STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
MEMOREX CORPORATION, )
)
Petitioner, )
)
vs. ) CASE NO. 86-1479BID
)
STATE OF FLORIDA ) DEPARTMENT OF TRANSPORTATION, )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to notice, an administrative hearing was held before William R. Cave, Hearing Officer with the Division of Administrative Hearings on May 13, 1985, in Tallahassee Florida.
APPEARANCES
For Petitioner: Carolyn S. Raepple
HOPPING, BOYD, GREEN & SAMS
420 First Florida Bank Building Post Office Box 6526 Tallahassee Florida 32314
For Respondent: Larry Scott
Florida Department of Transportation Haydon Burns Building
Tallahassee Florida 32301
The issues are: (1) whether the bid submitted by Memorex Corporation (Memorex) met the Department of Transportation (DOT) specifications for Contract No. APO886C2 and thereby making Memorex the lowest responsible bidder for that contract; (2) whether Memorex timely filed its Notice of Protest and thereby has standing in this bid protest and; (3) whether Municipal Leasing Corporation (Municipal) was in full compliance with the mandatory requirements of Invitation To Bid and thereby the lowest responsible bidder in Contract No. APO886C2.
BACKGROUND
This matter involves a competitive bid for data processing equipment to be installed in the DOT Burns Data Center. Data is stored on direct access storage units in the Burns Data Center. Access to that stored data can be obtained at DOT computer terminals throughout the State of Florida. A data request proceeds from a terminal to the Burns Data Center where it passes through a front-end processor (a type of controller), the host computer (an IBM 3081 central processing unit), a controller, and finally to the appropriate direct access storage unit. Once the data is retrieved from the direct access storage unit,
it proceeds to the requesting terminals following the same path as the request only in reverse order. Through an Invitation to Bid DOT sought to expand the storage capacity of its direct access storage units.
By formal protest filed April 24, 1986, with DOT, Memorex seeks to rescind DOT's disqualification of its bid for Bid Contract No. APO886C2; to be declared the lowest responsible and responsive bidders and to be awarded the contract.
In support of its position, Memorex presented the testimony of Robert Booth, Stephen Ferguson, Herbert Pressly and Cecil Mills. Memorex's Exhibit Nos. 1-3 were received into evidence; Exhibit 6 was allowed only for the limited purpose of demonstrating DOT's knowledge prior to the issuance of the Invitation to Bid.
DOT presented the testimony of Stephen Ferguson, James Knerr and Michael A. White. Respondent's Exhibit Nos. 1-3 were received into evidence.
Ruling was reserved on the objection of DOT to questions asked by Memorex of Herbert Pressly with respect to irregularities in the Municipal bid. After considering the record in its entirety, the objection is overruled. The questions and answers on this subject have been considered in the recommended order issued here.
The parties submitted posthearing Proposed Findings of Fact and Conclusions of Law. A ruling on each proposed finding of fact has been made as reflected in the Appendix to the Recommended Order.
FINDINGS OF FACT
Upon consideration of the oral and documentary evidence adduced at the hearing, the following facts are found:
On February 7, 1986, DOT requested authority for noncompetitive single source acquisition of two (2) IBM 3380-AD4 Direct Access Storage Devices and four (4) IBM 3380-BD4 Direct Access Storage Devices (IBM Direct Access Storage Devices). To support its request, DOT noted, among other things, that:
This would allow DOT to connect the proposed drives (IBM Direct Access Storage Devices) to the existing controllers and provide back up in case of controller failure (sometime referred to as the need for complete controlled redundancy).
Other non-IBM equipment would require two (2) additional controllers and cause a space problem in its data center.
The IBM Direct Access Storage Devices could be upgraded to double capacity (sometime referred to as double density).
On February 7, 1986, the Department of General Services (DGS) denied DOT's request for single source acquisition.
On February 20, 1986, DOT submitted additional support for the single source acquisition and, again among other things, noted the space problem and the need for two (2) controllers if non-IBM equipment was to be purchased since non-IBM storage units would not attach to IBM controllers.
