STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DICTAPHONE CORPORATION, )

)

Petitioner, )

)

vs. ) CASE NO. 89-5657BID

) DEPARTMENT OF GENERAL SERVICES, )

)

Respondent. )

and )

) LANIER BUSINESS PRODUCTS, INC., ) and CENTRAL-VOICE, INC., )

)

Intervenors. )

)

RECOMMENDATION

The final hearing in this case was held before Donald D. Conn, Hearing Officer, Division of Administrative Hearings, on November 28, 1989, in Tallahassee, Florida.

APPEARANCES

For Petitioner: John O. Williams, Esquire

Renaissance Square

1343 East Tennessee street Tallahassee, FL 32308

For Respondent: Stephen S. Matheus, Esquire

Office of General Counsel Roger Executive Center Knight Building, Suite 309 2737 Centerview Drive

Tallahassee, FL 32399-0950

For Intervenors: Lauchlin T. Waldoch, Esquire

P. O. Box 1876 Tallahassee, FL 32302

(Lanier Business Products, Inc.)

Patrick D. Hurley, Esquire

P. O. Drawer 1049 Tallahassee, FL 32302 (Central-Voice, Inc.)

STATEMENT OF THE ISSUE

The issues in this case are whether the bid of Lanier Business Products, Inc. (Lanier), is responsive to the standard cassette portion of the Department

of General Service's (Respondent's) Bid Number 380-600-520-K by meeting specifications 3.3.6 and 3.3.8 concerning finger tip control and indicator visible power "on", and also whether the Respondent should waive the 1/4" difference in size of the machine which Dictaphone Corporation (Dictaphone) bid in Class III of the specifications, and thereby deem this bid responsive to the micro-cassette portion of the bid.

PRELIMINARY STATEMENT

At the hearing, Dictaphone called five witnesses, the Respondent called one witness, Lanier called one witness, and Central-Voice, Inc. (Central) did not call any witnesses. The parties filed five joint exhibits, and Lanier introduced one additional exhibit. The parties filed a stipulation of facts and issues at the commencement of the hearing.

The transcript of the hearing was filed on December 14, 1989, and thereafter, the parties sought and were granted an extension until January 5, 1990 to file proposed recommended orders, including proposed findings of fact, which hake been considered and utilized in the preparation of this Recommended Order. Specific rulings on the parties' proposed findings of fact are contained in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. The Respondent advertised for competitive bids to provide cassette dictation equipment in two categories, standard and micro-cassette, pursuant Bid Number 380-600-520-K. Lanier, Central and Dictaphone timely submitted their bids in response to this invitation to bid.

   
   

2. The Respondent provided notice of its intended decision to award a contract to Lanier, the low bidder, for standard recorders (desktop dictators), portables, transcriber, and combination recorder/transcriber on September 21, 1989. The Respondent also provided notice of its intended decision to award a contract to Central, the third low but lowest responsive bidder, for micro- cassette portable recorders and transcribers on September 21, 1989. Central's bid of micro-cassette equipment was responsive to, and met all specifications for this equipment.

   
   

3. Dictaphone'S bid was rejected with regard to the micro-cassette portable recorders because it measured five inches by two and one-half inches by seven-eighth inches, which met the specifications required of Table I, Classes I, II and IV, but did not meet the requirement of Class III in that it is one- fourth inch longer and one-fourth inch wider than the specifications. Dictaphone does have a micro-cassette portable model which meets the size criteria in the specifications, but did not bid this equipment.

   
   

4. Lanier bid a standard cassette model VW105 which is also identified as P148.

   
   

5. Dictaphone timely filed its notice of protest and petition for formal hearing, and is an adversely affected party since it submitted the second-low bid to that of Lanier in the standard cassette portion, and the immediately lower bid to that of Central in the micro-cassette portion of the bid. Lanier submitted the low bid for both the standard cassette units, and the micro- cassette units, but Lanier's bid for the micro-cassette was deemed nonresponsive for failure to bid a voice activated recorder. Dictaphone was the second low

   bidder for both types of recorders, but as found above, was deemed nonresponsive to the micro-cassette portion of the bid.

   
   

6. The Respondent's Division of purchasing1 is composed of the Bureau of Standards and the Bureau of Procurement. The Bureau of Standards has the sole responsibility to prepare bid specifications, and to evaluate equipment which is bid for compliance with such specifications. Staff of the Bureau of Procurement assemble invitation to bid packages. Bid, specifications contain the technical requirements by which equipment that is bid is evaluated. As it relates to: this case, staff of the Bureau of Standards prepared the specifications for Bid Number 380-600-520-K, and were responsible for evaluating equipment bid under these specifications, including 3.3.6 and 3.3.8. There was no challenge to the specifications in this bid.

