STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
AMDAHL CORPORATION, )
)
Petitioner, )
)
vs. ) CASE NO. 79-625RX
)
FLORIDA DEPARTMENT OF )
GENERAL SERVICES, )
)
Respondent, )
and )
) INTERNATIONAL BUSINESS MACHINES, )
)
Intervenor, )
)
vs. )
)
ITEL CORPORATION, )
)
Intervenor. )
)
FINAL ORDER
The instant proceeding was initiated upon the filing by Amdahl Corporation ("Amdahl") of a "Petition for Determination of the Invalidity of an Existing Rule". The petition is filed under authority of Section 120.56, Florida Statutes. An order was entered by the Director of the Division of Administrative Hearings assigning the case to the undersigned. ITEL Corporation ("ITEL") filed a Motion to Intervene which was granted. The final hearing was originally scheduled to be conducted on April 16, 1979.
This matter is closely related to a proceeding pending before the Division of Administrative Hearings under the provisions of Section 120.57(1), Florida Statutes. That case is styled International Business Machines Corporation vs. Florida Department of General Services, et al., DOAH Case No. 79-078BID. Upon stipulation of the parties, further proceedings in this matter were consolidated for the purpose of the final hearing with proceedings in Case No. 79-078BID.
IBM Corporation ("IBM"" moved to intervene, and the motion was granted. The consolidated final hearing commenced on April 4 and concluded on April 13, 1979.
There are no salient factual issues pertaining to this matter. On September 29, 1978, the Department of Highway Safety and Motor Vehicles ("DHSMV") and the Department of General Services ("DGS") distributed an Invitation to Bid/Request for Proposal for acquisition of data processing equipment for DHSMV. Three vendors (IBM, Amdahl, and ITEL) submitted bids. Amdahl and ITEL have been notified that their bids were rejected. At issue in Case No. 79-078BID is whether the bid of IBM is responsive, and if so, whether IBM should be awarded the contract. Amdahl and ITEL have stipulated in that
proceeding that they were not responsive to the Request for Proposal. Therefore, only IBM could be held responsive.
Amdahl is asserting that DGS rules that apply when there has been only one valid bid in response to an invitation constitute an invalid exercise of delegated legislative authority. Since these rules set substantive and procedural framework under which it will be determined that IBM should be awarded the bid, or that the matter should be awarded the bid, or that the matter should be rebid, Ambahl, as a vendor likely to participate in any rebidding, is substantially affected by the rule.
Section 287.062, Florida Statutes (1978 Supp.) provides in pertinent part:
No purchase of commodities may be made when the purchase price thereof is in excess of $2,500 unless made upon com- petitive bids received, except:
If the head of any state agency shall maintain that an emergency exists in regard to the purchase of any commodity, so that the delay incident to giving opportunity for competitive bidding would be detri- mental to the interests of the state, then the head of such agency shall file with the division [Division of Purchasing of DGS] a statement under oath certifying the conditions and circumstances. ...
Purchasing agreements, contracts, and maximum price regulations executed by the division are excepted from bid requirements.
Commodities available only from a single source may be excepted from the bid requirements upon the filing by
the head of an agency of a certification of conditions and circumstances with
the division if, subsequent thereto, the division authorizes the exception in writing.
* * *
The statute requires that purchases of commodities with a price in excess of
$2,500 be made upon "competitive bids received" except (insofar as is here pertinent) when there is an emergency, or when commodities are available only from a single source.
Acting under authority of this statute, and under its rule making authority set out at Section 287.042(10), Florida Statutes, DGS has adopted Rule 13A-1.02, Florida Administrative Code. It provides in pertinent part:
Competitive Bids Required on Purchases Exceeding $2,500 - In accordance with
Chapter 287, Florida Statutes, 1978, all purchases in excess of $2,500 for an item
or group of items, shall be made by first securing two or more formal competitive bids, except as provided in 13A-1.08,
13A-1.09, 13A-1.10 and 13A-1.13. This
shall in no way be construed as limiting the number of bids solicited, it being intended that as many competitive bids be secured as possible, consistent with good purchasing practices.
* * *
(3) Receipt of One Bid in the First Call for Bids on Commodities Exceeding $2,500 - When only one bid is received for the pur- chase of an item or group of items ex- ceeding $2,500 in the first call for bids, the agency shall review the bid in order
to determine the reasons, if any, why only one bid was received before issuing a second call for bids; provided, however, if the agency determines that a second call for bids would not be in the best interest of the agency, then the agency head may make a certification, in
writing, as to the conditions and cir- cumstances to the Division of Purchasing. In addition, copy of complete bid in- vitation and specifications, copy of all bids along with a tabulation sheet noting "no bid" responses, and a list of vendors by name and address from whom bid invi- tations were solicited must accompany the certification, the division may, in writing, authorize the purchase or re- quire a second call for bids.
