STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

INTERNATIONAL BUSINESS MACHINES )

)

Petitioner, )

)

vs. ) CASE NO. 79-078BID

) STATE OF FLORIDA, DEPARTMENT ) OF GENERAL SERVICES, and FLORIDA ) DEPARTMENT OF HIGHWAY SAFETY ) AND MOTOR VEHICLES, )

)

Respondents. )

) AMDAHL CORPORATION and ITEL ) CORPORATION, )

)

Intervenors. )

)

RECOMMENDED ORDER

Pursuant to notice, a final hearing was conducted in the above case before the undersigned Hearing Officer.

APPEARANCES

For Petitioner, Talbot D'Alemberte International Donald M. Middlebrooks Business Kenneth G. Oertel

Machines Debora Karlan Block

Corporation: Richard McDunnough and Nick DeRoma

For Respondent, Department of

General Services: Thomas M. Beason

For Respondent, Department of

Highway Safety Edwin E. Strickland and and Motor Vehicles: Enoch J. Whitney

For Intervenor, Gary Williams Amdahl Steve Uhfelder

Corporation: John McCullough and Mark Augenblick

For Intervenor,

ITEL Corporation: Jerome H. Shevin

DEFINITIONS

The Petitioner IBM Corporation will be referred to as "IBM".

The Respondent Florida Department of Highway Safety A and Motor Vehicles will be referred to as "DHSMV".

The Respondent Florida Department of General Services will be referred to as "DGS".

The Electronic Data Processing Division of DGS will be referred to as "EDP".

The Intervenor Amdahl Corporation will be referred to as "Amdahl". The Intervenor ITEL Corporation will be referred to as "ITEL".

The Request for Proposal issued by DHSMV and DGS will be referred to as "RFP".

STATEMENT OF THE CASE

DHSMV is seeking to acquire electronic data processing equipment in order to fulfill its responsibilities to improve systems for issuing and maintaining records of drivers licenses, motor vehicle title certificates, and motor vehicle registrations.

The primary purpose of the acquisition is to develop an "on-line system" for updating license, registration, and title information.

The system will permit personnel at local tax collector offices to directly program data respecting renewals or changes into DHSMV data processing equipment.

In accordance with the provisions of Sections 23.021 et seq. and 287.062, Florida Statutes, the acquisition was attempted through a competitive bid process under the auspices of the EDP Division of DGS. An RFP was issued.

Three vendors responded: IBM, Amdahl, and ITEL.

The competitive process culminated in DGS recommending that IBM be awarded the contract. The recommendation was placed on the agenda for the December 19, 1978 meeting of the Governor and Cabinet. The Governor and Cabinet are the agency head for both DHSMV and DGS. The recommendation was withdrawn from the agenda shortly prior to the meeting. Subsequent to December 19, DGS and DHSMV changed their positions, and recommended to the Governor and Cabinet that all bids be rejected, and the matter be rebid. This recommendation was placed on the agenda for the January 9, 1979 meeting of the Governor and Cabinet. Because various requests for hearing had been filed, the Governor and Cabinet referred the matter to the Division of Administrative Hearings for the scheduling and conducting of a formal administrative hearing.

Amdahl filed the initial request for formal hearing under the provisions of Section 120.57(1) with DHSMV and DGS, and alleged that IBM's bid should have been rejected, and the matter rebid, or, in the alternative, that Amdahl's bid should not have been rejected. ITEL filed a "Motion to Intervene and Request for Formal Hearing" which contained similar allegations. IBM filed a Motion to Intervene asserting that it should be awarded the bid.

The various petitions were filed in the office of the Division of Administrative Hearings on January 10, 1979, and the matter was referred to the undersigned Hearing Officer. A pre-hearing conference was scheduled to be conducted on January 29 by notice dated January 11. Prior to the prehearing conference Amdahl and ITEL filed pleadings indicating that they no longer wished to petition for a hearing, but that in the event IBM persisted in its request for a hearing, they would participate as intervenors. IBM continued to request a hearing, and the status of the parties was clarified by Order entered January

30 as follows: IBM is the Petitioner, DGS and DHSMV are Respondents, and Amdahl and ITEL are Intervenors. With the concurrence of all parties, additional prehearing conferences were scheduled, and the weeks of April 2 and 9 were set aside for the final hearing. Thereafter the parties vigorously pursued discovery, and additional prehearing conferences were conducted on February 16, March 9, and March 29, 1979. Pending motions were resolved by Orders entered on February 19, March 12, and April 2, 1979. On March 28, the parties filed a prehearing stipulation which effectively resolved many issues in the case, and included witness and exhibit lists. The prehearing stipulation, which includes as attachments the primary documentary evidence, was received in evidence at the final hearing as Hearing Officer's Exhibits 1 and 2.

The final hearing commenced on April 4 and continued through April 13, 1979. IBM called the following witnesses: Ralph Davis, the former Executive Director of DHSMV; Chester Blakemore, the present Executive Director of DHSMV; Joe Cresse, a Commissioner of the Florida Public Service Commission who was formerly the Assistant Secretary of the Department of Administration and State Budget Director; John J. Hittinger, the Director of the Division of Purchasing of DGS; Hobson Strain, the Tax Collector of Polk County, Florida; Melvin Smith, the Tax Collector of Hillsborough County, Florida, who is presently Director of the Florida Association of Tax Collectors; Robert R. Judson, a witness who qualified as an expert in the field of data processing procurement, with an emphasis on government procurement of data processing, equipment; John O'Bryan, the Systems Research and Communications Manager of DHSMV; Nigel Pallister, a systems analyst employed by DHSMV; John DeRuyter, a senior management analyst in the Bureau of Management Improvement of the Florida Department of Admiriistration; Joe McCaskill, the Financial Services and Data Processing Administrator for DHSMV; Travis Bartlett, the Chief of the Bureau of Management Information Systems of the EDP Division of DGS; Charles H. Beker, a marketing representative for the Data Processing Division of IBM; and Dozier Johnson, the Director of the Legislative Systems and Data Processing Division of the Joint Legislative Management Committee.

DGS called Joseph Robert Ippolito, the Director of the Division of EDP of DGS, as a witness, and offered the deposition testimony of Frederick M. Specht, an employee of the Contract Relations Department, Data Processing Division of IBM. The deposition testimony was received in evidence as DGS Exhibits 2 and 3. DHSMV did not call any additional witnesses.

Amdahl called the following witnesses: Robert A. Bruce, Jr., a marketing representative employed by Amdahl; Terry B. Miller, a private consultant who qualified as an expert witness in the field of government computer acquisitions; Arthur Tonkinson, the location manager and data processing manager of the Tallahassee Office of IBM; Paul Stephenson, a systems engineer employed by IBM; and recalled J. R. Ippolito. Amdahl also offered designated portions of the deposition of Charles H. Becker. This deposition was received in evidence as Hearing Officer's Exhibits 9 and 10. The designated portions of the deposition that were received are set out at pages 88 through 92, and 134 of Volume VIII of

the transcript of proceedings of April 13, 1979. ITEL did not call any additional witnesses.

