STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

B & L SERVICE, INC., )

)

Petitioner, ) CASE NO. 89-3568BID

)

vs. )

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent. )

) COUNTY TRANSPORTATION/AAA ) WHEELCHAIR WAGON SERVICE, INC., )

)

vs. ) CASE NO. 89-3569BID

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Claude B. Arrington, held a formal hearing in the above-styled cases which have been consolidated on July 19, 1989, in Fort Lauderdale, Florida.

APPEARANCES

FOR PETITIONER: John M. Camillo, Esquire B & L Service Vernis & Bowling, P.A. Inc. 301 S.E. 10th Court

Fort Lauderdale, Florida 33316

FOR PETITIONER: Karen Caputo, President, pro se County Trans- AAA Wheelchair Wagon Service, Inc. portation/AAA Post Office Box 2281

Wheelchair Wagon 5890 Rodman Street

Service, Inc. Hollywood, Florida 33023-2281

FOR RESPONDENT: Colleen A. Donahue, Esquire

Department of Health and Rehabilitative Services

201 W. Broward Boulevard Suite 406

Fort Lauderdale, Florida 33301

STATEMENT OF THE ISSUES

As to case 89-3568BID, whether the bid protest filed by B & L Service, Inc., shall be upheld. As to case 89-3569BID, whether the bid protest filed by AAA Wheelchair Wagon Service, Inc., d/b/a County Transportation, shall be upheld.

PRELIMINARY STATEMENT

On April 7, 1989, Respondent, Department of Health and Rehabilitative Services (DHRS), issued a Request for Proposals relative to certain transportation services provided to transportation disadvantaged Medicaid recipients in DHRS District X. The Request for Proposals identified twelve transportation categories which would be the subject of the contract to be awarded.

In case 89-3568BID, Petitioner, B & L Service, Inc., protests the award to AAA Wheelchair Wagon Service, Inc., d/b/a County Transportation for transportation categories designated as category f. and category g.

In case 89-3569BID, Petitioner, AAA Wheelchair Wagon Service, Inc., d/b/a County Transportation protests the award of all categories that were awarded to B & L Service, Inc. B & L Service, Inc., was permitted to intervene in case 89- 3569BID.

At the consolidated hearing, the following witnesses testified: Vera I. Sharitt, the DHRS employee who had direct responsibility for overseeing the Medicaid transportation program, Nancy Porter, the DHRS program administrator for Medicaid, and Karen Caputo, the president of AAA Wheelchair Wagon Service, Inc. By stipulation of the parties, the depositions of the following were received into evidence: Karen P. Flynn, Donald Kent Rice, Urbin Myers, Robert Missal, Carmen Gutierriez, and Paul Freedlund. By stipulation of the parties, the following joint exhibits were accepted into evidence: Exhibit 1, the Request for Proposals, Exhibit 2, a memo dated May 18, 1989, Exhibit 3, a memo dated May 23, 1989, Exhibit 4, a memo dated June 2, 1989, Exhibit 5, a letter dated May 23, 1989, Exhibit 6, the evaluation sheets of the proposals for categories f. and g., Exhibit 7, the proposal submitted by AAA Wheelchair Wagon Service, Inc., d/b/a County Transportation, Exhibit 8, the proposal submitted by B & L Service, Inc., and Exhibit 9, monitoring reports. At the request of the parties, official recognition was taken of DHRS manual numbered HRSM 75-2, entitled "Contract Management System for Contractual Services" July 1, 1988, edition, and of the portion of the Florida Medicaid Handbook entitled "Medicaid Provider Handbook Transportation Services."

A transcript of the proceeding has been filed. The proposed findings of fact submitted on behalf of the parties are addressed in the appendix to this recommended order.

FINDINGS OF FACT

1. On April 7, 1989, Respondent, Department of Health and Rehabilitative Services (DHRS), published and issued a Request for Proposals (RFP) which solicited proposals for the provision of twelve identified categories of transportation services to Medicaid recipients in DHRS District X.

   
   

2. DHRS issued the RFP because it did not want to award the contract primarily on the basis of price.

3. The purpose of the RFP was to solicit proposals which evidenced a demonstrated capability and reliability for providing cost-effective, courteous and prompt transportation services to transportation disadvantaged Medicaid recipients in District X to and from medical appointments and Community Mental Health services.

   
   

4. The RFP identified twelve transportation categories which would be the subject of the contract to be awarded. The categories were designated by the letters a-1.

