
    C.H. BARCO CONTRACTING COMPANY, Appellant, v. STATE of Florida, DEPARTMENT OF TRANSPORTATION and Wiley N. Jackson Company, Appellees.
    No. BH-209.
    District Court of Appeal of Florida, First District.
    Feb. 12, 1986.
    
      F. Alan Cummings, Michael L. Rosen and Harry R. Detwiler, Jr., of Holland & Knight, Tallahassee, for appellant.
    Maxine F. Ferguson, Larry Scott and A.J. Spalla, Tallahassee, for appellee Department of Transp.
    Charles T. Schropp and David T. Knight, of Shackleford, Farrior, Stallings & Evans, Tampa, for appellee Wiley N. Jackson Co.
   PER CURIAM.

C.H. Barco Contracting Company (Barco) appeals the rejection of its bid for three road construction projects in Duval County. The Department of Transportation, by final order rendered June 26, 1985, rejected the bids submitted by Barco and awarded the subject contracts to the second low bidder. Barco seeks review of the Department’s determination that Barco’s bid was non-responsive because it failed to meet the Department’s minority participation goals or demonstrate that it made a good faith effort to meet those goals.

The Department advertised and accepted bid submissions for three road construction projects in Duval County, Florida. When the bids were opened December 5, 1984, Barco was the apparent low bidder on all three projects. However, as Barco did not meet the Department’s goal for participation by disadvantaged business enterprises (DBEs) pursuant to section 339.0805, Florida Statutes (1984 supp.), Barco was required to demonstrate that it had made a good faith effort to meet the contract goals. The Department set percentage goals for DBE participation in the respective projects as follows: Project 3510— 10%; Project 3511 — 12%; and Project 3512 — 15%. Barco’s bid submission proposed zero percent DBE participation in all three projects. Of the four ranked bidders, the second and third low bidder met or exceeded the DBE goals on each of the three projects while the fourth low bidder proposed DBE participation of 4.6%, 6.59% and 12.65%, for the respective projects. The Department issued a notice of intent to award contract to Wiley N. Jackson Company (Jackson), the second low bidder, and Barco timely filed a notice of protest pursuant to section 120.53(5), Fla.Stat. A section 120.57(1) hearing was held and the hearing officer entered a recommended order rejecting Barco’s protest and affirming the Department’s decision to award the contracts to Jackson. The Department entered a final order adopting the recommended order and this appeal ensued.

Florida Administrative Code Rule 14-78.-03(2)(b)(4) (1984 supp.) provides, in part:

For all contracts for which DBE and WBE contract goals have been established, each bidder shall meet or exceed or demonstrate that it could not meet, despite its good faith efforts, the contract goals set by the department.

The rule goes on to provide that failure to meet the DBE goals will result in the bid submission being deemed non-responsive and the bid being rejected. Id. Florida Administrative Code Rule 14-78.-03(2)(b)(4)(A)(iv), requires a contractor who fails to meet the DBE goal to provide the Department with information demonstrating its good faith efforts. Florida Administrative Code Rule 14-78.03(2)(b)(4)(B)(i-ix) (1984 supp.) sets forth nine non-exclusive criteria against which a contractor’s good faith efforts will be evaluated. These criteria include: whether the contractor solicited all DBEs doing the type of work the contractor seeks to perform; whether the contractor selected economically feasible portions of the work to be performed by the DBEs; whether the DBE goals were met by other bidders; whether the contractor assisted DBEs in obtaining necessary bonding, credit or insurance; whether the work subcontracted matches the capabilities of solicited DBEs; and whether the contractor has utilized DBEs or WBEs in the last six months on other contracts. Subparagraphs (v) and (viii), two of the nine criteria, provide in full:

(b) Whether the contractor submits all quotations received from DBEs or WBEs, and for those quotations not accepted in explanation of why the DBE or WBE will not be used during the course of the contract. Receipt of a lower quotation from a non-DBE or a non-WBE will not in itself excuse a contractor’s failure to meet contract goals; provided however, a contractor’s good faith efforts obligation does not require a contractor to accept a quotation from a DBE or a WBE which exceeds the lowest quotation received from any subcontractor by more than 1%.
(viii) Whether the contractor’s efforts were merely pro forma and given all relevant circumstances, could not reasonably be expected to produce sufficient DBE and WBE participation to meet the goals.

