STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
SUWANNEE VALLEY MEDICAL PERSONNEL ) CORPORATION, )
)
Petitioner, )
)
vs. ) CASE NO. 89-4566B1D
)
DEPARTMENT OF CORRECTIONS, )
)
Respondent, )
)
and )
) PERSONNEL POOL OF NORTH CENTRAL ) FLORIDA, INC., d/b/a MEDICAL ) PERSONNEL POOL, )
)
Intervenor. )
)
RECOMMENDED ORDER
Pursuant to notice, a formal hearing was held in this case on September 29, 1989, in Tallahassee, Florida, before the Division of Administrative Hearings, by its designated Hearing Officer, Diane K. Kiesling.
APPEARANCES
For Petitioner, John F. Gilroy Suwannee Valley Attorney at Law Medical Haben & Culpepper
Personnel 306 North Monroe Street Corporation: Tallahassee, Florida 32302
For Respondent, Drucilla E. Bell Department of Perri M. King Corrections: Attorneys at Law
Florida Department of Corrections
1311 Winewood Boulevard
Tallahassee, Florida 32399-2500
For Intervenor, Thomas D. Watry Personnel Pool Attorney at Law
of North Parker, Hudson, Rainer & Dobbs Central Florida, 1200 Carnegie Building
Inc., d/b/a 133 Carnegie Way Medical Atlanta, Georgia 30303 Personnel Pool:
STATEMENT OF ISSUES
The issues are whether Personnel Pool of North Central Florida, Inc., d/b/a Medical Personnel Pool (MPP), is the lowest qualified bidder on Contract No. R- 2119 or whether Suwannee Valley Medical Personnel Corporation (Suwannee) is entitled to the award of Contract No. R-2119 or is entitled to have all bids rejected and the contract relet for bids.
PRELIMINARY STATEMENT
Suwannee filed its petition for formal administrative proceedings under Section 120.57(1), Florida Statutes, on August 10, 1989, alleging numerous defects in the process by which the Department awarded Contract No. R-2119 to MPP. That contract was one for the provision of registered nurse (RN) and licensed practical nurse (LPN) services to the Department's correctional institutions in the Department's Region II. Among the allegations of the petition were claims that (1) the bidders' average total costs were miscalculated under the terms of the Invitation to Bid (ITB) and, as a result, Suwannee's point score was miscalculated; (2) the Department's Bid Evaluation Committee (the Committee) members improperly took into consideration factors outside of the ITB, so as to reduce Suwannee's point total; (3) the contract was improperly awarded to a bidder (MPP) who was not the "lowest and best" bidder;
the Department's decision to award Contract No. R-2119 was improperly influenced by perceived adverse publicity; (5) the Department was without authority to let Contract No. R-2119 for public bid; (6) the Department's decision to let Contract No. R-2119 for public bid, and to award that contract to MPP, was improperly related to the award and termination of an earlier contract with Suwannee; and (7) the entire process by which Contract No. R-2119 was awarded to MPP was improperly infused with and tainted by prejudice within the Department against Suwannee.
The petition was referred to the Division of Administrative Hearings. The final hearing was originally set for September 8, 1989.
On August 31, 1989, MPP, as the successful bidder awarded the challenged contract, moved to intervene, to continue the hearing and for a temporary stay of discovery. The motion to intervene was unopposed. The motion for continuance and temporary stay was premised upon the Department's failure to notify MPP in a timely manner of the filing of the petition. See, Rule 221- 6.006, Florida Administrative Code. By telephone conference hearing on August 31, 1989, the Hearing Officer granted the motions to intervene, to continue the hearing and to temporarily stay discovery, over the Department's objection to the latter motions (Suwannee did not object to either motion), on the basis of the Department's failure to comply with Rule 221- 6.006, Florida Administrative Code, which requires the Department to provide a copy of the formal protest to all other bidders at or before the time the matter is referred to DOAH. The Hearing Officer found that this failure resulted in MPP's having insufficient notice to enable it to prepare for hearing and to participate meaningfully in discovery, some of which had already transpired. The final hearing was therefore rescheduled for September 29, 1989.
Prior to the final hearing, MPP filed its Motion In Limine and for Protective Order, showing that Suwannee had served written discovery upon it inquiring in detail into circumstances surrounding Suwannee's previous regional contract for nursing services (Contract No. R-2113) and the publicity surrounding that contract and asking for detailed financial and other information regarding MPP which was not a part of MPP's bid. MPP objected that
these issues were immaterial in a bid protest hearing, as well as in part requiring disclosure of confidential commercial information and trade secrets. After a telephone conference hearing, the Hearing Officer granted the motion for protective order, except as to certain questions as they may have related specifically to Contract No. R-2119. The Hearing Officer found that Contract No. R-2113 was immaterial to this proceeding except as its circumstances could be shown to have actually influenced any material actions in the award of Contract No. R-2119. The Hearing Officer further ruled that the bidders' financial and other information outside of the actual bid documents was also immaterial.
