vs. ) CASE NO. 85-3638BID
Intervenor. )
Telecom Plus of Florida, Inc. Tampa, Florida
The final hearing was held in this case in Tallahassee, Florida, on November 4 and 8, 1985. The main issue is whether the posted bid tabulations prepared by consultants to the Leon County School Board ("LCSB") for a telephone system to serve the LCSB Administration Complex and Lively Area Vocational- Technical Center Main Campus were developed in an arbitrary and capricious manner. 1/
On September 12, 1985, the LCSB issued a Request for Proposals ("PEP") for a telephone system to serve its Administrative Complex and Lively Area Vocational-Technical Center Main Campus ("the proposed telephone system"). Subsequently, several addenda and supplemental materials were forwarded to all participating vendors of handwritten portion. The PEP scheduled a vendor's conference for September 19, 1985. It required any "discrepancies, errors, omissions, or ambiguities in the specifications or addenda (if any)" to be reported to the LCSB no later than September 25, 1985. Similarly, the PEP required vendors to "submit written requests for clarification of terminology, if necessary, no later than September 25, 1985." Responses to the PEP were required by the time set for opening the vendors' proposals at 10:00 a.m. on October 4, 1985.
The compressed time frames were imposed in an effort to be able to complete the PEP process, award the contract and have a telephone system installed by the first week of January 1986. This target date for installation was established because, although budgetary and other problems delayed the start of the PEP process, the LCSB had decided by September 1985 to change its telephone listings in the December 1985 to December 1986 edition of the Official Telephone Directory For Tallahassee, Florida, in anticipation of a new telephone system.
Pursuant to a requirement of the PEP, ten letters of intent to submit proposals were received on or before September 19, 1985, including letters of intent from Petitioner, Telecom Plus of Florida, Inc. ("Telecom Plus"), and Intervenor, Centel Business Systems ("Centel"). Telecom Plus, Centel, and three other vendors submitted proposals on or before the deadline of October 4, 1985. By letters dated October 10, 1985, the LCSB Director of Purchasing notified the five proposing vendors that the Superintendent intended to recommend to the LCSB that the contract be awarded to Centel based on the bid tabulation prepared by the LCSB telecommunications consultants. Attached to those letters was a copy of the evaluation summary (bid tabulation). The letter was written on LCSB stationery on behalf of the LCSB and, under Rule 6g x 37-6.09, Rules of the LCSB, had the effect of announcing the intention of the LCSB to award the contract to Centel.
The proposed telephone system will serve two locations, the LCSB Administration Complex and the Lively Area Vocational-Technical Center Main Campus. These two locations are separated by a distance of approximately 4,500 feet. The PEP required the proposed telephone system to provide telephone service to each location, as well as to interconnect the two locations. The cable(s) for the interconnection between the two locations will be housed in a 4,500-foot long, four-inch PVC conduit to be installed as part of the proposed telephone system.
To satisfy the needs of the LCSB, the proposed telephone system could be in one of several configurations. At least one Electronic Private Automatic Branch Exchange (EPABX, commonly referred to as a "switch") is necessary to provide for intra- and inter-facility communications and to connect the Administration Complex and Lively Area Vocational-Technical Center Main Campus to the outside world. The PEP indicated that the possible configurations for the proposed telephone system included: (1) a single switch at the Administration Complex with cables extending at least 4,500 feet to each telephone instrument at the Lively location; (2) a single switch at the Administration Complex with remote peripheral equipment ("RPE," means a portion of the single switch which is remotely located) located at the Lively location and connected to the switch by 4,500-foot long cables, and (3) two switches, one at the Administration Complex and one at the Lively location, interconnected by 4,500-foot long cables.
Telecom Plus filed a protest after the posting of the bid tabulations on or about October 16, 1985. 2/ In its letter of protest, as further explicated in the Prehearing Stipulation, Telecom Plus raised three basic issues. First, Telecom Plus complained that the RFP specifications were ambiguous and not well enough defined, resulting in comparisons between vendors' systems which were not "apples to apples." Second, Telecom Plus claimed that Centel's Call Accounting System, a required subcomponent of the proposed telephone system, fails to meet the FFP's specifications. Finally, Telecom Plus challenged the subjectivity of the point awards in the equipment evaluation,
claiming that the point awards for equipment did not accurately reflect the proposals of Telecom Plus and Centel.
The LCSB used a request for proposals to solicit vendors' suggestions on how its proposed telephone system needs could best be met because, in the opinion of the LCSB telecommunications consultants, an invitation to bid setting forth precise specifications for equipment in a given configuration would have eliminated all competition among vendors.
While the telephone systems proposed by Telecom Plus and Centel differed in the mechanisms used to meet the LCSB needs, the systems were capable of comparison in an evaluation of whether and the extent to which they met the LCSB needs.