The following exhibits offered by IBM were received into evidence: IBM Exhibits 265, 268, 269, 280, 281, 286, 290, 296, 297, 298, 335, 354, 358, 366,

377, 380, 382, 383, 385, 388, 398, 428, 431, 462, 500, 501, and 503. The

following exhibits offered by IBM were rejected: IBM Exhibits 375, 432, 502, 511, and 513. DGS Exhibits 1, 2, and 3 were received into evidence. The following exhibits offered by Amdahl were received into evidence: Amdahl Exhibits 37, 39, 53, 58, 59, 75, 81, 83, 92, 93, 94, 114, 119, 202. 207, 281,

316, 319, 320, and 330. The following exhibits offered by Amdahl were rejected:

Amdahl Exhibits 38, 154, 220, 282, and 307. ITEL Exhibits 1A and 2 were received into evidence. Hearing Officer's Exhibits 1 through 10 were received into evidence. The parties have submitted post-hearing legal memoranda, including Proposed Findings of Fact, Conclusions of Law, and Recommended Orders.

The issues to be determined in this proceeding are whether IBM was responsive to the RFP issued by DHSMV and DGS, and if so, whether the matter should be rebid, or whether the best interests of the State justify awarding the contract to IBM. IBM contends that its response contained no major deviations from the RFP, that the procurement is an emergency, that no other yvendors can respond to the RFP, and that the cost of rebidding would be great. The other parties assert that IBM's response contained major changes to the RFP, thus disqualifying its bid, and that even if IBM's bid was responsive, the best interest of the State would not be served by awarding the contract to IBM. Amdahl contends, in addition, that IBM and various State employees engaged in conduct which rendered the acquisition process non-competitive. DHSMV contends, in addition, that IBM's bid has expired by its terms, and that the matter must necessarily be rebid.

FINDINGS OF FACT

1. This case involved an acquisition of data processing equipment by DHSMV. DHSMV is headed by the Governor and Cabinet and includes the Division of Florida Highway Patrol, the Division of Drivers Licenses, the Division of Motor Vehicles, and the Division of Administrative Services. Section 20.24, Florida Statutes. DHSMV is required to maintain records of all applications for drivers licenses, reasons for denial of any license, suspension and revocation information, accident reports, abstracts of court records involving conviction of traffic offenses, and information pertaining to financial responsibility. Sections 322.20 and 324.051, Florida Statutes. DHSMV is also responsible for issuing certificates of title for motor vehicles, and for maintaining registration and licensing records. Sections 319.23, 320, Florida Statutes. These are substantial record keeping requirements. DHSMV data processing responsibilities are handled by the Kirkman Data Center within the Division of Administrative Services. The Kirkman Data Center is one of the larger data processing operations within state government.

   
   

2. The tax collectors of Florida's sixty-seven counties act as agents for DHSMV in the registration and licensing of motor vehicles. Under the present system registration and title data is gathered at the tax collectors' offices, and forwarded to DHSMV to be recorded in files at the Kirkman Data Center. This is known as a "batch" system. There are inherent problems in this type of system. In the first place, there is a gap between the time that the data is originally collected, and the time that it is recorded in the DHSMV records. It generally takes forty-five days from the time the data is received before it can be processed by DHSMV, and frequently the data is in excess of ten days old

   before it is received. At the time of the hearing there were 950,000 registrations which had not yet been finally processed by DHSMV. This is not a backlog of registrations, but is a typical number of registrations that inherently, at any given time, will be awaiting processing under the present system. This is not a result of the capacity of present data processing equipment, but of the system being utilized. A second problem inherent in a batch system is the additional opportunity for errors caused by the necessity of posting information twice, by delays, and by the opportunity for loss of records.

   
   

3. Having a large number of unposted records is not a new phenomenon at DHSMV. In fact, the situation is presently much improved over past years, particularly those years prior to the Legislature changing the times for purchasing auto tags to coincide with birth dates. As recently as September, 1978 there was a backlog of unposted records in excess of five million. Since then DHSMV has brought its records as current as the present system will permit. So long as tax collectors are not directly linked to the DHSMV data processing system, there will be a large number of vehicle registrations not posted in the records of DHSMV.

   
   

4. In 1977 the Florida Legislature funded computer and communications costs for placing the tax collectors of fourteen counties on an "on-line network". Under this system, the offices of the various tax collectors will be directly linked to the master computer system at the Kirkman Data Center. When a taxpayer renews his or her registration at the local tax collector's office, the information will be simultaneously entered into DHSMV records. DHSMV records will thus be absolutely current, and errors will be reduced significantly. Current and accurate vehicle and driver information is a goal of the State of Florida for a number of reasons, and is of particular importance to law enforcement officials.

   
   

5. Even aside from the desire to implement the tax collector on-line network, DHSMV's data processing needs have expanded annually, and it is projected that needs will continue to expand.

   
   

6. The Kirkman Data Center presently operates primarily with equipment manufactured by the Burroughs Corporation. The equipment has at various times in the past performed inadequately, and it does not have sufficient capacity for implementation of a tax collector on-line network.

   
   

7. In seeking to solve its data processing needs, DHSMV explored numerous alternatives for data processing equipment. Initially, DHSMV considered upgrading the existing Burroughs equipment. On August 18, 1977, Burroughs was given a letter of intent to procure a "B7700" computer system. Efforts to negotiate a contract for upgrading the Burroughs equipment were unsuccessful. On December 21, 1977, DHSMV considered a sole source procurement of an Amdahl

   Model V6-II, Central Processing Unit, and forwarded an Automatic Data Processing Equipment Request (ADPER) to the EDP Division of DGS. This request was denied by EDP for lack of justification for a sole source procurement. On January 3, 1978, DHSMV transmitted to EDP a proposed request for proposal which required that the internal performance of the central processing unit to be procured must be equal to or greater than the IBM Model 3033, or Amdahl V6-II. The RFP was not approved by EDP. Thereafter, other alternatives were considered such as acquiring equipment from other state agencies, and another attempt was made to reach agreement on a contract with Burroughs. These efforts were unsuccessful. On August 23, 1978, DHSMV transmitted a Sole Source Acquisition Request for an

   IBM Model 158 Central Processing Unit to the EDP Division as an interim solution. This request was rejected by EDP.

   
   

8. Employees of DHSMV and DGS examined data processing systems used by other states. Visits were made to electronic data processing installations utilizing Amdahl, ITEL, IBM, Burroughs and Univac equipment. After reviewing numerous data processing systems, it was concluded that the Wisconsin Data Base System was the most effective approach toward developing an on-line tax collector system in terms of efficiency and cost.