The parties filed their Prehearing Stipulation on September 27, 1989. In that pleading, the parties entered stipulations as to the admissibility of numerous documents, specifically Joint Exhibits 1 through 9, and further stipulated several facts, set forth below.
The stipulations from the Prehearing Stipulation, accepted at the final hearing and hereby found as facts, included the following facts:
The Department properly published the ITB for Contract No. R-2119 on or about June 28, 1989;
Both Suwannee and MPP filed bids in a timely manner;
Suwannee timely filed a notice of protest to the Department's bid tabulation, on July 31, 1989;
Suwannee timely filed a petition for formal hearing;
The bids were opened on July 18, 1989, in public session where all parties were present;
DOC made the initial decision to award contract No. R-2119 to MPP based on
DOC's determination that MPP had a higher point score.
Finally, Suwannee stipulated at the final hearing that the question of the Department's authority to let Contract No. R-2119 for public bid was no longer at issue.
Suwannee presented the testimony of Steven G. Smith, Cynthia Vathauer, Gerald P. Ellsworth and Chris Fortner. The Department of Corrections (DOC) presented the testimony of Dianne Rechtine, M.D. MPP presented the testimony of Chris Fortner and had Exhibit 1, the deposition of Patty Patray, admitted in evidence. Joint Exhibits 1-10 were also admitted in evidence.
The transcript of the proceedings was filed on October 31, 1989. The parties' proposed findings of fact and conclusions of law were to be filed within 10 days of the filing of the transcript. All three parties untimely filed their proposed orders on November 13, 1989. Despite this untimely filing, they have been considered. Specific rulings on each proposed finding of fact are made in the Appendix attached hereto and made a part of this Recommended Order.
FINDINGS OF FACT
The ITB on Contract No. R-2119 was developed jointly between the Department's Central Office and the Region II contracting staff. The Region II staff sent a draft of the ITB to the Central Office, where it was reviewed by Gerald Ellsworth, the Department's Human Service Program Specialist. Mr. Ellsworth is responsible for reviewing the Department's contracts and plans, as well as for development of the Department's proposed invitations to bid and other related types of documents. Mr. Ellsworth has considerable experience in drafting and reviewing governmental contracts for purchasing of services at the state, local and federal government levels.
The ITB was also reviewed by the Department's legal office, the Office of Management and Budget and the Correctional Medical Authority, with regard to both the specifications and the contract language in the ITB.
The Department properly published the ITB on or about June 28, 1989.
The ITB was published under cover of a formal State of Florida Invitation to Bid for Contractual Services, Form PUR: 7031 (Rev. 10/18/88), containing the State of Florida standard general conditions for bids for contractual services. Among those conditions were detailed requirements regarding the sealed nature of bids, requirements for the execution of bids, requirements regarding the opening of bids and conditions regarding prices, terms and payment, interpretations and disputes, conflict of interest, awards, governmental restrictions, default, legal requirements, advertising, assignment, liability, facilities, cancellation and public records.
The same general conditions on the first page of the ITB specifically provided an exclusive mechanism for the bidders to resolve questions and disputes regarding the conditions and specifications of the ITB:
INTERPRETATIONS/DISPUTES: Any questions con- cerning conditions and specifications shall be directed in writing to this office for receipt no later than ten (10) days prior to the bid opening. Inquiries must reference the date of bid opening and bid number. No interpretation shall be considered binding unless provided in writing by the State of Florida in response to requests in full compliance with this provision. (Emphasis added.)
The body of the ITB stated that the Department was soliciting bids for registered and licensed practical nurse services in the Department's Region II, on all shifts, for the care and treatment of inmate patients, as further defined in the ITB's section entitled "Responsibilities of Successful Bidder; Scope of Work."
The ITB also contained detailed requirements regarding Nurse Professional Qualifications, Quality Management Standards, Scheduling of Nurses, Records, Invoicing, Insurance, Legal Requirements, Conflict of Interest, Unsatisfactory Performance, Brokering of Contract, Subcontracts, Verbal Instructions, detailed procedural requirements regarding the submission, review and evaluation of the bids, a description of the institutions covered and a copy of the sample contract.
One of the procedural requirements in the body of the ITB repeated that:
All inquiries from Bidder's [sic] concerning this Invitation to Bid shall be submitted in writing to the office identified on the cover of this Invitation to Bid. Such inquiries shall be received by the office on or before the date indicated above in the Calendar of Events as the "Last Day for Written Inquiries" [July 10, 1989]. (Emphasis added.)
