STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CABER SYSTEMS, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 90-3517BID

) DEPARTMENT OF GENERAL SERVICES, )

)

Respondent, )

and )

)

GA Computer Products, )

)

Intervenor. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Don W. Davis, held a formal hearing in the above- styled case on June 19, 1990, in Tallahassee, Florida.

APPEARANCES

For Petitioner: Thomas F. Morante, Esquire

One Biscayne Tower

Two South Biscayne Boulevard, Suite 3750 Miami, Florida 33131

For Respondent: Susan Kirkland, Esquire

Jim Bennett, Esquire Office of General Counsel

Department of General Services Suite 309 Knight Building

2737 Centerview Drive

Tallahassee, Florida 32399-0950

For Intervenor: Lowell L. Garrett, Esquire

Nancy A. Copperthwaite 5300 Southeast Financia

200 South Biscayne Boulevard Miami, Florida 33131

STATEMENT OF THE ISSUES

The primary issue for determination is whether the bid of Intervenor, in response to Respondent's invitation to bid, is non-responsive. Secondary issues to be resolved include Petitioner's legal standing to protest all recommended awards to Intervenor in all the bid's categories where intervenor was deemed the successful bidder; whether Intervenor is an operational division of a corporation authorized to conduct business within the State of Florida; whether

Intervenor satisfied bid requirements for submission of a valid manufacturer's certificate; and whether intervenor satisfied bid requirements involving identification of a service coordinator and provision of a list of service representatives in the State of Florida for the computer equipment which is the subject of the bid.

PRELIMINARY STATEMENT

On May 7, 1990, Respondent posted the results of bid tabulations of the responses received to its Invitation to Bid for microcomputers. Subsequently, Petitioner timely filed a notice of protest and formal written protest.

Thereafter the matter was transferred to the Division Of Administrative Hearings for conduct of a formal administrative hearing pursuant to Section 120.57(1), Florida Statutes.

At the final hearing, Petitioner presented the testimony of two witnesses and three evidentiary exhibits. Testimony of one witness and nine evidentiary exhibits were presented on behalf ofIntervenor. Respondent presented three evidentiary exhibits and testimony of one witness.

A transcript of the final hearing was filed with the Division Of Administrative Hearings on July 9, 1990. Proposed findings of fact were submitted by the parties and are addressed in the appendix to this recommended order.

Ruling was reserved by the hearing officer upon the motion of Respondent and Intervenor to jointly adopt and introduce, over Petitioner's objection, three exhibits identified by Petitioner at the final hearing. The motion is now granted and this ruling is further addressed in the conclusions of law portion of this recommended order.

FINDINGS OF FACT

1. Respondent issued an Invitation To Bid (ITB) for microcomputers, Bid No. 129-250-040-B, on February 19, 1990. The ITB was revised by a March 22, 1990 addendum which established April 9, 1990, as the date for opening bid responses with bid tabulations to be posted on May 7, 1990.

   
   

2. The purpose of the ITB was to establish a twenty-four (24) month contract for the purchase of microcomputers and equipment by all State of Florida agencies and other eligible users. Political subdivisions of the State of Florida, as well as state universities, could exercise the option of purchasing from the contract, if they so desired.

   
   

3. The ITB invited bids in several categories of microcomputer equipment. Petitioner's timely filed written protestaddresses 17 of those categories where Intervenor was determined by Respondent to be the successful bidder. Those categories are numbered 255, 256, 257, 258, 259, 260, 266, 267, 268, 269, 271, 272, 273, 275, 276, 277, and 278. However, the bid tabulation posted by Respondent on May 7, 1990, establishes that Petitioner was the next lowest bidder in only four of the 17 categories. Those four categories are 266, 267, 268, and 269.

   
   

4. In accordance with Paragraph 13 of the ITB general conditions, all corporations responding to the ITB were required to be registered with the Florida Department of State and authorized to transact business in the state in accordance with requirements of Chapter 607, Florida Statutes. Further, such

   bidders were required to insert their corporate charter number, resulting from that registration, in the appropriate space in the bidder acknowledgement form provided by Respondent for inclusion in responses to the ITB.

   
   

5. Intervenor provided the Department of State Corporate Charter No. 822327 in the bidder acknowledgement form submitted with its response to the ITB. That charter number is assigned by the Department of State to VGC Corporation d/b/a VGC Corporation of Delaware, a corporation organized under laws of Delaware and authorized to transact business in the State of Florida since 1969.

   
   

6. Intervenor mistakenly listed, in its bid, the federal employment identification (FEID) number of another subsidiary corporation of VGC Corporation (VGC). The FEID number submitted by intervenor was that of Graphic Arts Supply, Inc., (GAS), acquired by VGC in December of 1986. GAS became a wholly owned subsidiary of VGC at that time and remains such at the present time.