The rule also provides that the above list “is not intended to be exclusive or exhaustive and the department will ... also [look at] the quality, quantity and intensity of these efforts.” Id.

Barco contends the Department, prior to the December 5, 1984, letting had liberally interpreted these criteria in determining whether the contractor demonstrated a good faith effort. Beginning with the December 5, 1984, letting, argues Barco, the Department switched to a strict or literal interpretation of the criteria. Barco maintains that it would have been awarded the subject contracts had the Department not changed its interpretation. Barco argues the Department’s new interpretation amounts to an “incipient nonrule policy,” see McDonald v. Department of Banking and Finance, 346 So.2d 569, 580 (Fla. 1st DCA 1977), and, since the non-rule policy represents the reversal of a past policy which was widely known and relied on by affected parties, the agency bears a greater burden of proof in justifying this non-rule policy. See Walker v. State Department of Transportation, 366 So.2d 96 (Fla. 1st DCA 1979). Alternatively, Barco contends the Department, unilaterally and without prior notice, abrogated the so-called “one percent rule” (contained in Florida Administrative Code Rule 14-78.-03(2)(b)(4)(B)(v)). Barco asserts it was entitled to rely on the Department’s previous interpretation of this criterion; it did rely on the Department’s previous interpretation of this criterion; and suffered detriment due to its change in position caused by relying on the Department’s previous interpretation. See State Department of Revenue v. Anderson, 403 So.2d 397, 400 (Fla.1981).

We find unpersuasive Barco’s contention that, but for the Department’s decision to reinterpret the good faith efforts criteria in a more literal fashion, it had submitted evidence sufficient to demonstrate a good faith effort to comply with the DBE goals set by the Department. While there was some testimony indicating some members of the Department felt the interpretation of the good faith effort criteria was stricter than in the past, we find the criteria enunciated in the rule to be of such a nature that a case-by-case adjudication is clearly contemplated by the rule. Thus, the fact that the interpretation of the criteria as applied to the facts of the instant case may have varied from a previous interpretation is not dispositive. The interpretation of the good faith standard applied by the Department in this case is clearly a permissible one and is consistent with the clear and unambiguous language of the rule. As stated in McDonald v. Department of Banking and Finance, supra:

The Florida APA ... also recognizes the inevitability and desirability of refining incipient agency policy through adjudication of individual cases. There are quantitative limits to the detail of policy that can effectively be promulgated as rules_ 346 So.2d at 581. (emphasis supplied)

Barco relies heavily on the fact that the Department’s Good Faith Efforts Committee reversed its initial recommendation that Barco’s good faith efforts package be approved. Subsequent to the initial approval of Barco’s good faith effort package, the chairman of the Good Faith Efforts Committee attended a meeting with a senior policymaker and a member of the Awards Committee who indicated their disagreement with the Good Faith Efforts Committee’s decision to approve Barco’s good faith efforts package. The Good Faith Efforts Committee then requested or was directed, the testimony on this point is in conflict, to reconsider their decision and determined to recommend that the bid be deemed non-responsive for Barco’s failure to provide a good faith effort to meet the DBE goals. The Good Faith Efforts Committee is the first step in a four-tiered internal review mechanism through which a bid submission must pass before a contract is awarded. It was undisputed that each supervening level of the review mechanism was free to reject the recommendation of the Good Faith Efforts Committee. In light of this fact, the Good Faith Efforts Committee’s actions alone do not demonstrate the application of a non-rule policy, nor do they establish that the Department had previously applied the criteria in such a manner that that interpretation was widely known and relied on by contractors.