Each of the alleged ambiguities raised in the Telecom Plus letter of protest were apparent on the face of the FFP. Telecom Plus did not avail itself of several opportunities to have any such perceived ambiguities in the RFP specifications cleared up. On September 19, 1985, the LCSB conducted a vendors' conference to answer vendor questions concerning the PEP and to clarify the vendors' understanding of the PEP. Representatives of Telecom Plus and Centel, as well as several other vendors, attended the vendors' conference. Notes from the vendors' conference setting forth questions raised and the LCSB's answers were distributed as supplemental material to all PEP specifications. In addition to the clarifications made as a result of the vendors' conference, the PEP included an invitation to vendors to submit written requests for clarification of terminology, if necessary, by no later than September 25, 1985. No such written requests were received by LCSB. The PEP also provided that any discrepancies, errors, omissions, or ambiguities in the specifications, errors, omissions, or ambiguities in the specifications or addenda should be reported in writing to the LCSB by no later than September 25, 1985. No such written notification was received by the LCSB. Despite complaints in its protest that these time frames were inadequate, Telecom Plus acknowledged the time frames in its response to the PEP and neither made objection nor took exception to them.
On the merits, the PEP clearly and accurately communicated that no system architecture was "preferred" over another. The LCSB wanted the vendor's to propose their solutions to the peculiar communications problems faced by the LCSB. Neither single switch, double switch nor switch with remote peripheral equipment (RPE) configuration was to be excluded from consideration. Regarding the system features, the PEP required electronic multi-line key sets "providing for combinations of five or more lines and/or programmable feature access buttons." Although it may have been wiser to specify the maximum number of lines and feature access buttons, there is nothing ambiguous about the PEP. It requires a minimum of five lines or feature access buttons.
Telecom Plus asserted that the Call Accounting System proposed by Centel did not comply with the RFP specifications in that the Call Accounting System proposed by Centel only provides 40,000 call records. The LCSB indicated in the notes from the vendors' conference that a 60,000 capacity in number of calls recorded was "desired"; no 60,000 capacity was specified in the EFP itself. Even if the desired target of 60,000 call records contained in the vendors' conference notes was considered a specification of the RFP, vendors had the option of adding or deleting items from the system requirements in their proposal as long as the additions or deletions are clearly indicated. Centel clearly indicated that its proposed SUMMA IV Call Accounting System would provide only 40,000 call records, complying with the addition/deletion provision of the RFP. 3/ In recognition of the fewer call records provided by Centel's
Call Accounting System, the LCSB telecommunications consultants awarded Centel seven fewer points than possible. Telecom Plus, on the other hand, received all of the available points for its Call Accounting System that exceeded the desired target of 60,000 call records.
The RFP described the criteria to be used by the LCSB in evaluating proposals. A maximum of 1,000 points would be awarded to each proposal--300 points for equipment considerations, 300 points for vendor considerations and
400 points for financial considerations. The equipment considerations included the system's fulfillment of the minimum size, feature, capacity and performance characteristics contained in the RFP, as well as the availability and functionality of specified items, such as the availability of features, ease of systems operation, and projected longevity. The vendor considerations included the vendor's capability and qualifications to provided installs and maintain the system, which would involve an evaluation of the vendor's experience (particularly with other installations of comparable size and complexity), available manpower, financial stability, and proposed installation and maintenance plans. The financial considerations included initial and recurring costs of the system, which would involve an evaluation of the cost of lease or purchase, cost of maintenance, cost of future additions based upon an assumed annual average growths cost of insurance, cost of systems administration, and any other determinable costs associated with the acquisition, installations or operation of the proposed system.
In evaluating proposals, some effort was made to relate points to a dollar value. Since Centel's proposal would cost a total of $1,164,528 over seven years and Telecom Plus' would cost a total of $1,223,281 over seven years, it was borne in mind that each point in the equipment or vendor categories would relate to roughly $4,000 in the financial category. In other words, if a proposal fell short of optimal in an equipment category, for example, the proposal would receive enough fewer points in the equipment category to correspond to the value in dollars by which the proposal was thereby reduced figured at roughly $4,000 per point.
