STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

PLANNING RESEARCH CORPORATION, )

)

Petitioner, )

)

vs. )

) STATE OF FLORIDA, DEPARTMENT )

OF TRANSPORTATION, ) CASE NO. 90-1583BID

)

Respondent, )

)

and )

)

CUBIC WESTERN DATA, INC., )

)

Intervenor. )

)

RECOMMENDED ORDER

Following the provision of notice, a formal hearing was held in this case on March 28 and 30, 1990. Authority for conducting this hearing is set forth in Section 120.53(5), Florida Statutes. Charles C. Adams was the Hearing Officer.

APPEARANCES

FOR PETITIONER: Deborah A. Getzoff, Esquire

Hala Ayoub, Esquire Richard C. Bellak, Esquire

Fowler, White, Gillen, Boggs, Villareal and Banker, P.A.

101 North Monroe Street Tallahassee, Florida 32301

FOR RESPONDENT: Paul J. Martin, Esquire

Susan P. Stephens, Esquire Office of the General Counsel Department of Transportation Haydon Burns Building

605 Suwannee Street, MS 58

Tallahassee, Florida 32399-0458

FOR INTERVENOR: Frank A. Shepherd, Esquire

Gary M. Pappas, Esquire Popham, Haik, Schnobrich and

Kaufman, Ltd.

4100 One CenTrust Financial Center

100 Southeast Second Street Miami, Florida 33131

STATEMENT OF THE ISSUES

The issues to be considered here are those associated with the appropriate disposition of RFP-DOT-88-01 (the RFP), related to proposals received from Planning Research Corporation (PRC), AGS Information Services, Inc., (AGS), and which originally involved the proposal by Cubic Western Data, Inc., (Cubic).

PRELIMINARY STATEMENT

This case was prompted by the February 21, 1990 decision by the State of Florida, Department of Transportation (DOT) purporting to reject all proposals it had received from the several offerors alluded to in the issues statement. That decision concerning RFP-DOT-88-01 was challenged by PRC, as formally stated on March 9, 1990. Cubic requested intervention, and by decision announced at a hearing that allowed oral argument on the motion to intervene it was announced in the record that the intervention by Cubic was accepted.

Upon request, official recognition was made of the Recommended and Final Orders and Amended Final Order in the case of Cubic Western Data, Petitioner, vs. Department of Transportation, Respondent, and Planning Research Corporation, Intervenor, DOAH Case No. 89-6926BID; Winchester Properties, Petitioner, vs.

Department of Transportation, Respondent, and Linder/Funk/Fregly/Oertel Partnership, Intervenor, DOAH Case No. 89-6I25BID; and the Notice of Voluntary Dismissal and Order in Planning Research Corporation, Appellant, vs. State of Florida, Department of Transportation, Appellee, in the District Court of Appeal, First District, State of Florida, Case No. 89-03200.

At hearing PRC presented the testimony of Debra Stemle, Al Palmer, Ed Gibson, Terry Cappellini, and John Berry. DOT presented the testimony of George

1. Lovett, Woodrow Lawson, and Terry Cappellini. DOT also offered the deposition testimony of Ben Watts, Brant Hargrove and Nodrie Moses. Cubic presented the testimony of Steve Shewmacker. Those exhibits which are indexed in the transcript were presented and received.

   
   

   The transcript of proceedings, the depositions, and the exhibits have been considered in preparing this Recommended Order. The last volume of transcript was filed with the Division of Administrative Hearings on April 20, 1990. That made the due date for filing proposed recommended orders April 30, 1990. The parties made a timely submission of proposed recommended orders. In addition, PRC and Cubic have submitted memoranda in support of their proposed recommended orders. All these filings have been considered. The suggested fact finding set out in the proposed recommended orders is addressed in an appendix to the Recommended Order.

   
   

   FINDINGS OF FACT

   
   

   THE RFP

   
   

   1. In October 1988 DOT put out a RFP requesting responses from 52 potential offerors. This solicitation garnered responses from three offerors, PRC, AGS, and Cubic. Those responses were received in March 1989. As described in the RFP, DOT desires to acquire a new barrier and ticket toll collection system which would automate the toll collection operations and retrieval of toll audit data, having in mind increased reliability and performance.

   2. This project is principally one which envisions the purchase of commodities. It also has associated service requirements. Those service items are principally involved with training and maintenance.

      
      

   3. This purchase would update technology in the existing toll system which is basically 1950's technology. The existing equipment presents maintenance problems and accounting problems. Those accounting problems are associated with an inaccurate portrayal of the monies collected and the monies that were not collected. The latter item is significant as it relates to the opportunity for potential theft of toll revenue by employees. In addition, there are problems with traffic counts. There are problems with report processing time for management and revenue reports. In the southern end of the turnpike there is the specific problem wherein the DOT is converting from a ticket type system to a coin operated system, and until the barrier type or coin collection equipment contemplated under the RFP is installed, the DOT will be manning those toll collection lanes that are designed for automatic or machine operation. Those lanes are manned by OPS personnel.

      
      

   4. A copy of the basic RFP may be found as PRC Exhibit 3 admitted into evidence. It does not contain addenda.

      
      

   5. Within the RFP is found a form which is entitled "State of Florida Request for Proposal Commodities Acknowledgment Form." Under General Conditions, at paragraph 5, it directs the offerors to submit any questions concerning the provisions and specifications in writing to DOT for receipt at a time no later than ten days prior to the proposed opening. It cautions the offerors that if they dispute the reasonableness, necessity, or competitiveness of the terms and conditions in the RFP or the contract award recommendation, to offer that opposition in accordance with Rule 13A-1.006, Florida Administrative Code, and within the time requirements of Section 120.53(5), Florida Statutes. In that same form, paragraph 17 references the liability question and reminds the offerors that any contract resulting from this proposal is designed to hold and save the State of Florida harmless against claims by third parties that resulted based upon a contractor's breach of contract or negligence.

      
      

   6. Under Special Condition 2.04 DOT reserves the right to reject all proposals. It also speaks to the ability to waive minor irregularities which are seen as those variations from the terms and conditions of the RFP which are not price effective or advantageous to the offeror or beneficial in a way not enjoyed by other offerors or to the extent that the irregularities do not adversely impact the DOT. It reminds the offerors that departure from the RFP requirements other than minor variations cannot be waived. It further states that an offeror cannot modify its proposal after the opening.

      
      

   7. Special Condition 2.05 follows up the previous condition by stating that nonresponsive proposals will not be considered for the award. Proposals are seen as being subject to rejection in that they may be rejected if found irregular and not in conformance with the requirements and instructions set out in the RFP. Those items may be found to be irregular and nonresponsive in the instance of conditional proposals and indefinite or ambiguous proposals, among other things.

   8. Two Special Conditions which are involved with DOT's right to cancel the contract are as follows:

      
      

      1. Cancellation for Unappropriated Funds

         The performance by the Department of any of its obligations pursuant to this RFP is subject to and contingent upon the availability of monies lawfully appropriated for the purpose. If the Department deems at any time during the proceedings that funds are not available, the Department will notify the Proposers of such status, and all obligations of the parties, if any, shall end as cancelled by mutual consent.

      2. Cancellation for Other Causes

      A contract arising from this RFP may be cancelled by the Department at any time for failure of the Contractor to complete specified work in accordance with the provisions of the contract and this RFP. Cancellation for such cause shall occur immediately upon Contractor's receipt of written notification thereof from the Department to the Contractor by certified mail, return receipt request.

      
      

   9. Special Condition 2.12 identifies the terms of a general or prebid conference that calls for mandatory attendance of the offerors and indicates that the members of the Technical Review Committee will be available to respond to questions that the offerors have which relate to clarification of the details of the specifications. Affiliated with that section is Special Condition 2.13 which relates to the offerors' inquiries. It reminds those offerors to examine the RFP to determine whether the DOT requirements are clearly stated. It invites the offerors to state in writing any belief that the requirements of the RFP are restrictive to competition. If the offeror wishes to change any specification, it is required to identify that specification and describe why it is difficult to meet the specification and to give a detailed explanation of why the change is justified. The offeror in that instance also provides what is referred to as a recommended change to the specification. A suggested change must be received by the DOT no later than the date shown as the last date for inquiries and questions set out in the schedule of RFP events. Under the amended schedule of RFP events, the date for last inquiries and questions to the DOT was November 28, 1988. If an offeror failed to request the change by the deadline specified, the offeror is seen to accept the Department's specifications. The DOT is to decide which changes would be acceptable. If necessary, the DOT would issue an addendum reflecting acceptable changes to the RFP, as was done in the instances referred to before. Any changes through an addendum are sent to all offerors to make certain that the offerors are given the opportunity of making proposals that deal with a common set of specifications.