   
   

7. At the time of its acquisition, there existed within GAS a particular segment of that business which dealt primarily with computer products. This computer segment of GAS was set up by VGC as a separate division of the parent corporation in November, 1988. The formation of the new division within VGC was announced at that time by the VGC president in an interoffice memorandum which stated in pertinent part:

   
   

   The Computer Products Group of Graphic Arts Supply has grown significantly in the last several years, accounting for approximately 10% of the total corporation's sales. The growth opportunities in this area are enormous and our long term goal is to become one of the major material distributors of computer products in the United States. Accordingly, I am pleased to announce that we will make this operation a separate division, reporting to Tom Mclaughlin.

   
   

8. At the time of the issuance of the November 1988 interoffice memorandum, Tom Mclaughlin was a vice-president and subsidiary manager of VGC corporation. Another individual, Pat Mclaughlin, was a VGC vice-president and general manager of the new division, the intervenor in this cause.

   
   

9. Another memorandum issued by the VGC president on September 14, 1989, further emphasized that VGC's Business Systems Division, which is also intervenor, was an operating division of VGC. That memorandum stated that the company comprising the Business Systems Division was known as "GA Computer Systems" and further provided in pertinent part that:

   
   

   The Business System Division is an operating unit and not a subsidiary. The Business Systems Division relies on VGC-Rochester for financial and administrative support, and VGC-Florida for all other support and reporting.

   
   

10. On the date of Intervenor's response to the ITB, GAS and Intervenor continued to maintain a business relationship. Pursuant to that relationship, GAS provides certain administrative services to Intervenor in the form of certain record keeping and payment of various taxes in the state of New York. Intervenor pays a fee to GAS for these services.

11. Other administrative functions, such as federal and state tax return preparation, are performed by VGC-Rochester and VGC-Florida, other components of VGC.

    
    

12. Intervenor's response to the ITB was submitted and signed by John J. Piseck, an employee of VGC who serves as the eastern regional sales manager for Intervenor's computer products.

    
    

13. Another of the ITB's general conditions requires that bids from non manufacturers to provide microcomputers must be accompanied by a certification from the manufacturer that the bidder is an authorized representative of the manufacturer. The certification submitted by Intervenor with its bid response was executed by a representative of Hewlett-Packard Corporation, the computer manufacturer, certifying that GA Computer Products is an authorized dealer/representative.

    
    

14. On the date of Intervenor's response to the ITB, adealer/representative contract existed between Intervenor and Hewelett-Packard. The agreement was signed on Intervenor's behalf by Patrick Mclaughlin, VGC vice- president and general manager of Intervenor.

    
    

15. Page 12 of the ITB special conditions provides in pertinent part that:

    
    

    The bidder shall name a service coordinator and provide a complete list of in-state representatives, and manufacturer's authorized service repair centers on page 19 as part of the bid response.

    
    

16. In the course of fulfilling its responsibility to evaluate each vendor's response to the ITB, Respondent accepted either a list of the bidders' own in-state representatives or a list of the manufacturer's in-state representatives as meeting this service requirement of the ITB. Respondent does not, and is not required to, verify information supplied by vendors relating to service locations.

    
    

17. Intervenor has fully complied with the ITB requirement relating to naming a service coordinator and providing a list of service representatives and repair centers. Specifically, Intervenor named one of its employees as the service coordinator, provided a toll-free telephone number for communication with the coordinator, and listed five Hewlett-Packard service locations within the State of Florida. These service locations honor the warranties of the manufacturer, Hewlett-Packard, without regard to which Hewlett-Packard dealer sold the product.

    
    

18. Intervenor was responsive in all material respects to Respondent's ITB No. 129-250-040-B.

    
    

    CONCLUSIONS OF LAW

    
    

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

    
    

20. Petitioner's objection to the ore tenus motion of Intervenor and Respondent to the adoption and submission into evidence of three exhibits identified by Petitioner at the final hearing is over ruled and the motion is granted. While the exhibits constitute hearsay evidence, their contents

    corroborate other non hearsay evidence admitted in the course of final hearing. Spicer v. Metropolitan Dade County, 458 So.2d 792 (Fla. 3rd DCA 1984).

    
    

21. The proof establishes that Petitioner has standing to contest only those four categories of the bid award numbered 266, 267, 268, and 269. Since Petitioner is not the second lowest bidder in the remaining thirteen categories originally contested, Petitioner does not have standing to protest the award in those categories. See, Preston Carroll Company v. Florida Keys Aqueduct Authority, 400 So.2d 524 (Fla. 3rd DCA 1981).

    
    

22. Petitioner bears the burden of establishing its entitlement to the relief sought in this proceeding. Florida Department of Transportation v. J. W.

    C. Company, Inc., 396 So.2d 778 (Fla. 1st DCA 1981). The affirmative of those issues raised by Petitioner in its Formal Written Protest and Amended FormalProtest must be supported by a preponderance of the evidence. Agrico Chemical Co. v. State Department of Environmental Regulation, 365 So.2d 759 (Fla. 1st DCA 1979), cert. den. 376 So.2d 74.

