Do you provide goods or services that public agencies purchase? Do you want to pursue public contract awards? Do you know how to get started? These are questions that you may have asked yourself. If you are looking to bid on public contracts, then there are some steps that you can take to put a plan into action.

First, you should identify public agencies that need your goods and services. Some agencies may have purchasing cycles for particular goods and services and knowing when those opportunities will be advertised is critical. Most agencies maintain websites with links to their purchasing departments and/or purchasing procedures. They may also have representatives that can provide guidance on doing business with the agency and whether there are any registration or pre-qualifications requirements. The websites may also list the pending advertisements and bidding deadlines. Prior to contacting an agency, however, be mindful that there may be cones of silence or other restrictions on who you may speak with to get information about a particular contract. There are also private companies that compile bidding opportunities that you may be able to subscribe to.

Once you have identified a public agency that is in need of your goods or services, then make sure that you can meet the agency’s standard contractual terms and conditions. These would include the types of licensure, insurance, bonding, and payment terms, for example, that the agency may require for its contracts and purchase orders. After you know what agencies need your services, and that you are prepared to meet their standard terms and conditions, you have to be prepared to submit a responsive bid by whatever submittal deadline is established by the advertisement. A responsive bid is generally defined as one that conforms in all material respects to the requirements of the solicitation. For example, it is important to provide all  of the required information, price terms and bid forms required by the agency. Dotting the i’s and crossing the t’s is critical when it comes to submitting a bid to a public agency.

Public procurement is a highly specialized area of the law and each contract advertisement and award must be reviewed on a case by case basis. To optimize your chances of success, it is important to carefully review each and every advertisement and to make sure that your bid conforms to the specific requirements. Clerical oversights may be the difference between landing a profitable contract and rejection. For specific questions and concerns with respect to bidding on a particular contract or award related challenges or “bid protests”, legal counsel should be consulted as early in the process as possible.

There was a recent article in Tampa Bay Online by Yvette Hammett, linked here, dealing with new dorms going up at the University of South Florida. Other than my normal interest in the goings on at my alma mater was the construction methodology for the project. Tampa-based CBG Building Co., plans to use a system developed by Denver-based Prescient Co., Inc., where segments of the building are designed and pre-constructed off site and then shipped to the site for installation.  The dormitory project consists of a 6 story parking garage and a 6 story dormitory with 500 apartment style units.

A quote from the article notes that this type of construction may be expandable to different types of projects:

What makes this building system so different is this: “We don’t construct our building,” said Prescient CEO Satyen Patel. “We assemble it.” The process involves three companies — one for software development, one that heads up the manufacturing technology and one that installs the products on site, Patel said.

“We deliver a post, a panel and a truss. Those are the three finished goods that come out of our manufacturing system and get assembled on site. We can go taller than timber and substantially less expensive than concrete.”

Patel said the Florida market will be big for his company for several reasons: the projects work well for senior living facilities, Prescient serves the higher density market and its system works well for in fill construction because it doesn’t require a large staging area like traditional construction does, Patel said.

The original intent in going to this system was to meet an August 2016 completion date. It will be interesting to see the progress on this project and if that schedule is met.

The regular Florida legislative session is almost concluded.  The House adjourned on Tuesday and the Senate is in session until Friday.  A special session to address the state budget is expected but not yet set.  I previously addressed two construction related bills being considered this year: HB 87/SB418 related to construction defects, as noted here, and HB 501/SB 1158 related to shortening the statute of repose from 10 years to 7 years, as noted here.

The Chapter 558 bill, HB 87, was amended to address many of the concerns raised in my prior blog post.  The amended bill passed the House on a vote of 112 to 0. The House bill was substituted for the “companion” Senate bill, SB 418, and passed 35-4.  The bill will be sent to the Governor for his consideration. The Governor will have 7 days to veto, sign or allow the bill to become law without his signature, IF his office officially receives it during session (by May 1); if not sent to him until after May 1st, he will have 15 days to act.  It is expected that the governor will not veto this legislation and that the changes to Chapter 558 will take effect on July 1, 2015.  Although not perfect, the Chapter 558 bill, is significantly better than it was.  The text of the final bill can be found here.