   
   

9. The Wisconsin Data Base System is a series of computer programs developed by the State of Wisconsin to provide a data base for vehicle/driver identification. Florida is being provided the system by the State of Wisconsin without charge in exchange for DHSMV providing Wisconsin its drivers license system. This will result in monetary savings of approximately $500,00 and fifteen to twenty-four months of employee time in developing a comparable system. The Wisconsin Data Base System operates on IBM compatible equipment, but it can be used on any vendor's computer should the vendor decide to convert its programs to accept the Wisconsin package. The cost of such a conversion would be significant; however, it could be accomplished. Both Amdahl and ITEL manufacture IBM compatible equipment. ITEL also finances and remarkets IBM and other manufacturers' equipment. In Wisconsin the system is operating on an Amdahl central processing unit.

   
   

10. Prior to September, 1978, DHSMV, DGS, and the Department of Administration were working together, at the direction of then Governor Reubin Askew to solve the DHSMV data processing problem. Employees of the three departments frequently disagreed concerning the proper solution. They were ultimately able, however, to develop a plan known as the DHSMV Data Processing Plan, which they all considered satisfactory. On September 6, 1978, the Plan was approved by the Governor and Cabinet. A key aspect of the Plan is adoption of the Wisconsin Data Base System. The Plan specified that any vendor conversion must involve use off the Wisconsin package. The Plan contained the following schedule for implementation:

    
    

    Phase I - September 8 - September 29

    
    

    EDP Division, DOA and DHSMV, will prepare a Request for Proposal (RFP), with technical specifications to satisfy DHSMV's requirements.

    
    

    Phase II - September 30 - November 12

    
    

    1. Vendors prepare proposals and submit their recommendations on November 12. */

       
       

    2. DHSMV starts site preparation.

       
       

       Phase III - November 13 - December 8

       
       

       1. EDP Division, DOA and DHSMV evaluate vendor proposals.

          
          

       2. Vendors benchmark Wisconsin System on their proposed equipment.

       Phase IV - December 19

       
       

       Recommendation to Governor and Cabinet on December 19.

       
       

       Phase V - December 20 - March 20 DHSMV completes the site.

       Phase VI - March 21 - May 30

       
       

       1. Vendor installs the proposed equipment, and software, operational and ready for DHSMV acceptance test.

          
          

       2. EDP Division and DOA will participate and assist in the performance evaluation.

          
          

       3. DHSMV will implement and field test tax collector's system in two counties (Lee and Leon).

       
       

11. Immediately following approval of the Plan, an RFP drafting team was formed. It was composed of representatives from DHSMV, DGS, and the Department of Administration. Through an intensive effort between September 6 and September 29, 1978, Team members collectively and individually drafted the RFP. After several drafts, a final version was authored at a meeting on September 28.

    
    

12. On September 29, the RFP was released, and distributed to sixty-one vendors from the DGS, Division of Purchasing's Authorized Bidders List. The Authorized Bidders List includes every supplier of computers who has registered with the Division as being interested in receiving bid solicitations for that. type of equipment. On October 2, a legal advertisement was published in the Tallahassee Democrat, and on October 4, a similar advertisement was published in the Orlando Sentinal Star. The legal advertisements requested competitive bids for the equipment.

    
    

13. The RFP is thirty-seven pages in length, and consists of the following sections:

    
    

    Section I. Purpose and Scope of this Request for Proposal.

    
    

    Section II. Additional Terms and Conditions. Section III. Bidder Instruction and Submissions. Section IV. Evaluation.

    Section V. Functional and Technical

    Specifications.

    
    

    Section VI. Benchmark Information.

    
    

    Appended to the RFP was Attachment "A", fifty-six pages in length, and including the following Riders:

    Rider A. Terms and conditions applicable to the acquisition of electronic data processing products.

    
    

    Rider B. Maintenance Services.

    
    

    Rider C. Software and Programming Services.

    
    

    The RFP outlines all of the technical requirements and specifications for the data processing system required by DHSMV, and requires prospective bidders to submit bids proposing a data processing system with processing capabilities sufficient to implement and operate the Wisconsin Data Base System. Certain provisions of the RFP are specified as mandatory. Some of the mandatory provisions were technical and others, such as delivery and installation dates, were included because of the time frame established by the procurement plan.

    
    

14. Attachment "A" to the RFP is a contract that the successful vendor would be required to execute. The Riders set out terms and conditions of the contract. The RFP included provisions for recommending changes to the RFP and to Attachment "A" in advance of bid submissions. Including the contract as an attachment to the RFP, and requiring that recommended changes be submitted prior to bid proposals is a new procedure in procurement of data processing equipment in Florida. Similar provisions had been employed only once before, specifically in a request for proposal issued on behalf of a data center at Florida State University.

    
    

15. The RFP provides that vendors were to submit technical Proposals and cost proposals in two separate packages. Cost proposals would be opened and considered only if technical proposals were found acceptable. Bids would be evaluated under the RFP by an Evaluation Committee. The evaluation would center first upon the technical proposals. Those bidders whose proposals passed technical muster would then have their cost proposals evaluated, and would be required to subject their proposed equipment to a benchmark. A benchmark is a test designed to evaluate the performance of computer systems, programs, and devices. The benchmark evaluates the performance of a computer relative to system specifications. Benchmark tests are typically not run until after a preliminary determination is made that a bid is otherwise responsive. Equipment used for processing the benchmark must be the same as bid. Failure of the proposed system to complete the benchmark in accordance with the RFP benchmark objectives results in the vendor being disqualified. The benchmark objectives in this RFP require the system to operate the Wisconsin Data Base Package, performing a minimum of ten transcriptions per second with a `response time not to exceed five seconds. A benchmark package was included in the RFP.

    
    

16. On October 4, 1978, the evaluation committee was formed in accordance with the RFP. There were four subcommittees, each of which included representatives from the three departments involved in the procurement. An executive subcommittee was formed to oversee the bidding process. Although such a function was not specified in the RFP, the executive subcommittee evaluated contractual provisions submitted by bidders to determine whether the proposed provisions were responsive to the RFP, and specifically to Schedule "A". A technical subcommittee was formed to evaluate whether responses to the RFP were technically sufficient. A cost subcommittee was formed to evaluate cost proposals submitted by vendors. A benchmark subcommittee was formed to perform the benchmark.

17. The RFP provides that vendors could pose questions and recommended changes to the RFP prior to the submission of bid proposals. In accordance with the schedule provided in the RFP, bidders', conference was conducted on October 9, 1978. The purpose of the conference was to discuss the contents of the RFP and to permit prospective bidders to pose questions. Such questions were to be submitted and answered in writing. Following the conclusion of the conference, Addendum No. 1 was prepared by the executive subcommittee answering questions raised at the conference. Addendum No. 1 was released on October 11, 1978. The RFP also provides that vendors could propose changes to the terms and conditions contained in Attachment "A". Under the original schedule these proposed changes were to be submitted on October 9. After release of the RFP, however, it was discovered that the desired liquidated damage provisions had been omitted from Attachment "A". These were added and were included in Addendum No. 1. Vendors were permitted until October 23, 1978 to respond to those changed terms, and to propose further changes to Attachment "A".