      
      

   10. Special Condition 3.04 identifies the fact that the price proposals would not be opened until after completion of the evaluation and rating of technical proposals. An offeror's price would not be considered if the technical proposal was rejected during the evaluation.

   11. Special Condition 4.01 identifies the stages of the evaluation process. The first stage examines the qualifications of all offerors. The second stage examines technical proposals. The third stage examines price proposals. The fourth stage looks at the remaining proposals in the review process and rates them to arrive at the best overall proposal.

       
       

   12. Special Condition 6.01.02 speaks to indemnification and states:

       
       

       The contractor shall indemnify, defend, save and hold harmless, the state, the Department and all of its officers, agents, or employees from all suits, actions, claims, demands, liabilities of any nature whatsoever arising out of, because of, or due to breach of, this Agreement by the Contractor, its subcontractors, agents or employees or due to any act or occurrence of omission or commission of the Contractor, its subcontractors, agents or employees. Neither the Contractor nor any of its subcontractors will be liable under this section for damages arising out of injury or damage to persons or property directly caused or resulting from the sole negligence of the Department or any of its officers, agents or employees. The parties agree that 1% of the total compensation [sic] to the Contractor for performance of this agreement is the specific consideration from the Department to the Contractor for the Contractor's indemnity agreement.

       
       

   13. Special Condition 6.01.03 deals with liabilities for wrongful or criminal act by the Contractor and its language is to this effect:

       
       

       The bond shall be subject to the additional obligation that the principal and surety executing the bond shall be liable to the State in any civil action which might be instituted by the Department or any officer of the State authorized in such cases, for double any amount in money or property the State might lose, or be overcharged, or otherwise be defrauded of by any wrongful or criminal act of the Contractor, his agent or his employees. The parties agree that 1% of the total compensation to the Contractor for performance of this agreement is the specific consideration from the Department to the Contractor for the Contractor's indemnity agreement.

       
       

   14. General Provision 5.07.02 deals with failure to remove and renew defective materials and work, and it states:

       
       

       Should the Contractor fail or refuse to remove and renew any defective materials used or work performed, or make necessary repairs in an acceptable manner and in accordance with the

       requirements of the specifications, within the time indicated in writing, the Engineer shall have the authority to cause the unacceptable or defective materials or work to be repaired, removed and renewed, as may be necessary; all at the Contractor's expense. Any expense incurred by the Department in making these repairs, removals, or renewals, which the Contractor has failed or refused to make, shall be paid for out of any monies due or which may become due the Contractor, or may be charged against the contract bond. Continued failure or refusal on the part of the Contractor to make any or all necessary repairs promptly, fully and in an acceptable manner shall be sufficient cause for the Department, at its option, to perform the work with its own organization, or to contract with any other individual, firm or corporation to perform the work. All costs and expenses incurred thereby shall be charged against the defaulting Contractor and the amount thereof deducted from any monies due or which may become due him, or shall be charged against the performance bond. Any work performed subsequent to forfeiture of the contract, as described in this section, shall not relieve the Contractor in any way of his responsibility for the work performed by him.

       
       

   15. Under General Provision 8.08 dealing with default and termination of contract, for reasons described, DOT has the right to take the contract work away from that Contractor and declare the contract in default within ten days of notice that the complained-of conditions have not been corrected.

       
       

   16. General Provision 8.09 speaks to the Department and states:

       
       

       Upon declaration of default the Department will have full power to appropriate or use any of all materials and equipment on the site which are suitable and acceptable, and may enter into an agreement with others for the completion of the work under the contract, or may use other methods which in the opinion of the Engineer are required for the completion of the work in an acceptable manner. All costs and charges incurred by the Department because of the Contractor's default, including the costs of completing the work under the contract, shall be charged against the Contractor. In case the expense so incurred by the Department is less than the sum which would have been payable under the contract if it had been completed by the defaulting Contractor, the defaulting Contractor shall be entitled to receive the difference. In case the expense exceeds the sum which would have been payable under the

       contract, then the Contractor and the surety shall be liable and shall pay the Department the amount of the excess.

       If after the ten calendar day notice period, and prior to any action by the Department to otherwise complete the work under the contract, the Contractor should establish his intent to prosecute the work in accordance with the Department's requirements. The Department may elect to permit the Contractor to resume the work, in which case any costs to the Department incurred by the delay, or from any reason attributable to the delay, will be deducted from any monies due or which may become due under the contract.

       
       

   17. General Provision 8.10 deals with the amount of liquidated damages and it states:

       
       

       Such liquidated damages shall be the amounts established in the following schedule which shall apply to each project and retainage.

       
       

       Daily Charge Per

       Original Contract Amount Calendar Day

       $50,000 and under ................. $ 200

       over $50,000 but less

       than $250,000 ................... 300

       $250,000 or more but less than

       $500,000 ........................ 400

       $500,000 or more but less than

       $2,500,000 ...................... 550

       $2,500,000 or more but less than

       $5,000,000 ...................... 650

       $5,000,000 or more but less than

       $10,000,000 ..................... 750

       $10,000,000 or more but less

       than $15,000,000 ................ 1,000

       $15,000,000 or more but less

       than $20,000,000 ................ 1,250

       
       

       $20,000,000 or over ............ 1,250 plus

       0.005 percent per day for any amount over $20,000,000

       
       

   18. Under the section in the RFP dealing with the Contract Agreement is found Section 14.00 which contains the language set out in Special Conditions

       6.01.02 previously quoted.

   19. Under the Contract Agreement at Section 19.00 is found a statement of further emphasis about the ability of the DOT to proceed premised upon available funding wherein it is stated:

       
       

       The Department during any fiscal year, shall not expend money, incur any liability, or enter into any contract which, by its terms, involves the expenditure of money in excess of the amounts budgeted as available for expenditure during such fiscal year. Any contract, verbal or written, made in violation of this subsection shall be null and void, and no money shall be paid on such contract. The Department shall required a statement from the comptroller of the Department that funds are available prior to entering into any such contract or other binding commitment of funds. Nothing herein shall prevent the making of contracts for periods exceeding one year, but any contract so made shall be executory only for the value of the services to be rendered or agreed to be paid for in succeeding fiscal years, and shall be contingent upon an annual appropriate of the legislature.

       
       

       THE FIRST EVALUATION COMMITTEE: ITS DECISIONS

       
       

   20. The committee that was formed to evaluate the several responses had strong technical expertise and limited contractual or administrative experience. Its members were Debra Stemle, Deputy Director Office of Toll Operations; Richard Humphry, head of the facilities and equipment section with toll operations; Scott Love, a data processing manager in the Fort Lauderdale toll operation; Bernard Schmit, a toll technical supervisor; Herb Pressly, associated with the DOT information system and service office; and James Anderson, internal audit staff. Non-voting members included persons from the consulting groups, Post, Buckley, Shue, and Jernigan and Palmer and Associates. Woody Lawson from the DOT Office of Contractual Services served as a liaison to the evaluation committee to address contract questions should they arise.

       
       

   21. In the experience of DOT it is unusual to purchase commodities by use of an RFP. Moreover, it is unusual to have a commodities purchase in which the Purchasing Division within DOT is not involved. It was not involved on this occasion and the liaison and advisory functions concerning the purchase were through the Contractual Services Division.

       
       

   22. The evaluation committee began its work within a week of receipt of the proposals. After its first week of review it had made certain discoveries concerning the proposals that can be characterized as problem areas. Those discoveries are outlined in the memorandum prepared through the offices of Post, Buckley, Shue and Jernigan. The operative terms of that memorandum are based upon observations by the evaluation committee. A copy of that memorandum may be found as PRC Exhibit No. 4 admitted into evidence. Cubic's responsiveness was called to question for reasons outlined in the memorandum attachments. In addition, under paragraphs 21-27 attached to the memorandum, certain comments were offered about AGS and its suggestion of changes to the RFP filed with its proposal. A copy of those items that are alluded to in those paragraphs 21-27 may be found as PRC Exhibit No. 5 admitted into evidence. In the attachment to

       the memorandum, PRC 4, there were observations to the effect that AGS was taking exception to some of the terms of the RFP. Quoting from those paragraphs 21-27, they remarked:

       
       

       1. AGS - Special conditions Proposal Page No. FDOT TSC-1

          Takes exception with RFP 2.008

          Need Purchasing and Attorney's office to review.

          
          

       2. AGS - Special condition

          • Proposal Page FDOT TSC-1

          • Request Addition to SEC. 2.09

            
            

       3. AGS - Special Condition

          Proposal Pg FDOT TSC-1

          Request changes in Section G.01.02 of RFP.