After the receipt of this additional information, James K. Kern, DGS; visited the DOT Burns Data Center and after reviewing the situation on-site and talking with Herbert Pressley of DOT; made a recommendation that the second request for single. source acquisition be approved.
After the recommendation for approval by James K. Kerr, Memorex on February 27, 1986, filed notification with DGS of its intent to protest DOT's single source acquisition of IBM direct access storage devices.
(b) On March 4, 1986, Memorex responded to its notification of intent to protest single source acquisition by letter to John J. Hittinger, DGS and, among other things, noted that:
Memorex being a manufacturer of disk storage equipment since 1967 had demonstrated compatibility with every generation of IBM Data Storage.
Memorex was willing to agree to a contractual upgrade to double capacity units when available.
Memorex was withdrawing its protest.
On March 13, 1986, DGS, based on Memorex's input and the withdrawal of its intent to protest single source acquisition, again denied DOT's single source request because DGS felt that the only way to determine if this bid should be single source or competitive was to competitively bid the direct access storage devices.
On March 13, 1986, Steve Ferguson, DOT, commented on Michael A. White's letter of March 4, 1986 to John J. Hittinger, referred to in finding of fact number 6 and, among other things noted that:
Controllers and disks must be cross connected in the DOT Bureau Data Center in the event of controller failure (complete controller redundancy) and that this backup policy would not be compromised.
He was concerned about whether the Memorex data storage units would attach to the IBM 3880 controller. There is no evidence that White ever responded to this comment.
At this point, based on conversation between White and Kerr, White and Pressley and White and Ferguson and correspondence received into evidenced it is clear that both DOT and DGS were of the opinion that Memorex could directly attach its data storage units to the IBM-388O controller without the intervention of a Memorex controller. Both DOT and DGS felt that a competitive bid was necessary to determine if there were suppliers other than IBM who could furnish direct access storage devices which met the specifications as contemplated by DOT.
Also at this point, the evidence is clear that Memorex was aware that DOT wanted to purchase data storage devices with present capability for upgrading to double capacity that would attach directly to the IBM 3880 controller without the intervention of another controller and thereby provide for cross connection of controllers and disks so that complete controller redundancy could be achieved.
On March 17, 1986, the DOT issued an Invitation to Bid for two (2) IBM 3380-AD4 direct access storage devices (or equivalent) and four (4) IBM 3380-BD4
direct access storage devices (or equivalent), ("the IBM (or equivalent) Direct Access Storage Units"). The Invitation to Bid contained the following material specifications:
The direct access storage units must be "equivalent" to the IBM Direct Access Storage Units.
The IBM (or equivalent) Direct Access Storage Units must "attach to existing IBM 3880-003 Storage Control units" (IBM Controllers.)
The proposed IBM (or equivalent) Direct Access Storage Units must occupy a foot print no greater than 60 square feet.
Direct access storage devices (disk drives) store the data on magnetic media. The two IBM 3380-AD4's or equivalents were "head of string disk drives" which attach directly to the IBM 3880-003 controller. The controller's function, as its name implies, is to control the operation of the disk drives. The IBM 3380-BD4's or equivalents are "non-head string disk drives" which attach to the AD4's in a string.
No bid solicitation protest was filed by Memorex prior to the submission of its bid.
On April 7, 1986, bids for the purchase and financing of IBM (or equivalent) Direct Access Storage Units were timely submitted by:
Memorex Corporation -- for the Memorex Equipment which was alleged to be equivalent to IBM Direct Access Storage Units.
Amdahl -- for Amdahl equipment allegedly equivalent to IBM Direct Access Storage Units, but which did not attach to the IBM Controllers.
Government Leasing -- for IBM Direct Access Storage Units.
Municipal Leasing - for IBM Direct Access Storage Units.
Capital Financial Assets -- for IBM Disk drives.
The Memorex bid provided for four (4) Memorex 3680 Direct Access Storage Units (disk drives) one (1) Memorex 3683 Dual Path Storage Controller one (1) Memorex 6240 or 3680 High Density Package Direct Access Storage Unite and one (1) Memorex 3888 controller. The purpose of the Memorex 3888 controller was to provide the connection between DOT's IBM 3880 controller and Memorex's disk drives. The "Memorex Equipment" met the sixty (60) square space limitation as set forth in the Invitation To Bid.