   
   

5. Petitioner, B & L Service, Inc. (B & L Service), and Petitioner, AAA Wheelchair Wagon Service, Inc., d/b/a County Transportation (AAA Wheelchair) submitted proposals that were accepted and evaluated by DHRS.

   
   

6. Petitioner, B & L Service timely protested the award to AAA Wheelchair of the categories of service identified in the RFP as category f. and category

   1. This protest forms the basis for Case 89-3568BID.

      
      

7. Petitioner, AAA Wheelchair timely protested the award to B & L Service of several categories of service for which both AAA Wheelchair and B & L Service had submitted proposals. This protest forms the basis for Case 89-3569BID.

   
   

8. An evaluation committee consisting of four DHRS employees and one employee of the Florida Department of Transportation was appointed to evaluate the different proposals. The RFP advised all parties that the evaluation committee's recommendations would be reviewed by the District Administrator who would make the final determination.

   
   

9. The evaluation committee analyzed each proposal using the rating sheet that was included as a part of the RFP. The following categories and point values were used to analyze each proposal:

   
   

   1. Response to Statement of Purpose/Need Project Understanding - 10 points

   2. Method of Service Provision - 20 points

   3. Demonstrated Organizational Capability - 10 points

   4. Rate Analysis - 10 points

      
      

10. Categories f. and g. are as follows:

    
    

    1. Demand-responsive wheelchair transpor- tation requested at least 24 hours prior to the provision of service: approximately 800-1000 trips per month

    2. Demand-responsive wheelchair transpor- tation requested less than 24 hours prior to the provision of service: approximately 15-30 trips per month

    
    

11. The evaluation committee reasonably determined that it should recommend one provider for categories f. and g. to avoid unnecessary confusion for the recipients of the respective services. Category f., which would involve between 800-1000 trips per month, was a more significant category than category g., which would involve 15-30 trips per month, in terms of number of persons

    served and the amount of money involved. It was reasonable for the winner of category F. to be awarded category g.

    
    

12. The evaluation committee awarded B & L Service the following points for category f.:

    
    

    Category I: 45

    Category II: 85

    Category III: 27

    Subtotal: 158

    Category IV. 46

    Grand Total 204

    
    

13. The evaluation committee awarded AAA Wheelchair the following points for category f.:

    
    

    Category I: 41

    Category II: 89

    Category III: 36

    Subtotal: 166

    Category IV: 38

    Grand Total 204

    
    

14. The evaluation committee awarded B & L Service the following points for category g.:

    
    

    Category I: 45

    Category II: 86

    Category III: 27

    Subtotal: 158

    Category IV: 46

    Grand Total 204

    
    

15. The evaluation committee awarded AAA Wheelchair the following points for category g.:

    
    

    Category I: 41

    Category II: 89

    Category III: 36

    Subtotal: 166

    Category IV: 32

    Grand Total 198

    
    

16. B & L Service and AAA Wheelchair received the same number of total points for category f. The evaluation committee voted to break the tie for category f. between B & L Service and AAA Wheelchair. By a vote of 4 to 1, the evaluation committee voted to recommend that B & L Service be awarded the contract for category f. and, consequently, for category g. There was no justification or explanation given by the committee for its vote. The procedures under which the committee was operating did not provide for a vote in the event of a tie.

    
    

17. B & L Service proposed to perform the services required for categories

    f. and g. for $14.70 per trip while AAA Wheelchair proposed to provide the services for category f. for $15.00 per trip and the services for category g. for $16.00 per trip. The lower price proposed by B & L Service enabled it to score higher than AAA Wheelchair in category g. and to tie AAA Wheelchair in

    category f. AAA Wheelchair scored higher than B & L Service in categories I-III of categories f. and g., the areas designed to evaluate the provider's ability to deliver quality service.

    
    

18. Paul V. Freedlund, the District Administrator for DHRS District X delegated to Carmen Gutierrez, the Acting Deputy District Administrator for DHRS District X, the responsibility to review the RFP process to ensure its validity. Ms. Gutierrez was instructed by Mr. Freedlund to recommend the providers she considered most capable of performing the contracts for the respective categories of service based on the information that was available to her.

    
    

19. Ms. Gutierrez delegated to Nancy Porter, the Medicaid Program Administrator for DHRS District X, the responsibility to review the RFP process and to make a recommendation as to which provider should receive the award for categories f. and g. Ms. Porter was also told to justify her recommendation.