          [sic]

          
          

       4. AGS - Special Condition

          Proposal Pg. FDOT TSC-2

          Request Changes in Section 6.01.03 of RFP.

          
          

       5. AGS - General Provisions

          • Proposal Pg. FDOT TSC-2

          • Request Changes in Section 5.07.02

            
            

       6. AGS - General provision

          • Proposal pg FDOT - 2

          Request changes - Section 8.08

          Section 8.09

          Section 8.10 Refer to Purchasing and Attorney

          
          

       7. AGS - Proposal Pg FDOT TSC-3 Request Contract Agreement

Sec. 22.00

Sec. 14.00

Sec. 19.00

Go to cubic western data

Vol 1 CWD Qualification Statement

These relate back to sections within RFP already described.

1. As can be seen the evaluation committee was persuaded that it needed the assistance of the Purchasing Division and attorneys within DOT to examine the problems with the AGS suggestions. This is somewhat misleading, because assistance was provided from contractual services, not purchasing. It also felt the need for consultation concerning the responsiveness of Cubic.

   
   

2. Ms. Stemle's testimony describes the evaluation committee's reaction to the Cubic and AGS proposals as an attempt by Cubic to change the documentation of the DOT and for AGS to propose a language change to the contract document.

3. In its effort to have the matters examined the evaluation committee contacted Woody Lawson and asked if the evaluation committee should have any real concern about Cubic and AGS. Lawson advised that the evaluation committee should move forward to examine the technical proposals of the three offerors and that the problems that had been seen in the responses might not in their own right constitute a matter of concern. The observation by Ms. Stemle was that this meant, if the proposals in their terms complied in all respects with the RFP, that DOT would be contracting with an offeror for what the RFP called for. This specifically refers to compliance with the technical aspects of the RFP.

   
   

4. In essence, the method contemplated by Mr. Lawson's advice to the evaluation committee was one in which the issue of overall responsiveness in view of the problem language in the Cubic and AGS responses related to administrative or contractual requirements was set aside until the technical proposals could be examined. That examination revealed that the technical proposal by Cubic related back to the problems of changes to the contract format and caused the evaluation committee great concern about the responsiveness of Cubic. The technical aspects of AGS were not found to present sufficient problems, in the mind of the evaluation committee, to cause a re-examination of the contract or administrative issues that were addressed in the memorandum attachments within PRC No. 4 as they describe the suggestions in PRC No. 5 that had been promoted by AGS in its response.

   
   

5. From Ms. Stemle's point of view, the, problems that existed with the AGS suggested contractual changes or administrative changes that could be addressed in the course of a negotiating phase leading to a contract should AGS be found to be the most advantageous offeror. Persons within DOT who might have a greater appreciation of the significance of the AGS suggestions, that is to say persons from the contracting services or legal arm within DOT did not make a critical examination of the AGS suggestions.

   
   

6. By contrast to the circumstance with the AGS proposal, a meeting was convened to consider the responsiveness of Cubic following the assessment of its technical terms. Out of that meeting a decision was reached to reject the proposal of Cubic. These activities are described in the composite PRC No. 7, which includes a memorandum of May 16, 1989, concerning the meeting to discuss the responsiveness issue and a May 18, 1989 letter advising Cubic of the decision to reject its proposal. This decision was met with a protest filed by Cubic. The terms of that formal written protest are described in the Cubic Exhibit No. 3 admitted into evidence. That protest was voluntarily dismissed on July 31, 1989 as shown in Cubic's Exhibit No. 4 admitted into evidence. The case had been forwarded to the Division of Administrative Hearings for consideration as Cubic Western Data, Petitioner vs. Department of Transportation, Respondent, DOAH Case No. 89-3852BID. With the advent of the notice of voluntary dismissal, the case was dismissed before the Division of Administrative Hearings by order, shown in Cubic Exhibit No. 5 admitted into evidence.

   
   

7. Following the notice of voluntary dismissal of the Cubic protest the evaluation committee proceeded with the work of examining the remaining proposals and the office of contractual services opened the price proposals. The office of contractual services was made aware of the scoring in the technical aspects of the two remaining proposals and conducted the opening of

   the price proposals at a public session. The office of contractual services and the evaluation committee conducted independent examinations of the pricing. In doing this work those groups had an engineer's estimate of the cost which was based upon all unit rates which had been requested in the RFP. In effect, there

   was a comparison of the proposals against the engineer's estimate. The committee had in mind making certain that the pricing was in keeping with the technical proposal. Through this process DOT derived its proposal tabulation, a copy of which may be found as PRC Exhibit No. 8 admitted into evidence. It shows that out of a possible 2,000 points PRC achieved 1,830 and AGS 1,304.

   This document reminds those concerned that any intended award of the contract is contingent upon and subject to the Governor and Cabinet's approval under the authority of Section 287.073, Florida Statutes, and Rule 13N-1.005, Florida Administrative Code. This exhibit constituted a statement of the DOT intent to award to PRC.

   
   

8. The bids had been opened on September 11, 1989, and the posting time ran from 8:00 a.m., November 21, 1989 until 8:00 a.m., November 28, 1989.

   
   

   CUBIC RETURNS

   
   

9. Notwithstanding the voluntary dismissal of its challenge to the agency decision finding it unresponsive, as noticed July 31, 1989 and the resultant lack of involvement of Cubic in the review process associated with examination of the price quotation and comparison to the remaining offerors, Cubic attempted to resurrect its participation in the administrative process. This was done by a letter of protest on November 27, 1989, which may be seen as Cubic Exhibit No.

   6 admitted into evidence, and a formal written protest dating from December 6, 1989, Cubic Exhibit No. 7 admitted into evidence. The case was referred to the Division of Administrative Hearings and became Cubic Western Data, Petitioner vs. Department of Transportation, Respondent, and Planning and Research Corporation, Intervenor, DOAH Case No. 89-6926BID. On January 2, 1990, the Hearing Officer recommended the dismissal of the protest by Cubic and by Final Order of January 22, 1990, the Secretary of DOT dismissed the protest and ordered that the contract be awarded to PRC. That order did not contain the caveat found in the notice of intent to award tabulation that reminded interested persons that the decision was contingent upon approval by the Governor and Cabinet pursuant to Section 287.073, Florida Statutes, and Rule 13N-1.005, Florida Administrative Code. A copy of the Recommended Order and Final Order may be found as Cubic Exhibit No. 8 admitted into evidence.

   
   

10. Having determined to award the contract to PRC and in anticipation of that outcome, DOT provided documentation to the Director of the Division of Purchasing of the Department of General Services in support of its choice on November 15, 1989. A copy of that information with a transmittal letter may be seen as PRC Exhibit No. 10 admitted into evidence. This was followed by a February 7, 1990 letter to the Director of the Division of Purchasing of the Department of General Services requesting that the item be agendaed before the Governor and Cabinet for its February 20, 1990 meeting. The letter mentioned the fact that court action which had been commenced by PRC attempting to prohibit the disclosure of the details of its proposal had been dismissed. Thus, the cabinet aides and the Governor and Cabinet would be able to examine the details of PRC's submission. The correspondence points out that the Cubic price proposal had never been examined by DOT and remained unopened. The correspondence; included a copy of the January 22, 1990 Final Order dismissing the Cubic protest. A copy of the February 7, 1990 correspondence was admitted as PRC Exhibit No. 1. The record does not reveal that the Governor and Cabinet sitting as the State of Florida, Department of General Services has ever acted to approve or disapprove the intended contract award to PRC. As of the week of the final hearing it was still a deferred agenda matter in front of that body.

11. Secretary Benjamin J. Watts, agency head for DOT, had his first involvement in this case in the summer of 1989 at about the time Cubic brought its initial challenge to the decision finding it unresponsive. In the absence of the then Secretary Kaye Henderson he spoke with the General Counsel to DOT, Tom Bateman, and advised Bateman to make the decision that Secretary Henderson contemplated; that decision being one where the agency moved forward with the decision making process concerning this RFP.

    
    

12. Following that circumstance Watts received a number of telephone calls from different offices or individuals in the legislature inquiring about whether the DOT properly reviewed this case and if Cubic had been treated fairly. Watts replied in the affirmative.

    
    

13. Sometime around Christmas of 1989, Watts met with Cubic, PRC and AGS to discuss the pending case and upon the advice of an attorney within DOT, Bob Daniti, decided to leave matters to the Hearing Officer. This pertained to Cubic's existing case which was eventually dismissed on January 22, 1990.