Certification is not required if bid specifications were approved by the Division of Purchasing and bids were solicited from all suppliers registered with the Division or from a list specifically approved by the Division for the particular commodity involved.
"Competitive bids" is defined in DGS Rules to mean two or more valid responses to a bid invitation. Chapter 13A-1.01(10), Florida Administrative Code. "Valid bid" is defined as "a responsible offer in full compliance with the bid specifications and conditions." Chapter 13A-1.01(11), Florida Administrative Code. The "one bid" referenced in Rule 13A-1.02(3) clearly refers to a valid bid.
Amdahl contends that Rule 13A-1.02(3) in effect adds an additional exception to the requirement that purchases in excess of $2,500 be made upon competitive bids received as set out in the statute. This exception is "the best interest of the agency". The contention is without merit. When the statute refers to "competitive bids received" it clearly requires that before purchases of commodities in excess of $2,500 are made, more than one valid bid will be received by an agency. If only one bid is received, the agency has not
received competitive bids, and a purchase cannot be made unless it is made under one of the exceptions set out at Section 287.062. The "best interest of the agency" criteria specified in Rule 13A-1.02(3) must relate to the specified statutory exceptions. If the rule were construed to create other exceptions, it would clearly be beyond the agency's authority to promulgate it. The term "best interest of the agency" does not, however, demand that result, and appears logically to suppose that the best interest of the agency would be the existence of an emergency, or availability of commodities from only one source.
In order to determine that an emergency exists, or that commodities are available only from a single source, the agency head is in the case of an emergency, required to file a statement under oath certifying the emergency,; and in the case of a single source, to certify conditions and circumstances.
The second paragraph of Rule 13A-1.02(3) eliminates these certification requirements when there has been only one bid in response to an invitation. Since one bid cannot be construed as "competitive bids received", purchasing commodities when there has been only one bid must be done under the specified exceptions set out at Section 287.062. Certification is required in the statute, DGS lacks the authority to excuse it. Therefore, the provision in Rule 13A-1.02(3) that certification is not required constitutes an invalid exercise of delegated legislative authority. Whereupon, it is
The provisions of the first paragraph of Rule 13A-1.02(3), Florida Administrative Code, constitute a valid exercise of delegated authority, and the petition of Amdahl with respect to the first paragraph of the rule is hereby dismissed.
The provisions of the second paragraph of Rule 13A-1.02(3), Florida Administrative Code, are hereby declared to be an invalid exercise of delegated legislative authority.
DONE AND ORDERED in Tallahassee, Leon County, Florida, this 27th day of April, 1979.
G. STEVEN PFEIFFER Hearing Officer
Division of Administrative Hearings Oakland Building
2009 Apalachee Parkway
Tallahassee, Florida 32301
(904) 488-9675
COPIES FURNISHED:
C. Gary Williams, Esq. Dubose, Ausley, Esq. Post Office Box 391 Tallahassee, FL 32302
Talbot D'Alemberte, Esq. Donald Middlebrooks, Esq. 1400 Southeast First National
Bank Building Miami, FL 33131
Jerome H. Shevin, Esq. First Federal Building 30th Floor
One Southeast Third Avenue Miami, FL 33131
Edwin E. Strickland, Esq.
Department of Highway Safety and Motor Vehicles
Neil Kirkman Building Tallahassee, FL 32301
Thomas M. Beason, Esq. Department of General Services Larson Building
Tallahassee, FL 32301
R. A. McDonough III, Esq. Regional Counsel
IBM Data Processing Division
153 53rd Street
New York, N.Y. 10022
Kenneth G. Oertel, Esq. 646 Lewis State Bank Bldg. Tallahassee, FL 32302
Mr. Carroll Webb Executive Director Administrative Procedures
Committee
Room 120, Holland Bldg. Tallahassee, FL 32301
Ms. Liz Cloud Department of State Room 1802
Capitol Bldg. Tallahassee, FL 32301
Appendix to Final Order
STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
AMDAHL CORPORATION, )
)
Petitioner, )
)
vs. ) CASE NO. 79-625RX
)
FLORIDA DEPARTMENT OF )
GENERAL SERVICES, )
)
Respondent, )
and )
) INTERNATIONAL BUSINESS MACHINES, )
)
Intervenor, )
)
vs. )
)
ITEL CORPORATION, )
)
Intervenor. )
)
APPENDIX TO FINAL ORDER
The Respondent, Florida Department of General Services ("DGS") and the Intervenor, IBM Corporation ("IBM") have submitted Proposed Findings of Fact and Conclusions of Law. Rulings upon the proposed findings and conclusions are set out herein.
RULINGS WITH RESPECT TO DGS
DGS Proposed Findings of Fact 1-15 are hereby adopted.