    
    

18. Both IBM and Amdahl submitted recommended changes. On October 24, 1978, the executive subcommittee met and developed responses. On October 26, the executive subcommittee issued Addendum No. 2. Addendum No. 2 consisted of the vendors' proposed changes with the indication "yes" or "no" entered next to the proposal. The "yes" responses indicated contract changes proposed by bidders that were considered minor, were acceptable to the State, and could be utilized by a vendor in its final proposal. "No" responses meant that the proposed change was substantially the same as the language in Attachment "A" and was without consequence, or that the proposed change was not acceptable to the State.

    
    

19. Bids were opened on November 9, 1978. Twenty-six companies submitted "no bids". Thirty-two companies did not respond. IBM, Amdahl, and ITEL submitted proposals. Technical proposals were turned over, to the technical subcommittee. Cost proposals remained sealed and in the custody of DHSMV.

    
    

20. During the period from November 10 through November 13, the technical subcommittee evaluated the bids. The technical subcommittee utilized a check list which contained twenty-two specific requirements. The technical subcommittee concluded that ITEL's proposals deviated from the provisions of the RFP substantially, and that both IBM and Amdahl deviated from some of the provisions of the RFP, but the deviations were considered minor because operation of the system would not be affected. The technical committee concluded that the equipment bid by IBM and by Amdahl was capable of performing the tasks. On November 14 the technical subcommittee issued its report to the executive subcommittee. The technical subcommittee found that IBM and Amdahl were responsive to the RFP with minor deviations, and that ITEL was not responsive. In its final report, the technical subcommittee stated: "We request that the executive committee review the proposed contracts from IBM and Amdahl to insure that they are acceptable."

    
    

21. During the same period the executive subcommittee began evaluation of the contractual changes to Attachment "A" contained in the bids. In their contract proposals, both Amdahl and IBM submitted changes which had not previously been considered by the State and contract terms and conditions which had been marked "no" during the Addenda process. The executive subcommittee considered bid responses without regard to whether proposed changes had been submitted during the Addenda process, and based its evaluation of the proposed contracts upon how proposed changes would impact the operational status of the Kirkman Data Center.

22. On November 16 and 17, clarification conferences were held with representatives of Amdahl for the purpose of discussing Amdahl's proposed changes to the RFP. On November 16, a similar clarification conference was held with representatives of IBM. The executive subcommittee found the Amdahl bid to be not responsive because of certain unacceptable contract changes in Amdahl's bid. Among the Amdahl contract terms and conditions found unacceptable was the provision that limited acceptance testing and warranty coverage to hardware only, excluding the operating system or systems control program. Another major problem with the Amdahl proposal was its failure to provide single vendor responsibility as required under the RFP.

    
    

23. By letter dated November 17, 1978, ITEL Corporation was advised that its bid was found to be unresponsive to the RFP, and that its proposals were rejected. ITEL's cost data was returned to ITEL unopened. By letter dated November 17, Amdahl was advised that its proposed contract changes were considered major changes and unacceptable. Amdahl was advised that its proposal was rejected and its cost proposal was returned to it unopened. By letter dated November 20, 1978, Amdahl attempted to resubmit its cost proposal and attempted to withdraw all but one of its recommended changes to the terms and conditions of Attachment "A". Amdahl's attempted resubmission was refused by the purchasing director of DHSMV.

    
    

24. The executive subcommittee determined that none of the terms and conditions of the IBM proposal constituted "major" deviations from Attachment "A". It determined that changes proposed by IBM were minor, and found the IBM bid to be responsive. IBM's cost proposal was forwarded to the cost subcommittee for evaluation. The cost subcommittee found the IBM proposal acceptable. On November 30 the benchmark subcommittee performed the benchmark tests on IBM data processing equipment in Gaithersburg, Maryland. IBM successfully passed the benchmark.

    
    

25. After he received the final recommendation from the executive subcommittee, the Executive Director of DHSMV, (Mr. Blakemore), by letter dated December 4, 1978, certified that rebidding of the procurement would not be in the best interests of DHSMV "due to the limitation of time as set forth in the data processing plan of the Department of Highway Safety and Motor Vehicles approved by the Governor and Cabinet on September 6, 1978." A recommendation that IBM be awarded the contract was placed on the agenda of the Governor and Cabinet for the December 19 meeting bye DGS. At a meeting of the Cabinet Aides held December 13 and 14, Mr. Blakemore and the Director of the EDP Division of DGS (Mr. Ippolito) recommended that IBM be awarded the contract. Mr. Ippolito thereafter gave further review to IBM's proposed contract changes. He changed his mind and determined that the contract changes were unacceptable and that the matter should be rebid. Mr. Ippolito consulted with Mr. Blakemore. DGS and DHSMV then jointly requested delay of consideration of the agenda item, and the Governor and Cabinet deferred consideration of the procurement until January 9, 1979.

    
    

26. Thereafter Mr. Blakemore consulted with counsel, and, based upon legal advice, concluded that IBM was not responsive, and that the matter should be rebid. A recommendation that all bids be rejected and the contract rebid was agendaed for consideration by the Governor and Cabinet for its January 9, 1979 meeting. The instant proceeding ensued.

    
    

27. Generally, in the field of government procurement, there are two types of competitive procurement: the Invitation For Bid or Invitation To Bid ("IFB") process and the Request for Proposal ("RFP") process. The difference between

    the two methods is the extent to which the vendor is given latitude to exercise judgment. An IFB is rigid while an RFP is flexible. Typically, an IFB identifies the solution to a problem while an RFP identifies a problem and requests a proposed solution. If a bid is responsive to an IFB, cost controls the decision; With an RFP technical excellence as well as cost controls the decision. Only minor, clerical sorts of deviations are permitted in response to an IFB. With respect to an RFP however, a major exception would be one that would overturn a statutorily imposed requirement, or a change that would prevent the governmental entity from meeting its procurement needs.

    
    

28. The RFP concept is typically used in computer acquisitions because of the dynamics of computer technology. In Florida the RFP process has been utilized in computer acquisitions, and in acquisition of such creative items as movie films. With respect to computer acquisitions, the Florida practice has allowed vendors the same broad range of discretion described above with respect to RFP acquisitions generally.

    
    

29. The Request For Proposal involved in the instant procurement has some characteristics of an RFP and some characteristics of an IFB. Bidders are permitted considerable flexibility in proposing central processing units, peripheral equipment, and software. There are, however, provisions in the RFP which limit flexibility. Paragraph 2.0 provides:

    
    

    Attachment A is a contract which sets forth terms and conditions desired by the State. All bidders will be required to execute Attachment A. Bidders may recommend minor changes. All recommended changes must be

    submitted to the State prior to the submission of the bid proposals. The State reserves

    the right to accept or reject any changes. The State at its option may accept or reject any or all proposals, or any parts thereof. Any recommended changes which the State accepts, notification will be forthcoming

    to all bidders. The proposal submitted by the successful bidder will become a part of the contract.