The ITB contained a "Bid Price Sheet" which contained separate blanks for RN and LPN services, separate blanks for each service for weekdays and weekend/holidays, and separate blanks for each of these categories for each of the three geographic areas of Region II, in each of the three years of the contract. That Bid Price Sheet stated that prices quoted "shall be firm net prices regardless of travel involved. . . " The body of the ITB specified that bidders must submit "all costs in the format specified on the Price Quote Sheet provided." (Emphasis added.) Further, the "Proposal Evaluations" section of the ITB specified that the figures to be inserted in the blanks on p. 15 were to be "hourly rates" for each type of nursing service. The next paragraph of this section of the ITB, however, stated that "Total cost, and cost breakouts on the Price Quote Sheet shall be clearly stated."
The undisputed testimony of Gerald Ellsworth established that the intent of these provisions of the ITB was to require the bidders to state the total cost (i.e., net firm price) for each hour of nursing services in a particular geographic area at a particular point in time. Even though the ITB set forth an estimate of the hours that would be required under the contract, this information was clearly only in the nature of an estimate, and it was never the intent of the ITB to require the bidders or the Committee to project or evaluate, respectively, the total cost of the contract (as opposed to the total cost of each hour of service) by multiplying the bidders' bid costs for each hour of service by the corresponding estimate of hours needed over the three- year life of the contract for each of those categories. The primary reason for this focus upon the cost of an hour of service, rather than the cost of the entire contract, is that the estimated hours needed, as indicated by the ITB, are only estimates. Actual demands for service and workloads are likely to vary considerably, both by type of nursing position and geographic area. These demands could also vary as a result of factors such as the vacancy levels in the Department's own staff of employee nurses or changes in administrative personnel at a given institution.
The ITB called for a mix of both objective and subjective evaluation of materials submitted by the bidders. The cost data, submitted in response to
p. 7, para. E; p. 12, para. F.2.e; and p. 15, para. 7 was entirely objective, as was the Committee's role in evaluating that data.
On the other hand, the information required from bidders under p. 12, para. F.2.a ("Project understanding and statement of work and reference from clients"), and p. 12, para. F.2.b ("Nurse Professional Qualifications"), called for a mix of both subjective and objective information and evaluation. The former, referred to throughout the testimony as "Criterion A," required the bidder to submit "a narrative statement of work to be performed, and references
from clients in accordance with the specifications appearing at p. 4, para. 2.A. The latter, referred to in the testimony as "Criterion B," required bidders to:
submit professional qualifications, experi- ence, and CPR certification for Department reviewers which documents the Bidders [sic] capability to provide registered and licensed practical nurse personnel that meet the training specifications.
as set forth at pp. 4-5, para. 2.B. Within Criterion B, for example, an entirely objective requirement is the proof of the bidders' nurses' CPR qualification. A subjective element of this same criterion would be the quantity and quality of documentation of available nurses.
The ITB required the Committee to award points to the respective bidders based on a formula which takes into account each of these objective and subjective criteria. That Formula, at its first level, assigned a point value of 20 points for Criterion A (Project understanding and statement of work, and references from clients), 30 points for Criterion B (Nurse Professional Qualifications) and 50 points for Criterion C (Bid Cost).
Specifically as to Criterion C (Bid Cost), this criterion was entirely objective and did not require any subjective analysis by the Committee. The ITB specified that the lowest bidder "shall" be awarded 50 points, based on the average of the three years' quotes for cost of hours of nursing services. The ITB specified that the remaining bidders "shall" be awarded points for bid cost based on the following formula:
Points Awarded Equals 50 x (1-A/B) where A equals the difference between the respective bidders' average bid and the lowest average bid, and B equals the lowest bidder's average bid.
Unlike Criterion C, the Committee members' evaluation of the bidders' responses to Criteria A and B was left to their judgment and discretion. While the ITB set forth factors that were to be taken into consideration by the Committee members under these criteria, there was no required method by which an evaluator was to assign points for Criteria A and B. Specifically, there was no requirement in the ITB that the evaluators rank the bidders under Criteria A and
B. An evaluator was free, for example, to give all bidders full point credit under either criterion, or to assign them any variation of points.
This type of point system for mixed weighing of subjective and objective criteria is not unusual in governmental purchasing contracting and competitive bidding and is, in fact, normal procedure.
The bid criteria set forth in the ITB, as well as the system set forth therein for evaluation of those bids by a mix of subjective and objective criteria, is rational. Further, and specifically, the ITB's requirement that costs be quoted as a rate per hour of service, by geographic area and point in time, is rational. It would be irrational to evaluate bid cost under this ITB by multiplying each bidder's price quotes for individual hours of service, broken down by geographic area and point in time, by the corresponding estimates of hours needed, set forth at p. 3 of the ITB, and then comparing the resulting "total cost" of the contract under each bid, since the estimated hours were
intended to be no more than estimates, and the Department recognizes that these hours are subject to significant variation over the term of the contract. This probable variation would make the latter calculation entirely meaningless and baselessly speculative.