Barco also contends, in effect, that it was entitled to rely exclusively on the so-called “one percent rule” (which we note, is not a rule, but merely one of the criteria contained within the rule) found in subparagraph v of the good faith criteria. That provision states that a contractor is not required to use a DBE quote that exceeds a non-DBE quote by more than one percent in order to be deemed in good faith. Barco argues they were entitled to rely on the fact that the Department “invariably” applied the one percent rule as a satisfactory reason for failing to use DBE quotes and that the department had previously allowed contractors to rely exclusively on the one percent rule to show a good faith effort. As proof of this Department “policy”, Barco states in its initial brief that it “had on one other occasion submitted a bid in which it did not meet the DBE participation goal, yet Barco was awarded the contract based on the Department’s application of the one percent rule.” Once again, we find that the evidence adduced at hearing fails to support Barco’s argument. Barco’s president testified that in August, 1983, Barco’s bid submission failed to meet the DBE goal, yet it was awarded the contract through exclusive reliance on the one percent rule. We find this testimony to be rather perplexing as the one percent provision was not added to the rule until May 3, 1984. Even if the one percent rule had been utilized in approving Barco’s bid submission, it does not establish that Barco was entitled to rely exclusively on this provision. The August, 1983, letting set a DBE participation goal of 8%. Barco’s proposed DBE participation was 6.5%. We have no trouble distinguishing a case in which the contractor meets some 88% of the proposed DBE participation goal from a case in which the contractor proposes zero percent compliance with the DBE participation goal. Barco’s president also testified that the company was awarded a contract in August, 1984, but as Barco’s bid submission in that case met the DBE goals, Barco was not required to show that it had made a good faith effort and thus could not have relied on the one percent rule. The only testimony offered by Barco to support its allegation that exclusive reliance on the one percent rule was a practice widely known and relied on by Florida contractors was Barco’s president’s testimony that several DBEs who called with quotes the night before the letting, reminded him that he did not have to use the DBE quotes if the non-DBE’s quote was more than one percent lower. We do not find this evidence sufficient to establish Barco’s contention that reliance on the one percent rule was widespread among contractors doing business with the Department. In fact, it appears that some bidders utilized DBE quotes which were more than one percent over non-DBE quotes. This fact alone tends to refute Barco’s allegation that contractors knew they could rely solely on the one percent provision to satisfy the good faith efforts requirement.

We find the record adduced at the administrative hearing sufficiently supports the Department’s determination that Barco failed to show it exercised a good faith effort to meet the DBE goals. In so finding, we are mindful of this court’s role in reviewing an agency’s decision to award a contract. As the supreme court stated in Liberty County v. Baxter’s Asphalt and Concrete, 421 So.2d 505, 507 (Fla.1982):

In Florida ..., a public body has wide discretion in soliciting and accepting bids for public improvements and its decision, when based on an honest exercise of this discretion, will not be overturned by a court even if reasonable persons may disagree.

We find the Department has advanced competent substantial evidence to support its determination to reject Barco’s bid as non-responsive. Barco failed to solicit all certified DBEs performing the type work to be subcontracted. Testimony indicated that Barco solicited 27 certified DBEs out of some 250 in the Department’s directory. While not all DBEs are available to do all types of work in all locations, there was evidence that Barco’s effort was lacking, out of 33 certified DBEs available for concrete work, Barco solicited only 12. Barco obtained only a single quotation from a certified DBE through its solicitation efforts. Barco received at least three quotations from unsolicited DBEs. The necessity of requiring a contractor to solicit all DBEs, especially where the contractor seeks refuge in the one percent rule, is readily evident. Should a contractor be allowed to selectively solicit DBEs, he would be free to solicit only those which, due to geographical considerations or other factors, would produce quotes higher than the quotes of non-DBEs and the contractor would be able to avoid the Department’s DBE goal. Clearly, one provision should not be read so as to emasculate the entire rule. Furthermore, as has been previously noted, Barco was the only bidder who failed to include any DBE participation in its bid submissions. Two bidders met the DBE goals on each of their respective bids, while a third proposed substantial compliance. There was also evidence which would tend to show that Barco’s efforts were merely pro forma and under the circumstances would not be expected to secure DBE participation to meet the goals.

