KAREN E. RUSHING. Investigation of Procurement - Conformity of Bid Specifications for Solicitation #132566JS - Roller Chopping County Preserves

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1 KAREN E. RUSHING Clerk of the Circuit Court and County Comptr oller Investigation of - Conformity of Bid Specifications for Solicitation #132566JS - Roller Chopping County s Investigative Services Karen E. Rushing Clerk of the Circuit Court and County Comptroller Jeanette L. Phillips, CPA, CGFO, CIG Director of Internal Audit and Office of the Inspector General Investigative Team Jody Maxwell, CPA, CIA, CFE, CIGA Senior Internal Auditor June 2014

2 TABLE OF CONTENTS Page Summary and Results 3 Investigative Findings 4 Exhibit A 8 Page 2

3 Summary and Results The Clerk of the Circuit Court and County Comptroller s Internal Audit Department and Office of the Inspector General has completed an investigation of the procurement for solicitation #132566JS - Roller Chopping County s. The investigation was planned and conducted in accordance with the Principles and Standards for Offices of Inspector General. The purpose of the investigation was to evaluate conformance with bid specifications. On May 6, 2014, the Ethics and Compliance forwarded an to the Director of Internal Audit and Office of the Inspector General. The concerned solicitation #132566JS - Roller Chopping County s and alleged; 1. The equipment noted for use by the recommended awardee, did not meet the bid specifications. (Substantiated) 2. An inappropriate relationship between a county employee in, who was responsible for assisting with the procurement of the Roller Chopping services, and the recommended awardee. (Referred to Ethics and Compliance, Resolution ) On May 20, 2014, a vendor, registered with Sarasota County government, contacted the Clerk of the Circuit Court and County Comptroller via and presented the same allegations as noted above. Allegation 2, above, was referred to the Ethics and Compliance in accordance with County Resolution Allegation 1 is the subject of this report. Based on the results of the investigation concerning the specifications of solicitation #132566JS - Roller Chopping County s, the Internal Audit Department and Office of the Inspector General determined: A. The equipment noted for use by the recommended awardee did not meet the specifications of the solicitation #132566JS - Roller Chopping County s. B. More than one county employee knew or should have known that the roller chopper equipment, presented by the awarded bidder, did not meet the weight specifications for solicitation #132566JS - Roller Chopping County s. C. County staff did not provide requested information to a bidder. Page 3

4 Investigative Findings A. The equipment noted for use by the recommended awardee did not meet the specifications of the solicitation as outlined in the bid - IFB #132566JS - Roller Chopping County s. Observations On July 22, 2013, Solicitation #132566JS - Roller Chopping County s was advertised by the Department and became available on the eprocure system. The purpose of the solicitation was to obtain contracted services to roller chop 9 non-contiguous parcels of land owned by and located in Sarasota County. The solicitation (with 2 addendums) included, Section 5.0 Equipment Specifications, detailing the requirements of the machinery, known as a chopper, necessary to complete the work in the appropriate manner. Specifically the following was required - The tractor (power unit) must be equipped with rubber tires and have a front mounted hydraulic blade to help push down trees and larger brush prior to running over the vegetation with the chopper. The roller chopper can be single or double drum. Drums can be connected and run side by side as long as each drum has a minimum 15,000 pound weight on the ground. No equipment can be wider than 10 feet total (when accessing gates). The drums must be a minimum of 30 inches in diameter capable of being filled with water. It is anticipated the drums will be filled approximately half full to complete appropriate chopping. This amount of water could be increased or decreased depending on soil and vegetation condition. The chopping blades must be a minimum of 8 inches in height and capable of chopping 4 inch diameter vegetation at breast height (DBH). Should significant rutting occur in any area, work will cease and contractor will relocate to areas where little or no rutting occurs. As described above, to qualify as both a responsible and responsive bidder the equipment specifications required the chopper to have a minimum weight of 15,000 pounds. The Department issued a Notice of Recommended Award without verifying solicitation specifications. Subsequently, weight tickets obtained from the awardee reflected that the chopper equipment had a calculated weight of 13,600 pounds. The calculated weight was short the required weight by 1,400 pounds or 9.33%. References: County Ordinance No , Section 2-217(c) - Methods provides that Invitations for Bid (IFB) may be solicited when the Official determines that the use of the competitive sealed bids is advantageous to Sarasota County. IFB s shall be issued by Page 4