It was not the intent of the ITB to find the "lowest and best" bidder. Instead, the intent of this ITB was to find the lowest bidder who met the qualifications and specifications set forth in the ITB. This is not the same as "lowest and best."
The Bidders and Their Bids Medical Personnel Pool
MPP, the successful bidder on Contract No. R-2119, timely submitted its bid for that contract.
MPP's bid showed that MPP is a nationally recognized health care provider, with over twenty years of experience in serving the health care needs of both home health clients and facility clients. Its franchise office in Gainesville, Florida, is one of four offices operated in the Region II area by Mr. Ed Bixby, a former vice president of MPP's parent company, Personnel Pool of America, Inc. Mr. Bixby personally has over fifteen years of experience in medical staffing. All MPP offices follow the same national corporate standards for quality assurance, office operation and general business practice. Further, MPP is a financially sound and viable business, with an ongoing corporate recruitment program that regularly attracts new employees.
MPP's client service representatives are on-call and available 24 hours a day, seven days a week, to meet the Department's staffing needs. The agency has been managed since October 1987, by Mr. Duane Gorgas, who has seventeen years of experience in facility clinical laboratory medicine, and who is licensed by the Department of Health and Rehabilitative Services as a clinical laboratory supervisor.
MPP demonstrated compliance with Criterion B of the ITB by showing that each of its nurses is carefully and personally screened and tested for nursing skills prior to being sent into the field. In addition, MPP personally verifies all nurses' licenses with the Department of Professional Regulation, as well as their CPR certifications. A minimum of one year's documented current clinical experience is required prior to a nurse's being sent into the field. Further, MPP is itself an approved provider of nursing and other professional continuing education programs (DPR Provider No. 27M0938) and provides continuing education directly to its employees on a regular basis.
MPP's Gainesville franchise already provides RN's and LPN's to correctional facilities, hospitals and nursing homes throughout sixteen counties in north central Florida. A list of the prisons and county jails currently and historically staffed by MPP in both Regions II and III was included in the bid, and includes thirteen corrections facilities in those two regions.
A broad range of references from these and other clients, both institutional and personal, was included as Attachment II to MPP's bid. Copies of the licenses of 48 experienced MPP nurses, qualified and available to provide the services called for under Contract No. R-2119, were attached to the bid as Attachment III.
Suwannee
Suwannee's bid was also timely submitted.
Whereas Suwannee now protests that the Department's manner of determining bid costs as net cost per hourly unit of service is irrational, that contention is belied by Suwannee's own bid. In the first place, Suwannee did not quote cost as a multiplication of hourly rates times total estimated hours anywhere in its bid, even though its president, Mr. Fortner, now contends this is the only rational way to quote or determine bid cost under the ITB.
Further, Mr. Fortner expressly conceded that the ITB did not call for any such calculation of "total cost" by multiplication of rates by estimated hours.
Even so, Suwannee has waived any objection or question it may now have as to the method of determining bid cost. Mr. Fortner conceded that he was fully aware of the standards set forth at pp. 1 and 11 of the ITB, requiring that questions or objections to the reasonableness, necessity or competitiveness of the terms and conditions of the ITB be submitted in writing in a timely manner prior to July 10, 1989. Mr. Fortner nevertheless conceded that he failed to submit any such questions or objections regarding the reasonableness, necessity or competitiveness of the terms and conditions of the ITB, until the filing of his protest after the award of the bid to MPP, and long after July 10, 1989.
Having failed to file any timely written objections to the reasonableness, necessity or competitiveness of the terms and conditions of the ITB, therefore, Suwannee has waived any objections to the Department's method of calculating bid costs by averaging each bidder's unit net price for an hour of service by geographic area and point in time, as opposed to Suwannee's after- the-fact preferred method of multiplying these rates by estimated hours to determine Suwannee's definition of "total cost."
Suwannee's bid, as supported by its president's testimony, showed that Suwannee was only incorporated in late July 1988, less than a year before the ITB was published. Prior to that time its then-22-year-old president's business experience consisted of operating a video store. Mr. Fortner conceded he had no prior experience whatsoever in providing any sort of nursing or medical services.
Prior to the bid letting, Suwannee's sole experience in attempting to staff a correctional facility was at Baker Correctional Institute.
Mr. Fortner testified that his first client was Lake City Medical Center, yet no reference from that facility appears in his bid. On the other hand, MPP's bid contains a highly favorable reference from Lake City Medical Center's director of nursing, indicating a completely satisfactory contractual relationship with MPP since 1987.
Whereas MPP directly provides continuing education to its nurses under its own provider number, Suwannee takes the position that continuing education requirements are the nurses' responsibilities, and that they must meet these requirements at their own expense.
Further, while Mr. Fortner stated that he believes Suwannee tests its nurses, he admitted he did not know how, and Suwannee's bid was silent on this aspect of Criterion B of the ITB. Suwannee's bid was also silent on screening of new nurse applicants. Suwannee has only recently hired a full-time director of nursing.
