STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

JAMES C. HARTLEY and ) PROFESSIONAL CENTER FIVE, )

)

Petitioners, )

)

vs. ) CASE NO. 88-4645BID

)

DEPARTMENT OF HEALTH ) AND REHABILITATIVE SERVICES, )

)

Respondent, )

and )

)

1. B. HAMNER MILLER, )

   )

   Intervenor. )

   )

   
   

   RECOMMENDED ORDER

   
   

   The final hearing in this case was held on October 20, 1988, in Tampa, Florida, before Donald D. Conn, a duly designated Hearing Officer of the Division of Administrative Hearings. The parties were represented as follows:

   
   

   For Petitioner: Joseph D. McFarland, Esquire

   520 Second Avenue, South

   St. Petersburg, Florida 33701

   
   

   For Respondent: Jack Farley, Esquire

   W. T. Edwards Facility 4000 West Buffalo Fifth Floor, Room 520 Tampa, Florida 33614

   
   

   For Intervenor: Robert L. Rocke, Esquire

   Post Office Box 3433 Tampa, Florida 33601

   
   

   The issue in this case is whether the Department of Health and Rehabilitative Services (Respondent) should award Lease Number 590:1946 for office space and client related services to James C. Hartley and Professional Center Five (Petitioners) . Prior to the commencement of the hearing, J. B. Hamner Miller, the owner of the real property at issue in this case, moved to intervene, and without objection from the parties, intervention was granted. At the conclusion of the Petitioners' case in chief, the Respondent moved to dismiss this matter, urging that Petitioners had failed to establish any basis upon which relief could be granted. A ruling on the Notion was reserved and will be incorporated in this Recommended Order. During the hearing, the Petitioners called one witness and introduced two exhibits. One joint exhibit was received in evidence. Official recognition was taken of Rule 13M-1.015, Florida Administrative Code.

   No transcript of the final hearing has been filed. The parties were allowed to file proposed recommended orders, including proposed findings of fact, within ten days after the hearing, and the Appendix this Recommended Order contains a ruling on each timely filed proposed finding of fact.

   
   

   FINDINGS OF FACT

   
   

   1. The Respondent issued an Invitation to Bid by which sought to lease approximately 21,000 net useable square feet of office space to be located in Tampa, Florida. This Invitation to Bid is referred to as Lease Number 590:1946.

      
      

   2. Three bids were received in response to the Invitation to Bid, and they were opened on July 29, 1988. Bids were received from the Petitioner, Structures, Inc., and a third bidder that has not filed a protest, and is therefore not relevant to this proceeding.

      
      

   3. All bidders were initially determined to be responsive to the Invitation to Bid. Petitioner and Structures, Inc., submitted bids involving the same office space and real property. Petitioners' bid for this space was lower that the bid filed by Structures, Inc., when compared on a present value rental cost analysis.

      
      

   4. Despite Petitioners' lower bid, Respondent awarded this lease to Structures, Inc., due to the receipt of a letter dated August 2, 1988, from Intervenor, the owner of the subject property, stating that, "Mr. Hartley (Petitioner) has no right to propose this property to the Department as Mr. Hartley and I have no agreements with respect to my leasing the property to him." On the basis of this letter, the Respondent concluded that Petitioners had no legal interest in the subject property and therefore did not have the requisite control over the property to submit this bid. The Petitioners' bid was determined to be nonresponsive.

      
      

   5. Petitioners did not present competent substantial evidence to discredit or refute Intervenor's contention that they lacked any legal interest in this property. It is undisputed that Intervenor owns the property, and Intervenor was present at the hearing to confirm that the letter of August 2, 1988, was, in fact, his letter. The Petitioner, James C. Hartley, was not present at the hearing. The only evidence presented by Petitioners of any alleged interest in this property is a copy of a telecopy letter dated June 29, 1988, filed with its bid, which purports to express the intention of Intervenor and Petitioner Hartley to enter into a lease for certain property described on an Exhibit A, which was not presented in evidence. Thus, there is no indication on the face of this document that the telecopy letter relates to the subject property. However, even if the letter does relate to the property owned by Intervenor, the agreement specifically states that Intervenor's obligation to enter into a lease with Petitioner is expressly conditioned upon Intervenor's approval, In his sole discretion, of any sublease with the Respondent. If for any reason the Intervenor disapproved of the Petitioners' bid and lease with the Respondent, according to this agreement, he could simply refuse to enter into any lease of the subject property with Petitioners, and thus, Petitioners would have no interest or control over the property, and could not then sublease it to the Respondent. Finally, there is no recital of consideration in the purported agreement set forth in the telecopy letter.

