STATE OF FLORIDA DIVISION OF ADMINISTRATIVE HEARINGS

LAND-O-SUN DAIRIES, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 90-3702BID

)

) PALM BEACH COUNTY SCHOOL ) BOARD, )

)

Respondent, )

)

and )

) JOHN HART DISTRIBUTORS, INC., )

)

Intervenor. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, J. Stephen Menton, held a formal hearing in the above-styled case on July 3, 1990, in West Palm Beach, Florida.

APPEARANCES

For Petitioner: Alex Ferrer, Esquire

Arnold Shevin, Esquire STROOCK, STROOCK and LAVAN

Southeast Financial Center

200 South Biscayne Boulevard Suite 3300

Miami, Florida 33131-2385

For Respondent: Abbey G. Hariston, Esquire

School Board of Palm Beach County 3970 RCA Boulevard, Suite 7010 Palm Beach Gardens, Florida 33410

For Intervenor: James D. Wilkerson, Jr., Esquire

SCHULER, WILKERSON & HALVORSON, P.A.

The Barristers Building 1615 Forum Place, Suite 4D

West Palm Beach, Florida 33401 STATEMENT OF THE ISSUES

The issue in this case is whether the Respondent, Palm Beach County School Board ("School Board") should award the contract for supplying milk, and milk products (Item 1 of Invitation to Bid 91C-5R) for the period June 15, 1990, through June 16, 1991, to Petitioner, Land-O-Sun Dairies Inc. ("Land-O-Sun"), the low bidder for the contract, or whether Land-O-Sun's bid should be rejected and the contract awarded to Intervenor, John Hart Distributors, Inc., ("John Hart") based on the assertion that Land-O-Sun has been convicted of a public entity crime.

PRELIMINARY STATEMENT

On June 4, 1990, the general counsel for the School Board sent a letter to all vendors who bid on the contract to provide milk, milkshake mix and fruit juices pursuant to a bid solicitation dated February 21, 1990 (the "Invitation to Bid"). That letter advised the bidders that the School Board's Superintendent of Schools intended to recommend that the contract for Item 1 of the Invitation to Bid be awarded to John Hart. In the letter, the School Board advised unsuccessful bidders including Land- O-Sun, that they had seven days from the date of the receipt of the letter to file a written request for an administrative hearing on the matter. By letter dated June 11, 1990, Land-O-Sun requested a hearing within the time frame set forth in the School Board's June 4, 1990 letter. The case was referred to the Division of Administrative Hearings to conduct a formal administrative hearing in accordance with the provisions of Section 120.53(5), Florida Statutes. The hearing was noticed and conducted on July 3, 1990.

Prior to the commencement of the hearing, John Hart filed a Petition For Leave To Intervene on June 27, 1990. In addition, John Hart also filed a Motion To Dismiss on the grounds that Land-O-Sun did not file its notice of protest and/or formal written protest within the time frame set forth in Section 120.53(5)(b), Florida Statutes.

At the commencement of the hearing, both the School Board and Land- O-Sun consented to the Petition To Intervene. Therefore, the Petition was granted and John Hart was offered party status in this proceeding. Land- O-Sun filed a written response in opposition to the Motion To Dismiss.

The School Board also filed a written response objecting to the Motion To Dismiss and requesting that the hearing proceed in order to provide the School Board with guidance in the form of a recommended order regarding the award of this contact. After reviewing the Motion and the responses thereto, hearing argument of counsel and being advised as to the facts surrounding the June 4, 1990 letter sent by the School Board and the Request For Hearing dated June 11, 1990 by Land-O-Sun, the Motion To Dismiss was denied and the hearing proceeded as scheduled. The legal issues raised in the Motion to Dismiss are discussed in the Conclusions of Law section of this Recommended Order.