Whereas MPP submitted qualifications for 48 nurses to staff the estimated hours under contract, Suwannee proposed to staff the same number of estimated hours with only 31 nurses. Mr. Fortner testified that the number of licenses in Suwannee's bid constitutes the full complement of nurses he deems necessary to provide the number of hours of service estimated in the ITB. The Bid Evaluation Process
Objective Evaluation of Criterion C
Initially, because of a confusing misprint in the ITB regarding the mathematical formula for calculating points to be awarded to bidders, other than the lowest average cost bidder, under Criterion C (bid cost), some of the four Bid Evaluation Committee members calculated the ranking of bidders under that criterion differently. That calculation was corrected by Dr. Rechtine, the Committee chairperson, however, in consultation with officials of the Region II office. The correction did not alter the ultimate overall ranking of the bidders, although it made slight differences in the points awarded individual bidders by some members of the Committee, and in one case the second and third bidders under Criterion C were reversed on one evaluator's tally sheet. All four of the Committee members testified that they agreed with the corrected calculation of points to be awarded each of the bidders under Criterion C. At no time was any other part of any Committee member's points awarded altered or changed.
Subjective Evaluation of Criteria A and B Steven Smith
Committee member Steven Smith, Regional Health Services Administrator for Region II, responsible for assisting institutions in the region with health service issues, including contracting for health services, evaluated the respective bids of MPP and Suwannee in a rational and reasoned manner. With respect to Criteria A and B, Mr. Smith thoroughly reviewed the entire bid document of each bidder and made judgments as to the merits of each bid. His evaluations were based on how the bidders presented their respective documents, including the presentation and content of the narratives. While he did not assign any greater weight to either MPP's or Suwannee's references, Mr. Smith felt that MPP better articulated its understanding of the nature of the work. Mr. Smith was particularly impressed with MPP's understanding of the Department's court-ordered duty to improve access for inmates' to nursing services, which Mr. Smith felt was indicative of MPP's understanding of the contract's service requirements. He was also impressed with MPP's documentation of its 24-hour coverage. In sum, Mr. Smith felt MPP's bid was much clearer than Suwannee's.
Cynthia Vathauer
Committee member Cynthia Vathauer is a Department accountant, in charge of the inmates' welfare fund, who has previously served as an evaluator of competitive bids. Ms. Vathauer evaluated the respective bids of MPP and Suwannee in a rational and reasoned manner. With respect to Criteria A and B,
Ms. Vathauer reviewed the ITB and next performed a detailed analysis of whether the bid components called for by the ITB under Criteria A and B were present in each bid. Her review of the bids under Criteria A and B consisted of listing all of the required components under each criterion and then checking off whether each bidder had adequately provided the required components, making notes where there was partial or questionable compliance and deducting points from the total allowable for each criterion which was missing or incomplete.
Whereas Suwannee contends Ms. Vathauer made "no analysis" of the bids under Criteria A and B, simply because Ms. Vathauer stated that she did not read these components of the bids in detail for comparative content, this allegation is not supported by the weight of the competent, substantial evidence. Ms. Vathauer's detailed analysis of the presence or absence of the factors called for by the ITB, supported by her contemporaneous notes, shows that Ms. Vathauer made a rational and reasoned analysis of the bids under those criteria, fully supporting her allocation of points to the bidders under those criteria. She admitted candidly that she was not familiar with the clinical or operational aspects of health service provision. Thus, for example, rather than attempt to compare the relative quality of nurse evaluations (which, incidentally, was not required under the ITB), Ms. Vathauer based her judgment of compliance with this criterion on the presence or absence of valid copies of actual licenses.
Dianne Rechtine, M.D.
Dianne Rechtine, M.D., is the medical executive director at North Florida Reception Center and acting medical services director for Region II.
Dr. Rechtine also performed a rational and reasoned evaluation of the bids under the standards of the ITB.
Dr. Rechtine read the respective bids and, with respect to Criteria A and B, assigned points based on her evaluation of those bids. Her notes of how she allocated points under these criteria appear as Joint Exhibit No. 4D and show that Dr. Rechtine actually scored Suwannee higher than MPP under Criterion A and the same as MPP under Criterion B. Suwannee has not been heard to assert that Dr. Rechtine's analysis under these criteria was other than rational and reasoned. Thus, it is found that Dr. Rechtine's analysis and evaluation of the bids was in fact rational and reasoned.
