STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MODERN COPY SERVICE, INC., )

d/b/a MODERN MAILERS, )

)

Petitioner, )

)

vs. ) CASE NO. 81-2421BID

)

DEPARTMENT OF AGRICULTURE )

AND CONSUMER SERVICES, )

)

Respondent. )

) MODERN COPY SERVICE, INC., )

d/b/a/ MODERN MAILERS, )

)

Petitioner, )

)

vs. ) CASE NO. 81-2481BID

)

DEPARTMENT OF AGRICULTURE )

AND CONSUMER SERVICES, )

)

Respondent. )

)

RECOMMENDED ORDER

A hearing was held in-the above-consolidated cases, after due notice, at Tallahassee, Florida on December 9, 1981, before Thomas C. Oldham, Hearing Officer.

APPEARANCES

For Petitioner: Robert L. Hinkle, Esquire

HINKLE & HATTAGLIA

Post Office Box 10448 Tallahassee, Florida 32302

For Respondent: Robert Chastain, Esquire

Department of Agriculture and Consumer Services

Mayo Building

Tallahassee, Florida 32301

For Intervenor: John G. Wood, Jr., Esquire

424 East Call Street Tallahassee, Florida 32301

ISSUE PRESENTED

Case No. 81-2421: Whether Petitioner's bid for contractual services to attach labels and mail" The Florida Market Bulletin" should be accepted.

Case No. 81-2481: Whether Petitioner's bid for contractual services to attach labels and mail "The Senior Consumer Monthly" should be accepted.

These consolidated cases involve the claim of Petitioner Modern Copy Service, Inc., d/b/a Modern Mailers, that Respondent Department of Agriculture and Consumer Services should award it two contracts for attaching labels and mailing copies of two separate publications of the agency. Petitioner claims that even though it did not submit the low bid on either of the two contracts, Respondent did not follow proper bidding procedures under Chapter 287, Florida Statutes, and Chapter 13A-1, Florida Administrative Code, not specifying criteria in the invitation for bids which would be used in determining the acceptability of a bid, as required by Rule 13A-1.16, F.A.C.

The two contract cases were consolidated pursuant to Rule 28-5.106, F.A.C. upon request of the Respondent. A motion for 1eave to intervene in the proceedings by Direct Mail Specialists, Inc., based on its claim to be the low bidder in both procurements, was granted.

At the hearing, Petitioner called three witnesses and submitted the deposition testimony of two other witnesses, plus another deposition of a witness who was called in its case in chief. (Petitioner's Exhibits 1-3) Respondent called no witnesses but submitted two exhibits in evidence consisting of the bid files (Respondent's Exhibit 1) and a late-filed copy of Chapter 13A- 1, F.A.C., of which official recognition was taken (Respondent's Exhibit 2). In a post-hearing letter, Petitioner submitted another copy of Chapter 13A-1,

1. which contained the prior version of Rule 13A-1.06 concerning timeliness of petitions challenging bidding procedures. Official recognition is taken also of this former rule. The Intervenor called one witness.

   
   

   Petitioner's Proposed Findings of Fact and Conclusions of Law, and Intervenor's Proposed Findings of Fact have been fully considered, and those portions not adopted herein are considered to be unnecessary, irrelevant, or unsupported in law or fact. Respondent did not file a proposed order or brief.

   
   

   The parties agreed that the Hearing Officer would have until January 20, 1982 in which to file his Recommended Orders in these matters.

   
   

   FINDINGS OF FACT

   
   

   1. Petitioner, Modern Copy Services, Inc. d/b/a Modern Mailers, Tallahassee, Florida, is a firm which provides mail processing services and, for the past several years, provided such services to Respondent Department of Agriculture and Consumer Services with respect to three of the agency publications, including The Florida Market Bulletin, and The Senior Consumer. The past work of the firm has been satisfactory to the Department. (Testimony of Giroux, Harrison, Varick, Petitioner's Exhibits 2,3, Respondent's Exhibit 1).