The other pending construction bill, HB 501/SB 1158 regarding Statute of Repose, appears to be done for the year as it was not considered and passed in either chamber.  Although the bills could be considered as part of the special session, that is not likely.  The good news is that this legislation appears to be dead for this year.  The bad news is that this type of anti-owner legislation will come back, in the near future if not next year.  It will be important for all owners, public or private, in construction projects to watch for such legislation and oppose vigorously.

HB 501 to reduce the statute of repose in construction cases was heard by the House Civil Justice subcommittee.  There was an amendment to the bill to allow any claims that are currently over 7 years, but less than 10 years, to have until July 1, 2016, to file suit.  This “savings clause” is similar to the one used in 2006 when the statute of repose was then reduced from 15 years to 10 years.  The bill passed the subcommittee on a vote by 8-6.  For those interested in watching the hearing you can do so here beginning at the 7:18 mark.  Special recognition to Ronald Woods, P.E. of Woods Engineering and Tom Miller, P.E. of Structural Engineering and Inspections, Inc. for appearing and speaking out against the bill.

The Legislature will be considering legislation this year to change Chapter 558, Florida Statutes.  Chapter 558 is  required process for any party seeking to pursue claims for construction defects.  The original goal of Chapter 558 was to provide an opportunity to settle defect claims without litigation or arbitration, and not to create another source of dispute or litigation.  This bill is contrary to that original intent. The proposed bill would create new rights and defeats any realistic hope to amicably resolve claims as more fully explained below.  These changes, if enacted, will negatively impact all owners of construction improvements including hospitals, doctor’s offices, school buildings, condominiums, single family homes and commercial buildings.  The proposed legislation can be found here and the specific problems are noted below.

Lines 66-76:

Requiring the notice to specify the location of each alleged defect is impossible relative to any structure of any size.  To require a claimant to inspect all buildings (20, 30, 40 or 50+) and identify with specificity every instance where a specific defect (e.g. crack in the stucco) appears would be prohibitively expensive, and not necessary at this stage.  The parties to whom a notice of claim would be sent are the construction professionals – they should be able to locate the defects if the Notice of Claim describes “in reasonable detail sufficient to determine the general nature of each construction defect.” The last sentence, which provides that the failure to provide the information is prima facie evidence of a defective notice, invites disputes over the sufficiency of a notice of claim.  Once the nature of the defect is identified, the notified parties can inspect and draw their own conclusions just as easily as the claimant can.  The only thing this will accomplish is to create a “gotcha” for claimants.

Overall, the proposed procedure will increase the burden on owners (residential and commercial) to go beyond what a court would require to prove a case at trial. It will also have a chilling effect because the cost to do so would be exorbitant and many would simply not be able to get it done and afford it. Chapter 558 was created to lower expense as opposed to increasing the cost to reach a resolution.  This will effectively stop homeowners and owners from being able to make a claim when legitimate defects exist in residential and commercial construction.

All of these issues were addressed in 2003 when Chapter 558 was originally enacted and then later revised to clarify and resolve some early inequities in the process. Why is this being revisited now?  This will place the burden of defective construction on claimants as opposed to shifting responsibility to the party that created the problem.

Further, requiring the notice to specify the specific provisions of the Building Code that are violated would again impose prohibitive costs on claimants, who would have to pay consultants for hours of analysis and report preparation which, again, is not necessary at this stage.  The intent of Chapter 558 is to require notice and give an opportunity to inspect and allow a cooling-off period for the parties to talk before suit is filed.  The purpose of Chapter 558 and the notice procedure is to not have trial specific proof but enough information to allow the parties to discuss the defects and achieve a possible remediation or settlement.

