STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

BRUCE NANTS, )

)

Petitioner, )

)

vs. ) CASE NO. 87-4069BID

) DEPARTMENT OF EDUCATION, )

)

Respondent. )

)

RECOMMENDED ORDER

Final hearing in the above-styled action was held on September 28, 1987, in Tallahassee, Florida, before Mary Clark, Hearing Officer of the Division of Administrative Hearings.

The parties were represented as follows:

For Petitioner: Bruce Nants, Esquire (pro se)

13 South Magnolia Avenue Post Office 547871 Orlando, Florida 32854

For Respondent: Charles S. Ruberg, Esquire

State Board of Education Knott Building

Tallahassee, Florida 32399 BACKGROUND

Sometime prior to July 1987, the Florida Department of Education issued Invitation to Bid No. 87-0123, to procure collection services for defaulted student loans under the Florida Guaranteed Student Loan Program, the Florida Auxiliary Loan (PLUS) Program and the State of Florida Student Loan and Scholarship Loan Programs.

Bruce Nants Submitted a proposal in response to the invitation to bid. His proposal and several others were eliminated from final consideration for non- compliance with the proposal requirements. The results of the Department's evaluation of the proposals were provided in a letter dated July 21, 1987.

Bruce Nants filed a timely notice of protest, and after unsuccessful efforts at informal resolution, the protest petition was referred to the Division of Administrative Hearings for conduct of a formal hearing.

Another protest was filed by Central Adjustment Bureau, Inc., (See DOAH Case No. 87-4068BID). The issues were not similar and the cases were not consolidated.

Notices of the protest were sent to all bidders, but none sought intervention.

At the hearing, the officer of presentation was reversed by agreement of the parties to facilitate exposition of the procurement process. The Department presented one witness and two exhibits, including the Invitation to Bid and the evaluation sheets related to the Nants proposal.

Bruce Nants testified in his own behalf and presented no other witnesses.

His five exhibits, including his proposal, were received into evidence.

No transcript was prepared and only the Department Submitted a Post-hearing proposed recommended order. The Department's proposed findings are substantially adopted here and are specifically addressed in the attached Appendix.

ISSUES

The issue for resolution in this proceeding is whether the Petitioner, Bruce A. Nants, was properly disqualified for consideration in the BID No. 87- 0123.

Petitioner ("Nants") claims that his proposal complies with the Invitation to Bid (ITB), that a re-evaluation should be made by a different committee, and that his proposal should be fully considered in the competitive process.

Respondent ("DOE") contends that Nants' proposal did not meet the specified requirements of the ITB and was properly disqualified. DOE also argues that the proposal represents an offering of services which are different in nature from the services it is attempting to procure.

FINDINGS OF FACT

The Invitation To Bid

1. The purpose for Invitation to Bid No. 87-0123 is stated in the Introduction to that document:

   
   

   INTRODUCTION

   
   

   The Florida Department of Education (hereinafter Department) is soliciting proposals from commercial collection agents/law firms (hereinafter Agent) for delinquent account collection services on defaulted Florida Student Loans, Florida Auxiliary Loans (PLUS) and State of Florida Student Loan and Scholarship Loans. Florida Guaranteed Student Loans and Auxiliary Loans are loans made to students and parents of students by participating lenders and insured by the Department against default, death, disability and bankruptcy by the borrower.

   
   

   The purpose of the Department in contracting for collection services on seriously delinquent and defaulted loan

   accounts is to increase collections through the use of professional collection activities beyond the efforts of the loan servicing contractor and the expertise of the Department's' staff.

   
   

2. DOE intends to award contracts to the four bidders who received the highest scores in the evaluation process. The top three bidders will receive contracts for "first placement" of accounts for collection; the fourth bidder will receive a contract for "second placement", and if performance warrants, it might subsequently receive "first placements".

   
   

3. "First placement" refers to accounts which have never before been placed with a collection agency; "second placements" are those for which the first collection agency failed to obtain results.