The order of the Department rejecting Barco’s bid as non-responsive and awarding the subject contracts to Jackson is supported by competent substantial evidence, whereas Barco’s factual assertions are tenuous at best. Accordingly, the final order of the Department is affirmed.

MILLS and JOANOS, JJ., concur.

BOOTH, C.J., dissents.

BOOTH, Chief Judge,

dissenting.

We should reverse the order below, based on the findings of the hearing officer, adopted in the order sought to be reviewed. These findings, quoted and summarized in pertinent part below, are not challenged on this appeal:

I. THE AGENCY CHANGED ITS INTERPRETATION/POLICY OF THE RULE AFTER THE BIDS WERE SUBMITTED.

In this regard, the hearing officer’s findings, accepted by the agency, are as follows:

Beginning with the bid letting in December, 1984, related to the Barco matter, the Department of Transportation has decided that [1] solicitation would be in the form of certified mail, return receipt requested, or hand-delivery with appropriate receipt and that bidders would provide copies of the certified mail receipts or other receipts with the bid blank. The claim on the part of the bidder that the solicitations were made by certified mail, naming the persons who were solicited would not suffice even if those assertions could be proven by evidence submitted after the bid opening, which evidence tended to verify the claims as set forth in the summary letter. Moreover, the department decided, that contrary to its prior interpretation of its rules, [2] a substantial number of solicitations to available DBEs and WBEs listed in the department’s directory would not be sufficient. Beginning with the Barco situation it would be necessary to solicit all [emphasis theirs] available DBEs and WBEs, without regard for perceptions by the bidders on whether responses would be forthcoming from all [emphasis theirs] available DBEs and WBEs. [3] The department also determined that all quotations already received from DBEs or WBEs should be provided with the bid blank. A written summarization or itemization of those quotations would not be sufficient. [4] The department takes the point of view in its decision to reject the Barco bids that it would not allow Barco to rely exclusively on the 1% differential between the quotations, ... given what the department deemed to be unacceptable efforts in compliance with other review criteria as discussed. Finally, in the overview, the department rejected the Barco bids because of the impression that the efforts made by Barco at good faith compliance with DBE goals were not of the quality, quantity and intensity that was necessary, [emphasis added except where otherwise indicated]

Summarizing the foregoing findings of the hearing officer, the agency changed its interpretation/policy after the bids were submitted in the following particulars: (1) mailing verification requirements were changed to require proof be submitted at the time of the bid; (2) a “substantial number of solicitations” would not suffice under the new interpretation, but “all available DBEs and WBEs” would have to be solicited and proof furnished; (3) that, contrary to prior practice, all quotations received from DBEs or WBEs should be provided with the bid blank, a written summar-ization no longer being sufficient; (4) where (1), (2), and (3), supra, were not complied with, the one-percent differential between non-DBEs and DBEs would no longer excuse a contractor from accepting a quotation from a DBE or a WBE, despite the provision of Rule 14-78.03.

II.BARCO WAS AWARDED A PREVIOUS CONTRACT BASED ON THE APPLICATION OF THE ONE-PERCENT CRITERION.

The hearing officer found as follows:

Barco on one other occasion had submitted a bid in which it did not meet the DBE participation goal, based upon the fact that the non-DBE quotes were more than one percent lower than the quotations from DBE subcontractors and had been awarded the contract on that occasion.

The hearing officer also found (quoted infra V.) that Barco relied on the one-percent criterion and did not submit its DBE quotes, although Barco had sufficient DBE quotes to comply with all the stated goals.

III. IN NOT SOLICITING ALL DBEs, BARCO EXERCISED “A BUSINESS JUDGMENT. BASED ON PRIOR EXPERIENCE WITH DBEs, THEIR LOCATION AND ANTICIPATED COST OF MOBILIZATION FOR DBEs.”