Collectively, these changes are not designed to facilitate resolution, but are instead punitive toward claimants.

Lines 120-129:

There is no need for another statutory provision allowing fees for “frivolous” claims.  Section 57.105 already exists for that purpose.  Further, the courts already have inherent jurisdiction to sanction parties for bad faith or egregious conduct.  See Bitterman v. Bitterman, 714 So. 2d 356 (Fla. 1998) .

Lines 154-157:

Requiring claimants to produce maintenance records and “other documents” pre-suit imposes costs on claimants but is not helpful at this stage.  The statute already allows for visual inspections and destructive investigation.  An inspection, destructive or otherwise, will allow the notified party to form an opinion about whether the alleged defect is truly a defect or merely the result of a lack of maintenance.  Producing records will be neither helpful nor relevant unless and until suit is filed as they are matters of proof.  Having these records does not assist a party in responding to the notice of claim as the recipients will either agree to fix the problem, make a monetary offer or not.  Once again, the point of Chapter 558 is to allow the inexpensive and efficient resolution of disputes, not create obstacles to filing suit.

Lines 166 – 181:

This section creates a mini-litigation process of its own.  The whole point of creating Chapter 558 was that it was to be an alternative to litigation.  Chapter 558 does not currently require a notified party to do anything.  A notified party is not required to retain consultants, review documents, provide a remediation or do anything at all under the existing statute.  In fact, a notified party can simply not respond to a notice of claim and no punishment is afforded under current law.  The idea that contractors must spend substantial sums investigating and defending against Chapter 558 claims is not true.  There is no purpose to be gained by adding subsection (16) except to create a club with which to threaten claimants.

At the end of the day, these changes will make pursuing real construction defects more difficult and will pass along the liability for those defects to the owners and purchasers rather than those that constructed the improvements.

468951949If you intend to provide a service to a public agency, be sure to consider the impact of long term contractual issues on the cost and profitibility when preparing the proposal. The agency’s contractual requirements are typically incorporated into the solitication. If they are not, you may have to inquire as to what they will include prior to submitting a proposal. It is imperative to know whether performance of the contract is doable and sustainable.

For example, are there upfront costs that will be incurred?  What if the contract has a termination for convenience clause?  Will you lose your investment? Are there insurance and bonding requirements?  How much will these items cost? Is there a mechanism to seek price adjustments in the event your costs increase?  If so, what is the likelihood that the agency will actually approve cost increases over the lifetime of the contract?

These are the types of questions that should be asked prior to submitting a proposal to provide the public agency with services.  On the one hand, service providers routinely seek to competitively price their proposals in an effort to gain contract awards.  On the other hand, the question that must be asked is whether that pricing structure will be sustainable over the duration of the contract, and considering the contractual terms.

If there are questions, the agency may have a procedure to seek clarification, and get answers by way of addenda.  You may also want to consider consulting with legal counsel if interpretation of the contract terms are an issue.

79072825 If you want to challenge the terms of a solicitation or intended award decision and Chapter 120, Florida Statutes applies, then watch the clock. Chapter 120, which is referred to as the Administrative Procedure Act, generally applies to state agencies and departments. Local governments, including counties and cities, typically have their own codes and policies regarding bid protests. Where Chapter 120 applies, there are strict deadlines that must be adhered to.