    
    

14. Watts then received a telephone call on February 14, 1990, from Brian Ballard of the Governor's office. Watts had a meeting with Ballard to describe Watts' impression of the case. Ballard requested that DOT do a side-by-side comparison of the proposals based upon information that Cubic had supplied Ballard and his office, according to Ballard. Watts is unaware of who Ballard may have met with from the Cubic firm. This inquiry by Ballard was made at a time beyond which DOT had declared its intention to award the contract by entry of its Final Order on January 22, 1990. From what Ballard said to Watts, Cubic had given Ballard two or three exhibits out of the proposal and highlighted certain areas and within those exhibits told Ballard that if Cubic is being declared unresponsive, then some of the other firms should have been found unresponsive as well.

    
    

15. The opposition to the DOT choice to award to PRC as expressed by persons who communicated their point of view to Watts was not based upon any concerns as to the technical analysis. It was premised upon concerns about procedures.

    
    

16. Ballard also informed Watts that he wanted the review done and a recommendation made about this matter on Monday following that Wednesday, which would have been February 19, 1990. As Ballard expressed it this would allow him to get back with Cubic on February 20, 1990.

    
    

17. Watts responded to these instructions by telling a second committee which he selected on February 14, 1990 to make a further review and that he wished to have their recommendations by February 19, 1990, if possible. He told them that if that was not possible, then their reasons should be provided by the end of the upcoming weekend. In anticipation of the discussion with the Governor's office, Watts told his personnel that he wanted them to give him some estimate of how long it would take. If the review could not be completed by the designated time, Watts said that he intended to simply go back to Ballard and tell him that it was not possible to give an impression of this case by the deadline which Ballard had imposed.

    
    

18. In furtherance of the instructions which he had been given by Ballard, Secretary Watts convened the second evaluation committee which was constituted of persons who had stronger grounding in administrative and contract matters. This group included George Lovett, the General Counsel for District V; John Ellis, Professional Services Coordinator in that same District; Brant Hargrove,

    General Counsel for District II; Nodrie Moses, from the procurement office; Jack Monpetit, Professional Services Coordinator, District II and Marly Eichhoefler, from the DOT Auditor's office.

    
    

19. Secretary Watts issued a memorandum which gave a written indication of his intentions about the duties of the second evaluation committee. A copy of that memorandum may be found as DOT Exhibit No. 1 admitted into evidence. He charged that group with the responsibility to review the RFP and all proposals, to include the Cubic proposal which had been rejected in the final order entered cutting off the participation of Cubic in the process. He told them to review and compare major elements of each proposal and determine how responsive each offeror had been in completing the RFP. He indicated that they should identify any problem areas, procedures, questions or etc. that revealed themselves. He allowed them to question the first review committee as well as others who had been involved in the process to gain information about background and technical matters, and provided a list of names of persons who could be contacted to include the members of the first evaluation committee. The Secretary did not intend that the second review committee look carefully at the technical side of the proposals. Being uncertain of their charge in that respect, the second evaluation committee came back to the Secretary early on in their review process and asked for clarification on that point and were told that they need not concern themselves with the particulars of the technical aspects of the proposals.

    
    

20. It was not the intention of Secretary Watts that the second evaluation committee get involved in any in-depth discussion or analysis of the choices of the first evaluation committee or to offer a specific critique of the work done by that group. His intention was that the second evaluation committee operate independent of the activities of the first evaluation committee. Watts even went so far as to instruct his second evaluation committee not to ask questions of the first evaluation committee about what conclusions the initial group had reached and not to get information or documents from the first group that would reveal what the prior group had done.

    
    

21. The second evaluation committee pursued its responsibilities for several days. On February 17, 1990, it wrote a memorandum to Secretary Watts with its recommendations. A copy of that memorandum may be found as DOT Exhibit No. 2 admitted into evidence.

    
    

22. The second evaluation committee did not draw any different conclusions about the responsiveness of the Cubic proposal, nor ascertain any impropriety in treatment that Cubic received in the evaluation process. It did determine that AGS was also nonresponsive for reasons that will be discussed more thoroughly. The evaluation of the PRC proposal by the second evaluation committee lead to the conclusion that the PRC proposal was responsive. That perception was held by the first evaluation committee as well. It is accepted here, together with the opinion of the unresponsiveness of Cubic.

    
    

23. After receipt of the report from the second evaluation committee, Secretary Watts held an exit interview with those persons. In the course of that exit interview the conclusions reached by the second evaluation committee were explained to Watts. It was at that point that Watts gave this group some insight into the history of the case in terms of the contentions that had been made about DOT and its first assessment of these proposals. At this juncture, he asked the second evaluation committee if they discovered anything improper with the bidding or anything in the way of influencing that process, taken to mean improper influence. The second evaluation committee told him that there

    did not appear to be any impropriety or undue influence. That perception is in accord with the assessment of the present record, in that it has not been revealed that the DOT participated in any impropriety or was susceptible to undue influence in the process of the initial evaluation of the responses.

    Likewise, nothing in the activities of the second evaluation committee is seen to be inappropriate in terms of the portions of this project that they examined related to the administrative or contractual portion of the RFP. The conclusions that they reached are correct in academic terms. Their ability to proceed to evaluate as a jurisdictional matter is not acceptable for reasons that will be discussed in the conclusions of law. More particularly, the second evaluation committee in its exit conference with Secretary Watts told him that their impression of those persons that they had spoken with from the first evaluation committee did not lead them to conclude that there was any pressure on or undue bias exercised by that group. Secretary Watts described for the second evaluation committee what he called rumors around Tallahassee of political influence used to find Cubic nonresponsive and apparently the suggestion that this would work somehow to the advantage of PRC. Again, to the extent that form of commentary was being pursued, it does not comport with the facts in this case.

    
    

24. The second evaluation committee in its conclusions about the work of the first evaluation committee determined that the first group had not spent as much time in analyzing procedural and administrative issues as the second group did and saw this as being the reason the first evaluation committee did not discover the unresponsive nature of the AGS proposal.

    
    

25. The second evaluation committee did not look closely at the AGS technical proposals to see how those might have an influence on its proposed contract language. Nonetheless, explanation of the AGS bid with the suggested contractual arrangement which AGS has advanced (See PRC Exhibit No. 5), reveals that a consideration of the technical aspects of the AGS bid would not save the proposal from a declaration that it is unresponsive.

    
    

26. With the determination that AGS was not responsive, DOT was left with one responsive offeror.

    
    

27. Secretary Watts had a conversation with Ronnie Thomas, Director of Purchasing for the Department of General Services. The recommendation that Thomas made to Watts was to re-advertise in that there were three offerors basically capable of doing the work and it would be in the best interest of the taxpayers to re-advertise. The choice to re-advertise would be in lieu of the award of the contract to PRC. That contract would not be for a sole-source purchase. In would be under the guise of what is referred to in Section 287.062(2), Florida Statutes, as a negotiated purchase.

    
    

28. In addition to discussing the situation with the second evaluation committee, Secretary Watts sought the advice of his legal staff. He decided to re-advertise because he felt that DOT had not followed its own procedures, as it relates to examination of the AGS proposal by the original evaluation committee and its failure to deal with the problems in that proposal. Under the circumstances, Watts did not believe that he would be able to support the decision to award to PRC, before the public and the Governor and Cabinet. In his mind this outweighed any decision in favor of PRC as being an arrangement that would be advantageous to the State. He believes that there is a benefit to be derived by competition, whether re-advertising leads to a better price advantage or not.

29. Secretary Watts believes that even though the matter has been referred to the Governor and Cabinet for its decision, DOT has the ability to reject all proposals and re-advertise.

    
    

30. On February 21, 1990, all three offerors were informed of the agency decision to reject all bids. The correspondence directed to PRC may be found as PRC Exhibit No. 9 admitted into evidence. The correspondence directed to Cubic may be found as Cubic Exhibit No. 9 admitted into evidence. In its operative terms, that correspondence is the same and in pertinent part states:

    
    

    Further review of the proposals submitted in response to RFP-DOT-88-01, Toll Collection System, revealed that the proposals submitted by AGS Information Services, Inc., and Cubic Western Data were non-responsive. In order to have competitive offers there must be two or more offers submitted by responsive and qualified offerors. As a result, we do not have two competitive proposals.

    The Department has determined that the commodities which were the subject of this request for proposals are available from more than a single source. Therefore, the Department has decided to withdraw its notice of intent to award RFP-DOT-88-01 to Planning Research Corporation, which was contingent on Governor and Cabinet approval. This letter is your notice of our decision to reject all proposals. It is our intent to issue a new Request for Proposals for a Toll collection System.