5 and award of bid shall be made to the lowest, responsible and responsive bidder, unless the requirement for competition is exempted by the Official. Sarasota County Manual, Chapter 25 provides for definitions of terms relating to the procurement process by referring to definitions as published by the National Institute of Governmental Purchasing (NIGP). The NIGP Online Dictionary of Terms offers the following definitions - Responsible Bidder/Offeror: A contractor, business entity or individual who is fully capable to meet all of the requirements of the solicitation and subsequent contract. Must possess the full capability, including financial and technical, to perform as contractually required. Must be able to fully document the ability to provide good faith performance. Also see Qualified Bidder. Responsive Bidder/Offeror: A contractor, business entity or individual who has submitted a bid or proposal that fully conforms in all material respects to the Invitation for Bids/Request for Proposal (IFB/RFP) and all of its requirements, including all form and substance. Qualified Bidder: A bidder determined by the purchasing organization to meet the minimum standards of business competence, reputation, financial ability, and product quality for placement on the bidders list. Also see Responsible Bidder. Recommendation In accordance with Sarasota County, Standard Operating Procedure #36: Responsiveness & Responsibility Verification Process, prior to contract award, the Analyst should document the verification of the specified qualifications outlined in the solicitation. Irregularities and discrepancies should be documented and reviewed by the Official or designee. Page 5

6 B. More than one county employee knew or should have known that the roller chopper equipment, presented by the awarded bidder, did not meet the weight specifications for solicitation #132566JS - Roller Chopping County s. Observations The bid specifications (with 2 addendums), as outlined in solicitation #132566JS - Roller Chopping County s, Section 5.0 Equipment Specifications, state: The tractor (power unit) must be equipped with rubber tires and have a front mounted hydraulic blade to help push down trees and larger brush prior to running over the vegetation with the chopper. The roller chopper can be single or double drum. Drums can be connected and run side by side as long as each drum has a minimum 15,000 pound weight on the ground. No equipment can be wider than 10 feet total (when accessing gates). The drums must be a minimum of 30 inches in diameter capable of being filled with water. It is anticipated the drums will be filled approximately half full to complete appropriate chopping. This amount of water could be increased or decreased depending on soil and vegetation condition. The chopping blades must be a minimum of 8 inches in height and capable of chopping 4 inch diameter vegetation at breast height (DBH). Should significant rutting occur in any area, work will cease and contractor will relocate to areas where little or no rutting occurs. During the solicitation process there is an opportunity for bidders and potential bidders to ask questions to clarify information contained in the solicitation. The questions and answers are posted on the eprocure system and available for all bidders and potential bidders to read. During the solicitation process of solicitation #132566JS - Roller Chopping County s, a question was asked regarding the requirement for a minimum chopper weight of 15,000 pounds. The response posted on the eprocure system defined the weight as a minimum empty weight. A timeline of activity related to this solicitation, included as Exhibit A to this report, illustrates that more than one county employee was aware of the minimum weight requirement as contained in the solicitation and clarified in the eprocure system as an empty weight on July 30, Recommendation We recommend the County review actions taken by staff and initiate appropriate action. Additionally, quality assurance measures should be reviewed, amended as necessary, and staff retrained to prevent similar occurrences. Page 6

7 C. County staff did not provide requested information to a bidder. Observations It is clear from the activity contained in Exhibit A that the bidder had interest in the weight of the equipment of the awardee. Correspondence between County staff displays hesitance, to provide the bidder the actual weight of the equipment. Despite repeated requests for the weight of the equipment, County staff did not provide the bidder with the actual weight during the procurement process for solicitation #132566JS Roller Chopping County s. Recommendation We recommend the County review actions taken by staff and initiate appropriate action. Additionally, quality assurance measures should be reviewed, amended as necessary, and staff retrained to prevent similar occurrences. Page 7

8 Exhibit A - Timeline of Activity # Date Author/ Recipient(s) Activity 1 7/22/13 Advertisement: Advertisement of solicitation #132566JS - Roller Chopping County s. 2 7/30/13 Posting on eprocure system: Question - with a minimum chopper weight of 15,000 pounds. Is this per drum? empty? Answer - This is minimum weight for the entire chopping unit not including the power unit. This is an empty weight with the capability of adding water if necessary to achieve vegetation reduction. As stated, vegetation reduction is dependent on vegetation type and soil conditions. Investigator Comments The bid specifications include verbiage related to equipment in Section 5.0 Equipment Specifications. Analyst requested assistance via from several Natural Resources- employees to help answer questions posted on eprocure. Answer matches verbiage in #3 and conflicts with basis for weight calculation in # /30/13 Environmental Supervisor- / Analyst This is minimum weight for the entire chopping unit not including the power unit. This is an empty weight with the capability of adding water if necessary to achieve vegetation reduction. As stated, vegetation reduction is dependent on vegetation type and soil conditions. Response is used to provide answer in #2. 4 8/9/13 Meeting: Non-Mandatory Pre-Bid Meeting is held for solicitation #132566JS - Roller Chopping County s. 5 8/14/13 Deadline: Request for Information deadline for solicitation #132566JS - Roller Chopping County s. Page 8

