer in his order:

The unfair bidding advantage one contractor derives from the failure to list required subcontractors is generally threefold: (1) it provides the precious few minutes which may be saved by failing to provide a name for the appropriate blank on form D-1 and matching the name with the price used in the bid computation, (2) it allows the potential for speculation, by use of a phantom price and efforts to shop that item or trade until a subcontractor can be found at the speculative contract price, and (3) it permits a successful bidder to accept additional subcontractor bids after the bid opening, giving the opportunity for undercutting the low subcontractor on whom he relied in formulating his bid.

These policy reasons, implicit in Section 255.0515, thus prevent competitive advantage, insure the quality of the subcontractors, insure public confidence in the bidding process, and encourage future competition. See, e.g., Wester v. Belote, 103 Fla. 976, 138 So. 721 (1931); Baxter's Asphalt and Concrete, Inc. v. Liberty County, 406 So.2d 461 (Fla. 1st DCA 1981); Harry Pepper & Associates, Inc. v. City of Cape Coral, 352 So.2d 1190 (Fla.2d DCA 1977); City of Opa Locka v. Trustees of Plumbing Industry Promotion Fund, 193 So.2d 29 (Fla.3d DCA 1966). Accord ...