STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

UNIVERSITY OF SOUTH FLORIDA, )

)

Petitioner, )

vs. ) CASE NO. 89-3374BID

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent. )

)

RECOMMENDED ORDER

A hearing was held in this case before Arnold H. Pollock, a Hearing Officer with the Division of Administrative Hearings, in Tallahassee, Florida, on July 7, 1989.

APPEARANCES

For the Petitioner: Justin R. Lumley, Esquire

Assistant General Counsel University of South Florida 4202 Fowler Avenue

Tampa, Florida 33620-6250

For the Respondent: John Rodriguez, Esquire

DHRS (IDTAO)

1317 Winewood Boulevard Building One, Room 304 Tallahassee, Florida 32399-0700

STATEMENT OF THE ISSUES

The issue for consideration was whether Respondent properly rejected Petitioner's proposal to provide emergency medical service and paramedic examinations for the Department.

PRELIMINARY STATEMENT

By letter dated June 14, 1989, Dr. Joseph K. Blackman, Deputy Director of the University of South Florida College of Education's Institute for Instructional Research and Practice, (University), indicated the University's intent to protest the award of the proposal for emergency medical technician and paramedic examination and certification services to other than the University.

Thereafter, on June 26, 1989, the matter was referred by the Department of Health and Rehabilitative Services, (Department), to the Division of Administrative Hearings for appointment of a Hearing Officer, and on June 29, 1989, the undersigned set the case for hearing on July 7, 1989 at which time it was heard as scheduled.

At the hearing, counsel for Respondent indicated that he had personally communicated with counsel for the other potential parties, both the successful proposer and the other unsuccessful proposer, and was assured by both counsel that neither desired to participate in this hearing.

At the hearing, the Department presented the testimony of Charles, E. Barner, Jr., a management consultant, and introduced HRS Exhibits A through H. The university presented the testimony of Dr. Joseph K. Blackman, Deputy Director of the University College of Education's Institute for Instructional Research, and introduced Petitioner's Exhibits 1 and 2.

Subsequent to the hearing, the University provided the undersigned with a transcript and it submitted Proposed Findings of Fact which have been ruled upon in the Appendix to this Recommended Order. The Department did not.

FINDINGS OF FACT

1. Prior to the taking of testimony, the parties stipulated that the University of South Florida, Petitioner herein, has standing to protest the award in issue here; that all notices were adequate and timely; that all procedural requirements have been satisfied by both parties; and that the only issue of fact is the validity of the Department's rejection of Petitioner's Proposal.

   
   

2. Charles E. Barner, Jr. is a principal in Regulatory Agency Management Systems, (RAMS), headquartered in Tallahassee, a management consultant firm involved in the providing of hardware and software systems to regulatory agencies. Mr. Barner was formerly Assistant Director of the Department of Professional Regulation and in that capacity, was familiar with the qualification examination system.

   
   

3. Until the instant procurement, the Department of Professional Regulation had administered, for the Department of Health and Rehabilitative Services, the examinations for emergency medical services and paramedics which it had developed because DHRS had no built in expertise to develop and administer examinations. However, prior to the instant cycle, DHRS officials decided to go outside the state system to procure the service, and a Request For Proposals, (RFP), was developed and issued seeking proposals to provide the development and administration of an examination and evaluation system.

   
   

4. In furtherance of this decision, DHRS gave to RAMS an outline of what it desired and RAMS developed the full RFP to give as broad a coverage as possible. RAMS provided the agency with numerous options on various salient parts of the RFP, and the intent of the agency was to provide a full package of services. The ultimate thrust of the proposal was to farm out the entire test and evaluation process from development to evaluation to remove DHRS from those activities. The RFP developed was provided to those prospective proposers on the Department of General Services' list of prospective proposers and was advertised.

   
   

5. The RFP was designed to do several things: (1) to determine the qualifications of the proposer, and (2) to determine the dollar cost if there were qualified vendors. The primary concern of DHRS in accomplishing the procurement in this fashion was that in farming out an entire service from solicitation to challenge, they would get qualified proposers to accomplish the required task within the agency budget.

6. RAMS was involved in the agency's evaluation of the proposals submitted by each of the three proposers. The rating committee was made up of Mr. Woodard, Mr. Huskey, and, as a de facto member, Mr. Barner. The rating criteria utilized by the evaluation committee was furnished by RAMS, and there is no indication the committee used any criteria other than those. The committee met three or four times, but no minutes were kept of any of the meetings.