Peggy (Richardson) Patray
Since Peggy (Richardson) Patray was not called to the witness stand, MPP offered into evidence, without objection, her deposition testimony, taken prior to MPP's intervention and without benefit of cross-examination by MPP or its counsel. Nevertheless, that deposition and Ms. Patray's own evaluation notes appearing as Joint Exhibit No. 4E demonstrate that Ms. Patray, a registered nursing services consultant employed by the Department and previous nursing supervisor at New River Correctional Institute, carefully reviewed the ITB and analyzed and evaluated the bids under Criteria A, B and C prior to awarding points to the bidders. Ms. Patray looked at the types of facilities from which references were obtained and considered, for example, related jail-type experience to be a positive factor. Ms. Patray actually scored Suwannee superior to MPP under Criterion A for reasons related to the bidders' statements of understanding of work. She scored the two bidders evenly under Criterion B, even though she was favorably impressed by one (at the time of her deposition, she could not recall which) bidder's emphasis on pre-employment screening and
in-service training, when contrasted with the other bidder's leaving of this responsibility to the individual nurses. Finally, Ms. Patray testified that she
was favorably impressed with MPP's sources of references, as opposed to Suwannee's, and that there was not enough information in Suwannee's bid, in her opinion, regarding nurse professional qualifications.
In sum, Ms. Patray's testimony and notes in Joint Exhibit No. 4E demonstrate clearly that she also performed a rational and reasoned evaluation of the bids of the parties under the terms and conditions of the ITB.
Suwannee's Allegations
There is no evidence on the record of this proceeding to support Suwannee's allegations that political or media pressure adverse to Suwannee influenced the decision to award Contract No. R-2119 to MPP. Each Department witness who testified in this proceeding testified that no such political pressure was brought to bear upon them or even attempted. The competent, substantial and unrebutted evidence of record demonstrates clearly that no such pressure or influence occurred or was attempted.
In the same vein, Suwannee has alleged that the Committee improperly considered, to Suwannee's prejudice and detriment, factors or information outside of the ITB and the bid documents. The only evidence of record of Committee members having considered information outside of the ITB or the bids was the testimony of several of the Committee members that they either were aware of or considered allegations of past difficulties with MPP, not Suwannee. For example, Mr. Smith testified that he was aware of one past problem with MPP, but none with Suwannee. In any event, he did not consider anything outside of the bid documents in his review. Ms. Vathauer said nothing relating to this issue. Dr. Rechtine testified that she was aware of, and had considered, past problems with MPP, that she had received favorable input as to Suwannee and, to the extent that this knowledge affected her evaluation, she agreed that it did so to the advantage of Suwannee (scored 20 under Criterion A, 20 under Criterion B), and to the disadvantage of MPP (scored 12 under Criterion A, 20 under Criterion B). Finally, even Ms. Patray testified that she had received some negative reports on MPP, whereas she mentioned no such information regarding Suwannee. In sum, there is no evidence of record to support Suwannee's allegations that the Committee members improperly considered, to Suwannee's prejudice and detriment, factors outside the bid documents. Any error which may have occurred in this regard was entirely harmless as to Suwannee, and if it had any effect at all, it worked to Suwannee's benefit. Results of the Bid Evaluation Process
The result of the bid evaluation process was that MPP received 88 overall points under the formula set out in the ITB, Suwannee received 85.62, Quality Care received 73.05 and Upjohn received 58.87. MPP was also the low bidder on cost, i.e., Criterion C. The weight and preponderance of the competent, substantial evidence demonstrates that Contract No. R-2119 should have been awarded to MPP, as it was, and that there is an ample, rational, reasoned and logical basis in the record supporting the decision of the Department to award the contract to MPP.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction of the parties to and subject matter of these proceedings. Sections 120.53(5) and 120.57(1), Florida Statutes.
Most recently in Department of Transportation v. Groves-Watkins Constructors, 530 So.2d 912 (Fla. 1988), rehearing denied, the Florida Supreme Court reiterated the standard of review applicable to proceedings challenging an administrative agency's award of a contract by public bid:
Initially, we note the strong judicial deference accorded an agency's decision in competitive bidding situations:
public body has wide discretion in soliciting and accepting bids for public improvements and its decision, when based on an honest exercise of this discretion, will not be overturned by a court even if it may appear erroneous and even if reasonable persons may disagree.
Liberty County [v. Baxter's Asphalt & Concrete, Inc.], 421 So.2d [505] at 507 (emphasis [by the court]). . . . See also Culpepper v. Moore, 40 So.2d 366 (Fla. 1949); William A. Berbusse, Jr., Inc. v. North Broward Hospital District, 117 So.2d 550 (Fla. 2d DCA 1960).
In Liberty County, we recognized the broad discretion legislatively accorded public agencies and held that an agency's decision based upon an honest exercise of this discretion cannot be overturned absent a finding of "illegality, fraud, oppression or misconduct." 421 So.2d at 507. Liberty County thus established the standard by which an agency's decision on competitive bids for a public contract should be measured.
* * * although the APA provides the
procedural mechanism for challenging an agency's decision to award or reject all bids, the scope of the inquiry is limited to whether the purpose of competitive bidding has been subverted. In short, the hearing officer's sole responsibility is to ascertain whether the agency acted fraudulently, arbitrarily, illegally, or dishonestly. 530 So.2d at 913-14. (Emphasis added.)