DGS Proposed Finding of Fact 16 is rejected. DGS asserts that it has accomplished a competitive bidding within the contemplation of Section 287.062, Florida Statutes, even when there is only one valid bidder. This construction of the statute is inconsistent with the statute. The statute provides:
No purchase of commodities may be made when the purchase price thereof is in excess of $2,500 unless made upon competitive bids received ...
One valid bid cannot possibly be considered "competitive bids received". DSG argues that such a construction in effect would require an agency to continue to rebid an item when only one vendor responds. This is not totally true. If an item is bid more than one time, and there is still only one responsive bidder, a sole source procurement would be appropriate. The fact that other vendors might
have the materials would not frustrate the sole source procurement, since their failure to bid it clearly eliminates them as a source. In any event, the DGS policy argument set out in Paragraph 16 is one that should be made to the Legislature.
DGS Proposed Finding of Fact 17 correctly characterizes Attorney General Opinion 066-102. It should be pointed out, however, that Attorney General Opinion 053-254 is exactly to the contrary. Attorney General Opinion 066-102 is hereby rejected.
DGS Proposed Finding of Fact 18 is hereby adopted insofar as it pertains to Paragraph 1 of Rule 13A-1.02(3), and is consistent with the construction given that rule in the Final Order. The paragraph is hereby rejected insofar as it pertains to the second paragraph of the rule.
RULINGS WITH RESPECT TO IBM
IBM Proposed Findings 1-3, and 6-9 are hereby adopted.
IBM Proposed Findings 4 and 5 are rejected as not being supported by the evidence, and as being beyond the scope of official recognition.
IBM Proposed Conclusions of Law 1 and 8 are hereby adopted.
IBM Proposed Conclusions of Law 2, 4-7, and 10-12 are hereby rejected as being contrary to the Conclusions of Law set out in the Final Order, or as being irrelevant to the issues in the instant rule challenge proceeding. The provisions of paragraph 3 of IBM's Proposed Conclusions of Law which end with the case citation: Louisville and Nashville R. Co. v. Speed-Parker Inc., 103 Fla. 439, 137 So. 724 (1931) are hereby adopted. The remaining portion of paragraph 3 of IBM's Proposed Conclusions of Law is rejected as being contrary to the Conclusions of Law set out in the Final Order.
IBM Proposed Conclusion of Law 9 is adopted only to the following extent: DHSMV and DGS could award the contract to IBM, but only if the award were undertaken in accordance with one of the specified exceptions set out in Section 287.062, Florida Statutes.
DONE AND ORDERED in Tallahassee, Leon County, Florida, this 27th day of April, 1979.
G. STEVEN PFEIFFER Hearing Officer
Division of Administrative Hearings Oakland Building
2009 Apalachee Parkway
Tallahassee, Florida 32301
(904) 488-9675
COPIES FURNISHED:
C. Gary Williams, Esq. Dubose, Ausley, Esq. Post Office Box 391 Tallahassee, FL 32302
Talbot D'Alemberte, Esq. Donald Middlebrooks, Esq. 1400 Southeast First National
Bank Building Miami, FL 33131
Jerome H. Shevin, Esq. First Federal Building 30th Floor
One Southeast Third Avenue Miami, FL 33131
Edwin E. Strickland, Esq.
Department of Highway Safety and Motor Vehicles
Neil Kirkman Building Tallahassee, FL 32301
Thomas M. Beason, Esq. Department of General Services Larson Building
Tallahassee, FL 32301
R. A. McDonough III, Esq. Regional Counsel
IBM Data Processing Division
153 53rd Street
New York, N.Y. 10022
Kenneth G. Oertel, Esq. 646 Lewis State Bank Bldg. Tallahassee, FL 32302
Mr. Carroll Webb Executive Director Administrative Procedures
Committee
Room 120, Holland Bldg. Tallahassee, FL 32301
Ms. Liz Cloud Department of State Room 1802
Capitol Bldg. Tallahassee, FL 32301
| Issue Date | Proceedings |
|---|---|
| Apr. 27, 1979 | CASE CLOSED. Final Order sent out. |
| Issue Date | Document | Summary |
|---|---|---|
| Apr. 27, 1979 | DOAH Final Order | First paragraph of the challenged rule is valid, second is an invalid exercise of delegated legislative authority. |
DEPARTMENT OF PROFESSIONAL REGULATION vs. BOARD OF PROFESSIONAL ENGINEERS, 79-000625RX (1979)
ERVIN JAMES HORTON vs DEPARTMENT OF CORRECTIONS, 79-000625RX (1979)
ERVIN JAMES HORTON vs DEPARTMENT OF CORRECTIONS, 79-000625RX (1979)
STATE PAVING CORPORATION vs DEPARTMENT OF TRANSPORTATION, 79-000625RX (1979)
ERVIN JAMES HORTON vs DEPARTMENT OF LEGAL AFFAIRS, 79-000625RX (1979)