      
      

   2. By public notice, dated September 2, 1981, Respondent announced that sealed bids would be received until September 15, 1981 for "Labeling and Mailing 'The Senior Consumer Newspaper'". A similar notice was published on September 8, 1981 calling for sealed bids until September 22, 1981 for "Labeling and Mailing the 'Florida Market Bulletin'". These procurements were conducted by

      formal advertising due to a change in the law which required contractual service contracts to be handled in the same-manner as had commodities in the past. The services in question needed to be advertised and bid because they each exceeded

      $2,500.00 in amount. (Testimony of Harrison (Petitioner's Exhibit 3) Respondent's Exhibit 1).

      
      

   3. Invitations to bid for services concerning "The Senior Consumer" were mailed on August 27th to three Tallahassee firms, including Petitioner, Canon Graphics, and Intervenor Direct Mail Specialists, Inc. The bid package consisted of a Request for Quotation, a standard Invitation to Bid Form PUR2043 containing standard General Conditions, and the bid specifications. The Request for Quotations showed that the services required were attaching labels and mailing approximately 51,000 copies of The Senior Consumer Monthly from October, 1981 through September, 1982, and called for bids on a price per thousand. The specifications provided that the bids would be subject to Rule 13A-1.16, F.A.C., and set forth a more detailed description of the services required, the number of editions, circulation details, scheduling, penalties for delaying mailing, and information concerning Respondent's option to renew the award. Among the requirements included in the specifications were that the vendor must pick up the labels supplied by Respondent, fulfill all requirements for mailing second class publications by the postal service, and delivery of the publications to the Post Office within a stated period after receiving copies from the printer. (Respondent's Exhibit 1).

      
      

   4. In response to the invitation, Petitioner and Intervenor submitted timely bids. Petitioner's bid was $9.50 per thousand and Intervenor's bid was

      $8.95-per thousand. In order to determine whether the low bidder, Intervenor Direct Mail Specialists, Inc., was a qualified and responsible firm, Respondent's purchasing agent, Grace Harrison, and another employee, Lester Brinson, visited its place of business, viewed the firm's equipment, and talked to the manager concerning the firm's experience in providing similar services for Rose Printing Company and The Florida Bar. As a result of their visit, Respondent's personnel determined that the Intervenor possessed adequate equipment and sufficient experience to render the required services in a satisfactory manner. No subsequent inquiry was made by Respondent with respect to the Intervenor's record of performance in its contracts with Rose Printing Company and The Florida Bar, or to compare the respective abilities of Petitioner and Intervenor to provide the requisite services. In fact, Intervenor had experienced some difficulties on its previous jobs with regard to sorting problems, and timeliness of its services. However, no contracts were lost by Intervenor as a result of these difficulties and Petitioner has had various problems with Post Office procedures itself in the past. (Testimony of Harrison, Brinson, Schwartz, Chambers, (Petitioner's Exhibits 1,3), Respondent's Exhibit 1)

      
      

   5. Subsequent to the visit of Respondent's purchasing personnel to the Intervenor's place of business, award of the contract was made to that firm by the issuance of a purchase order on October 8, 1981. Respondent's purchasing agent Harrison, together with personnel of Respondent's Division of Consumer Services had recommended award of the contract to Intervenor based upon the fact that it was qualified and had submitted the low bid. (Testimony of Harrison, Petitioner's Exhibit 3, Respondent's Exhibit 1, supplemented by testimony of Varick (Petitioner's Exhibit 2)

   6. Respondent mailed Request for Quotation for attaching labels and mailing approximately 46,900 copies of The Florida Market Bulletin semi-monthly October, 1981 through September, 1982, to the same three bidders as in the previous procurement. Timely bids were received again from Petitioner and Intervenor. Petitioner submitted a bid price per thousand of $8.50 and Intervenor a bid price of $8.45. The bid package was similar to that sent out for the Senior Consumer publication. The specifications similarly provided for the vendor to fulfill all postal requirements as to second class publications, and delivering the bulletins to the Post Office within seventy-two hours from notification that the Bulletin and labels were ready for pickup. (Testimony of Harrison, Petitioner's Exhibit 3, Respondent's Exhibit 1)