   
   

4. The evaluation of the fifteen proposals DOE received in response to the ITB included an initial review against a checklist to determine if the proposal minimally met the specified requirements. In this process the Nants proposal and seven others were eliminated.

   
   

   The Nants Proposal

   
   

5. Bruce A. Nants is an attorney licensed by the State of Florida, maintaining a law office and practice in Orlando, Florida. His proposal was submitted on behalf of his law office, a sole proprietorship.

   
   

6. As stated in the July 1987, letter of notification, Nants' proposal was rejected for violations of four requirements of the ITB: Section 3.3, 4.7, 4.9, and 4.11.

7. Section 3.3, "Agent Staff", requires the submission of "... a description of staff who will be

   responsible for administration and

   coordination of the contract. The agent is expected to assign staff members who are qualified, experienced, and capable of providing technical assistance to the Department. The agent shall identify the personnel involved in the conduct of this work and document their qualifications.

   
   

   The agent's proposal shall indicate by name the management and professional personnel to be responsible for major contract activities. An appendix in the proposal shall contain a resume for each of the employees, indicating relevant professional experience. (emphasis

   added) Respondent Exhibit #1

   
   

8. This section also requires the submittal of organizational charts.

9. Nants included a sketchy organizational chart, a narrative description of his staff, including their names and areas of responsibilities, and one resume: his own.

   
   

10. His proposal was cited for violation of this provision based on failure to include more than that one resume.

    
    

11. The requirement for resumes uses the term, "employees". Nants is his firm's only employee. The other individuals are independent contractors. However, this is a legal distinction without significance in the context of section 3.3. The language of this section in its entirety makes it apparent that DOE was interested in the qualifications and experience of the individuals responsible for providing services under the proposed contract. The sentence requiring documentation uses the term, "personnel", a more generic designation which includes both employees and other staff, however designated. The documentation could have been included in a resume but was not provided in that form or otherwise, except as to Nants. The information required was necessary to compare proposals.

12. Section 4.7 requires-- "Samples of the agent's client

    inventory, remittance statements, performance analysis, acknowledgment report, close and return report, and other reports that are required pursuant to Section 15(k) of the example State of Florida contract (See Exhibit I)."

    
    

    Respondent's Exhibit #1

    
    

13. The sample contract attached to the ITB indicates that these reports are required by DOE from its collection agents on a monthly basis.

    
    

14. The Nants proposal included only one form, a copy of an accounts receivable ledger which he sends to the collection agencies he has represented for several years in DOE collections. This computer-generated sheet lists payments received by the office from various delinquent debtors.

    
    

15. Section 4.9 requires a --

    
    

    Description of the collection procedures, techniques, and systems to be used.

    Include samples of notices, letters, typical telephone contacts, forms, and video screens utilized by the agent in the collection of delinquent accounts and in the providing of information to the Department....

    
    

16. The Nants proposal included three legal forms the firm uses in its suits on behalf of the DOE: a form complaint, a summons to the debtor defendant, and an "affidavit of amount due, interest and non-military service and venue". The proposal also included a sample demand letter which is sent prior to initiation of the legal action.

17. At the hearing Nants presented other sample documents he has developed for his collection lawsuits. These cannot be considered a supplement of his proposal, but are competent evidence that his collection procedures are essentially legal services.

    
    

18. Section 4.11 of the ITB requires:

    
    

    Copies of independently audited financial statements for the last three tax years.

    
    

19. The Nants proposal stated that the law office does not produce or prepare financial statements, but offered federal tax returns upon request.

    
    

20. The fact that Bruce Nants is a law firm rather than a traditional collection agency does not, of itself, bar his eligibility for consideration in Bid No. 87-0123. The first sentence of the ITB Introduction addresses law firms as well as commercial collection agents. (See paragraph #1 above.) A law firm, Hayt, Hayt and Landau, was selected by the evaluation committee for the second highest scored proposal and was recommended for a "first placement" contract. That is a larger firm, however, with a collection agency contained within the structure of the firm. Under its past contract with DOE, Hayt, Hayt and Landau has performed all pre-litigation services that a collection agency provides.