The total price of the Municipal bid was $526,233.00. The total price of the Memorex bid was $504,854.00.
On April 11, 1986, DOT posted the bid tabulation disqualifying the bids of Memorex and Amdahl as nonresponsive for failure to meet the bid specifications and awarding Contract No. APO886C2 to Municipal as the lowest responsive bidder.
Memorex's bid was declared nonresponsive for three main reasons:
The bid specifications required that the direct access storage control units attach to existing IBM controllers. Memorex's direct access storage units could not attach to the IBM 3880-003 Control Unit.
DOT required redundancy within the system and intended to cross- connect the direct access storage devices to achieve that. Because Memorex's direct access storage units would not attached directly to the IBM 3880-003 controller, redundancy could not be achieved.
IBM direct access storage units have in-place production units that can be field upgraded to double density.
Memorex disk drives could not be upgraded to double density and did not have double density production units in the field.
On April 14, 1986, Memorex filed its Notice of Protest of DOT's intent to award the contract to Municipal, and on April 24, 1986, Memorex filed its Formal protest with DOT.
The configuration of Direct Access Storage Devices as proposed by Memorex and shown in Memorex's Exhibit No. 4 and the configuration as contemplated by DOT and shown in DOT's Exhibit No. l both require a Memorex 3880 controller to provide the connection between DOT's IBM 3880 controller and Memorex's 3680 Direct Access Storage Units.
The configuration of Direct Access Storage Devices as contemplated by DOT in Bid No. APOB88C2 provides for the Direct Access Storage Devices to attach directly to DOT's IBM 3880 controller without using an intervening controller for the attachment.
Controller redundancy is the process by which the controllers and the attached disk drives are cross-connected to guard against the chance of failures which could cause the loss of data and loss of access to data. Although the chance of such failures is low, DOT has determined that the possibility is high enough to warrant guarding against such failures. To obtain controller redundancy DOT began planning to cross-connect the IBM 3880 controllers eighteen
(18) months ago. At this point cross- connecting has not occurred at DOT, but one of the reasons for this bid was to begin the process and provide redundancy. To obtain controller redundancy the disk drives subject to this bid must have the ability to directly attach to the IBM 3880 without an intervening controller.
The more credible evidence shows that in considering the common practice and custom of the data processing industry the use of a specific model number of an IBM Direct Access Storage device (or equivalent) that must "attach" to a specific model number of an IBM controller in an invitation to bid establishes a benchmark which a non-IBM direct access storage device must equal in order to satisfy the specifications of the invitation to bid.
In the instant case, DOT did establish a benchmark and all of the specifications of the IBM-3380-AD4 and 3380-BD4 Direct Access Storage Device, including how it attached to the existing IBM-3880 controller allowing for cross connection to obtain controller redundancy, were effectively included in Invitation to Bid.
Considering the common practice and custom of the data processing industry in bidding projects, the bid specifications contained in the DOT Invitation To Bid and used by DOT in awarding Contract No. APO886C2 were clear and unambiguous.
The equipment that was the subject of the Memorex bid did not meet the intent of the specifications of the Invitation To Bid.
The DOT Invitation To Bid did not contain a "no substitute" limitation as provided for in Rule 13A-1.02(16), Florida Administrative Code, nor was it necessary since at the time of the Invitation To Bid both DOT and DGS were of the opinion that other suppliers of direct access storage devices, at least Memorex, could supply an "equivalent" direct access storage device that would attached directly to DOT's existing IBM 3880 controller.
Although the word "equipment" appears throughout the Invitation To Bid, the evidence does not support the contention of Memorex that this allows the substitution of a configuration of equipment that performs the same functions as the specified Model of IBM direct Access Storage Device which can only attach to the IBM 3880 controller through an intervening Memorex controller.
The "Memorex Equipment" has some of the same features and can perform some of the same functions as the "IBM Equipment" but the "Memorex Equipment" is not equivalent to the "IBM Equipment" specified in the Invitation To Bid.