Section 120.57(3), Florida Statutes, in pertinent part, states:

“Any person who is adversely affected by the agency decision or intended decision shall file with the agency a notice of protest in writing within 72 hours after the posting of the notice of decision or intended decision. With respect to a protest of the terms, conditions, and specifications contained in a solicitation, including any provisions governing the methods for ranking bids, proposals, or replies, awarding contracts, reserving rights of further negotiation, or modifying or amending any contract, the notice of protest shall be filed in writing within 72 hours after the posting of the solicitation. The formal written protest shall be filed within 10 days after the date the notice of protest is filed. Failure to file a notice of protest or failure to file a formal written protest shall constitute a waiver of proceedings under this chapter. The formal written protest shall state with particularity the facts and law upon which the protest is based. Saturdays, Sundays, and state holidays shall be excluded in the computation of the 72-hour time periods provided by this paragraph.” [Emphasis added]

Note that the initial filing deadline for the notice of protest is within 72 hours and not days. Further, the failure properly file the notice shall constitute a waiver of the right to the protest procedure. Accordingly, best practice will be to note the exact time of day of the posting of the decision that you intend to protest and calculate 72 hours from that time.

 

461991811Bidders may have an opportunity to be heard during evaluation committee meetings or in conjunction with other proceedings during a competitive solicitation process.  Members of the public also have the right to a reasonable opportunity to be heard in accordance with a recently enacted Florida Statute, Section 286.0114.

Section 286.0114 went into effect on October 1, 2013, and provides that members of the public have a right to be heard on a proposition before a Florida “board or commission” takes official action.  The opportunity to be heard does not need to occur at the same meeting that the official action takes place, so long as it occurs during the decision making process and is within reasonable proximity in time before the official action is taken.  The board or commission may, however, adopt rules or policies, including limitations on the amount of time that an individual may speak and the number of persons who may speak on behalf of the same group.

As bidders are also members of the public, if the need arises to speak for or against a contract award, the new law provides another avenue to voice your concerns before a final decision is made.  Prior to stepping up to the microphone, however, you should confirm with the agency’s clerk as to whether there are any rules or procedures that have been adopted.  For example, there may be a form that you will need to fill out prior to speaking.

186956838(1)In Florida, public agencies typically have restrictions on bidder communications with public officials and employees. For example, an agency may have a prohibition on communicating with anyone other than a designated representative during the competitive solicitation process. These restrictions are often referred to as a “Cone of Silence”. Violations of the Cone of Silence can result in disqualification of the bidder.

The purpose of a Cone of Silence is to prevent bidders or their representatives from lobbying decision makers while designated staff are afforded the opportunity to evaluate the bids or proposals in accordance with the terms of the solicitation. The restriction on communications may, for example, terminate when the agency’s board or commission meets to make a final decision. At that time the bidder may be able to address the board or commission directly before it makes a final award decision. While the restriction is in place, however, bidders must be extremely careful not to violate the Cone of Silence.

Determining whether a Cone of Silence applies to a particular competitive solicitation may be as easy as reviewing the solicitation document itself. If, however, the solicitation is silent on the issue, it may require some legal research into the applicable agency code, regulations or policies. Even if not stated as a Cone of Silence or restriction on communications, the solicitation document may provide instructions on which agency representative may be contacted for purposes of answering questions.

Considering the potential ramification of an unauthorized communication with a public agency, bidders should be determine whether and to what extent the particular public agency has a restriction, and strictly adhere to any instructions provided for purposes of contacting the agency. Failure to adhere to the restriction on communications could lead to an unnecessary loss of a contract.

 

As demonstrated by the interest generated by a panel presentation I moderated last week for NAIOP’s Central Florida chapter, and the media response you can see at http://www.bizjournals.com/orlando/blog/2013/10/what-public-private-partnerships-could.html?page=all written by Abraham Aboraya, the Greater Orlando area continues to buzz about the prospects of public/private partnerships. The panel presentation featured Clint Glass, senior vice-president of Balfour Beatty Construction, David Hobbs, director of facilities planning and construction at Seminole State College and John Driscoll, president of Alter + Care, a division of The Alter Group.

 

Despite competing with Mayor Dyer’s State of the City Address, we drew a full room of attendees, generated great, thought-provoking questions, created a stir in the room after the presentation, and culminated with Mr. Aboraya’s excellent media coverage. We thank everyone involved for keeping the flame of P3s alight in Central Florida and look for great things there soon.