    
    

23. Evidence presented by Intervenor at the final hearing conclusively establishes that it is an operating division of VGC and has been such since November of 1988. Intervenor is thereby authorized to utilize the Department of State Corporate Charter Number of VGC in its response to the ITB.

    
    

24. Petitioner places great weight on Intervenor's mistaken use of GAS' FEID number in the ITB response and the continued business contact between the two entities. Such a mistake should be considered a minor irregularity and correction permitted. Such action would not affect the price of the bid. Further, Intervenor would receive no advantage or benefit not enjoyed by other bidders, and such correction would not adversely impact Respondent's interests. See, Tropabest Foods, Inc. v. State Dep't of Gen. Servs., 493 So.2d 50 (Fla. 1st DCA 1986).

    
    

25. Alternatively, even if the weight of the evidence permitted the conclusion that Intervenor and GAS were the same entity, the failure of GAS to be properly qualified to do business in the state of Florida should not, alone, be deemed fatal to that bid until GAS is actually doing business in the state. See, Marinair Freight Forward, Inc., v. Florida Department of Commerce, 419 So.2d 1136 (Fla. 1st DCA 1982).

    
    

26. Respondent's ITB required that responding bidders submit a valid manufacturer's certificate. Petitioner's argument that the certificate presented by Intervenor applies only to Intervenor and not to VGC, is not persuasive. Petitioner presented no evidence in support of that position. Intervenor, on the other hand, presented uncontroverted evidence that Intervenor, GA Computer Products, had an agreement, signed by a vice president of VGC, with the manufacturer making Intervenor an authorized dealer for Hewlett-Packard computers. Uncontradicted testimony is proof of a contested issue. Merrill Stevens Dry Dock Company v. G & J Investment Corporation, Inc., 506 So.2d 30 (Fla. 3d DCA 1987).

    
    

27. Intervenor also complied with ITB requirements that bidders name a service coordinator and provide a list of in-state representatives and manufacturer's authorized repair centers. Respondent's interpretation of this condition of the ITB permits bidders to provide either a list of their own in- state representatives or a list of manufacturer's in-state representatives.

    Intervenor fully complied with this requirement by naming a service coordinator employed by VGC and providing addresses of five in-state manufacturer service locations.

    
    

28. Competitive bidding situations require that strong deference be accorded the agency's decision, absent special circumstances of fraud, illegality, or arbitrary agency action. Respondent has not acted fraudulently, arbitrarily, illegally or dishonestly. Department of Transportation v. Groves- Watkins Constructors, 530 So.2d 912 (Fla. 1988). Petitioner's claims should be denied.

RECOMMENDATION

Based on the foregoing, it is hereby

RECOMMENDED that upon Intervenor's submission of a corrected FEID number, a Final Order be entered denying Petitioner's claims and confirming the award of the contested 17 categories of Respondent's ITB No. 129-250-040-B to GA Computer Products, a division of VGC Corporation.

DONE AND ENTERED this 23rd day of July, 1990, in Tallahassee, Leon County, Florida.

DON W.DAVIS

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 23rd day of July, 1990.

APPENDIX

The following constitutes my specific rulings, in accordance with Section 120.59, Florida Statutes, on findings of fact submitted by the parties.

Petitioner's Proposed Findings.

Petitioner's proposed findings consisted of 32 pages encompassing unnumbered paragraphs dealing with an intertwined mixture of legal conclusions, argument and proposed factual findings. Therefore, Petitioner's submission cannot be treated by the Hearing Officer in this appendix on an individualized basis for each proposed finding. However, Petitioner's submission has been reviewed and addressed, where possible, by the findings of fact set forth in this recommended order. Otherwise, all disputed issues of material fact have been addressed by the evidence adduced at the hearing held in this cause.

Intervenor's Proposed Findings.

1.-32. Adopted in substance.

Respondent's Proposed Findings.

1.-2. Adopted in substance. 3.-4. Rejected, unnecessary. 5.-24. Adopted in substance. 25.-27. Rejected, unnecessary.

28. Adopted in substance.

COPIES FURNISHED:

Thomas F. Morante, Esq. One Biscayne Tower Suite 3750

Two S. Biscayne Boulevard Miami, FL 33131

Susan Kirkland, Esq.

Jim Bennett, Esq.

Office of General Counsel Department of General Services Suite 309 Knight Building

2737 Centerview Drive Koger Executive Center Tallahassee, FL 32399-0950

Lowell L. Garrett, Esq.

5300 Southeast Financial Center

200 S. Biscayne Boulevard Miami, FL 33131

Ronald W. Thomas Executive Director Knight Building

Koger Executive Center 2737 Centerview Drive

Tallahassee, FL 32399-0950

Docket for Case No: 90-003517BID

Orders for Case No: 90-003517BID