   
   

7. The Chief of the Bureau of Standards, Edward T. Judge, and Charles Waterson, purchasing specialist wish the Bureau of Standards, performed the technical eva1uation of model VW105/P148 which was bid by Lanier, and after a demonstration of this equipment by Lanier, determined that this machine complied with these bid specifications.

   
   

8. Prior to the posting of the bid tabulation and intended award in this matter, but after the Bureau of standards had completed its technical evaluation of Lanier's equipment, Cathy Hutchins, purchasing specialist with the Bureau of Procurement, questioned whether there had been an oversight in the technical evaluation. By memo through the Chief of the Bureau of Procurement, H. P. Barker, Hutchins questioned whether Lanier met bid specification 3.3.6 concerning fingertip controls and "fast erase". When informed by Judge that there had been no oversight and Lanier was in compliance, the bid tabulation and notice of intended awards were posted by the Bureau of Procurement. Neither Hutchins nor Barker contend that it is the responsibility of the Bureau of Procurement to determine technical compliance with bid specifications. They acknowledge that they do not have the technical expertise to make such an evaluation, and that this is properly within the authority and expertise of the Bureau of standards.

   
   

9. Specification 3.3.6 for standard cassette units provides:

   
   

   Shall have fingertip controls for "Eject", "Fast Erase", "Rewind", and "Fast Forward", appropriately identified.

   
   

10. The purpose and intent of this specification was to preclude separate, external, bulk erasers, which were used in the late 1970's and early 1980's. In response to user demand, the erase function has now been incorporated into these machines, but a requirement for sequential pressing of two buttons on the machine has been developed as a safety measure to present accidental erasures. When the erase function is contained within the machine, and is activated by fingertip controls, it is deemed compliant with the above specification. There is no industry standard which would require a machine to have a single "erase" button, or for any particular buttons to be pressed in sequence to activate this function.

    
    

11. The Lanier erase function is indicated the word "erase" which is imprinted on the face of the machine's display. When the appropriate two buttons are pressed in sequence, a flashing LED indicator comes up over the word "erase" to show the user that the erase function is engaged. The two fingertip controls

    or buttons which engage the erase function on the Lanier machine are marked "telephone" and "rewind".

    
    

12. The desktop machine bid by Dictaphone is the same equipment that was on last year's state contract for dictation equipment; and specification 3.3.6 has not changed in this year's bid specification from last year's. The erase function on the Dictaphone equipment is also activated by pressing two fingertip controls marked "erase" and "rewind" in sequence. Activation of this function is visibly indicated by an illuminated LED which reads "erase". Pressing the erase button alone does not activate any function on the Dictaphone machine.

    
    

13. Neither the Dictaphone nor Lanier equipment has any indication or instruction on their surface to tell the unfamiliar user how to engage the erase function. The user guide explains to the user which buttons to press to activate this function. These buttons are clearly marked on the machine and are easy for the user to find. Thus, this function is "appropriately identified" on both machines.

    
    

14. The Lanier VW105/P148 machine is responsive to the bid in question and met the technical requirements of specification 3.3.6. The Respondent's award of the standard desktop unit to Lanier was not based upon any waiver of any irregularity regarding this specification. There are no significant differences in the Dictaphone and Lanier machines which would cause one to be responsive and the other to be nonresponsive to specification 3.3.6.

    
    

15. Specification 3.3.8 for the standard cassette unit provides as a requirement that equipment have:

    
    

    Indicator, Visible; Power "ON"

    
    

16. Whenever any function on the Lanier machine is engaged, by whatever means, a display is activated which visibly indicates that the power is on. Thus, there is a visual display on the Lanier machine which comes on when the machine is activated and goes off when it is deactivated. On the Dictaphone equipment there is a red LED reading "on" which is activated along with a display which becomes visible when the Dictaphone machine comes on. There are no significant differences in these two machines which would cause one to be deemed responsive and the other nonresponsive to specification 3.3.8. The Lanier VW105/P148 is responsive to specification 3.3.8, and the Respondent's award to Lanier was not based upon any waiver of any technical requirements of this specification.

    
    

17. There was no evidence presented concerning the micro-cassette models bid by either Central or Dictaphone, and therefore there is no factual basis to question the Respondent's award in the micro-cassette category to Central.

CONCLUSIONS OF LAW

18..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.

1. 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, or evidences the agency's bad faith. Department of Transportation v. Groves- Watkins Contractors, 530 So.2d 912, 914 (Fla. 1988); Baxter's Asphalt and Concrete, Inc. v. Department of Transportation, 475 So.2d

   1284 (Fla. 1st DCA 1985); Capelletti Brothers . Department of General Services,

   432 So.2d 1359 (Flab 1st DCA 1983); Liberty County v. Baxter's Asphalt and Concrete, Inc., 421 So.2d 505 (Fla. 1982); 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. Couch Construction: Co. v. Department of Transportation, 361 So.2d 172, 175 (Fla. 1st DCA 1978).