Municipal failed to insert its corporate charter number on the Bidder Acknowledgment Form, however, there was no space provided on the form for the corporate charter number even though paragraph 5, Legal Requirements of the Special Conditions attached to the Invitation To Bid specifically states that a space is provided.
Municipal did not initial all twenty-three (23) special items attached to the Invitation To Bid, however, it did reference in its cover letter that the contract would include all of the terms and conditions of the bid and its response.
Municipal failed to comply with Section 9, Services and Warranty of the Invitation To Bid when it did not include any attachment concerning service and warranty.
Paragraph 6 of the Special Conditions attached to the Invitation To Bid provides for rejecting the vendor's bid for failure to comply with the mandatory requirements in the specifications.
The Invitation To Bid and attachments do not define mandatory requirements and there was no other evidence introduced that defined mandatory requirements.
DOT waived Municipal's failure to comply with those requirements listed in finding of facts 30, 31, and 32 on the basis that they were minor irregularities and its cover letter embraced all the terms and conditions of the Invitation To Bid.
There was no evidence that Memorex made any inquiry of DOT in regard to clarifications of the specifications after receiving the Invitation To Bid and before submission of its bid.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, this proceeding.
Memorex contends in this proceeding that the decision to award contract No. APO886C2 to Municipal should be rescinded because the specifications in the Invitation To Bid were unambiguous and DOT's post-bid opening interpretations of those specifications which resulted in Memorex's bid being declared nonresponsive were improper and unlawful. Memorex also contends that Municipal's failure to comply with all the mandatory requirements of the Invitation To Bid requires DOT to reject Municipal's bid. For these reasons, Memorex demands that the contract be awarded to it or, in the alternatives that the purchase of the data storage units be re-bid.
DOT contends that Memorex lacks standing to protest the award of this contract to Municipal because of the untimeliness of its notice of protest. DOT points to Section 120.53(5), Florida Statutes and Rule 14-25.24, Florida Administrative Coded in support of its contention that Memorex's failure to file a notice of protest prior to the bids being received constitutes a waiver of its rights to challenge the award of this contract. Rule 14-25.24(1), Florida Administrative Code requires any person adversely affected by a bid solicitation to file a written notice of protest prior to the date bids are to be received and a formal written protest within ten days after filing the notice of protest. Section 120.53(5) Florida statutes, has similar requirements and is the statutory authority for Rule 14-25.24, Florida Administrative Code.
The evidence is clear that Memorex did not, file a protest before April 7, 1986, the date bids were to be received. However, Memorex contends that it is not challenging the bid specifications and, therefore, not required to file a notice of protest before the date bids are to be received but is subject only to the time requirements of Rule 14-25.24(2), Florida Administrative Code, in filing its notice of protest and formal written protest, which time requirements it did meet.
Memorex makes no challenge as to the ambiguity of the specification as it interprets those specifications but centers its challenge on what Memorex terms post-bid opening interpretations by DOT. Under this limited challenge, it is concluded that Memorex does have standing to prove that its interpretation was correct and that DOT added specifications after the bid was opened which resulted in disqualification of the Memorex bid. However, it is concluded that any challenge to the ambiguity of the specifications is precluded. The Cone Corporation v. Department of Transportation, Division of Administrative Hearings Case No. 85-2828, Final Order entered January 24, 1986.
The burden of proof is on the party asserting the affirmative of an issue before an administrative tribunal. Florida Department of Transportation
v. J.W.C. Company, Inc., 396 So.2d 778 (1 DCA Fla. 1981). Memorex must prove its allegations by a preponderance of the evidence. Florida Department of Health and Rehabilitation Services v. Career Service Commissions 289 So.2d 412 (4 DCA Fla. 1974). Memorex has failed to prove the allegations made in its bid protest.
The evidence is clear that Memorex was aware that prior to the Invitation To Bid DOT wanted Direct Access Storage Devices that were equivalent to the IBM-3380 AD4 and BD4 so that direct attachments to the IBM 3880
controller could be accomplished because, among other things, this would allow cross connection which is necessary for complete controller redundancy to be achieved and it would also allow for present upgrade to double capacity if needed. Additionally, the evidence is clear that using specified IBM equipment for a benchmark in the bidding process is common practice and custom in the data processing industry and Memorex was aware of this practice and custom. Had there been any doubts contact with DOT to clarify this point would have been appropriate. This was not done.