      
      

   7. On September 22, 1981, the day of bid opening on the Florida Market Bulletin procurement, Jim Giroux, the owner of Petitioner firm inquired of Ms. Harrison as to the criteria to be used in making awards on both procurements. She informed him that price alone was the criteria for such award, and that if the low bidder met the specifications, there was no reason not to make the award to such bidder. A "Requisition on Purchasing Agent", dated September 28, 1981, was issued by Respondent in which the contract on the Florida Market Bulletin was awarded to the low bidder, Intervenor Direct Mail Specialist, Inc. At the time of hearing, Intervenor had performed services under the Senior Consumer contract for two months without any problems. However, the award to the Intervenor on the Florida Market Bulletin contract has been held in abeyance pending disposition of these proceedings. (Testimony of Harrison, Giroux, Schwartz, Brooks, Petitioner's Exhibit 3, Respondent's Exhibit 1).

      
      

      CONCLUSIONS OF LAW

      
      

   8. Section 287.042, Florida Statutes, sets forth the powers, duties, and functions of the Division of Purchasing of the Department of General Services pertinently as follows:

      
      

      287.042 Powers, Duties, and Functions.--The Division shall have the following powers, duties, and functions:

      (4) To establish a system of coordinated, uniform procurement policies, procedures, and practices which will require agencies to acquire contractual services utilizing competitive procurement methods to the maximum extent practicable. Such methods shall include, but not be limited to, adequate public notice requirements and procedures for the evaluation of all potential contractual service providers, including such factors as capabilities, past record, and experience and such factors as may be determined by the division to be applicable to particular requirements . . .

      (13) Except as otherwise provided herein, to adopt rules necessary to carry out the purposes of this section . . . Such . . . procurement of contractual services by

      state agencies shall be in strict accordance with the rules and procedures prescribed

      by the Department of General Services.

   9. Section 287.057, Florida Statutes, permits an agency to enter into a contract for contractual services utilizing procedures set forth in its rules only when the price of the service is less than $2,500.00

      
      

   10. The applicable rule of the Department of General Services dealing with contractual services is set forth in Rule 13A-1.16, Florida Administrative Code, as follows:

       
       

       1. Competitive Bids on Purchases Exceeding

          $2500 - Unless an emergency exists (13A-1.16(8) or a service is available only from a

          single source (13A-1.16(9) all purchases for contractual services, or for a group of individual contractual services, in excess of $2,500 shall be made by formal competitive invitation for bid to the maximum extent practicable. The invitation for bids shall include a detailed

          description of the services sought, the date for submittal of bids, and all contractual terms and conditions applicable for the procurement of contractual services, including the criteria which shall include, but not be limited to, price, to be used in determining acceptability of the bid. If the agency contemplates renewal of the contract it shall be so stated in the invitation for bids. No criteria may be used in determining acceptability of the bid that was not set forth in the invitation for bids. The contract shall be awarded with reasonable promptness by written notice to the qualified and responsive bidder who bids the lowest price. This bid must be determined in writing to meet the requirements and criteria set forth in the invitation for bids.

          
          

   11. Petitioner contends that Respondent's processing of the proposed services contracts were defective in several respects. First, Petitioner states that Section 287.042(4) Florida Statutes, is implemented by Respondent's Rule 13A-1.16(1) Florida Administrative Code, concerning criteria used in determing acceptability of bids, and that Respondent did not specify criteria which it utilized in the two invitations in question. It claims that, although Respondent's personnel purported to base the awards on price alone, in fact they also applied factors concerning the Intervenor's ability to perform the contracts in making the determinations. Secondly, Petitioner asserts that Respondent did not enter into written agreements with the Intervenor, as required by Subsection 287.057(1)(b), Florida Statutes, and that Respondent has made no written determinations showing that the bids met the requirements and criteria set forth in the invitation for bids, as required by Rule 13A-1.16(1), F.A.C.