   
   

7. The evaluation process included a review of each proposal, independent of each other, by evaluators acting independently; a comparison of the notes made by each evaluator as to each proposal; and the formulation of a recommendation to the Department.

   
   

8. When the Petitioner's proposal was evaluated, it was determined not to meet the criteria in some facets of the RFP requirements. Primarily this related to two areas. The first dealt with Petitioner's perceived refusal to defend the examination, a primary reason for disqualification. The second dealt with the inability of the evaluators to determine the relationship between the University and those who would review the examination, deposit funds, and otherwise administer the process. The RFP specifically prohibited subcontracting.

   
   

9. With regard to the defense of challenges to the examination, RAMS, in its evaluation, contends the University indicated it would not defend an examination item it did not develop. RAMS concluded this was not a proper response to the request. Challenges deal not only with examination questions but also with conditions of the examination and challenge defense was clearly a part of the RFP. When the agency "vendorized" the examination process, it intended that the contractor would defend the entire examination process. Rejected applications were to be defended against by the agency but all other aspects of the process, including the examination and the conditions thereof, were to be defended by the vendor. This was clearly set out in the RFP.

   
   

10. According to Mr. Barner, those requirements are not at all atypical, and under the circumstances, are not inappropriate. In fact, this is done nationally by various accrediting agencies and the other two proposers agreed without qualification to defend the examination.

    
    

11. With regard to the issue of subcontracting, RAMS personnel concluded upon evaluation that on the basis of the proposal itself, not considering post- submitted documentation, the relationship between the University and a Mr. Brandt was unclear. It was the agency's intention to have a single party responsible for the entire process and not to rely on a joint venture. After opening, substantial effort was made to verify the references in the proposal to Mr. Brandt to determine his relationship with the University, and based on all available information at the time, RAMS, on behalf of the agency, concluded that Mr. Brandt was not and would not be an employee of the University.

    
    

12. RAMS' analysis of the proposal did not indicate Petitioner could not defend an examination or question the quality of Mr. Brandt's operation. RAMS' position, adopted by the agency, was that the University proposal did not respond appropriately to the RFP in this case.

    
    

13. The RFP provided with reference to examination challenges:

    
    

    The provider shall respond to all legal challenges and civil suits that may develop as a result of the examination,

    its content, the sites or the administration of the sites, and shall defend the examination before any Division of Administrative Hearings or appeals to that process to the District Court of Appeals or other courts. The Department shall not be responsible for any costs related to a defense of the examination, its content, or the administration.

    
    

14. Both other proposers, the University of Central Florida and NAI, indicated their willingness to comply with all terms and conditions of the RFP with regard to legal defenses to the examination process including both current and future items.

    
    

15. Review of the Petitioner's proposal indicates that the University took the position, in regard to the examination challenges, that it would not defend the examination unless there was a provision for an extra fee for this service. In pari materia it stated:

    
    

    The Institute is of the opinion that the Department cannot, via this RFP or otherwise, exonerate itself from ultimate legal responsibility for the examinations' content and process. The Institute will provide data and professional support in connection with any legal challenges and civil suit that may develop as a result of the portion of the examination that was developed at the Institute or related to the administration of the sites. The Institute cannot accept any responsibility for test items developed prior to this contract. The Institute cannot accept responsibility for legal defense of the department, of course, nor can it assume responsibility for costs involved in sending personnel to legal defenses, unless a contingency against this eventuality is included in the, project grant award.

    
    

16. The RFP allowed for a modification of terms in a proposer's response and the University claims that it did not specifically decline to undertake exam challenge defense, but merely suggested an additional fee therefor, and that this is an alternative proposal which meets the standard. The agency, on the other hand, contends that modification is appropriate only after the proposer agrees to comply with the terms of the request for proposal. It asserts that in the instant case, the condition generated a nonresponsive precondition to examination defense. Upon evaluation of the conflicting positions, it is found that the University's proposal was not a mere modification but more a counterproposal, and as such, was not responsive.

    
    

17. With regard to the relationship between Mr. Brandt and the University, as was stated previously, the RFP provides for no subcontracting. The

    University claims that employees of Brandt and Associates will be "employed by

    ...(from Brandt Associates)", and Mr. Brandt, an employee of Brandt Associates, would be employed by the University. Review of the documentation and the testimony makes it clear that Mr. Brandt will be responsible to the University as a university employee and not as a subcontractor.