9 # Date Author/ Recipient(s) Activity Investigator Comments 6 8/21/13 Due Date: Due date for submittal of bids for solicitation #132566JS - Roller Chopping County s. 7 8/27/13 Environmental Supervisor- through Manager, / Analyst 8 9/4/13 Bidder/ Official, Analyst Award Recommendation: The same Environmental Supervisor - submits an Interoffice Memorandum to the Analyst recommending award of solicitation #132566JS - Roller Chopping County s to the lowest bidder. The Analyst and the Official are both notified via of a bidder s intent to protest the award of solicitation #132566JS - Roller Chopping County s unless county staff is able to document that the awardee s equipment meets the specifications as outlined in the solicitation. 9 9/9/13 Visit and Inspection of Equipment: Analyst and the Environmental Supervisor - visit the awardee to inspect the equipment. Measurements are recorded for the drum diameter and the drum width and pictures are taken. 10 9/10/13 Communication(s): Recorded specifications (measurements of diameter, width and height) are sent to the bidder who requested the information. The bidder responds to the Analyst requesting the weight of the equipment. Weight is not obtained during this visit. Information sent does not include weight of equipment. Page 9

10 # Date Author/ Recipient(s) 11 9/12/13 Awardee/ Analyst, Environmental Supervisor- 12 9/13/13 Analyst/, Environmental Supervisor- Activity As per our conversation the other day attached are 2 weight tickets from {weight station} on my Roller Chopper, They reflect the total weight of the Truck + Trailer + Roller Chopper as total weight of 29,860 lbs and the total weight of the Truck + Trailer of 16,260 lbs That relates to the Chopper being 13,600 lbs with no water in the drums. The water capacity of each drum is 435 US Gallons at 7 lbs per gallon to add 3,045 X 2 = 6,90* For a total weight of 19,690 lbs Please contact me if there is any further information needed. * Quoted accurately, however, mathematically this calculates as 6,090 Based on the information provided by the vendor below* and the attached weight tickets, the roller chopper meets our required specifications. I have not seen or have been made aware of any formal protest submitted as of this morning. The protest period has expired. I will begin working on the contract for this solicitation. *below - refers to the directly above that contains the awardees calculation of weight. Investigator Comments In conflict with the weight specification as described on eprocure, see #2. In conflict with information contained in #2. The bidder who indicated intent to protest has not been provided the weight as requested. Page 10

11 # Date Author/ Recipient(s) 13 9/13/13 Director of Natural Resources/ Analyst, Official, Environmental Supervisor -, Chief, Manager, 14 9/13/13 Official/ Analyst, Senior Analyst, Chief, Environmental Supervisor- Activity I understand what you are saying however I need to be certain there is no angle from which this can be considered contrived or manipulated. That being said, in reading the spec it says the minimum weight of the roller chopper must be 15,000 pounds. It then goes on to say we anticipate the drums would be half filled for the required work. Could the spec be construed to say the unfilled chopper must be 15,000 pounds? This may be moot since the protest period has expired but I still need us to consider that interpretation. Especially if there was a delay in getting on the vendor s site since he was out of town. One I read implied there was. Please proceed. This meets all specs as described. Protest window is closed. Investigator Comments Director of Natural Resources expresses views on weight specifications. The bidder has not been provided the weight as requested. During an interview with the Official, he indicated that he and the Chief were acting on information relayed to them by the Analyst and that he ( Official) had not physically reviewed the solicitation file. The Official also noted that he relied on the Senior Analyst to have conducted a proper review of the solicitation file in question. Page 11

12 # Date Author/ Recipient(s) 15 9/13/13 Official/ Analyst, Natural Resources Director, Senior Analyst, Chief, Environmental Supervisor- Activity { Analyst}, Please make sure you share the weight ticket with {bidder} and inform him that we are proceeding as awarded. Also inform him that the protest window is now closed. { Official} Investigator Comments Weight tickets are not shared with the bidder. 16 9/13/13 Analyst/ 17 9/13/13 Official / Analyst, Chief { Official}, I would urge not to send weight tickets to {the bidder}. He did not ask for them and I would not think it would be wise to invite more questions or speculation from him. I agree that we should send a courtesy stating that the protest period is now closed, but nothing further. As {Natural Resources Director} brought up about the empty or full weight of the equipment, I am sure this would have the potential for {the bidder} to keep this alive. Please advise if you agree. Agreed. The bidder requested the weight of the equipment which was not provided. During an interview with the Official, concerning this response, he indicated that he was agreeing that an should be sent to the bidder and stated that he was not directing the Analyst to withhold the weight ticket information. Page 12