    
    

31. On that same date an amended final order was issued signed by the same person who had authored the letter notifying the parties of the decision to reject all proposals, as designee of Watts. The amended final order in its substance is associated with DOAH Case No. 89-6926BID and differs from the January 22, 1990 final order to the extent of reminding those parties that the award to PRC is contingent upon approval by the Governor and Cabinet in accordance with Section 287.073, Florida Statutes and Rule 13N-1.005, Florida Administrative Code. Secretary Watts perceives the amended final order as establishing a correction to the January 22 order, concerning advice to the parties that the contract must be approved by the Governor and Cabinet. He does not perceive this as being a continuing statement of the intention to award to PRC in the face of a contradictory decision to reject all bids, as evidenced in the correspondence of that same date.

    
    

32. The DOT estimate concerning the time necessary to re-advertise contemplates an intent to award by December 7, 1990, with no time allowance for a protest from a disappointed offeror.

    
    

    PROBLEMS WITH THE AGS PROPOSAL

    
    

33. Based upon an examination of the testimony of Secretary Watts, Terry Cappellini, Director of Purchasing within DOT, and members of the second evaluation committee, together with an analysis of the overall record concerning the RFP language and policy matters associated with the RFP process, the AGS proposal is not responsive.

34. As alluded to before, PRC Exhibit No. 5 sets out the suggestions which AGS had in mind when it submitted its proposal. It calls them exceptions.

    
    

35. In Special Condition 2.08, the language of which is found at page 6, AGS has recommended insertion of additional language to the affect that:

    
    

    In the event the Department cancels for unappropriated funds this RFP or any contract entered into with Contractor pursuant thereto, the Department will, within 30 days of notification of such cancellation, pay Contractor for all work actually performed.

    Such payment shall be in accordance with the payment terms specified in the Contract between the Department and the Contractor.

    
    

    Similar language is contemplated as being added to Section 19.00 under the Contract Agreement which language in the Contract Agreement has been recited at page 11 in the recommended order. In describing the reasons for the suggested additional language AGS states that it is requiring assurance that if the RFP or any contract with DOT and AGS is cancelled because of a problem of funding, AGS insists on being paid for work that is actually performed. In furtherance of that arrangement it recommends insertion of the above-quoted language.

    
    

36. With respect to Special Condition 2.09, which is quoted at page 6 in this recommended order, AGS vies for cancellation after allowing AGS a reasonable opportunity to remedy the problems contemplated, instead of the right to cancel immediately. It recommends the insertion of additional language to the affect:

    
    

    In the event the Department intends to cancel a contract arising from the RFP due to Contractor's alleged failure to complete specified work in accordance with the provisions of the contract or this RFP, the Department shall notify Contractor of such intention, identifying the alleged deficiency, and allow the Contractor a period of 30 calendar days form the date of such notice to remedy the deficiency. In the event Contractor fails to remedy the deficiency within such 30 day period, the Department may cancel the contract effective immediately.

    
    

37. Related to Special Condition 6.01.02 dealing with indemnification, as related on page 8 in the recommended order, AGS states that it finds that the idea of indemnification associated with the sole negligence of the Department is not appropriate and would recommend that the word "sole" be substituted for by "or primary." A similar change is recommended for Section 14.00 under the Contract Agreement which has the same language as Special Condition 6.01.02.

    
    

38. In discussing Special Condition 6.01.03, the text of which is found at page 8 in the recommended order, AGS attempts to clarify that the one percent reference at special Condition 6.01.03 is in addition to the one percent total compensation for performance that is set out in Special Condition 6.01.02 by the insertion of additional language in Special Condition 6.01.03 in this way:

    Section 6.01.03 specifies that 1% of total compensation to the Contractor is the agreed compensation for performance by Contractor of the Indemnity Agreement set forth therein. AGS would like to make clear that this 1% is in addition to the 1% of total compensation for performance of the Indemnity Agreement set forth in Section 6.01.02. Accordingly, AGS recommends insertion of the following additional language in Section 6.01.03:

    `This 1% in addition to 1% of total compensation specified in Section 6.01.02 above.'

    
    

39. General Provision 5.07.02 is associated with the failure to the contractor to remove or renew defective materials and work, the text of which section is set out at page 9 of the recommended order. AGS expresses the belief that the contractor should be given a reasonable period of time to remove or renew before rights of the DOT are triggered. It recommends the insertion of language to the effect:

    
    

    The Department's rights under this Section shall be triggered only in the event Contractor fails to remove or renew defective material and/or work within a reasonable period of time from the date of request for such removal or renewal. Engineer and Contractor shall agree upon the duration of such time period on a case by case basis.

    
    

40. By remarks directed to General Provision 8.08 of the General Provisions related to the 10 day grace period to cure the defaults, AGS states its belief that 30 days is more reasonable and requests that the grace period be extended to 30 days.

    
    

41. In discussion of General Provision 8.09 dealing with the ability of the DOT to complete work after default, found at page 10 of the recommended order, AGS describes its belief that contract law and equitable considerations mandate that DOT is required to use its best efforts to mitigate damages and recommends insertion of the language to the effect:

    
    

    The Department shall use best efforts to mitigate damages in performing or arranging to have work performed as provided in this Section.

    
    

42. Discussion is made by AGS of General Provision 8.10, which is described at page 11 in the recommended order. AGS believes that the schedule of liquidated damages should discharge the contractors liability for acts or admissions unless the law requires otherwise. AGS commends insertion language to the effect:

    
    

    Except as otherwise provided by law, payment by Contractor of liquidated damages in accordance with this schedule shall fully discharge

    Contractor's liability for acts or omissions giving rise to such damages.

    
    

43. In discussing the Contract Agreement AGS requires the addition of a Section 22.00 which has this language:

    
    

    In no event will contractor be responsible for any special indirect, incidental or consequential damages resulting from loss of use or opportunity, data or profits arising out of or in connection with the use or performance of the products or services proposed to be delivered hereunder, even if contractor was informed, knew or should have known of the possibility of such damages. In no event will the liability of contractor in connection with the work proposed to be performed hereunder exceed amounts paid by the Department to contractor for such work. This limitation applies to all causes of action in the aggregate, including, without limitation, breach of contract, breach of warranty, negligence, strict liability and other unintentional torts.

    
    

44. Finally, under the Contract Agreement is found this comment by AGS wherein it says:

    
    

    AGS requires that the contract define the work AGS will perform. We have priced the work with the understanding that our Technical Proposal defines the work. If we will be required to do work not defined, we will be willing to review our price proposal.

    
    

45. In the provisions within the RFP that were referred to in the initial discussion of its terms, the offerors were given adequate opportunity to discuss and clarify those provisions which they did not understand or agree with.

    Absent success in the attempt to try to persuade DOT to change its position concerning those items within PRC 5 that AGS takes exception to, it had the ability to make a timely challenge to those terms and conditions. From the record, AGS did not attempt to persuade DOT to make changes nor did it pursue challenges to the terms and conditions excepted to. As a consequence, according to Special Condition 2.13, AGS has acquiesced in the terms and conditions.

    Absent a challenge within 72 hours of the date for submitting requested changes, which date according to PRC Exhibit No. 3 was November 28, 1988, no challenge may be pursued. To allow AGS to advance these recommendations and requirements set out in PRC 5 through the submission of its proposal, would be to condone a material departure from the requirements of the RFP. These items constitute other than minor irregularities which may not be waived. As described in Special Condition 2.04 these arrangements which AGS promotes could affect the price of the proposal and give the offeror an advantage over the other offerors, benefits not enjoyed by the competition. Of course Cubic sought similar advantage, so it is PRC who bore the brunt of these attempts by the competition. To allow AGS to require items or bargain for items in its favor that are not enjoyed by its competitors at a time beyond the acceptable place at which these adjustments could have been allowed or mandated by a decision honoring a

    challenge to the specifications, would be violative of Special Condition 2.13. It would also adversely impact the interest of the DOT described in Special Condition 2.04, in that the items which AGS would change are extremely important to DOT as a policy matter. These are items that DOT would not wish to surrender through negotiation. This speaks in particular to changes to Special Condition 2.08, General Condition 8.09, the addition of Section 22.00 under the Contract Agreement and the required deference to the technical proposals of AGS instead of the RFP. Moreover, under Special Condition 2.05 the AGS attempt constitutes a nonresponsive proposal in that it is a conditional proposal and is indefinite and ambiguous.

    
    

46. Under the scheme contemplated by the RFP, it would be inappropriate to wait until the time of intended contract award to AGS, as hypothetical winner, before making the final decisions on the recommendations that AGS had made to change the terms of the RFP. Regardless, in those instances which have been identified wherein AGS required a certain outcome associated with the RFP terms, this potential bargaining session is not contemplated and a decision on responsiveness would have to be reached without regard for such a bargaining session. In either event, whether referring to the recommended changes or required changes, AGS did not pursue these matters appropriately and they are items which are material, which may not be waived as minor irregularities and which cause the AGS bid to be unresponsive.