    
    

20. B & L Services had been the provider of the services required by categories f. and g. during the 1988-1989 DHRS fiscal year. AAA Wheelchair had been the provider of the services required by categories f. and g. for several years immediately preceding the 1988-1989, DHRS fiscal year. During their respective periods of performance, DHRS monitored their performances and maintained monitoring reports which reflected any deficiencies in the performances. Mr. Freedlund told both Ms. Gutierriez and Ms. Porter that because of the close scores any monitoring reports for the competing providers should be reviewed and to go with the provider they felt was better able to render the service effectively.

    
    

21. Nancy Porter, pursuant to the instructions she had received, reviewed the proposals submitted by B & L Service and by AAA Wheelchair, reviewed the evaluation committee's work, and reviewed the monitoring reports of B & L Service for the period it performed the subject services and the monitoring reports of AAA Wheelchair for the period it performed the subject services.

    
    

22. Nancy Porter recommended that AAA Wheelchair be awarded the contract for the category f. and the category g. services. In her memo to Paul Freedlund dated June 2, 1989, she justified her recommendation to award the category f. and category g. services, together with other categories of service that are not being contested, as follows:

    
    

    Based upon monitoring reports, past performance under prior contracts and response to the RFP, this provider appears to have the ability to provide the quality of services required in the bid specifications, thereby making them the most advantageous to the state and the lowest qualified bidder.

    
    

23. Nancy Porter's recommendation to Paul Freedlund was that B & L Service be awarded five of the twelve categories of service and that AAA Wheelchair be awarded the other seven categories of service. Paul Freedlund accepted Nancy Porter's recommendation. These protests followed the announcement of the intended awards.

    
    

24. B & L Service's protest is based, in part, on contact between Nancy Caputo, president of AAA Wheelchair, and DHRS after the evaluation committee had met, but before the intended final decision was made. B & L Service's protest is also based on DHRS not following the recommendations of its committee as to

    categories f. and g. On May 17, 1989, Vera Sharitt, the DHRS contract manager for Medicaid transportation, wrote Nancy Porter advising her of the evaluation committee's results and recommendations. On May 18, 1989, Nancy Porter prepared a memo to Paul Freedlund which erroneously stated that B & L Services had received the highest points from the evaluation committee for category f. as well as category g.

    
    

25. On May 19, 1989, Karen Caputo received a copy of Nancy Porter's memo dated May 18, 1989. Karen Caputo telephoned Nancy Porter, advised that an error had been made in the memo of May 18, 1989, and proceeded to tell Nancy Porter that her company could provide much better services than could B & L Service. Karen Caputo was upset when she called Nancy Porter. Nancy Porter listened and agreed to correct the error in her memo to reflect that there had been a tie in points for category f. instead of B & L Service being the point winner. On May 23, 1989, Nancy Porter prepared a second memo to Paul Freedlund which corrected the error in her memo of May 18, 1989. On May 23, 1989, Karen Caputo wrote Paul Freedlund a letter which discussed the merits of her proposal and the higher quality of service that had been provided by her company as compared to B & L Service. Her letter also asserted that B & L Service had the financial ability to offer lower prices than her company and also asserted that her company was a minority owned business.

    
    

26. The contact Karen Caputo had with the DHRS employees occurred before Mr. Freedlund instructed Ms. Gutierrez and Ms. Porter to review the RFP process and to make a recommendation since the scores awarded by the evaluation committee were so close.

    
    

27. Karen Caputo's contact resulted in the correction of the error in the memo of May 18, 1989. The contact Karen Caputo had with the DHRS employees did not, however, unduly influence their recommendations and did not constitute an unfair interference with the contract award process.

    
    

28. The protest of AAA Wheelchair is based on its assertion that B & L Service was not a qualified proposer and that its response to the RFP was deficient. B & L Service's performance of the f. and g. categories of service for the fiscal year 1988-1989 did not disqualify it as a proposer. While a number of deficiencies were noted in the monitoring reports for this period of time, DHRS had taken no steps to disqualify B & L Services as a proposer. B & L Service was a qualified proposer. The response to the RFP submitted by B & L Service was not deficient.

    
    

    CONCLUSIONS OF LAW

    
    

29. The Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to this proceeding. Section 120.57(1), Florida Statutes.

    
    

30. Part I of Chapter 287, Florida Statutes, relates to the procurement of commodities, insurance, and contractual services by agencies of the State of Florida.

    
    

31. Section 287.001, Florida Statutes, provides, in pertinent part, as follows:

    
    

    The Legislature recognizes that fair and open competition is a basic tenet of public

    procurement; that such competition reduces the

    appearance and opportunity for favoritism and inspires public confidence that contracts are awarded equitably and economically; and that documentation of the acts taken and effective monitoring mechanisms are important means of curbing any improprieties and establishing public confidence in the process by which contractual services are procured. It is essential to the effective and ethical procurement of contractual services that there be a system of uniform procedures to be utilized by state agencies in managing and procuring contractual services; that detailed justification of agency decisions in the procurement of contractual services be maintained; and that adherence by the agency and the consultant to specific ethical considerations be required.