    
    

    This provision is clear and unambiguous. Only "minor changes" to Attachment "A" could be submitted, and even these would need to be submitted prior to submission of bids. Section III of the RFP established a means (the Addenda process) for proposing recommended changes to Attachment "A". Despite these clear, unequivocal provisions, all three bidders proposed changes to Attachment "A" in their bid proposals, and the executive subcommittee considered them from the perspective of operational impact. Whatever the reason for the parties' actions, their actions cannot serve to vary the terms of the RFP.

    
    

30. In competitive procurements, including IFB type procurements, deviations in a bid response which have no adverse effect upon the State's interest, and would not affect the amount of the bid by giving the bidder an advantage or benefit not enjoyed by other bidders are not material and do not serve to disqualify a bidder. In view of the provisions of Paragraph 2.0 of the RFP, IBM's proposed changes to Attachment "A" must be measured against this standard. Several of the changes set out in IBM's response to the RFP do have an adverse impact upon DHSMV in that DHSMV would receive less than is provided

    in the RFP. Furthermore, several changes proposed by IBM would affect the amount of the bid, and give IBM a competitive advantage over other bidders.

    
    

31. The RFP provides that an acceptance test will be performed on all equipment initially provided by the successful bidder. The acceptance test would include a rerun of the benchmark, and a run of typical transactions to establish that the equipment performs up to the bidder's specifications, and up to the specifications provided in the RFP. In Paragraph 5c of Rider "A", Attachment "A" of the RFP, it is provided that in the event the system is deemed not to complete any phase of acceptance testing within ninety days after installation, the State, in its sole discretion, may elect one of four options:

    (1) to terminate the contract; (2) to demand that the contractor install a replacement of the system which, in turn, would be subject to acceptance testing; (3) to permit acceptance testing to continue; or (4) to pursue any other available legal remedy. In its response, IBM proposed:

    
    

    The State shall, within ninety (90) days after installation of the equipment, either accept or reject the equipment.

    
    

    The IBM proposal eliminates the State's remedy to demand installation of new equipment, or to continue acceptance testing. Elimination of the option to require a contractor to install new equipment would leave the State in a position, after it had expended considerable money implementing a system, to abandon it despite the fact that failure to implement the system was a result of faulty equipment, Elimination of the option to continue on with acceptance testing could force the State to accept machinery that had failed to pass tests because of economic hardship that would result from rejecting it. IBM's response to paragraph 5 provides DHSMV with significantly less than is provided in the RFP. It constitutes a material change from the RFP.

    
    

32. Paragraph 6 of Rider "A", Attachment "A" of the RFP contains the same provisions respecting acceptance tests for additional equipment provided under the contract as Paragraph 5 provides for equipment initially provided. Paragraph 6g would permit the State the same four options available under Paragraph 5c. IBM responded to Paragraph 6g in the same manner that it responded to Paragraph 5c. Its response offers DHSMV significantly less protection than provided in the RFP, and constitutes a material deviation from the terms of the RFP.

    
    

33. Paragraph 3c of Rider "B", Attachment "A" of the RFP provides:

    
    

    The contractor shall respond to the State's request for remedial maintenance within

    one (1) hour of such notification.

    
    

    In Paragraph 7f(3) of its contract, IBM proposed:

    
    

    Remedial maintenance will be performed promptly after the State notifies

    the contractor that the equipment is inoperative.

    
    

    IBM offered evidence which tended to show that it has provided remedial maintenance with respect to other contracts in less than one hour, despite the lack of any contractual obligation to do so. While this experience is an indication that IBM attempts to provide excellent service to its customers, it

    does not supplant contractual language. The word "prompt" is defined in Webster's New World Dictionary (Second Edition) as follows: "quick to act or to do what is required; ready; punctual; done at once or without delay." A contractual requirement that responses to calls for remedial maintenance be given in one hour cannot be misunderstood. A contractual requirement that the response be "prompt" requires different things under different circumstances.

    It is not difficult to envision circumstances where a "prompt response" would be more than one hour. The State expressed a desire to eliminate any ambiguity with respect to response time. IBM's effort to insert ambiguity materially alters the terms 6f the RFP.

    
    

34. Section 3.12.8 a (3) of the RFP, and Paragraph 4b of Rider "A", Attachment "A" to the RFP provides that the State has the right to defer installation of equipment upon thirty days notice to the contractor. In its response to Paragraph 4b, IBM required that the State give it ninety days notice for delay in an installation date. This is a material deviation from the provisions of the RFP. Unforeseen circumstances could place the State in the position of having to defer installation of equipment. Increasing the Notice requirement from thirty days to ninety days increases the potential exposure of the State to paying charges for equipment that it cannot use.

    
    

35. Paragraph 7a of Rider "A", Attachment "A" to the RFP provides for credits to be paid the State in the event of equipment failure. The credits would apply when equipment is inoperative for either a continuous period of twelve hours, or for a period of fourteen or more non-continuous hours in a twenty-four hour period. In its response IBM provided such credits for either a continuous twelve-hour period, or for a period of fourteen or more non- continuous hours within "one calendar day" instead of one twenty-four hour period. There are many possible circumstances wherein the State would be entitled to no credit under the IBM proposal, while it would be entitled to considerable credits under the provisions of the RFP. The IBM response constitutes a material, deviation from the provisions of the RFP.

    
    

36. Paragraph 3.12.7 of the RFP provides:

    
    

    The State desires the equipment delivered, installed, and ready for use not earlier than March 1, 1979, and not later than April 1, 1979. Delivery dates beyond

    April 1, 1979 are not acceptable.

    
    

    Under Paragraph 3.12.8a of the RFP the contractor is required to install equipment in accordance with the provisions of Section 3.0 of the RFP. Section

    3.0 of the RFP provides that installation of equipment must be complete on April 1, 1979. IBM's bid proposes to ultimately install an IBM Model 3033 Central Processing Unit. It is this central processing unit that passed the benchmark test, and meets the technical requirements of the RFP, and of Attachment "A". IBM does not propose to install the Model 3033, however, until June, 1979. An interim test machine would be provided and delivered by the April 1, 1979 deadline. This is an IBM Model 158-3 Central Processing Unit. The unit would not meet all of the technical requirements of the benchmark; however, it would be adequate for the purpose of implementing the Wisconsin Data Base System, and to perform functions required of the central processing unit prior to June, 1979. IBM has offered the Model 158-3 unit under terms that would comport with the provisions of Attachment "A" other than provisions respecting capacity, and under other terms that would not comport with the provisions of Attachment "A", but which would save the State substantial money.

37. The proposal to use an interim test machine is the sort of proposal that would be an acceptable change under general principles governing RFP acquisitions. The interim test machine meets the State's needs and saves the State money. With respect to the instant RFP, however, which required that changes to Attachment "A" be submitted in advance of bid submissions, the interim test machines cannot pass muster. It provides IBM a substantial competitive advantage over other potential bidders. The interim test machine, albeit developed conceptually in part as a result of IBM's inability to deliver a Model 3033 Central Processing Unit by April 1, is a creative and beneficial proposal. While the proposal would benefit the State, it affects the amount of the bid and gives IBM a competitive advantage over other bidders.