By submitting a proposal in response to the PEP, Telecom Plus signified that it understood and accepted the criteria upon which proposals were to be evaluated and the sole discretion of the LCSB evaluators to determine the bid rankings. 4/
Extensive testimony was received regarding the capabilities and features of both Telecom Plus' proposed NEAX 2400 telephone system and Centel's proposed SL-1N telephone system. In addition, the LCSB telecommunications consultants who performed the technical evaluation of the proposals detailed the relative merits of the two systems in their Evaluation Of Proposals dated October 11, 1985. In the Evaluation Of Proposals, points were awarded as follows:
| Centel | Telecom Plus |
A. Equipment |
|
|
Proven Reliability (of 40) | 40 | 35 |
System Architecture (of 40) | 39 | 35 |
Reliability Considerations |
|
|
(of 40) | 37 | 35 |
System Capacities (of 40) | 32 | 40 |
System Features (of 35) | 35 | 33 |
Instruments (of 35) | 28 | 30 |
Data Considerations (of 35) | 34 | 30 |
Call Accounting System |
|
|
(of 35) | 28 | 35 |
TOTAL | 273 | 273 |
B. Vendor | 292 | 290 |
C. Financial | 384 | 366 |
GRAND TOTAL | 949 | 929 |
The points awarded in the equipment evaluation were justified with one minor exception. The LCSB consultants based their award of points in the "System Features" category on the assumption that the system proposed by Telecom Plus provided for 100 speed call assignments. Actually, that system provides
200 speed call assignments. Accordingly Telecom Plus should have been awarded an additional point. Since the Telecom Plus system received 20 points overall less than Centel's proposed system, the addition of one point to Telecom Plus' total point award would not change the outcome.
Regarding proven reliability of the equipment proposed, Centel's proposed switch was first marketed by Northern Telecom in 1975. The switch was improved and modified over the years, and much of the SL-1N is "backward compatible" (i.e., uses components that could be used in prior versions of the switch) Telecom Plus' proposed NEAX 2400, in contrast, has been on the market only approximately 18 months. This gave Centel's proposal the advantage in this category.
Regarding Systems Architecture, Centel's RPE proposal gave it the advantage in solving the peculiar need of the LCSB to provide an EPABX to serve two buildings at least 4500 feet apart (but especially in comparison with the Telecom Plus proposal).
Regarding reliability considerations, Telecom Plus did not prove (either by documentation in its proposal or by evidence at the hearing) that its D Term telephone instruments will operate reliably at 4500 or more feet from its single telephone switch, as was proposed to provide telephone service for the Lively building. Telecom Plus did, however, delete from the manufacturer's literature included in its response to the RFP the manufacturer's recommendation that the D Term not be used more than 4500 feet from the switch. All these facts and circumstances result in an advantage to the Centel proposal.
In the categories System Capacities, Instruments and Call Accounting System, Telecom Plus' proposal deserved and was given the advantage. Telecom Plus did not prove that its advantage should have been larger. In System Capacities, Telecom Plus' proposal received eight more points (worth roughly
$32,000) for being "non-blocking" (i.e., all telephone instruments could be off-
hook at the same time) although Centel's proposal met all specifications of the RFP. Centel's Call Accounting System is capable of less-than-desired 40,000 call records; Telecom Plus' has the desired 60,000 call record capacity and was given the maximum 35 points in this category. Telecom Plus did not prove that its Call Accounting System was worth more than seven points (roughly $28,000) more to the LCSB, especially since lack of capacity can be addressed by simply "dumping" call records twice as often. (See also footnote 3 above.)
Regarding the financial category, Telecom Plus proved that the LCSB consultants erroneously used the pre-cutover price of $240 instead of the post- cutover price of $281 in figuring the cost of additional telephone sets anticipated to be needed during the first seven years of operation under the Centel proposal. This error deflated the total cost of the Centel proposal by approximately $3,000 over seven years. In light of the actual total cost of the Centel proposal, Centel should have received only 383 points in the financial category instead of 384 points, not enough of a difference to change the outcome of this case.
CONCLUSIONS OF LAW
This case was referred to the Division of Administrative Hearings under Section 120.53(5), Florida Statutes (Supp. 1984), as amended by Section 77, Chapter 85-180, Laws of Florida (1985). But Section 120.53(5) applies only when an agency which . . . enters into a contract pursuant to the provisions of
. . . chapter 287 . . . ." Section 287.012(1), Florida Statutes (Supp. 1984), states:
Definitions--The following definitions shall apply in this part:
"Agency" means any of the various state officers, departments, boards, commissions, divisions, bureaus, and councils and any other unit of organization, however designated, of the executive branch of state government. (Emphasis added.)
Therefore, neither Chapter 287 nor Section 120.53(5) would appear to apply to the Leon County School Board (LCSB) Request For Proposal (RFP) which is the subject of this proceeding.
