B. DICK PRODUCTS OF )
vs. ) CASE NO. 85-4001BID
) AM INTERNATIONAL, INC. d/b/a ) MULTIGRAPHICS, )
Intervenor. )
This case was heard on April 4, 1986, by R. L. Caleen, Jr. Hearing Officer with the Division of Administrative Hearings, in Tallahassee, Florida. The parties were represented by counsel:
For Petitioner: Thomas F. Woods, Esquire
For Respondent: Charles S. Ruberg Esquire
Office of the University Attorney Florida State University Tallahassee, Florida 32306
Whether Respondent's proposed purchase of a Multigraphics Total Copy Center 7 with TCS copy sorter 67-120 (120 bins) is an authorized "single source" purchase.
By petition dated October 31, 1985, Petitioner, A. B. Dick Products of Tallahassee, Inc. ("A.8. Dick") requested a formal hearing to contest Respondent, Florida State University's ("FSU") free-form decision to purchase a Multigraphics Model 7 off-set printing system ("TCS-7") as a "sole source, without competitive bidding.
In support of its request, A.B. Dick alleged that it had similar systems available which--if the purchase were competitively bid--would offer comparable service at a lower price.
On November 19, 1985, FSU granted the request for hearing and forwarded this case to the Division of Administrative Hearings for assignment of a hearing officer. At the parties' request, hearing was subsequently set for March 13, 1986, then-- on A.B. Dick's unopposed motion--reset for April 4, 1986.
On March 26, 1986, AM International, Inc., which sells the TCS-7, petitioned to intervene in support of FSU's proposed "sole source" purchase. The petition was granted.
On March 28, 1986, the parties filed a prehearing stipulation, identifying the issues and the parties' respective positions. A.B. Dick contends that it can provide printing equipment comparable to and at the same or lower cost than, the TCS-7 proposed for "sole source" purchase. FSU and AM International Inc., dispute this contention.
At the final hearings A.B. Dick presented the testimony of Willie Collins, Bill Parsons, Deborah Christie, Harold N. Mueller, and Charles K. Hill. FSU presented the testimony of Stephen J. Wharton. Petitioner's Exhibits 1 and 3, and Respondent's Exhibits A through D and L were received in evidence.
The transcript of hearing was filed on April 15, 1986. The parties filed proposed findings of fact and conclusions of law, with replies, by April 29, 1986. Rulings on the proposed findings are contained in the attached Appendix.
I.
FSU's Need For An On-Line, Fully Integrated, Off-Set Printing System, With Duplexing Capability.
Office Services, a sub-unit of the Business Services Department of FSU, provides printing and copying services to faculty students and staff at three locations on the university's main campus in Tallahassee, Florida. One of these locations, the "Union Copy Center," is on the premises of the University Union building complex.
The main function of the Union Copy Center is to provide quick, fast-turnaround copies--from 500,000 to a million copies per month. Copies are made within a very short time, either while the customer waits or within 48 hours.
The Union Copy Center is open nine hours a day. It provides additional services such as binding copied materials, laminating small items and making signs. It also has walk-up copying, where the customer operates a copy machine, then pays on a per copy basis.
The Union Copy Center is equipped with a Xerox 9500 photocopier collating machines, two walk-up copiers, a sign or nameplate making machine, a laminating machine, a spiral binding machines an A.B. Dick 350 press used for small posters and book covers, and a Multigraphics 4975 duplexing copying machine, which is no longer in service.
The Union Copy Center has two employees--a full-time operator or printer, and a print shop supervisor, who also supervises another copy center located elsewhere on the campus. Neither employee is a "dedicated operator"--defined as a person who operates only a single piece of equipment, with no additional duties.
For example, the full-time printer not only operates the machinery but also answers telephone calls, waits on walk-up customers, collects copying charges, writes tickets for each job, logs in each job by type of work to be performed, and sells class notes or supplements to students. He also operates the book bindery, which entails a substantial amount of handwork such as taping and stitching.
In June 1985, FSU hired Deborah Christie as the Graphics Manager of Office Services. In this capacity she was responsible
for the three on-campus printing and copying locations of Office Services, including the Union Copy Center. Her immediate supervisor was Barbara Johnson, Director of Business Services.
Ms. Johnson asked Ms. Christie to investigate and find equipment to replace the Xerox 9500 photocopier in the Union Copy Center.
The Xerox 9500 is an on-line, duplexing system which uses a photocopying process to produce copies from originals. Although it produces good quality copies in a very short time, it is expensive to operate. It has a "per copy, click charge," costing FSU from $4,000 to $6,000 per month.