   
   

2. In reviewing an agency's rejection of all bids, the Florida Supreme Court stated in Groves-Watkins, supra at 914:

   
   

   . . . 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 dishonest1y.

   
   

   In Groves-Watkins the Supreme Court noted there was not the slightest evidence of fraud or collusion in the rejection of the bids under review, and, further, found that the rejection of all bids was not a means of avoiding competition. Therefore, the Court found that the agency had not abused its discretion in rejecting all bids.

   
   

3. Under the judicially established standard by which an agency's decision regarding an award under an invitation to bid must be reviewed, it is concluded that the Respondent acted within its discretion in proposing to award Bid NO. 380-600-520-K to the lowest responsive bidders, Lanier in the standard desktop category and Central in the micro-cassette category. There is no evidence of undue competitive advantage in the record of this proceeding. Rather, a reasonable explanation of the Respondent's evaluation of these bids was provided at hearing, particularly with regard to the concerns raised by Dictaphone.

   
   

4. The Respondent's decision to award this bid to Lanier and Central was based solely upon its substantiated determination that they were the lowest responsive bidders in each category. There is nothing to indicate that the Respondent treated Dictaphone any differently than any other bidder, or that the successful bidders gained any particular advantage over Dictaphone due to the manner in which the bids were evaluated. No requirements of the invitation to bid were waived or altered, and Lanier and Central complied with the bid specifications in all material respects.

   
   

5. Therefore, Dictaphone has failed in this cafe to meet its burden of proof. It has not been established that the Respondent acted in an arbitrary or capricious manners or out of fraud, collusion or bad faith when it evaluated and proposed to award this bid to Lanier and Central.

RECOMMENDATION

Based on the foregoing, it is recommended that the Respondent enter a Final Order dismissing Dictaphone' protest of the award of Bid Number 380-600-520-K to Lanier and Central.

DONE AND ENTERED this 26th day of January, 1990, in Tallahassee, Leon County, Florida.

DONALD D. CONN

Hearing Officer

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 26th day of January, 1990.

APPENDIX DOAH CASE NO. 89-5657 BID

Rulings on Dictaphone's Proposed Findings of Fact:

1. Rejected in Findings of Fact 14 and 16.

2. Adopted in Finding of Fact 12.

3. Rejected in Finding of Fact 17, and 11otherwise as speculative and immaterial.

Rulings on Respondent's Proposed Findings of Fact:

1-4. Adopted in Finding of Fact 1. 5-6. Adopted in Finding of Fact 2.

1. Adopted in Finding of Fact 3.

2. Adopted in Finding of Fact 4. 9-10. Adopted in Finding of Fact 5.

1. Adopted in Finding of Fact 6.

2. Rejected as unnecessary.

Rulings on Lanier's Proposed Findings of Fact:

1-3. Adopted in Finding of Fact 6, but otherwise Rejected as unnecessary.

1. Adopted in Finding of Fact 8.

2. Adopted in Finding of Fact 1.

6-9. Adopted in Findings of Fact 2, 3 and 5.

1. Adopted in Findings of Fact 2 and 6.

2. Adopted in Finding of Fact 3.

12-19. Adopted in Findings of Fact 6 through 8.

1. Rejected as a conclusion of law and not a finding of fact.

2. Adopted in Finding of Fact 9.

3. Adopted in Findings of Fact 7 and 10. 23-24. Adopted in Finding of Fact 11.

1. Adopted in Findings of Fact 11 and 12.

2. Adopted in Finding of Fact 13. 27-29. Adopted in Finding of Fact 10.

30. Rejected as a summation of, or comment upon, testimony rather than a finding of fact.

31-32. Adopted in Finding of Fact 14.

33. Adopted in Finding of Fact 15. 34-35. Adopted in Finding of Fact 16.

36. Rejected as a summation of, or comment upon, testimony rather than a finding of fact.

37-38. Adopted in Finding of Fact 16.

Rulings on Central's Proposed Findings of Fact:

Stephen Mathues, Esquire Office of General Counsel Knight Building, Suite 309 Koger Executive Center 2737 Centerview Drive

Tallahassee, FL 32399-0950

John O. Williams, Esquire Renaissance Square

1343 East Tennessee Street Tallahassee, FL 32308

Lauchlin T. Waldoch, Esquire David A. Hallman, Esquire

P. O. Box 1876 Tallahassee, FL 32302-1876

Patrick D. Hurley, Esquire

P. O. Drawer 1049 Tallahassee, FL 32302

Susan Kirkland, Esquire General Counsel

Knight Building, Suite 309 2737 Centerview Drive

Tallahassee, FL 32399-0950

Ronald W. Thomas, Executive Director Dept. of General Services

Knight Building

Koger Executive Center 2737 Centerview Drive

Tallahassee, FL 32399-0950

Docket for Case No: 89-005657BID

Orders for Case No: 89-005657BID