    
    

32. Section 287.012, Florida Statutes, provides, in pertinent part, as follows:

    
    

    The following definitions shall apply in this part:

    * * *

    (10) "Qualified bidder" or "qualified offeror" means a person who has the capability in all respects to perform fully the contract requirements and has the integrity and reliability which will assure good faith performance.

    * * *

    1. "Request for proposals" means a written solicitation for sealed proposals with the title, date, and hour of the public opening designated. The request for proposals is used when the agency is incapable of specifically defining the scope of work for which the commodity, group of commodities, or contractual service is required and when the agency is requesting that a qualified offeror propose a commodity, group of commodities, or contractual service to meet the specifications of the solicitation document. A request for proposals includes, but is not limited to,

       general information, applicable laws and rules, functional or general specifications, statement of work, proposal instructions, and evaluation criteria. Requests for proposals shall state the relative importance of price and any other evaluation criteria.

    2. "Responsive bidder" or "responsive offeror" means a person who has submitted a bid which conforms in all material respects to the invitation to bid or request for proposals.

33. When the agency determines that contractual services of the value involved in this case is to be procured by means of request for proposals, Section 287.057(16), Florida Statutes, requires:

    
    

    (16) A selection team of at least three employees who have experience and knowledge in the program areas and service requirements for which contractual services are sought shall be appointed by the agency head to aid in the selection of contractors...

    
    

34. The standard of review of agency decisions for RFP acquisitions was articulated as follows in System Development Corporation v. Department of Health and Rehabilitative Services, 423 So.2d 433 (Fla. 1st DCA 1982):

    
    

    We are constrained to review the agency's decision under these circumstances only so far as to determine whether the decision was arbitrary, capricious or beyond the scope of its discretion, which discretion is very broad....

    
    

35. As to case 89-3568BID, Petitioner, B & L Service, failed to establish by a preponderance of the evidence that the agency's decision to award categories f. and g. to AAA Wheelchair was arbitrary, capricious, or beyond the scope of its discretion.

    
    

36. As to case 89-3569BID, Petitioner, AAA Wheelchair, failed to establish by a preponderance of the evidence that B & L Service was not a qualified proposer and that its response to the Request for Proposals was deficient.

RECOMMENDATION

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

RECOMMENDED that the Department of Health and Rehabilitative Services enter in case 89-3568BID a Final Order which denies the bid protest of Petitioner, B & L Service, Inc.

IT IS FURTHER RECOMMENDED that the Department of Health and Rehabilitative Services enter in case 89-3569BID a Final Order which denies the bid protest of Petitioner, AAA Wheelchair Wagon Service, Inc., d/b/a County Transportation.

DONE AND ENTERED this 8th day of September, 1989, in Tallahassee, Leon County, Florida.

CLAUDE B. ARRINGTON

Hearing Officer

The DeSoto Building 1230 Apalachee Parkway

Tallahassee, Florida 32399-1550 904/488-9675

Filed with the Clerk of the Division of Administrative Hearings this 8th day of September, 1989.

Appendix to the Recommended Order in Consolidated Cases

89-3568BID and 89-3569BID PETITIONER'S PROPOSED FINDINGS:

The proposed findings of fact, submitted on behalf of B & L Service, Inc., are addressed as follows:

1. The proposed findings of the first paragraph are addressed in paragraphs 1 and 4.

   
   

2. The proposed findings of the second paragraph are rejected as being unnecessary to the results reached.

   
   

3. The proposed findings of the third paragraph are addressed, in part, in paragraphs 1 and 2 and are rejected in part as being unnecessary to the results reached.

4 -5. The proposed findings of the forth and fifth paragraphs are rejected as being unnecessary to the results reached.

1. The proposed findings of the sixth paragraph are subordinate to the findings of paragraph 5.

   
   

2. The proposed findings of the seventh paragraph are addressed in paragraph 8.

   
   

3. The proposed findings of the eighth paragraph are addressed in paragraph 9, 10, 12, 13, and 16.

   
   

4. The proposed findings of the ninth paragraph are addressed in paragraph 11 and 16.

   
   

5. The proposed findings of the tenth paragraph are addressed in paragraph 24.

   
   

6. The proposed findings of the eleventh paragraph are addressed in part in paragraph 25 and are rejected in part as being contrary to the weight of the evidence.