      
      

   6. Based upon a complete review of the evidence presented, it is found that Petitioners did not have a valid, legal interest in the subject property

      which would be sufficient to allow them to file this bid and propose this lease to the Respondent. As such, Petitioners' bid was unresponsive.

      
      

      CONCLUSIONS OF LAW

      
      

   7. The Division of Administrative Hearings has jurisdiction over the, parties, and the subject matter in this cause. Sections 120.53(5) and 120.57(1), Florida Statutes. An agency has wide discretion in awarding contracts to responsible bidders, and its exercise of that discretion will not be overturned unless it is arbitrary or capricious. Baxter's Asphalt and Concrete, Inc. v. Department of Transportation, 475 So.2d 1284 (Fla. 1st DCA 1985); Capelletti Brothers v. Department of General Services, 432 So.2d 1359 (Fla. 1st DCA 1983); Wood-Hopkins Contracting Co. v. Roger J. Au and Son, Inc.,

      354 So.2d 446 (Fla. 1st DCA 1978). Agencies do not have unbridled discretion, however, and must act In a reasonable manner in the award of contracts.

      
      

   8. The burden is upon the unsuccessful bidder which seeks to establish that it is entitled to the award, or that the award to another bidder is arbitrary, capricious, illegal, or violative of established procedure. J. W. C. Co., Inc. v. Department of Transportation, 396 So.2d 778 (Fla. 1st DCA 1981).

      As the low bidder of the subject property and substantially affected party in this proceeding, Petitioners must establish at hearing that Respondent's intended award of the lease in question to Structures, Inc., was not the result of the honest exercise of the agency's discretion, but results from illegality, fraud, oppression or, misconduct. Liberty County v. Baxter's Asphalt and Concrete, Inc., 421 So.2d 505 (Fla. 1982). See also Department of Transportation v. Groves-Watkins Constructors, 10 F.A.L.R. 4827, 13 F.L.W. 462 (Fla. Sup. Ct. No. 71,081, filed August 18, 1988). Petitioners have failed to sustain their burden in this case.

      
      

   9. The principal issue in this case is whether Petitioners had a valid, legal interest in the subject property which would allow them to propose the lease of this property to the Respondent. The record in this case establishes that the owner of the property, Intervenor, never entered into a binding lease or agreement with Petitioner Hartley such that Petitioner Hartley could then propose the sublease of this property to Respondent.

      
      

   10. Rule 13M-1.015(3)(c)5., Florida Administrative Code, requires a bidder to provide a full disclosure statement of ownership if awarded the bid, and Rule 13M-1.015(4)(b) specifically requires bids to be signed by the owner or legal representative of the subject property and "must include proof of the bidder's authority to offer the facility..." Petitioners did not, and could not, comply with these provisions. It was not established that any valid option to lease this property existed, and there is, therefore, no basis to conclude that Petitioners, rather than Structures, Inc., submitted a responsive bid which was also the lowest and best bid.

RECOMMENDATION

Based upon the foregoing, it is recommended that Respondent enter a Final Order dismissing Petitioners' protest Lease Number 590:1946.

DONE AND ENTERED in Tallahassee, Leon County, Florida, this 3rd day of November, 1988.

DONALD D. CONN

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 3rd day of November, 1988.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-4645BID

Rulings on Petitioners' and Intervenor's Proposed Findings of Fact:

Petitioners and Intervenor did not timely file a Proposed Recommended Order containing proposed findings of fact.

Rulings on the Respondent' Proposed Finding of Fact:

1. Adopted in Findings of Fact 1 and 2.

2. Adopted in Finding of Fact 3.

3-5. Rejected as irrelevant and unnecessary. 6-8. Adopted in Finding of Fact 4.

9. Rejected in Finding of Fact 2, and as irrelevant.

COPIES FURNISHED:

Joseph D. McFarland, Esquire

520 Second Avenue, South

St. Petersburg, Florida 33701

Robert L. Rocke, Esquire Post Office Box 3433 Tampa, Florida 33601

Jack Farley, Esquire

W. T. Edwards facility 4000 West Buffalo Fifth Floor, Room 520 Tampa, Florida 33614

Sam Power, Clerk Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32399-0700

Gregory Coler, Secretary Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32399-0700

John Miller, General Counsel Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32399-0700

Docket for Case No: 88-004645BID

Orders for Case No: 88-004645BID