    
    

47. As generally described before, in the event changes are requested as contemplated by Special Condition 2.13, DOT determines if those changes are acceptable and to the extent that they are found to be acceptable they are incorporated as an addendum to the RFP, thus allowing all offerors the opportunity to submit proposals to the same controlling specifications. When AGS mandated a different set of requirements or requested them, it deprived the other offerors of the opportunity to submit proposals associated with the same specifications. This created an advantage and benefit for AGS not enjoyed by PRC.

    
    

48. In summary, none of the items that the first evaluation committee and the second evaluation committee discovered about the PRC proposal constituted other than minor irregularities. As described by Terry Cappellini, who is the Manager of the Office of Contractual Services for DOT, the PRC proposal is advantageous to the state in the sense of being the high technical low priced proposal.

    
    

    CONCLUSIONS OF LAW

    
    

49. The Division of Administrative Hearings has jurisdiction over the subject matter and the parties to this action in accordance with Section 120.53(5), Florida Statutes.

    
    

50. All parties have standing to participate consistent with the decision to allow limited participation by the Intervenor.

    
    

51. Section 287.001, Florida Statutes, establishes the legislative intent for procurement of commodities and contractual services. This RFP appropriates both. The statement of legislative intent speaks in terms of the need for fair and open competition in this procurement and the desire for the equitable and economical award of contracts. It talks about documentation of the efforts that agencies make in this endeavor as a means of curbing improprieties and establishing public confidence in the process. It describes the use of uniform procedures to be used by state agencies in managing and procuring contractual

    services. It talks in terms of the necessity of detailed justification for agency decisions in procuring contractual services. Finally, it mentions that agencies need to adhere to specific ethical considerations in these activities.

    
    

52. In lieu of the use of an invitation to bid, a state agency may promote competition in the procurement through the use of an RFP. This opportunity is described at Section 287.062(1)(e), Florida Statutes, where it says:

    
    

    When an agency determines in writing that the solicitation for competitive bids is not practicable or not advantageous to the state, commodities may be procured by requests for proposals. For commodities in excess of the threshold amount provided in s. 287.017 for CATEGORY FOUR, the determination shall be submitted to the division. To assure full understanding of and responsiveness to the requirements set forth in the request for proposals, discussions may be conducted with qualified offerors. The division shall assist in the discussion upon request from the agency. Qualified offerors shall be accorded fair and equal treatment with respect to any opportunity for discussion and revision of proposals prior to the submittal date specified in the request for proposals. The award shall be made to the responsible offeror whose proposal is determined to be the most advantageous to the state, taking into consideration price and the other evaluation criteria set forth in the request for proposals. The basis on which the award is made for commodities in excess of the threshold amount provided in s. 287.017 for CATEGORY FOUR shall be submitted in writing to the division.

    
    

53. The term "request for proposal" (RFP) is defined at Section 287.012(12), Florida Statutes.

    
    

54. The concept of the competitive bid is announced at Section 287.012(15), Florida Statutes, where the perception of a competitive offer is described as a circumstance in which two or more offers by responsive and qualified offerors are received. The concept of a responsive offeror is defined at Section 287.012(13), Florida Statutes. It speaks in terms of a person who has submitted a bid, taken to mean a proposal as well, which conforms in all material respects to the request for proposals. In the event that no competitive proposal for a commodity purchase is received, the Division of Purchasing within the State of Florida, Department of General Services may negotiate best terms and conditions for the purchase. See Section 287.062(2), Florida Statutes.

    
    

55. Section 287.012(10), Florida Statutes, defines "qualified offerors."

    
    

56. If it is a contract in which commodities are being acquired together with services, it is perceived as a commodities purchase as envisioned by Section 287.052, Florida Statutes.

57. In furtherance of the procurement process in Florida, the Division of Purchasing within the State of Florida, Department of General Services has a number of advisory and supervisory functions. Among those functions is the prescription of methods for securing competitive bids and proposal or negotiating and awarding commodity contracts. See Section 287.042(5), Florida Statutes. The Division is empowered to promulgate rules that are necessary to effectuate those purposes and to delegate to state agencies similar authority. See Section 287.042(13), Florida Statutes.

    
    

58. This RFP involves the procurement of information technology resources as defined at Section 287.073(1)(a), Florida Statutes. It contemplates the purchase of those resources through the use of an RFP. It therefore must conform to the requirements announced at Section 287.073(3), Florida Statutes, which state:

    
    

    When an agency determines that there are alternative means by which to meet the agency's requirements for information technology resources, that establishing precise specifications is not practicable, and that other evaluation criteria, in addition to price, will best meet the agency's requirements, the agency may solicit sealed proposals through a request for proposals, stating in writing the title, date, and hour of the public opening. A request for proposals may include, but is not limited to, general information, applicable laws and rules, functional or general specifications, a statement of work, proposal instruction, and evaluation criteria. Evaluation criteria may include, but are not limited to, cost factors, technological assessment, service assessment, reliability assessment, software compatibility, and benchmark performance. To assure full understanding of and responsiveness to the requirements set forth in the request for proposals, the agency may conduct discussions with qualified offerors. The division shall assist in such discussions upon the request of any agency. Qualified offerors shall be accorded fair and equal treatment with respect to any opportunity for discussion and revision of proposals prior to the submittal date specified in the request for proposals. A contract shall be awarded to the responsive offeror whose proposal is determined to be the most advantageous to the state, taking into consideration price and other evaluation criteria set forth in the request for proposals.

    
    

59. The purchase is made under the auspices of the Information Technology Resource Procurement Advisory Council, which duties are identified at Section 287.073(5), Florida Statutes. This overview commences prior to the issuance of the RFP. Among the council duties is the responsibility to adopt rules to establish standards for review of an agency's needs in the information

    technology resource area, examination of the proposed procurement specifications and the method of the acquisition and the necessary procedures to implement those guidelines. There is also created a review function by the Governor and Cabinet, sitting as the head of the State of Florida, Department of General Resources. Their obligation is to approve or disapprove the award of any contract for purchase of information technology resources that has been reviewed by the Information Technology Resource Procurement Advisory Council. See Section 287.073(8), Florida Statutes.

    
    

60. Some of the rules that have application to this process are set forth in Chapter 13A, Florida Administrative Code, rules of the Division of Purchasing within the State of Florida, Department of General Services. One of those rules defines the idea of a competitive offer at Rule 13A-1.001(12), Florida Administrative Code. It tracks the statutory concept that a competitive offer is constituted of two or more offers submitted by responsive and qualified offerors.

    
    

61. A valid proposal is defined at Rule 13A-.001(13), Florida Administrative Code, as:

    
    

    Valid Bid/Proposal -- A responsive offer in full compliance with the invitation to bid/ request for proposal specifications and conditions by a responsible person or firm. The responsiveness of a bid proposal shall be determined based on the documents submitted with the bid/proposal. The responsiveness of the bid or proposal and the qualifications or responsibility of the offeror will be determined as of the time the bid/proposals publicly opened.

    
    

    Of significance is the requirement that responsiveness be determined at the time that the proposal is publicly opened, not at some later date.

    
    

62. Rule 13A-1.001(22), Florida Administrative Code, refers to procurement of information technology resources. It identifies the necessity for review of a purchase such as envisioned by this RFP through the Information Technology Resource Procurement Advisory Council. This review takes place before the issuance of the RFP. The record does not reveal that the DOT failed in any fashion to comport with that requirement of review.

    
    

63. Rule 13A-1.001(23), Florida Administrative Code, is a reminder that procurement of information technology resources is reviewed by the advisory council pursuant to Section 287.073, Florida Statutes, and is subject to approval by the Governor and Cabinet as the head of the Department of General Services.

    
    

64. Rule 13A-1.001(30), Florida Administrative Code, discusses the method for procurement in the instance where no competitive proposals have been received as being an exceptional purchase. This relates to the negotiated purchase arrangement described at Section 287.062(2), Florida Statutes.

65. Rule 13A-1.001(35), Florida Administrative Code, defines the idea of a minor irregularity as:

    
    

    Minor Irregularity -- A variation from the invitation to bid/request for proposal terms and conditions which does not affect the price of the bid/proposal, or give the bidder or offeror an advantage or benefit not enjoyed by other bidders or offerors, or does not adversely impact the interests of the agency.

    
    

66. It can be seen that this definition has been incorporated into the terms and conditions of the RFP that were discussed in the fact-finding portion above.