At the hearing, Petitioner presented the testimony of Brian Kelly, who is a vice-president, general counsel and secretary of Finevest Foods, Inc. (the parent company of Land-O-Sun), and also secretary of Land-O- Sun. Petitioner also presented the testimony of Patricia Paige, who is an administrative assistant at the Rivera Beach, Florida plant of Land-O- Sun. Petitioner offered ten exhibits into evidence, all of which were

accepted. Petitioner's Exhibits 7 and 9 were accepted subject to an objection regarding the hearsay contents of those documents. Respondent presented the testimony of three witnesses: Doris Rowe, a buyer with the School Board; Richard Chuma, the Assistant Director of Purchasing for the School Board; and Betty Helser, the Director of Purchasing for the School Board. Respondent offered six exhibits into evidence, all of which were accepted. The Intervenor presented the testimony of one witness, John Hart, who is the president of the company. The Intervenor offered four exhibits into evidence, all of which were accepted.

At the request of the School Board and without objection from the other parties, official recognition has been taken of Sections 120.53(5), 120.57, 287.132 and 287.133, Florida Statutes (1989) and Rule 6A-1.012, Florida Administrative Code.

A transcript of the proceedings has been filed. Each of the parties has timely submitted a proposed recommended order including proposed findings of fact and conclusions of law. A ruling on each of the proposed findings of facts submitted by the parties is included in the Appendix attached this Recommended Order.

FINDINGS OF FACT

1. Pursuant to an Invitation to Bid issued by the Respondent, Palm Beach County School Board ("School Board") dated February 21, 1990, the School Board solicited bid proposals for the award of contracts to supply the schools under the School Board's jurisdiction with three separate items: milk and milk products, milkshake mix, and juice products. The contracts were to cover the period June 16, 1990 through July 15, 1991.

   
   

2. The award of the contracts for two of the three items included in the Invitation for Bid, milkshake mix and juice products, are not at issue in this proceeding. (For purposes of the Recommended Order, references to the "Contract" refer only the proposed award of a contract for Item 1 of the Invitation to Bid.)

   
   

3. Petitioner, Land-O-Sun Dairies, Inc. ("Land-O-Sun") and Intervenor, John Hart Distributors, Inc. ("John Hart") submitted bids pursuant to the Invitation to Bid.

   
   

4. The bid opening took place on March 21, 1990.

   
   

5. The School Board posted the bid tabulations on April 9, 1990.

   
   

6. The bid tabulation along with the recommendation to award the contract to the lowest bidder, Land-O-Sun, was scheduled to go before the School Board for final action at its May 2, 1990 meeting. However, prior to presentation to the School Board for award of the contract, the bid tabulation was "pulled".

   
   

7. Within seventy-two hours of posting the bid tabulations, the School Board's Department of Purchasing advised the School's Board Department of School Food Services that it had some concerns regarding milk delivery by the Petitioner, who was the apparent low bidder for the

   contract. As a result, the School Board's Department of Purchasing "pulled" the bid posting in order to review those concerns.

   
   

8. By letter dated April 10, 1990, John Hart expressed dissatisfaction with the School Board's decision to award a separate contract for each of the three items contained in the Invitation of Bid. John Hart also expressed a concern that some of the low bidders did not meet the qualifications in Paragraph Q of the Invitation of Bid. The School Board did not consider this April 10, 1990 letter to be a formal protest under Section 120.53, Florida Statutes because it did not contain the specificity required under the statute and also because the bid tabulations was "pulled" within seventy-two hours after posting.

   
   

9. After representatives from the School Board's Department of Purchasing met with Land-O-Sun's representatives and resolved the concerns, the School Board decided to re-post the bid tabulation.

   
   

10. The bid tabulation was posted for a second time on May 16, 1990.

    
    

11. The bid tabulation posted on May 16, 1990 indicated an intent on the part of the Superintendent of Schools to recommend the award of the contract for Item 1 under the Invitation to Bid to Land-O-Sun, the low bidder for that item.

    
    

12. Subsequent to the second posting, John Hart submitted an affidavit to the School Board affirming that it had not been convicted of a public entity crime as defined in Section 287.133(1), Florida Statutes. That affidavit was not included with the initial bid package submitted by John Hart.

    
    

13. John Hart contacted certain representatives of the School Board and advised them that the other bidders for the contract would not be able to truthfully submit a similar affidavit.