Further, in Volume Services Div., etc. v. Canteen Corp., 369 So.2d 391, 395 (Fla. 2d DCA 1979), the Court held:
In the absence of specific constitutional or statutory requirements, a public agency has no obligation to establish a bidding procedure and may contract in any manner not arbitrary or capricious. [citations omitted). Even when the receipt of bids is required by law, a public agency has no obligation to let a contract to a particular bidder - the lowest, the lowest and best or
the lowest responsible bidder - in the absence of a directive to that effect in the controlling legislation. [Fn. omitted, emphasis added].
Thus, the issue in this case is not whether the Department erred in a factual comparison of qualified bidders, in which comparison reasonable persons could disagree, nor is the issue whether the Department correctly selected the lowest, lowest and best, or lowest responsible bidder.
The issue presented is whether the Department acted fraudulently, arbitrarily, illegally or dishonestly, so as to subvert the purpose of competitive bidding. If fraud, arbitrariness, illegality or dishonesty which subverts the purpose of the Department in this competitive bidding is not shown, the decision of the Department to award Contract No. R-2119 to MPP must be upheld.
There is no evidence or suggestion on the record of illegality, fraud or dishonesty in any aspect of the letting of Contract No. R-2119, or the award of that contract to MPP. It must be concluded, therefore, that the award is not invalid for any of these reasons.
Suwannee has argued that the Department, by and through the Bid Evaluation Committee, acted arbitrarily in reviewing the bids and awarding Contract No. R-2119 to MPP.
In the first place, it is not arbitrariness alone which is prohibited under Groves-Watkins, supra; that decision makes it clear that in order to void a bid letting and award process, such arbitrariness must rise to the level of subverting the purpose of competitive bidding. Groves-Watkins, supra, 530 So.2d at 914.
The Department's representative testified, and the testimony is unrebutted, that the Department's purpose in letting bids on Contract No. R-2119 was to find the lowest bidder (in terms of lowest average cost per hourly unit of nursing service) who met the qualifications and specifications set forth in the ITB.
The unrebutted testimony further established that whereas the ITB did require a comparison and ranking of the bidders by average cost of hourly unit of service, it did not require any ranking of bidders under the other two criteria, i.e., Criterion A (statement of work and project understanding, and references of clients) or Criterion B (nurse professional qualifications). Thus, that portion of the overall purpose related to finding lowest cost is addressed primarily by Criterion C of the ITB, whereas the purpose of determining whether that lowest cost bidder met the qualifications and specifications set forth in the ITB was addressed by Criterion A and Criterion
B. It is arbitrariness subverting these purposes which Suwannee must demonstrate in order to prevail.
Having defined the purpose which the necessary arbitrariness must be shown to have subverted, the next step is to examine the definition of arbitrariness in the law, particularly with respect to administrative agency actions. That definition is provided in the oft-cited case of Agrico Chemical Co. v. Department of Environmental Regulation, 364 So.2d 759, 763 (Fla. 1st DCA 1979), rehearing denied:
A capricious action is one which is taken without thought or reason or irrationally.
An arbitrary decision is one not supported by facts or logic, or despotic. Administrative discretion must be reasoned and based upon competent substantial evidence. Competent substantial evidence has been described as such evidence as a reasonable person would accept as adequate to support a conclusion.
The requirement that a challenger has the burden of demonstrating agency action to be arbitrary or capricious or an abuse of administrative discretion is a stringent one indeed. [T]he degree of such required proof is by a preponderance of the evidence . .
Thus, Suwannee's burden in this proceeding is to show by a preponderance of the competent, substantial evidence that the Department and its Bid Evaluation Committee, in awarding Contract No. R-2119 to MPP, acted in a manner not supported by facts or logic, or in such a manner as to be despotic, to the end result of subverting the purpose of the competitive bidding process.
The clear preponderance of the competent, substantial evidence establishes that each member of the Bid Evaluation Committee evaluated the bids for Contract No. R-2119 in a rational and reasoned manner, and each of their evaluations was amply supported by logic. With respect to Criterion C, this calculation was entirely objective, calling for a mathematical calculation of the lowest average bid for hourly units of service, and the mathematical assignment of points to that bidder and the remaining bidders based upon the relationships of their respective bids to the lowest bid. While the evidence established that there was some initial confusion regarding the allocation of points under Criterion C, due to a typographical error in the ITB, the undisputed evidence established that this confusion was corrected in a timely manner, and the correct allocation of points was made under Criterion C, i.e.,
50 points to MPP as the lowest cost bidder.