    
    

67. Rule 13A-1.002(3), Florida Administrative Code, describes more completely the concept of procurement where no competitive proposals have been received, where it states:

    
    

    Receipt of No competitive Bids/Proposals, in the First Invitation to Bid/Request for Proposal on Commodities Exceeding the Threshold Amount for Category Two -- When no competitive bids/proposals are received for the purchase of a commodity or group of commodities exceeding the threshold amount for Category Two in the bid proposal solicitation, the agency shall review the situation in order to determine the reasons, if any, why no competitive bids/proposals were received before issuing a second invitation to bid/request for proposals; provided, however, if the agency determines that commodities are available only from a single source, or that conditions and circumstances warrant negotiation on the best terms and conditions, then the agency head may make a certification, in writing, using Exceptional Purchase Request/ Authorization/

    Certification Form PUR 7006 (Rev. 4/89), hereby incorporated by reference, as to the

    conditions and circumstances to the Division of Purchasing. In addition, a copy of the complete bid invitation or request for proposal, a copy of any bids/proposals received, along with a tabulation sheet noting "no bid/no proposal" responses, a list of vendors by name and address from whom bid

    invitations/proposals were solicited and a copy of the notice of intended award indicating no protest has been filed within the prescribed posting time or any protest filed has been resolved by final agency action, must accompany the certification. The Division may, in writing, authorize the purchase or negotiation or require issuance of a second invitation to bid or request for proposal. The Division's intended decision shall be posted within 21

    days after receipt or within 14 days after receipt of additional materials, if requested. Any person affected adversely by the Division's intended decision any protest in accordance with Rule 13A-1.006(3), F.A.C. Failure of the Division to approve or disapprove the request promptly after expiration of the time periods provided for protests by the statute or within the 21-day period (as extended by the 14-day period when applicable), whichever is later, shall constitute prior approval unless a protest is filed. If a protest is filed, the running of the 21-day and 14-day period is stopped until the protest is resolved by final agency action, subject to the provisions of Rule 13A-1.006(3), F.A.C.

    
    

    It makes it incumbent upon the DOT to review this situation and decide the reasons why no competitive proposals were received, if that circumstance exists. This review must be conducted before a second RFP is dispatched. It leaves the opportunity over to the agency to certify the procurement for negotiation upon the provision of certain information to the Division of Purchasing. If the Division of Purchasing is satisfied, it may authorize the purchase and negotiation or in the alternative, it may require the use of a second request for proposal. Again, this relates back to the idea of the negotiating activities of the Division of Purchasing described at Section 287.062(2), Florida Statutes.

    
    

68. Rule 13A-1.002(9), Florida Administrative Code, identifies an agency's right to reject proposals and reminds the agency that this must be identified in its advertising in a RFP. Here the potential offerors to the RFP were made aware of the opportunity of the DOT to reject proposals.

    
    

69. Rule 13A-1.002(10), Florida Administrative Code, speaks to the right of the DOT to waive the minor irregularities that it is also identified in the terms and conditions within the RFP.

    
    

70. As contemplated in Section 287.073(5), Florida Statutes, the Information Technology Resource Procurement Advisory Council has enacted certain rules. Rule 13N-1.003(1)(a)[3.], Florida Administrative Code, describes the method by which an agency must seek authority to negotiate with a single responsive offeror and refers back to the requirements of Rule 13A-1.002, Florida Administrative Code, that have been previously described. The Council reviews the intended purchase from a single responsive offeror and makes recommendations concerning that procurement before the agency submits the request to the Division of Purchasing within the State of Florida, Department of General Services for its actions under Rule 13A-1.002(3) and (4), Florida Administrative Code.

    
    

71. Rule 13N-1.004, Florida Administrative Code, speaks to the Council's procedures and requirements for review of an information technology resources procurement.. To the extent that those items had to be attended before submission of this procurement to be placed upon an agenda for approval by the Governor and Cabinet sitting as the State of Florida, Department of General Services, the record does not reveal that these requirements were not met.

72. Rule 13N-1.005(1), Florida Administrative Code, in pertinent part states:

    
    

    After the agency's completion of the evaluation process for the bids or proposals, the required posting of the attended reward, and the resolution of all protests, if any, the agency shall submit a written request to the Division of Purchasing to place the proposed acquisition on the Cabinet agenda. .

    
    

    In this case the evaluation process was completed and posting ran from 8:00 a.m. November 21, 1989, through 8:00 a.m. November 28, 1989. The posting having been achieved, this left open the possibility of protest. The Cubic protest was resolved by the Final Order of January 22, 1990. The absence of any further indication other than that set forth in PRC Exhibit 8, that the intent to award to PRC was contingent upon approval of the Governor and Cabinet as required by Section 287.073, Florida Statutes, and Rule 13N-1.005, Florida Administrative Code, did not make the January 22, 1990 decision incomplete. The housekeeping effort by DOT in which it placed that caveat in its disposition of the Cubic protest through the amended order of February 21, 1990, was retroactive in its term dating back to the substantive January 22, 1990 order.

    
    

73. Having concluded its procurement process and having decided to award to PRC, DOT no longer has jurisdiction in the process. The statutory scheme set out in Chapter 287, Florida Statutes, contemplates that an agency shall then refer its procurement for placement on the agenda of the Governor and Cabinet sitting as the head of the State of Florida, Department of General Services to examine and either approve or reject the purchase of information technology resources. This has been done and the issues remain pending before that body, in accordance with Section 287.073(8), Florida Statutes, and Rule 13N-1.005(2), Florida Administrative Code. Until that process has run its course the referring agency is without jurisdiction over this matter. Nothing in the statutes or rules contemplates concurrent jurisdiction while the proposed purchase undergoes scrutiny by the Governor and Cabinet. Furthermore, in administrative law terms, absent some specific provision in either statute or rule that confers the opportunity for rehearing, DOT may not re-examine its decision reached in the January 22, 1990 order. See Systems Management Associates, Inc. v. State, Department of Health and Rehabilitative Services, 391 So.2d 688 (Fla. 1st DCA 1980). That decision is as distinguished from Florida Department of Corrections v. Provin, 515 So.2d 302 (Fla. 1st DCA 1987) in which a provision on rehearing existed within the Department of Corrections' procedures.

    
    

74. The intended contract award to PRC was forwarded for action by the Governor and Cabinet through the February 7, 1990 request from the DOT sent to the Director of the Division of Purchasing of the Department of General Services, PRC Exhibit No. 1. Those impediments to the examination of the particulars of the PRC proposal have been removed with the dismissal of the appellate court action which attempted to prohibit an examination of the proposals' terms described in the fact-finding. In this posture the Governor and Cabinet may either approve or deny the request to award the contract to PRC.

    
    

75. There being no opportunity in law to reconvene the evaluation process beyond the January 22, 1990 order, those actions by DOT however well- intentioned, were ultra vires. The agency lost the ability to consider the substance of the proposals, to include the AGS proposal and its sufficiency.

    Thus, the Hearing Officer is without the authority to examine in law the matter of the AGS' responsiveness.

    
    

76. The agency could not reconvene the evaluation process sua sponte in response to Cubic's behind the scenes maneuvers which were unassociated with established procedures for resolving its concerns.

    
    

77. Under these circumstances the propriety of the DOT's decision to reject all proposals following the further evaluation by the second committee is not legally at issue and those opportunities envisioned by statutes, rules, the terms of the RFP, and the decision of the Department of Transportation vs. Groves Watkins, 530 So.2d 912 (FLA. 1988) are without relevance.

    
    

78. DOT's role will only be re-established in the event that its final order decision of January 22, 1990 is overturned by court opinion or upon the decision of the Governor and Cabinet in its disposition of the pending request to approve the contract award to PRC. Should court action mandate a further analysis of the responses to the RFP or arguably upon the request by the Governor and Cabinet to conduct an additional assessment, then DOT would be acting within its authority. Until such time, the actions it took which changed the intent to award to an intent to reject all proposals was unauthorized and without legal effect.

    
    

79. While the decision on January 22, 1990, does not constitute a contract award, it was final agency action which DOT may not recant. The flexibility afforded Okaloosa County in its reconsideration of its choice for its contractual award made at the same meeting in the case Berry v. Okaloosa County, 334 So.2d 349, (Fla. 1st DCA 1976) does not exist here. This situation is more analogous to the case of Dedmond v. Escambia County, 234 So.2d 758 (Fla. 1st DCA 1971) in which notification of selection in a contract process had been made and could not be overturned. Although the notification of a contract award must await the determination by the Governor and Cabinet, if it is their choice to approve this procurement from PRC, DOT has done all that it can in the interim. The DOT opportunity to take further action is contingent upon the decision to approve or disapprove the procurement.