    
    

    CONCLUSIONS OF LAW

    
    

18. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter in this case. Section 120.57(1), Florida Statutes.

    
    

19. Under the provisions of Section 287.057(2), Florida Statutes, unless otherwise authorized by law, all contracts for contractual services shall be awarded by competitive sealed bidding. However, according to Section 287.057(3),

    
    

    When an agency determines in writing that the use of competitive sealed bidding is not practicable, contractual services shall be procured by competitive sealed proposals ... [after a request for proposals has been issued to appropriate prospective proposers].

    
    

20. In this case, the parties stipulate that the procurement process was appropriate and the sole question relates to the propriety of the agency's rejection of Petitioner's proposal.

    
    

21. Section 120.53(5), Florida Statutes, provides the procedure whereby an unsuccessful bidder or proposer, (including those involved under chapter 287), may protest agency action and receive a hearing before the Division of Administrative Hearings under Section 120.57(1).

    
    

22. In the instant case, Petitioner was an unsuccessful proposer and has properly complied with all procedural requirements for protest hearing. It now bears the burden of proof to establish that it is entitled to the award, Florida Department of Transportation vs. J. W. C. Co., Inc., 396 So.2d 778 (Fla. 1st DCA 1981). It has failed to carry that burden.

    
    

23. Section 287.012(12), Florida Statutes, defined a "responsive offeror" as a person who has submitted a bid (response to a request for proposal) which conforms in all material respects to the request for proposal. A material variance is unacceptable and is disqualifying. A variance is material if it gives the proposer advantage over other competing proposers, changes the price bid, or stifles the competitive process. Non-material variations in a proposal may be waived by the awarding agency without violating the integrity of the bidding process, Tropabest Foods, Inc. vs. State, Department of General Services, 493 So.2d 40 (Fla. 1st DCA 1986).

    
    

24. An agency has wide discretion in soliciting and accepting bids and a decision based on an honest exercise of its discretion may not be overturned even if reasonably persons disagree with the outcome, C. H. Barco Contracting Company vs. State, Department of Transportation, 483 So.2d 796 (Fla. 1st DCA 1986).

25. A full evaluation of the evidence has resulted in findings that while there is no legitimate issue regarding Mr. Brandt's status as an employee of the University, Petitioner's alternative proposal regarding the issue of examination challenge defense constitutes a material variance from the terms set out in the Request for Proposal and was unresponsive. Consequently, the agency's rejection of Petitioner's bid is correct.

    
    

26. Absent a finding that the agency has acted fraudulently, arbitrarily, illegally, or dishonestly to subvert the competitive bidding process, its decisions based upon an honest exercise of its discretion cannot be overturned, Department of Transportation vs. Groves-Watkins Constructors, 530 So.2d 912 (Fla. 1988).

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore:

RECOMMENDED that the Secretary of the Department of Health and Rehabilitative Services issue a Final Order denying the protest of the University of South Florida in the instant procurement and awarding the contract to develop and administer emergency medical service and paramedic examinations for the Department to NAI.

RECOMMENDED this 11th day of August, 1989, in Tallahassee, Florida.

ARNOLD H. POLLOCK, Hearing Officer Division of Administrative Hearing The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearing this 11th day of August, 1989.

APPENDIX TO RECOMMENDED ORDER IN CASE NO. 89-3374BID

The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings o Fact submitted by the Petitioner herein.

1. & 2. Accepted and incorporated herein.

1. & 4. Accepted and incorporated herein.

   1. Rejected as contra to the evidence.

   2. Rejected as contra to the evidence.

   3. Accepted and incorporated herein.

   4. Rejected as contra to the evidence.

COPIES FURNISHED:

Justin R. Lumley Associate General Counsel

University of South Florida 4202 Fowler Avenue

Tampa, Florida 33620-6250

John Rodriguez, Esquire Interprogram & Developmental

Technical Assistance Office Department of Health and

Rehabilitative Services Building One, Room 304 1317 Winewood Blvd.

Tallahassee, Florida 32399-0700

Gregory L. Coler, Secretary DHRS

1323 Winewood Blvd.

Tallahassee, Florida 32399-0700

John Miller General Counsel DHRS

1323 Winewood Blvd.

Tallahassee, Florida 32399-0700

Sam Power Clerk DHRS

1323 Winewood Blvd.

Tallahassee, FL 32399-0700

Docket for Case No: 89-003374BID

Orders for Case No: 89-003374BID