The initial review by the Good Faith Efforts Review Committee found Barco’s solicitation of 27 DBEs substantial. The hearing officer’s order is in accord. There was no finding that this was pro forma compliance or bad faith. On the contrary, the testimony of Wynn was that the agency had not required 100 percent solicitation in the past. The hearing officer accepted this testimony as shown by findings set out in I., supra.

IV. THE CHANGED VOTE ON BAR-CO’S BID WAS A RESULT OF THE CHANGED INTERPRETATION.

The hearing officer found that the Good Faith Efforts Review Committee changed its vote after “executive guidance” based on “de novo” interpretation of the rule, and concluded, in part, as follows:

What has occurred on this occasion is that the Department of Transportation de novo is required to interpret its duly promulgated rule_while the petitioner and others have been allowed to profit from a less strenuous interpretation of that rule in the past; a literal interpretation was always available to the Department, and that interpretation has been made in these conclusions of law.

The hearing officer’s order makes it plain that the Good Faith Efforts Review Committee’s change in its decision was not based on new or additional facts. The change in the vote was based on “executive guidance” setting out a new interpretation.

The record entirely supports the conclusion that, as a result of the change in the interpretation made after the bids were in, the agency’s decision on this bidding changed, and Barco’s bid was rejected.

Keith 0. Pitchford, Chairman, Good Faith Efforts Review Committee, in December, 1984, testified as to original adequacy of Barco bids “based on our perspective at that time” (transcript, pages 90-91) and further testified (transcript, page 92):

Q. As a result of your changing or interpretation of the Department’s DBE rules, you and the committee reversed the position on Barco’s good-faith efforts package and changed it from one of approval to disapproval.
A. That’s correct.

Y. BARCO HAD SUFFICIENT QUOTES TO COMPLY WITH THE DE NOVO INTERPRETATION OF THE AGENCY.

The hearing officer specifically found:

While Barco fails to specifically mention the fact, there is greater than a 1% differential between the DBE quotations and the non-DBE quotations which were used in the several bid submissions. The quotations by the non-DBEs were lower by more than 1%. In view of that circumstance, Barco felt that it was appropriate to use the non-DBEs quotations as envisioned by Rule 14-78.03(2)(b)4.b.v., Florida Administrative Code (1984). This perception by the Petitioner relates to that portion of the rule which says:
... a contractor’s good faith efforts obligation does not require a contractor to accept a quotation from a DBE or WBE which exceeds the lowest quotation received from any subcontractor by more than 1%.
Had Barco chosen not to avail itself of the opportunity set forth in that rule, it had received sufficient DBE quotes to comply with all of the goals set forth in the several projects, [emphasis added]

VI. BARCO’S BID ON THE JOBS IS ALMOST A MILLION DOLLARS ($962,083) LOWER THAN THE NEXT LOWEST BID.

The order and record below show that the public is being required to pay a million dollars more for these jobs and that the one-million-dollar excess is not due entirely, or even primarily, to the use of “disadvantaged” contractors. The differential represents excess amounts being paid to the general contractor and wow-disadvantaged subcontractors. Jackson’s bid represents an increase of more than 18 percent over Barco’s bid. Paradoxically, the higher bidders were able, and indeed required, to use bids from DBEs simply because their bids were higher, thereby allowing the DBEs’ bids to come in within the one-percent range.

The order and record below show that the agency’s decision to change policy in “midstream” without prior notice has been wasteful of public funds and supports neither Section 337.11, Florida Statutes (work to be awarded to the lowest responsible bidder), nor Section 339.0805, Florida Statutes (regarding use of disadvantaged contractors). The order below, quoted infra, finds that Barco had sufficient available quotes from DBEs to comply with the de novo interpretation; and, had prior notice been given at the time of bidding, these quotes could have been used by Barco, achieving the results of both statutes and saving the public many thousands of dollars.