    
    

38. DGS, DHSMV, Amdahl and ITEL contended that many of IBM's proposals, other than those specified above, constituted material, major, or substantial deviations from the terms of the RFP. These contentions are not meritorious. Other changes proposed by IBM have not been shown to materially alter the terms of the RFP, nor to provide any competitive advantage to IBM.

    
    

39. Implementation of the tax collector on-line network will be a significant improvement in the State's motor vehicle license, title, and registration record keeping function. Citizens will no longer be required to wait as long as sixty days to receive title to automobiles that they have purchased. Data respecting a citizen's drivers license, motor vehicle registration and motor vehicle titles will all be quickly available and current. Law enforcement agencies will be able to receive current information rapidly. Local tax collectors will no longer be required to batch reams of data and forward it to Tallahassee, and the services tax collectors provide their constituents will be greatly enhanced.

    
    

40. The fact that implementation of the Wisconsin Data Base System will significantly improve services rendered by DHSMV, does not, however, render implementation of the system an emergency matter. While the present system is outdated, it is, within its limitations, remaining current. Backlogs of data are not increasing, but rather are as current as the system permits. The DHSMV record keeping system is presently better than it has ever been.

    
    

41. A rebid will require a substantial effort on the part of State employees. In terms of the value of the work of these State employees, the expense of rebiding would be considerable. In terms of actual cost to the State, the employees are already on the payroll, and the cost is not substantial.

    
    

42. Rebidding the instant procurement could result in the State saving considerable money while not inordinately delaying implementation of the tax collector on-line network. DHSMV is presently negotiating a service contract with a private concern that would allow development of the system, and would provide training to DHSMV personnel before equipment is acquired.

    
    

43. IBM originally contended that neither Amdahl nor ITEL are capable of being responsive to the instant RFP. The evidence does not support this contention. It is apparent from the evidence that both Amdahl and ITEL are capable of providing equipment that would fully comport with the requirements of the RFP.

    
    

44. Amdahl originally contended that this matter should be rebid on account of misconduct on the part of IBM in connection with this procurement.

    The evidence would not support any conclusion that IBM, or any vendor, or any State personnel engaged in any improper conduct during the course of this procurement.

    
    

45. In its response to the RFP IBM stated that its bid would be valid for

    120 days, expiring on March 9, 1979. DHSMV has contended that since it did not authorize any extension of the bid beyond March 9, 1979, the IBM bid has expired by its own terms. This contention is without merit. If the position of DHSMV were accepted, pursuit of the administrative remedy would have been futile, and would have frustrated the intent of the legislature in providing an administrative remedy.

    
    

    CONCLUSIONS OF LAW

    
    

46. The Division of Administrative Hearings has jurisdiction over the subject matter of this proceeding and over the parties. Section 120.57(1), Florida Statutes.

    
    

47. The DHSMV acquisition of data processing equipment is an acquisition of commodities within the meaning of Section 287.012, Florida Statutes. The price of the equipment exceeds $2,500, and it therefore can be acquired only "upon competitive bids received" unless one of the statutory exceptions applies. Section 287.062, Florida Statutes.

    
    

48. Paragraph 2.0 of the RFP precludes submission of recommended changes to Attachment "A" of the RFP unless the changes are proposed in advance of bid submissions. A procedure for submitting proposed changes in advance of bid submissions is provided in Section III of the RFP. These provisions are clear and unambiguous. The fact that the State's practice in the past has been to permit proposed changes to an RFP to be submitted in bid proposals, the fact chat all vendors who responded to the RFP proposed changes to Attachment "A", and the fact that the evaluation committee considered the proposed changes, cannot vary the clear language of the RFP. Proposed changes not submitted prior to bid submissions would render a bid unresponsive to the RFP.

    
    

49. Florida law favors acquisition of commodities by the State through competitive means. Section 287.062, Florida Statutes. The purpose of competitive acquisitions is to protect the public against collusive contracts and favoritisms, to secure fair competition upon equal terms for all vendors, and to afford an equal advantage to all vendors desiring to do business with the State. Wester v. Belote, 103 Fla. 976, 138 So. 721 (1931); Wood Hopkins Contracting Company v. Roger J. Au & Son, Inc. 354 So.2d 446 (1 DCA Fla. 1978); Hotel China & Glass Company v. Board of Public Instruction, 130 So.2d 78 (1 DCA Fla. 1961). Changes to bid specifications contained in a response serve to invalidate the response, unless the charge is not material, in other words does not adversely impact the interests of the State, and the change does not destroy the competitive character of the procurement by affecting the amount of the bid thereby giving the bidder an advantage or benefit not enjoyed by other bidders. Harry Pepper & Assoc. v. City of Cape Coral, 352 So.2d 1190 (2 DCA Fla. 1978); Westori Instruments, Inc. v. Florida Department of General Services, DOAH Case No. 75-2210 (Recommended Order entered December 28, 1976).

    
    

50. The changes proposed by IBM in its bid response to Paragraph 5 of Attachment "A" of the RFP constitute a material variation from the provisions of the RFP and render IBM's bid unresponsive.

51. Changes proposed by IBM in its bid response to Paragraph 6 of Attachment "A" of the RFP constitute a material variation from the provisions of the RFP and render IBM's bid unresponsive.

    
    

52. Changes proposed by IBM in its bid response to Paragraph 3c, Rider "B", Attachment "A" of the RFP, which proposed changes are contained in Paragraph 7f(3) of Attachment "A" of IBM's bid response, constitute a material variation from the provisions of the RFP and render IBM's bid unresponsive.

    
    

53. Changes proposed by IBM in its bid response to Paragraph 3.12.8a(3) of the RFP and to Paragraph 4b, Rider "A", Attachment "A" of the RFP constitute a material variation from the provisions of the RFP and render IBM's bid unresponsive.

    
    

54. Changes proposed by IBM in its bid response to Paragraph 7a of Attachment "A" of the RFP constitute a material variation from the provisions of the RFP and render IBM's bid unresponsive.

    
    

55. IBM's proposal of an interim test machine varies the terms of Attachment "A" of the RFP, and affects the amount of the bid, giving IBM an advantage not enjoyed by other bidders.

    
    

56. Other changes proposed by IBM in its bid response do not materially affect the provisions of the RFP, and do not provide IBM with any advantage or benefit not enjoyed by other bidders.

    
    

57. Even if IBM's bid were determined to be responsive to the RFP, it would not be appropriate to award the contract to IBM. If IBM's bid were found responsive, the State would have received only one valid bid. When only one bid is received, a matter must be rebid unless an emergency exists such that the delay inherent in a rebidding would not be justified, or unless there is only a single source for the commodity. DGS Rule 13A-1.02 (3), Florida Administrative Code; Amdahl Corporation vs. Florida Department of General Services, DOAH Case No. 79-625R (Final Order entered April 27, 1979). The evidence in this case would not support a conclusion that an emergency exists (DGS Rule 13A-1.01(12) Florida Administrative Code) and it is clear that there are at least three vendors able to supply the commodity.