It is clear that these specifications and other specifications of the IBM 3380 AD4 and BD4 Direct Access Storage Devices were incorporated into the specifications of the Invitation to Bid and that the Memorex equipment subject to the bid did not meet all of the specifications incorporated in the bid.
As to DOT's procedure in attempting to use single source acquisition and subsequently going to competitive bid, there was no showing that this was done to circumvent the denial by DGS. In fact, it was done at the insistence of DGS who found no problem with the specifications used by DOT to disqualify the Memorex bid.
A public agency has wide discretion in advertising for and accepting bids. The decision of an agency to award a contract, when based on an honest exercise of this discretion, will not be overturned even if it appears erroneous or reasonable people may disagree with the award. Liberty County v. Baxter's Asphalt & Concrete Inc., 421 So.2d 505 (Fla. 1982); C.H. Barco Contracting Company v. Department of Transportation, 483 So.2d 796 (1 DCA Fla. 1986). When a court finds no illegality, fraud, oppression, or misconduct of either the agency or the lowest bidder, the agency's discretion in awarding the bid will not be disturbed. Liberty County, supra, at 507. Memorex failed to prove the existence of any of the above elements, therefore, DOT's award of the contract to Municipal shall not be disturbed.
Based upon the foregoing Findings of Fact and Conclusions of Law recited herein, it is
RECOMMENDED that a final order be entered dismissing the bid protest submitted by Memorex Corporation on State Bid No. APO9886C2 and awarding the contract to MUNICIPAL LEASING CORPORATION.
Respectfully submitted and entered this 11th day of July, 1986, in Tallahassee, Leon County, Florida.
WILLIAM R. CAVE
Hearing Officer
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 11th day of July, 1986.
APPENDIX TO RECOMMENDED ORDER IN CASE NO.86-1479BID
The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties in this case.
Rulings on Proposed Findings of Fact Submitted by the Petitioner
The Petitioner has interspersed legal arguments throughout its Proposed Findings of Fact which have some facts stated within the legal arguments but not stated specifically as a finding of fact, and in those instances I have rejected the "Proposed Findings of Fact" as arguments.
Covered in the background part of this Recommended Order.
(a-c). Adopted in Finding of Fact 1(a-c).
Adopted in Finding of Fact 2.
(a-c). Adopted in Finding of Fact 11 (a-c).
(a-e) Adopted in in Finding of Fact 14(a-c).
Adopted in Finding of Fact 16.
Adopted in Finding of Fact 17.
8 (a-b). Adopted in Finding of Fact 18 (a-c).
Rejected as legal argument.
Rejected as not comporting with the substantial competent evidence in the record.
Adopted in Finding of Fact 19.
Adopted in Finding of Fact 15.
Adopted in Findings of Fact 23, 24, 25, 26 and 27 but clarified.
First sentence adopted in Finding of Fact 9. The second and third sentences are facts but rejected as irrelevant and immaterial because DOT and DGS both changed positions due to subsequent information supplied by Michael White. The fourth sentence is rejected as not comporting with the substantial competent evidence in the record.
15-16. Rejected as legal argument.
Adopted in Finding of Fact 29 but modified.
Adopted in Finding of Fact 18 but clarified.
First two sentences rejected as immaterial. The next two sentences adopted in Finding of Fact 29 but modified. The last sentence is rejected as not comporting with the substantial competent evidence in the record.
Rejected as not comporting with the substantial competent evidence in the record.
The first two sentences rejected as not comporting with the substantial competent evidence in the record. The last two sentences rejected as argument.
The first sentence rejected as not comporting with the substantial competent evidence in the record. The balance of the paragraph rejected as legal argument.
The first two sentences rejected as legal argument and the last sentence rejected as not comporting with the substantial competent evidence in the record.