   
   

7. The proposed findings of the twelfth paragraph are addressed in part in paragraph 25 and are rejected in part as being unnecessary to the results reached

   
   

8. The proposed findings of the thirteenth paragraph are addressed in paragraph 25.

   
   

9. The proposed findings of the fourteenth paragraph are addressed in part in paragraph 18 and are rejected in part as being recitation of testimony or as being subordinate to the findings made and the conclusions reached.

10. The proposed findings of the fifteenth paragraph are addressed in part in paragraph 25 and are rejected in part as being recitation of testimony or as being subordinate to the findings made and the conclusions reached.

    
    

11. The proposed findings of the sixteenth paragraph are rejected as being contrary to the weight of the evidence and as being recitation of testimony.

    
    

12. The proposed findings of the seventeenth paragraph are addressed in part in paragraph 21 and are rejected in part as being unnecessary to the results reached.

    
    

13. The proposed findings of the eighteenth paragraph are rejected as being in conflict with the findings of paragraph 27.

    
    

14. The proposed findings of the nineteenth paragraph are addressed in part in paragraph 18 and are rejected in part as being contrary to the evidence.

    
    

15. The proposed findings of the twentieth paragraph are addressed in paragraph 19.

    
    

16. The proposed findings of the twenty-first paragraph are addressed in part in paragraphs 21 and 22 and are rejected in part as being unnecessary to the result reached and as being contrary to the evidence.

    
    

17. The proposed findings of the twenty-second paragraph are rejected as being contrary to the findings of paragraphs 22 and 27.

    
    

18. The proposed findings of the twenty-third paragraph are rejected. The monitoring reports, taken as a whole, support the recommendations of Nancy Porter. The selective comparison of statistical information is unnecessary to the conclusions reached.

The proposed findings of fact, submitted on behalf of AAA Wheelchair Wagon Service, Inc., d/b/a County Transportation, are addressed as follows:

1-2. Addressed in paragraph 1.

1. Addressed in paragraph 8.

   
   

2. Addressed, in part, in paragraph 3 and are rejected in part as being unnecessary to the results reached.

5-8. Rejected as being unnecessary to the results reached.

1. Rejected as being contrary to the evidence.

   
   

2. Addressed in paragraph 9.

   
   

3. Addressed in paragraph 8.

   
   

4. Addressed in paragraph 9.

   
   

5. Rejected as being argument instead of a finding of fact.

   
   

6. Rejected as being unnecessary to the results reached and as being argument.

15-20 and are rejected as being unnecessary to the results reached and as being argument.

21-24 and are rejected as being unsupported by the evidence and as being argument.

25-26 and are rejected as being unnecessary to the results reached.

27-28 and are rejected as being unsupported by the evidence and as being argument.

29. Rejected as being contrary to the evidence and as being argument.

RESPONDENT'S PROPOSED FINDINGS:

The proposed findings of fact, submitted on behalf of the Department of Health and Rehabilitative Services are addressed as follows

1. Addressed in paragraphs 1, 2, and 3.

   
   

2. Addressed in paragraphs 4 and 10.

   
   

3. Addressed in paragraph 8.

   
   

4. Addressed in part in paragraph 8. Rejected in part as being unnecessary to the results reached.

   
   

5. Addressed in paragraph 9.

6-7. Addressed in paragraphs 12, 13, 14, 15, and 16.

1. Addressed in paragraph 11.

   
   

2. Addressed in paragraph 16.

   
   

3. Addressed in part in paragraphs 12, 13, 14, 15, and 17. Rejected in part as being subordinate to the findings made.

11-12. Rejected as being subordinate to the findings made.

1. Addressed in part in paragraphs 18 and 19. Rejected in part as being unnecessary to the results reached.

   
   

2. Addressed in paragraphs 21 and 22.

   
   

3. Addressed in paragraph 27.

16-18 Rejected as being conclusions of law.

COPIES FURNISHED:

Colleen A. Donahue, Esquire Department of Health and

Rehabilitative Services

201 West Broward Boulevard

Suite 406

Fort Lauderdale, Florida 33301

John M. Camillo, Esquire VERNIS & BOWLING, P. A.

301 Southeast 10th Court

Fort Lauderdale, Florida 33316

Karen Caputo, President

AAA Wheelchair Wagon Service Post Office Box 2281

5890 Rodman Street

Hollywood, Florida 33023

Sam Power, Agency Clerk Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32399-0700

Gregory L. 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: 89-003568BID

Orders for Case No: 89-003568BID