    
    

21. Bruce Nants admits that he is not trying to be a collection agency, but rather wants to get approved so that DOE can utilize his services to go directly to court and by-pass the collection agencies in certain cases. He does not wish to compete with collection agencies and offers a different service with the same goal the return of borrowed funds which DOE would otherwise lose.

    
    

22. Nants conceded at hearing that his proposal documentation was sketchy, but claimed that the DOE was already thoroughly familiar with how he operates. He does not make telephone calls or use other similar collection techniques; he sends the demand letter and, after no response, he files the form complaint in court.

    
    

23. For several years Nants has represented collection agencies who have been awarded DOE contracts and has obtained good results. He enjoys an excellent rapport with DOE staff. At their instigation he has established a standard system for handling collection suits. The courts now accept venue in Leon County and allow Rick Wells, the DOE representative, to testify by telephone.

    
    

24. The services offered by the Nants proposal are different in nature from those sought by the Department.

    
    

25. Those items which are absent from or are incomplete in Petitioner's proposal support the above finding, as they are precisely the items which would enable the Department to evaluate the Petitioner as a collection agency. By their absence or incompleteness, the Department is precluded from making such an evaluation.

    
    

    CONCLUSIONS OF LAW

    
    

26. The Division of Administrative Hearings has jurisdiction over the parties and subject matter in this proceeding. Sections 120.53(5) and 120.57(1), Florida Statutes.

27. In the procurement of contractual services by a state agency, the award may be made only to a qualified and responsive bidder or offeror. Subsections 287.057(2) and (3), Florida Statutes. "Responsive bidder" or "responsive offeror" is a person who has submitted a bid which conforms in all material respects to the invitation to bid or request for proposals. Subsection 287.012(12), Florida Statutes.

    
    

28. The facts in this case show that Petitioner's proposal failed to conform in material respects to the ITB.

    
    

29. Moreover, the services proposed by Bruce Nants are legal services, exempt from the definition of "contractual services," and thereby excluded altogether from the competitive procurement requirements of Subsection 287.057, Florida Statutes. See: Subsection 287.012(4)(b)4., Florida Statutes. Purchase of private legal services is governed by Section 287.059, Florida Statutes.

RECOMMENDATION

Based upon the above Findings of Fact and Conclusions of Law, it is hereby, RECOMMENDED:

That the formal protest of Bruce Nants be DENIED and DISMISSED.

DONE AND RECOMMENDED this 21st day of October, 1987, at Leon County, Tallahassee, Florida.

MARY W. CLARK

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 21st day of October, 1987.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-4069BID

1. Adopted in Paragraph 1.

2. Adopted in Paragraph 2.

3. and 4. Adopted in Paragraph 4.

1. Adopted in Paragraph 6.

2. through 10. Adopted in substance in Paragraph 6 and 7.

11. through 13. Adopted in substance in Paragraphs 12 and 13.

14. through 17. Adopted in substance in Paragraphs 10 and 11.

18. through 21. Adopted in substance in Paragraphs 8 and 9.

22. through 24. Rejected as unnecessary.

25. and 26. Rejected as immaterial. These sections were not cited as a bases for rejection in the notice to Petitioner.

27. through 29. Rejected as cumulative and unnecessary.

1. Adopted in substance in Paragraph 15.

2. Rejected as immaterial.

3. Adopted in Paragraph 16.

4. Adopted in Paragraph 17.

COPIES FURNISHED:

Bruce Nants, Esquire

13 South Magnolia Avenue Post Office Box 547871 Orlando, Florida 32854

Charles S. Ruberg, Esquire State Board of Education Knott Building

Tallahassee, Florida 32399

Honorable Betty Castor Commissioner of Education The Capitol

Tallahassee, Florida 32399

Sidney H. McKenzie, Esquire General Counsel

Knott Building

Tallahassee, Florida 32399

Docket for Case No: 87-004069BID

Orders for Case No: 87-004069BID