    
    

58. IBM has contended that there is an inherent unfairness in failure to award the contract to IBM. While there has been no prejudice caused IBM such as would create any estoppel requiring that IBM be awarded" the contract, IBM's contention is worthy of note. Benchmark tests are the last stage in evaluation of bid responses in computer acquisitions. This is because there is a very large expense involved in conducting these tests. Neither IBM nor the State should have been put to that expense in this instance. There is an inherent unfairness in advising a bidder that its bid response has been found acceptable, then conducting a benchmark, then advising the bidder that its response was not acceptable even though the benchmark was passed. If the following recommended order is adopted, and this matter rebid, it is appropriate that persons on the evaluation committee have a clear understanding of standards to be applied in evaluating responses.

RECOMMENDED ORDER

Based upon the foregoing Findings of Fact and Conclusions of Law, it is, hereby

RECOMMENDED:

That a final order be entered by the Governor and Cabinet as the Head of the Department of General Services and the Head of the Department of Highway Safety and Motor Vehicles declaring that no valid bid was received in response to the Request For Proposal, and directing that the subject procurement be rebid.

RECOMMENDED this 27th day of April, 1979, in Tallahassee, Florida.

G. STEVEN PFEIFFER, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304

(904) 488-9675

COPIES FURNISHED:

C. Gary Williams, Esquire Dubose Ausley, Esquire Post Office Box 391 Tallahassee, Florida 32302

Talbot D'Alemberte, Esquire Donald Mlddlebrooks, Esquire

1400 SE First National Bank Building Miami, Florida 33131

Edwin E. Strickland, Esquire Department of Highway Safety

and Motor Vehicles Neil Kirkman Building

Tallahassee, Florida 32301

Thomas M. Beason, Esquire Department of General Services Larson Building

Tallahassee, Florida 32301

R. A. McDonough, III, Esquire Regional Counsel

IBM Data Processing Division

153 53rd Street

New York, New York 10022

Kenneth G. Oertel, Esquire 646 Lewis State Bank Building Tallahassee, Florida 32301

Jerome H. Shevin, Esquire 30th Floor

First Federal Building One SE Third Avenue Miami, Florida 33131

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

INTERNATIONAL BUSINESS MACHINES )

)

Petitioner, )

)

vs. ) CASE NO. 79-078BID

) STATE OF FLORIDA, DEPARTMENT ) OF GENERAL SERVICES, and FLORIDA ) DEPARTMENT OF HIGHWAY SAFETY ) AND MOTOR VEHICLES, )

)

Respondents. )

) AMDAHL CORPORATION and ITEL ) CORPORATION, )

)

Intervenors. )

)

APPENDIX TO RECOMMENDED ORDER, RULINGS IN ACCORDANCE WITH FLORIDA STATUTES SECTION 120.59(2)

The parties have submitted-post-hearing legal memoranda, including Proposed Findings of Fact and Conclusions of Law. Rulings upon proposed findings of fact and conclusions of law are set out herein in accordance with the provisions of Section 120.59(2), Florida Statutes.

RULINGS RESPECTING IBM

The following Findings of Fact proposed by IBM have been substantially adopted in the Recommended Order. These findings of fact are hereby adopted to the extent that they are not inconsistent with the Findings of Fact set out in the Recommended Order: 1-40, 42-64, 66-83, 85-98, 100-121, 123-130, 134, 137-

156, 158-178, 181, 182, 186, 189-194, 207-209, 211-229, 232 and 234-238.

IBM Proposed Finding 41 is hereby adopted, however, to the extent that the paragraph contains an inference that the circumstances at DHSMV would justify an emergency acquisition, it is rejected.

IBM Proposed Finding 65 is hereby adopted insofar as it relates to RFP acquisition processes generally. The RFP in the instant acquisition contained provisions not compatible with those general principles. IBM Proposed Finding 84 is adopted; however, failure to define the word "no" does not create any ambiguity.

IBM Proposed Findings 135 and 136 contain correct characterizations of the testimony of various witnesses. Standards utilized by the Executive subcommittee of the Evaluation Committee were, however, contrary to the terms of the RFP.

IBM Proposed Finding 156 is adopted to the extent that it does not contain any inference that the certification was substantively a correct decision.

IBM Proposed Findings 179, 183, 197-202, 205, 206, 210, 223 and 224 contain accurate summaries of actions and opinions of the Executive Subcommittee. They are adopted to that extent.

IBM Proposed Finding 180 contains an accurate summary of testimony elicited at the hearing. To the extent that the proposed finding contains any inference that prior experience with the acceptance testing would obviate the need for adherence to contractual provisions, the proposed finding is rejected.

IBM Proposed Findings 239 and 240 contain an accurate summary of the cost to the State of rebidding in terms of the value of the work of State employees were it necessary to contract for it. In actuality, employees would be used in a rebidding who are already on the State payroll, and these expenses would not be incurred.

IBM Proposed Findings 241-249 contain an accurate summary of advantages that would follow from implementation of the tax collector on-line system, and disadvantages of the present system. The proposed findings are adopted to that extent, but are rejected to the extent that they contain conclusions that the present situation at DHSMV is an emergency such as to justify acquiring equipment through other than competitive means.

The following Findings of Fact proposed by IBM are hereby rejected as being contrary to the evidence: 99, 122, 131-133, 184, 185, 187, 188, 195, 196, 203,

204, 230, 231, 233 and 250.

The following Conclusions of Law proposed by IBM have been substantially adopted in the Recommended Order. They are hereby adopted to the extent that they are not in conflict with the Conclusions of Law set out in the Recommended Order: 3-8, 10-14, 19, 21-24 and 26-31.

IBM Proposed Conclusion of Law 1 is accurate as it pertains to bidding processes generally. The terms of any particular invitation to bid, or request for proposal could modify these propositions. The RFP in the instant proceeding did modify these propositions.

IBM Proposed Conclusion of Law 9 is accurate, but is incomplete. Proposals must substantially comply with all provisions of the RFP. Deviations from the specifications and mandatory requirements can be accepted only if they do not materially alter the terms of the RFP to the disadvantage of the State if they provide a competitive advantage to the bidder.

IBM Proposed Conclusions of Law 2, 15-18, 20 and 25 are hereby rejected as contrary to the Conclusions of Law set out in the Recommended Order.

RULINGS RESPECTING DGS

The following Proposed Findings of Fact submitted by DGS have been substantially adopted in the Recommended Order, and are hereby adopted to the extent that they are not in conflict with the Findings of Fact set out in the Recommended Order: 1-50, 52- 67, 78-82 and 87-94.

DGS Proposed Finding 51 is hereby rejected. The evidence would not support a conclusion that the Executive Subcommittee had any clear idea of its responsibilities in reviewing proposed contractual provisions. It appears that the Executive Subcommittee felt that it had wide latitude to determine whether proposed changes were in the best interest of the State.