First sentence rejected as not comporting with the substantial competent evidence in the record. The last sentence rejected as immaterial and irrelevant.
Rejected as legal argument.
Rejected as immaterial.
First sentence rejected as legal argument and the balance rejected as immaterial.
First sentence adopted in Finding of Fact 22 and the balance rejected as immaterial.
Rejected as not comporting with the substantial competent evidence in the record.
First sentence rejected as immaterial. The second sentence rejected as not comporting with the substantial competent evidence in the record.
The fact that Memorex Equipment met the 60 square foot requirement is adopted in Finding of Fact 15 and the balance is rejected as argument.
The first sentence adopted in Finding of Fact 11 and the balance rejected as argument.
Adopted in Finding of Fact 20.
The first sentence adopted in Finding of Fact 20 but modified. The next two sentences rejected as argument and the last sentence rejected as immaterial.
The first and last sentences rejected as not comporting with the substantial competent evidence in the record. The second sentence rejected as immaterial.
Rejected as not comporting with the substantial competent evidence in the record.
The first two sentences adopted in Findings of Fact 11 and 15 and the balance rejected as argument.
Adopted in Findings of Fact 30, 31 and 32 but clarified.
Adopted in Finding of Fact 33 but modified.
Adopted in Finding of Fact 35.
Rejected as argument.
Rulings on Proposed Findings of Fact Submitted by the Respondent
1. (a-c) Adopted in Finding of Fact 11 (a-c).
Adopted in Finding of Fact 13.
Adopted in Finding of Fact 14(a-e).
Adopted in Finding of Fact 17.
(a-c). Adopted in Finding of Fact 18(a-c).
Adopted in Finding of Fact 21 but modified.
Adopted in Finding of Fact 20 but modified.
The first three sentences rejected as irrelevant and immaterial. The balance is not stated as a finding of fact but as testimony of witnesses and is rejected as argument.
Adopted in Finding of Fact 22 but modified.
Adopted in Findings of Fact 1, 2, 3, 4 and 7.
Adopted in Finding of Fact 5.
Adopted in Finding of Fact 6.
Adopted in Finding of Fact 8.
Adopted in Finding of Fact 7.
COPIES FURNISHED:
Carolyn S. Raepple
HOPPING, BOYD, GREEN & SAMS
420 First Florida Bank Bldg. Post Office Box 6526 Tallahassee, Florida 32314
Larry Scott
Florida Department of Transportation
Haydon Burns Building Tallahassee, Florida 32301
Thomas Drawdy, Secretary Department of Transportation Haydon Burns Building Tallahassee, Florida 32301
STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
MEMOREX CORPORATION, )
)
Petitioner, )
)
vs. ) CASE NO. 86-1479BID
)
STATE OF FLORIDA, ) DEPARTMENT OF TRANSPORTATION, )
)
Respondent. )
)
ORDER AMENDING RECOMMENDED ORDER
Pursuant to Rule 22I-6.32(2), Florida Administrative Code, it is sua sponte ORDERED:
The Recommended Order entered in this cause on July 11, 1986 is amended to reflect May 13, 1986 as the date of the hearing rather than May 13, 1985. A copy of the amended page is attached for your records.
DONE and ORDERED this 23rd day of July, 1986 in Tallahassee, Florida.
WILLIAM R. CAVE
Hearing Officer
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 23rd day of July, 1986.
COPIES FURNISHED:
Carolyn S. Raepple
HOPPING, BOYD, GREEN & SAMS
420 First Florida Bank Bldg. Post Office Box 6526 Tallahassee, Florida 32314
Larry Scott
Florida Department of Transportation
Haydon Burns Building Tallahassee, Florida 32301
Thomas Drawdy, Secretary Department of Transportation Haydon Burns Building Tallahassee, Florida 32301
| Issue Date | Proceedings |
|---|---|
| Jul. 11, 1986 | Recommended Order (hearing held , 2013). CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Aug. 01, 1986 | Agency Final Order | |
| Jul. 11, 1986 | Recommended Order | Using specified IBM equip as benchmark for specification was common practice and where protestor's bid did not meet those specifications there was no basis for protest. |