During the course of Ms. Christie's investigation, she received proposals from The Kodak Corporation, A.B. Dick, and AM International, Inc. She reviewed the literature provided by these and other vendors of duplicating equipment, and surveyed the equipment used by commercial quick-copy shops in the Tallahassee area. She concluded, and reasonably so, that the Xerox 9500 photocopier should be replaced by an on-line, fully integrated
off-set printing system, with duplexing capability. "On-line" means that the different components of the system are connected so that the operator is not normally required to manually transfer materials from one component to the other, such as from the
master-maker to the press. "Fully integrated" means the components are mechanically and electronically connected, with full synchronization. "Duplexing" means that a single sheet passing through the press can produce a copy with print on both sides. (Over 75 percent of the Copy Center's jobs require two- sided printing.) With these features, the need for operator intervention would be minimal, and the operator could perform other duties while copies were being printed. Finally the quality of copies made by off-set printing is equal or superior to the quality of copies made by photocopying. Since off-set printing eliminates the "per copy click charge," copying is less costly-- as much as 50 percent lower than the cost of photocopying.
II.
Equipment Capable of Meeting FSU's Need
The equipment proposed by Kodak was the more expensive photocopying process, so it would offer little improvement over the Xerox 9500 currently in use.
Both A.B. Dick and AM International, Inc. offer off-set printing systems. The A.B. Dick system consists of Models 369T, 171, and a sorter. Model 369T is a tandem or duplexing off-set
press, to which an automated sorter can be connected. Model 171 is a master-maker which cannot be connected to or integrated with the Model 369 tandem press. Hence this printing system requires two separate actions by the operator. First, he uses the master- maker to make masters of the originals, then he manually transfers the masters to the document feeder portion of the press. The total cost of the A.B. Dick system is $68,984, which includes the press, the master-maker, the feeder, and the sorter with interface.
The AM International, Inc., system consists of a Total Copy System 7 with 67-120 sorter ("TCS-7"). This is a fully integrated; on-lined off-set printing system; with duplexing capability- which fully satisfies FSU's reasonably identified needs. No other system currently available on the market has such a combination of features. It has three components: a camera or master-maker, an off-set printing press, and a sorter or collator. Because of its unique combination of features, the operator normally need only set-up and place the originals in the document- feeder component of the master-maker (at one end of the system), then remove the printed copies from the sorter (at the other end of the system). In the absence of operational problems such as paper jams, the operator does not intervene between the loading of the feeder and the removal of finished copies. This frees him to perform other duties while copies are being made. The total cost of the TCS-7 is $80,123.16.
To meet the quick, fast turnaround and minimum operator intervention requirements of FSU, the duplication system must be relatively free of breakdowns. It has not been shown that the CCS-7 is more prone to breakdowns or requires repairs more often than other off-set duplexing systems currently available.
III.
The On-Line Integrated Features of the TCS-7 Are Unique
The unique on-line, integrated components of the TCS-7 means that it, alone, can satisfy FSU's reasonably identified needs. On-Line capability becomes even more critical as the number of "run" lengths shorten and the number of originals per job increase. For example, if the bulk of the work to be copied were two page documents, of which 5,000 duplexed copies were to be made, on-line capacity would become less important. The operator could make two masters, manually load them into a nearby press, and perform other duties while the copies are being run. (Tr.
160) But this is not the situation in the FSU Copy Center, where
60 percent of the jobs range from 50 to 500 copies per originals
25 percent are over 500 copies, and 15 percent range from 20 to 50 copies. The overall average is 19 originals per job, with an average of 700 copies per original. The on-line capacity of the TCS-7 satisfies FSU's needs for quick turnaround, cost-effective, high quality copying, while minimizing the need for operator intervention.
Under Section 287.062(1)(c) and Rule 13A-1.10, Florida Administrative Coded the State of Florida, Department of General Services authorizes "single source" purchase by state agencies. It authorized ten "single source" purchases of on-line copy systems between 1976 and 1982. By so doing, it acknowledged the uniqueness and importance of the on-line feature, described as "where the workflow is continuous and uninterrupted, requiring no operator intervention from the time the original is fed through the master-maker onto the press cylinders, printed and then the printed copies removed from the sorter." (Resp. Exhibit L)
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this proceeding. Section 120.57(1), Florida Statutes (1985).
Section 240.227(14), Florida Statutes, authorizes FSU to approve and execute commodity contracts pursuant to Chapter 287, Florida Statutes (1985). Pursuant to Section 240.225, Florida Statutes (1985), the Florida Department of General Services, has delegated its duties under Part 1, Chapter 287, Florida Statutes, to the State University System. See, Rule 13A-1.14, Fla.Admin.Code. Hence, the authority to authorize "single source" purchases without competitive bidding, is now exercised by the University President or the President's designee. Rule 6C2- 2.15(8), Fla.Admin.Code.
The evidence establishes that FSU has a real and legitimate need for an on-lined fully integrated off-set printing system, with duplexing capability, and that only the TCS-7 is capable of satisfying this need. The A.B. Dick system (Models 171 and 369T) is neither on-line nor fully integrated. The on- line, fully integrated characteristics of the TCS-7 make it unique among off-set printing systems. AM International, Inc., vendor of the TCS-7, is the only available source of such a system. Accordingly "single source" approval of the purchase of a TCS-7 for the Copy Center is justified and should be authorized by the President of
FSU, or his designee. See, Section 287.062(1)(c), Fla.Stat, (1985); Rule 6C-2.15(8), Fla.Admin.Code.
FSU and AM International, Inc., also contend that since