DGS Proposed Findings 68-77 are hereby rejected as contrary to the Findings of Fact set out in the Recommended Order.

DGS Proposed Findings 83-86 are accurate and are accepted, except that they ignore that IBM did offer its interim test machine under the provisions of Attachment "A" to the RFP. The offer would not, however, have comported with Attachment "A" because the interim test machine would not meet benchmark criteria, could not have passed an acceptance test and, if delivered under the provisions of Attachment "A," would have been very expensive.

DGS Proposed Conclusions of Law 95-114 and 116 have been substantially adopted in the Recommended Order and are hereby adopted to the extent that they are not in conflict with Conclusions of Law set out in the Recommended Order.

DGS Proposed Conclusion of Law 115 is hereby rejected. IBM's proposed change which would require the State to notify it within thirty days as to some equipment, and ninety days as to other equipment respecting termination due to non-appropriations of funds has no substantive impact upon the contract.

Florida law eliminates any obligation on the part of the State occasioned by termination of a contract for non-appropriation of funds Section 216.311(1), Florida Statutes. Even if the State failed to give IBM notice, the contract would terminate by action of law upon non-appropriation of funds.

DGS Proposed Conclusions of Law 117 and 118 are hereby rejected. IBM's proposal respecting the force mejuere clause has no impact upon the contract. The IBM proposal would require only that the State pay IBM all obligations due up to the time of the unforeseen event.

RULINGS RESPECTING DHSMV

The following Proposed Findings of Fact submitted by DHSMV have been substantially adopted in the Recommended Order, and are hereby adopted to the extent that they are not in conflict with the Findings of Fact set out in the Recommended Order: 1-9 and 11-14. The first sentence of DHSMV Proposed Finding

10 is adopted. The second sentence is rejected. The filing of a petition by IBM does not preclude the Governor and Cabinet from taking any action. It merely precludes the Governor and Cabinet from taking any action except in accordance with provisions of 120.57, Florida Statutes.

DHSMV Proposed Finding 15 is accepted insofar as it relates to the fact that IBM's proposed interim test machine would not meet the specifications set out in the RFP, and that its installation within the time table set out in the RFP would therefore not comply with the RFP.

DHSMV Proposed Finding 16 is adopted as to some of the changes submitted by IBM as set out in the Findings of Fact in the Recommended Order. Some of the changes submitted by IBM in its response to RFP were not material, and would not serve to disqualify IBM's bid.

DHSMV Proposed Conclusion of Law 1 is hereby rejected. Accepting DHSMV's Proposed Conclusion of Law 1 would totally frustrate IBM's rights to a hearing under the provisions of Section 120.57(1), Florida Statutes.

DHSMV Proposed Conclusions of Law 2 and 3 are adopted insofar as they relate to major changes submitted by IBM in its response to the RFP, but are rejected as to minor changes.

RULINGS RESPECTING AMDAHL

The following Proposed Findings of Fact submitted by Amdahl have been substantially adopted in the Recommended Order, and are hereby adopted to the extent that they are not in conflict with Findings of Fact set out in the Recommended Order: 1-15, 17-21, 23-26, 28-32, 34-40, 42-46, 48-54, 56, 58, 60-

67, 69-72, 74-76 and 78-83.

Amdahl Proposed Finding 16 is incomplete. It is not in the best interest of the State to accept a proposal without having obtained competitive bids unless an emergency exists, or unless commodities are available through only one source.

Amdahl Proposed Finding 22 is adopted, except insofar as the proposed finding contains an inference that IBM or State employees acted improperly with respect to the change in delivery dates.

The first paragraph of Amdahl Proposed Finding 27 is adopted. The second paragraph is rejected.

Amdahl Proposed Finding 41 is adopted with the words " . . . hoped that . .

." inserted between the words "state" and "would."

Amdahl Proposed Finding 47 is adopted except that "Addendum No. 2" should read "Addendum No. 1."

Amdahl Proposed Finding 55 is hereby adopted without any conclusion being made that the itemization is complete, or that the changes or exceptions are material, except insofar as changes have been found to be material in the Recommended Order.

Amdahl Proposed Finding 57 is adopted, except that there are other reasons for IBM proposing the interim test machine. One reason was that the machine would accomplish the State's objectives during the interim period at less cost.

Amdahl Proposed Finding 59 is adopted, except that the date "March 9" should read "October 9."

Amdahl Proposed Findings 33, 68, 73 and 77 are hereby rejected as contrary to Findings of Fact set out in the Recommended Order.

Amdahl Proposed Conclusions of Law 1-16(c), and 16(e) and (g) have been substantially adopted in the Recommended Order, and are hereby adopted to the extent that they are not in conflict with Conclusions of Law set out in the Recommended Order.

Amdahl Proposed Conclusion of Law 16(d) is correct in terms of salaries of existing State personnel only. Obviously, State personnel would be diverted from other tasks, and while there may be no direct dollar consequence of that, there is a consequence. Furthermore, mailing and paper work expenses would be incurred.

Amdahl Proposed Conclusion of Law 16(f) is hereby rejected.

RULINGS RESPECTING ITEL

The following Proposed Findings of Fact submitted by ITEL have been substantially adopted in the Recommended Order, and are hereby adopted to the extent that they are not in conflict with Findings of Facts set out in the Recommended Order: 1-6(b), 6(h) and (i), 7, 8, 10, 11, 13 and 14.

ITEL Proposed Findings 6(c), (d), (e), (f) and (g) are hereby rejected because they are contrary to Findings of Fact set out in the Recommended Order.

ITEL Proposed Finding 9 is accepted, except that the date "July 1, 1979," should be replaced with "sometime in June, 1979."

ITEL Proposed Finding 12 is adopted only insofar as it relates to Amdahl Central Processing Units. Furthermore, the word "substantially" at the end of the paragraph should be deleted.

ENTERED this 27th day of April, 1979, in Tallahassee, Florida.

G. STEVEN PFEIFFER, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304

(904) 488-9675

COPIES FURNISHED:

C. Gary Williams, Esquire Dubose Ausley, Esquire Post Office Box 391 Tallahassee, Florida 32302

Talbot D'Alemberte, Esquire Donald Middlebrooks, Esquire

1400 SE First National Bank Building Miami, Florida 33131

Edwin E. Strickland, Esquire Department of Highway Safety

and Motor Vehicles Neil Kirkman Building

Tallahassee, Florida 32301

Thomas M. Beason, Esquire Department of General Services Larson Building

Tallahassee, Florida 32301

R. A. McDonough, III, Esquire IBM Data Processing Division

153 53rd Street

New York, New York 10022

Kenneth G. Oertel, Esquire 646 Lewis State Bank Building Tallahassee, Florida 32301

Jerome H. Shevin, Esquire 30th Floor

First Federal Building One SE Third Avenue Miami, Florida 33131

Docket for Case No: 79-000078

Orders for Case No: 79-000078