CONCLUSION

The practical interpretation by an agency of its enabling legislation is entitled to great persuasive force and efficacy. However, the findings of the hearing officer make it absolutely clear that here the agency sought to change its practical interpretation retroactively to affect bids already submitted and that the agency gave no prior notice or opportunity to comply with new procedures. A change in that practical interpretation without prior notice or opportunity for compliance should not affect the basic rights of appellant. In Walker v. Department of Transportation, 366 So.2d 96 (Fla. 1st DCA 1979), a similar attempt at retroactive change in policy/interpretation was stricken by this court. I recognize the- difficulty of correcting the results of the agency’s improper action now that the contract has been awarded and the work underway. Nonetheless, this court should not seem to condone unconscionable actions violating fundamental fairness, and I must dissent. 
      
      . In Project 3510, the Department had set a goal of 3% Women Business Enterprise (WBE) participation. Barco exceeded this goal.
     
      
      . Although Barco couches its argument in terms of incipient nonrule policy, unilateral abrogation and detrimental reliance, we think this statement correctly characterizes the gist of Bar-co’s argument.
     
      
      . The order below finds that Barco solicited, by timely and proper letter, 43 companies, 27 of which were certified DBEs, and eight of which were certified WBEs.
     
      
      . Testimony of Sharon Wynn, DBE/WBE liaison officer, based on her involvement in good faith effort evaluation from 1980 through the Barco bidding in December, 1984, states in part as follows:
      Q. [Attorney for Barco] Now the first meeting of the good-faith efforts review committee, what discussion was had with regard to the number of DBEs that were solicited by Barco who were on the Department's DBE directory or listed in the Department’s DBE directory? Was there any discussion of that?
      
        
      
      A. As usual, we always have a problem with the number of — or we tend to have a problem with the number of DBE contacts that have been made.
      
        
      
      A. 43 in comparison to a directory of 250 so to speak.
      One, we break down the items that would have been available for work and see what the average would have been in terms of the solicitations made by the bidder. Consideration is given to those factors. Although they are not weighted, they are measured in terms of what he achieves in the way of bids. If he sends one letter and gets a response and gets a good response, then, of course, no one could lay him out for not calling the other 249.
      Q. At any rate, when the committee met the first time to review the good-faith efforts package submitted by C.H. Barco Contracting Company, it concluded that the number of DBEs that it had solicited was satisfactory or adequate to meet whatever the good-faith standard was?
      A. In comparison to what he received as bids, yes.
      
        
      
      Q. When you were the person who was evaluating the good-faith efforts packages submitted by bidders who did not meet the DBE goals, you never applied a standard or a criteria that the good-faith efforts package was automatically found lacking, was to be disapproved if the bidder did not solicit every DBE listed in the Department’s DBE directory?
      A. No, I didn’t.
      Q. Have you ever known that criteria to be applied?
      A. If it has, I just don’t recall.
     
      
      .These findings are, in pertinent part, as follows:
      The Good Faith Efforts Review Committee in its initial recommendation favoring the award of the contracts to Barco, was giving a liberal interpretation to the nine criteria for review of the good faith efforts at compliance with DBE contract goals.... This recommendation was then forwarded to the Chairman of the Technical Review Committee_ Hilliard ... requested a meeting with members of the Good Faith Efforts Review Committee. That meeting took place and two of the three members of the Good Faith Efforts Review Committee were in attendance, to include the chairman, a Mr. Pitchford. In the course of this meeting, at which "executive guidance” was given to the Good Faith Efforts Review Committee attendees, Hilliard and Potts made known their desire to give a more stringent or literal interpretation to the underlying rules dealing with the question of good faith efforts at compliance with the DBE contract goals. Following this consultation, the Good Faith Efforts Review Committee met for a second time to consider the question of Barco’s good faith efforts at compliance with the DBE contract goals.
      _ On this occasion Barco was recommended for rejection as to all three projects, based upon alleged failure to show good faith efforts at compliance with DBE goals.
     