Suwannee's contention that the allocation of points under Criterion C should have been made after multiplying each bidder's various hourly rates of service for each geographic area and point in time by the Department's estimates of hours to be required for those areas and time is totally unsupported in the record. First, it was shown that these estimates were only estimates, were subject to change, and would not yield an accurate picture of the total overall cost of the contract, because of this. Second, the ITB did not call for projecting or computing cost in this manner. It called only for net firm quotes of the total cost of each hourly unit of service, by geographic area and point in time. Even Suwannee submitted its bid showing only net price for hourly unit of service, and its president admitted that the ITB did not call for the calculation which Suwannee contends is the only rational way to calculate cost. Having submitted his bid in the proper format, without having submitted any timely questions or objections to the ITB, and having admitted that the ITB did
not call for the calculation he now urges as the only rational one, Mr. Fortner's assertions in this regard are not credible. The Department's manner of calculating cost under Criterion C is rational and reasoned and is supported by logical and competent, substantial evidence of record.
With respect to Criterion A and Criterion B, each Committee member described the process by which he or she evaluated the bids under these criteria. While each member scored the bidders differently, i.e., some gave full points and deducted for missing items, another started with half points and either added or subtracted, each member articulated a rational and reasoned basis for his or her analysis.
Clearly, the weight of the competent, substantial evidence shows that MPP was the lowest bidder that met the ITB's specifications and terms.
Suwannee has failed to demonstrate by any evidence, much less the preponderance of competent, substantial evidence required, that the decision to award Contract No. R-2119 to MPP was arbitrary and frustrated the purpose of the competitive bidding. To the contrary, the weight and preponderance of the competent, substantial evidence establishes that the decision to award Contract No. R-2119 to MPP was rational, reasoned, supported by logic and entirely consistent with the purposes of the competitive bidding.
RECOMMENDATION
Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that The Department of Corrections enter a Final Order awarding
Contract No. R-2119 to Personnel Pool of North Central Florida, Inc., d/b/a
Medical Personnel Pool.
DONE and ENTERED this 4th day of December, 1989, in Tallahassee, Florida.
DIANE K. KIESLING
Hearing Office
Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, Florida 32399-1550
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 4th day of December, 1989.
APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 89-4566BID
The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on the proposed findings of fact submitted by the parties in this case.
Specific Rulings on Proposed Findings of Fact Submitted by Petitioner, Suwannee Valley Medical personnel Corporation 1
Each of the following proposed findings of fact is adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 1 (page 5).
Proposed findings of fact 2-5, 7-12, 14-16, and 18 are subordinate to the facts actually found in this Recommended Order.
Proposed findings of fact 6, 17, and 19 are unnecessary or irrelevant.
Proposed finding of fact 13 is unsupported by the competent, substantial evidence.
Specific Rulings on Proposed Findings of Fact Submitted by Respondent, Department of Corrections
Each of the following proposed findings of fact is adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 2 (3); 3 (19, 25); 4 (page 5); 6 (11); 7 (12); 8 (16); 9 (46); 14 (44); and 15 (45)
Proposed findings of fact 1, 5, and 10-13 are subordinate to the facts actually found in this Recommended Order.
Specific Rulings on Proposed Findings of Fact Submitted by Intervenor, Medical Personnel Pool
Each of the following proposed findings of fact is adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 16-50 (1-35) and 53-63 (36- 46)
Proposed findings of fact 12-15 are unnecessary or irrelevant.
Proposed finding of fact 51 is included on page 5 of the Recommended Order.
Proposed finding of fact 52 is subordinate to the facts actually found in this Recommended Older
COPIES FURNISHED:
John F. Gilroy Attorney at Law Haben & Culpepper
306 North Nonroe Street Tallahassee, Florida 32302
Drucilla E Bell Perri M. King Attorneys at Law
Florida Department of Corrections 1311 Winewood Boulevard
Tallahassee, Florida 32399-2500
Thomas D. Watry Attorney at Law
Parker, Hudson, Rainer & Dobbs 1200 Carnegie Building
133 Carnegie Way Atlanta, Georgia 30303
Richard L. Dugger, Secretary Department of Corrections 1311 Winewood Boulevard
Tallahassee, Florida 32399-2500
| Issue Date | Proceedings |
|---|---|
| Dec. 04, 1989 | Recommended Order (hearing held , 2013). CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Dec. 26, 1989 | Agency Final Order | |
| Dec. 04, 1989 | Recommended Order | Standard for review of bids to provide contractual nursing services to state prisons. |
SANMAR GENERAL CONTRACTORS, INC. vs. STATE UNIVERSITY SYSTEM OF FLORIDA, 89-004566BID (1989)
THE URBAN GROUP vs DEPARTMENT OF TRANSPORTATION, 89-004566BID (1989)
ROMA CONSTRUCTION, INC. vs BROWARD COUNTY SCHOOL BOARD, 89-004566BID (1989)
BAXTER`S ASPHALT AND CONCRETE, INC. vs. DEPARTMENT OF TRANSPORTATION, 89-004566BID (1989)