13 # Date Author/ Recipient(s) 18 9/13/13 Analyst/ Bidder, Activity {Bidder}, Thank you for your participation. This is a courtesy notifying that the protest period is now closed for solicitation IFB JS. Investigator Comments The bidder has not been provided the weight of the equipment as requested. 19 9/13/13 Bidder/ Analyst So, does that mean you are going to waive the weight requirement? Question relates to weight specification. 20 9/13/13 Analyst/ 21 9/13/13 Official / Analyst, Chief Would you like me to answer this? I.E. {Bidder}, We have verified to our satisfaction, by an independent weight station, that the equipment meets the required specifications listed in the solicitation. Seems OK to say..those are the facts. In conflict with information contained in #2 and # /13/13 Analyst/ 23 9/13/13 Official / Analyst, Chief {The bidder} has also left me a voice message and would like me to return his call. At this time, I would rather not contact him by phone. I would prefer that all communication with him be written. Do you agree with this? Keep it in written form with him please. Short sweet and always stick to the facts. Remember that we are in litigation with him over the Canal Clearing Contract at this time. Thanks. Page 13

14 # Date Author/ Recipient(s) 24 9/13/13 Analyst/ Bidder, 25 9/13/13 Bidder/ Analyst Activity {Bidder}, We have verified to our satisfaction, by an independent weight station, that the equipment meets the required specifications listed in the solicitation. Super and the weight was? Investigator Comments In conflict with information contained in #2 and #11. The bidder has not been provided the weight of the equipment as requested. 26 9/13/13 Analyst/ 27 9/13/13 Bidder/ Analyst, When can I pass this conversation to you? I see that every time I reply to {the bidder} (with you and {Chief } cc ) he sends another question directly to me, but does not include any of the other individuals that should be included. {The bidder} appears to be beating this to the ground and is trying to drag me into a one-on-one conversation that I simply will not entertain. I believe we answered the vendor is compliant with the requirements. When do we stop this? Upon notice of intent to award I contacted {the Analyst}. He was in training and I notified {the Official} of my intent to protest the award to the low bidder because they had not verified his equipment to assure it met the specifications. {The Analyst} contacted me and asked about my intent to protest. We agreed that we needed to verify length, width and manufacture to establish that the chopper met the minimum weight required in the specifications. The Page 14

15 bid specifications clearly require a minimum weight of 15,000 pounds. I was asked by {the Analyst} to be patient so the equipment could be verified as the owner was out of town. I said that would be fine. Knowing the length & width of the drum allows you to calculate the water capacity of the drum and determine its weight full of water. This is then added to the base weight of the chopper to provide the overall weight. On Tuesday I received an with pictures from {the Analyst} showing the length & width of the drums on the chopper. These measurements will allow you to determine the weight of the drum full of water, but does not provide you with the base weight. I responded by immediately and asked for the manufacturer. Knowing the manufacturer would allow you to call or review their literature to determine if the chopper met the minimum specifications. Later on Tuesday {the Analyst} replied by that manufacturer was not a bid requirement. I immediately explained that without knowing the manufacturer additional verification would be needed to determine the weight of the chopper. I sent additional s to {the Analyst} on Wednesday & Thursday asking for a reply. I received an today (Friday) informing me that the protest period had closed. This is why you get formal bid protests. I expected the County to follow through on our agreement. I should not have had to act at all, as the County should have verified the information prior to issuing a notice of intent to award. This is the type of indifference that tarnishes the County s reputation and creates Page 15

16 adversity that results in bad blood and legal action. I should not have to act as an agent for the County and direct them to perform due diligence on the specifications, awards or contracts. The failure by the County to verify the equipment is indicative of the Department again attempting to manipulate the bid just as they did on the last bid which was thrown out. I have Just received an from {the Analyst} Friday 9/13/13 3:06 pm stating - we have verified to our satisfaction, by an independent weight station, that the equipment meets the required specifications listed in the solicitation. Why are you hesitant to state the weight? This creates the appearance that you are not being truthful. The independent weighing should have been observed and verified by a purchasing (un biased) staff member. The problem is this is a HOMEMADE chopper and the vendor should expect to have to qualify it and certify its weight. Had the vendor purchased the chopper as the other 2 low bidders did. The manufacturer would be able to declare the weight. 28 9/16/13 Analyst/ 29 9/16/13 Official / Analyst, Chief Your direction and guidance please. I am sure that {the bidder} is expecting a reply to this below*. {The bidder} has not stated or shown how he has been aggrieved by this recommended award as required.* directly above. Did he file a formal protest before the deadline? My understanding is that he did not, so has missed the protest window. No response is required to his . Please move forward with contract award. Subsequently, the contract was awarded to low bidder. Page 16

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