   12. The pertinent language of Section 287.042(4), F.S., requires that the methods of procurement for contractual services established by the Department of General Services must include procedures for the evaluation of potential service providers. Such requirement goes to the responsibility of bidders in determining whether or not a particular bidder is qualified to perform the services and thus receive an award. Although the Department of General Services has implemented the statutory provision to some extent in Rule 13A-1.06 in determining what vendors should be placed in the agency vendor file, and in Rule 13A-1.13(5) concerning new bidders for printing requirements, no overall procedures or the evaluation of all potential providers is the subject of a rule.

       
       

   13. Rule 13A-1.16(1), F.A.C., provides that an invitation for bid for contractual services shall include, inter alia, "all contractual terms and conditions applicable for the procurement of contractual services, including the criteria which shall include, but not be limited to, price, to be used in determining acceptability of the bid." (Emphasis added) It further provides

       that-no criteria may be used in determining acceptability of the bid that was not set forth in the invitation, and that the contact shall be awarded by written notice to the qualified and responsive bidder who bids the lowest price. It is therefore apparent that the "criteria" specified in the rule concerns the responsiveness of the bid and not the responsibility of the bidder. In short, a reasonable interpretation of the language of the rule would indicate that the "criteria" must include price, but need not include anything else if so determined by the procuring agency in determining whether a bid is responsive to the invitation. For example, if an invitation requires that bidders must perform the requested services within 24 hours, a bid which is contingent upon performance in 48 hours would be non-responsive to the invitation, and thus not be acceptable since it did not meet the specified criterion.

       
       

   14. As to the invitations in question, it is noted that criteria for acceptability of bids was included although not separately labeled. The specifications of both invitations provided that the vendor must deliver the publications to the Post Office within a stated period after receiving the copies, and further provided that the vendor must pick up materials and meet requirements for mailing second class publications, etc. These are certainly criteria which properly would be considered in determining the responsiveness of the bid if conditional bids were submitted. Accordingly, it is determined that Respondent met the requirements of Rule 13A-1.16(1), even though its personnel were understandably confused at the hearing in the use of the term "criteria" in context with the pertinent statute and regulation.

       
       

   15. Petitioner's remaining arguments concerning Respondent's alleged non- compliance with Section 287.057(1)(e) F.S. as to the need for written agreements, and with Rule 13A-1.16(1), F.A.C. as to written determinations that the bids met the requirements of the invitations, are not considered well founded The bid documents, together with the purchase orders, are sufficient to meet those requirements.

       
       

   16. In view of the above conclusions, it is unnecessary to address the Intervenor's claim that Petitioner's protest as to the Senior Consumer contract was untimely under the then current regulations.

RECOMMENDATION

It is recommended that the relief sought by Petitioner Modern Copy Services, Inc., d/b/a Modern Mailers, in these cases be denied; that the award to the Intervenor Direct Mail Specialists, Inc. in Case No. 81-2421 be confirmed, and that award be made to the Intervenor in Case No. 81-2481.

DONE and ENTERED this 20th day of January, 1982, in Tallahassee, Florida.

THOMAS C. OLDHAM

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 20th day of January, 1982.

COPIES FURNISHED:

Robert L. Hinkle, Esquire HINKLE & BATTAGLIA

Post Office Box 10448 Tallahassee, Florida 32302

Robert Chastain, Esquire Department of Agriculture

and Consumer Services Mayo Building

Tallahassee, Florida 32301

John G. Wood, Jr., Esquire

424 East Call Street Tallahassee, Florida 32301

Department of Agriculture and Consumer Services

ATTENTION: Leslie McLeod, Jr., Esquire Mayo Building

Tallahassee, Florida 32301

Docket for Case No: 81-002421

Orders for Case No: 81-002421