    
    

80. In summary, it would be incorrect to examine the propriety of the agency choice to reconvene an evaluation committee and based upon the recommendation from the second evaluation group, to reject all proposals.

RECOMMENDATION

Based upon the Findings of Fact and the Conclusions of Law, it is, RECOMMENDED:

That a Final Order be entered leaving in place the final order dated January 22, 1990 as amended by the February 21, 1990 order, in which the decision was made to recommend the intended award of a contract to PRC to the Governor and Cabinet; which sets aside the decision to reject all proposals, takes the necessary action to arrange for the item to be agendaed before the Governor and Cabinet; and foregoes further action until the Governor and Cabinet has made its decision.

DONE and ENTERED this 22nd day of May, 1990, in Tallahassee, Florida.

CHARLES C. ADAMS, 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 22nd day of May, 1990.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 90-1583BID

The following discussion is given concerning the proposed facts of the parties.

Petitioner's Facts

Paragraph 1 Reference to a September 23, 1988 publication in the Florida Administrative Weekly is not necessary in that the start-up date of October, 1988 has been Established in the recommended order and that suffices. Otherwise this paragraph is subordinate to facts found.

Paragraphs 2 through 16 are subordinate to facts found.

Paragraphs 17 and 18 are not necessary to the resolution of the dispute. Paragraph 19 in its first and third sentence is subordinate to facts found.

The second sentence is not necessary to the resolution of the dispute.

Paragraphs 20 through 25 are subordinate to facts found. Paragraph 26 is contrary to facts found.

Paragraphs 27 through 31 are subordinate to facts found.

Paragraph 32 is subordinate to facts found except to the extent it suggests that the AGS proposal is responsive. In that way it is contrary to facts found.

Paragraph 33 is subordinate to facts found with the exception that the problem with the AGS proposal in its suggestive contract language were not answered by the review.

In Paragraph 34, the impression by the initial evaluation committee that the AGS problem areas could be worked out later was erroneous.

The discussion in Paragraphs 35 through 39 concerning the ability of the agency to reconcile the problems with the change to the specified contract language and conditions contained within the RFP does not comport with the facts in the recommended order. The idea of default by an awardee and collection of the bid bond does not come into play because there is no opportunity to wait that long before resolving the issue of responsiveness of the offer concerning those contract terms and conditions set forth in the RFP.

Paragraph 40 is subordinate to facts found.

Concerning Paragraph 41, notwithstanding the fact that the agency has no specific policy about indemnification language, if an offeror wanted to modify the suggested language within the contracts and conditions found in the RFP it had to do so in accordance with the discussion in the recommended order.

Concerning Paragraph 42, even though there is no definitional statement of what an additional proposal may be, this does not preclude the opportunity to examine that issue on a case by case basis. That was done here.

The suggestion by Paragraph 43 that the proposed section 22.00 is other than part of a conditional proposal by AGS is rejected, as is the notion that this language in the proposed section 22.00, described by AGS as required, can be rejected at the time of a contract execution with AGS. It would be inappropriate to wait that long to decide the issue of the acceptability of that proposed section 22.00. That arrangement is not in keeping with the discussion in the recommended order.

Paragraph 44 is accepted with the exception that AGS and the DOT could not consider contract changes at the time of potential contract award to AGS.

Paragraphs 45 through 48 are subordinate to facts found. Paragraph 49 is contrary to facts found.

Paragraphs 50 through 52 are subordinate to facts found.

Concerning Paragraph 53, the only thing unique about the Cubic circumstance is its prior participation in the process.

Paragraphs 54 through 56 are subordinate to facts found.

Paragraph 57 is subordinate to facts found with the exception of the significance of the failure of the second evaluation team to appreciate that the first evaluation team had some knowledge of the problems of the AGS proposal. A clear impression of what was done by the first evaluation team would not appear to have promoted a different result in the analysis made by the second evaluation team.

Paragraphs 58 through 60 are subordinate to facts found.

Paragraph 61 is contrary to the impression described in the recommended order, in that both Cubic and AGS were unresponsive. The suggestion in Paragraph 62 that a complete evaluation of the technical matters would have caused a different impression of the problems with the AGS proposal is not accepted.

Paragraphs 63 through 65 are contrary to facts found. Respondent's Facts

These facts are subordinate to facts found. Intervenor's Facts

Paragraphs 1 through 21 are subordinate to facts found.

Paragraph 22 in the sense of suggesting immediate availability of John Berry to advise the first evaluation committee is not an accurate portrayal and it is that immediate advice which became significant in this case. That advise was provided by Woody Lawson.

Paragraph 23 is not necessary to the resolution of the dispute.

Paragraphs 24 through 27 are subordinate to facts found. It is accepted that the original evaluation committee perceived the AGS proposed addition of section 22.00 in the Contract Agreement as a recommendation; however, the more pertinent concern was the overall attitude of the first evaluation committee and its actions pertaining to the entire set of issues that were described in PRC 5.

Paragraphs 25 and 30 are subordinate to facts found.

Paragraph 31 is accepted wherein it describes the lack of contact with the DOT legal office. It is not accepted where it suggests that there was not contact with the purchasing office as having any significance. It sufficed to contact the contractual services office for advice without resort to discussions with the purchasing office.

Paragraphs 32 through 43 are subordinate to facts found.

Concerning Paragraph 44 it is not considered unusual that in the posting of the proposals, there rating and the statement of intended contract award that mention would be made of the decision being contingent upon approval of the Governor and Cabinet.

Paragraphs 45 through 52 are subordinate to facts found.

Paragraph 53 is incomplete in its depiction of the reasons for the request of Watts to reevaluate responsiveness. A more complete explanation is set forth in the recommended order.

Paragraphs 54 through 61 are subordinate to facts found. Paragraph 62 is not necessary to the resolution of the dispute. Paragraphs 63 through 76 are subordinate to facts found.

Paragraph 77 is contrary to the impression of what Secretary Watts concluded. The impression given and found as fact in the recommended order is that his principal concern with the activities of the first evaluation committee were those associated with the failure to ascertain the problems with the AGS proposal. In determining responsiveness the steps for that determination were identified in the RFP as being offeror qualification, responsibilities of the technical proposal, price responsiveness, followed by decision in a comparison of those offerors who had met those first three requirements. In that sense as described in the recommended order declarations regarding Cubic's responsiveness were not dependent on the impression of AGS and the declaration of non- responsiveness of AGS was not dependent on the treatment of Cubic. To the extent that Cubic by the report of those suggested facts is trying to describe some perceived unfairness in the treatment that Cubic received by either evaluation committee or anything that was done in the process in the review of Cubic's proposal, it is rejected as an inferential fact.

Paragraph 78 is rejected for reasons as stated above. Paragraph 79 is subordinate to facts found.

Paragraph 80 is not necessary to the resolution of the dispute.

Paragraphs 81 and 82 are subordinate to facts found.

Paragraph 83 is not necessary to the resolution of the dispute.

Paragraph 84 is subordinate to facts found with the exception of the statement by Secretary Watts with the ability to reject a contract award once it had been made. That circumstance does not exist here and is not reported factually.

Paragraph 85 is not necessary to the resolution of the dispute.

Paragraphs 86 and 87 are subordinate to facts found.

Paragraph 88 is rejected to the extent that it suggests that Secretary Watts could not defend the award to PRC. More properly stated he chose not to defend an award to PRC.

Paragraphs 89 through 92 are subordinate to facts found.

Paragraph 93 is rejected for reasons described in discussion of Paragraph

77.

Paragraphs 94 through 97 are subordinate to facts found.

Paragraph 98 is envisioned by the overall facts found in the recommended

order.

While the facts suggested in Paragraph 99 are acknowledged, they are not found to be necessary factual findings for the recommended order.

Paragraphs 100 and 101 are subordinate to facts found.

COPIES FURNISHED:

Ben G. Watts, Secretary Department of Transportation Haydon Burns Building, M.S.-58 605 Suwannee Street

Tallahassee, FL 32399-0458

Deborah A. Getzoff, Esquire Hala Ayoub, Esquire

Richard C. Bellak, Esquire Fowler, White, Gillen, Boggs,

Villareal and Banker, P.A.

101 North Monroe Street Tallahassee, FL 32301

Paul J. Martin, Esquire Susan P. Stephens, Esquire Department of Transportation

Haydon Burns Building, M.S.-58 605 Suwannee Street

Tallahassee, FL 32399-0458

Frank A. Shepherd, Esquire Gary M. Pappas, Esquire Popham, Haik, Schnobrich and

Kaufman, Ltd.

4100 One CenTrust Financial Center

100 Southeast Second Street Miami, FL 33131

Docket for Case No: 90-001583BID

Orders for Case No: 90-001583BID