The LCSB, however, an agency as defined by Section 120.52(1), Florida Statutes (Supp. 1984), and Telecom Plus of Florida, Inc. (Telecom Plus), is entitled to a formal administrative hearing under Section 120.57(1), Florida Statutes (Supp. 1984), in a proceeding in which its substantial interests are determined by the LCSB and which involves a disputed issue of material fact. Such a proceeding began when the LCSB announced its intention to award a contract to Centel Business Systems (Centel) to install the telephone communications system proposed in Centel's response to the RFP. 5/
Authority for the LCSB to enter into a contract with Centel is found in Section 230.23(9), Florida Statutes (1983). Section 230.23(9) does not provide any specific guidance in the context of an RFP like the one which is the subject of this proceeding. But reference can be made to Chapter 287 for guidance as to the nature of an RFP although Chapters 287 does not, strictly speaking, govern this proceeding. In Section 287.012, Florida Statutes (Supp. 1984), the definitional section, it is stated:
(11) "Request for proposals" means a written solicitation for sealed proposals with the title, date, and hour of the public opening designated. The request for proposals is used when the agency is incapable of specifically defining the scope of work for which the commodity, group of commodities, or contractual service is required and when the agency is requesting that a qualified offeror
propose a commodity, group of commodities, or contractual service to meet the specifi- cations of the solicitation document.
A request for proposals includes, but is not limited to, general information, applicable laws and rules, functional or general specifications, statement of work, proposal instructions, and evaluation criteria. Requests for proposals shall state the relative importance of price
and any other evaluation criteria.
Section 287.062(1), Florida Statutes (1983), provides in pertinent part:
(1) No purchase of commodities may be made when the purchase price thereof is in excess of $2,500 unless made upon competitive bids received, except:
* * *
(e) When an agency determines in writing that the solicitation for competitive bids is not practicable or not advantageous to the state, commodities may be procured by requests for proposals. For commodities in excess of $50,000, the determination shall be submitted to the division. To
assure full understanding of and responsive- ness to the requirements set forth in the request for proposals, discussions may be conducted with qualified offerors. The division shall assist in the discussion
upon request from the agency. Qualified offerors shall be accorded fair and equal treatment with respect to any opportunity for discussion and revision of proposals prior to the submittal date specified in the request for proposals. The award shall be made to the responsive offeror whose proposal is determined to be the
most advantageous to the state, taking into consideration price and the other evaluation criteria set forth in the request for proposals. The basis on which the award
is made for commodities in excess of
$50,000 shall be submitted in writing to the division.
Using the pertinent provisions of Chapter 287 as guides, it is clear under the facts of this case that Telecom Plus did not prove that the FFP issued by the LCSB was fatally ambiguous or that a contract should be awarded to Telecom Plus to install the telephone communications system proposed in its response to the FFP (incidentally two inconsistent and mutually exclusive positions). See Liberty County v. Baxter's Asphalt & Concrete, 421 So.2d 505,
507 (Fla. 1982); Culpepper v. Moore 40 So.2d 366, 370 (Fla. 1949); System Devel. Corp. v. Dept. of Health and Rehabilitative Services, 423 So.2d 433 (Fla. 1st DCA 1982).
Based on the foregoing Findings Of Fact and Conclusions Of Law, it is recommended that the Leon County School Board enter a final order awarding a contract to Centel Business Systems to install the telephone communications system proposed in its response to the Request For Proposals in this case.
RECOMMENDED this 5th day of December 1985, in Tallahassee, Florida.
J. LAWRENCE JOHNSTON Hearing Officer
Filed with the Clerk of the Division of Administrative Hearings this 5th day of December 1985.
1/ In the prehearing stipulation, the parties articulated this issue to be "[whether the proposed telephone system contract award by the LCSB to Centel is proper." (Prehearing Stipulation, p. 5.) At the final hearing, the parties clarified the current status of the contract award process to be that bid tabulations have been posted, but no further action or proposed action has been taken by the LCSB. Under the circumstances of this case, the legal standard for determination of whether the bid tabulations were proper" is whether the bid tabulations were developed in an "arbitrary and capricious" manner. See Conclusions of Law below.
2/ ROLM, an IBM Company, also protested but later withdrew its protest.
3/ Centel also proposed an OS 2500 Call Accounting System for consideration by the LCSB. This system provides 350,000 call records, nearly six times more than needed. The LCSB evaluators chose not to use this larger, more costly system or their evaluation of the Centel bid. Had the larger system been used, Centel's bid would have increased in cost by approximately $8,000 resulting in a loss of less than three points.
4/ In addition to signifying its understanding and acceptance of the evaluation criteria by submitting a proposal, Telecom Plus was familiar with the evaluation
criteria by virtue of its having responded to a previous LCSB request for proposal where virtually the same criteria were used.
5/ See paragraph 3 of the Findings of Fact above.
William G. Abrogast President
Telecom Plus of Florida, Inc. 5723 Benjamin Center Drive Tampa, Florida 33614
Carolyn S. Holifield, Esquire 2821 West Pensacola Street Tallahassee, Florida 32304
Carlos Alvarez, Esquire Carolyn S. Raepple, Esquire
Mr. Charles Couch, Superintendent Leon County School Board