    
    

14. The bid form specifically stated that, by signing the bid form, each of the bidders certified that they had not been convicted of a public entity crime. However, none of the bid packages included an affidavit specifically attesting to lack of conviction of a public entity crime.

    
    

15. Paragraph Q of the Invitation to Bid ("Paragraph Q") provides as follows:

    
    

    Q. PUBLIC ENTITY CRIMES: Bidder by virtue of bidding and signature on page one (1) of Invitation to Bid: Authorized Signature (Manual), certifies that they have not been convicted of a public entity crime as defined in Section 287.133 of the Florida State Statutes. A public entity crime as defined in Section 287.133 of the Florida State Statutes includes a violation of any state or federal law by a person with respect to and directly related to the transaction of business with any public entity in Florida or with an agency or political subdivision of any other state or with the

    United States, including, but not limited to, any bid or contract for goods or services to be provided to any public entity or such agency or political subdivision and involving antitrust, fraud, theft, bribery, collusion, racketeering, conspiracy or material misrepresentation. In addition, bidders certify that they have not been suspended and/or debarred from Federal Programs per Executive Order 12549 of February 18, 1986.

    
    

    Thus, pursuant to Paragraph Q, persons or entities "convicted of a public entity crime" as defined in Section 287.133, Florida Statutes or debarred/suspended from federal programs pursuant to Executive Order 12549 of February 18, 1986 were excluded from the bidding process and not eligible to bid.

    
    

16. Within seventy-two hours of the posting of the bid tabulation, on May 16, 1990 the posting was "pulled" because of the allegations made by John Hart that the other bidders could not provide an affidavit verifying that they had not been convicted of a public entity crime.

    
    

17. After John Hart suggested to School Board officials that the other bidders did not meet the requirements of Paragraph Q, counsel for the School Board contacted the other bidders and requested them to submit affidavits verifying that they had not been convicted of a public entity crime.

    
    

18. In response to the request from the School Board's attorney, Land-O-Sun filed an affidavit which was signed by Mary Callahan on behalf of Land-O-Sun on May 16, 1990. The notary certificate for that affidavit is dated May 15, 1990. However, the evidence estabished that the affidavit was actually executed in the presence of the notary on May 16, 1990. That affidavit was executed after consultation with the general counsel for the company, Brian Kelly, who determined that Land-O-Sun should indicate affirmatively in the affidavit that it had been charged and convicted of a public entity crime as defined in Chapter 287 of the Florida Statutes but that it had not been placed on Florida's convicted vendor list. Attached to the affidavit was an explanation of the circumstances surrounding the conviction.

    
    

19. Subsequent to the time that the affidavit was submitted to the School Board, Mr. Kelly has reviewed Chapter 287, Florida Statutes and has concluded that, in his opinion, Land-O-Sun has not been convicted of a public entity crime as defined therein since Land-O-Sun was not charged with the crime prior to July 1, 1989. Therefore, Mr. Kelly believes that he erroneously instructed the Land-O-Sun employees to affirmatively indicate on the affidavit that Land-O-Sun had been convicted of a public entity crime.

    
    

20. After receipt of the executed affidavits from the various bidders, the bid results were again posted on May 23, 1990 indicating an intent on the part of the School Board's Department of Purchasing to recommend the award of the contract to the low bidder, Land-O-Sun. Subsequent to the May 23 posting of the bid tabulation, John Hart timely

    submitted a written Notice of Protest on May 25, 1990. That Notice of Protest objected to the award of the contract to Land-O-Sun on the grounds that Land-O-Sun was not a qualified bidder under the terms of the Invitation to Bid.

    
    

21. On June 1, 1990, an informal hearing was held between representatives of the School Board and John Hart to discuss the bid protest. (This June 1, 1990 hearing will referred to as the "Informal Hearing.") Land-O-Sun was not notified of the June 1, 1990 Informal Hearing and was not present during that hearing.

    
    

22. At the Informal Hearing, John Hart provided the School Board representatives with information regarding a guilty plea entered by Land- O-Sun to a charge of an antitrust violation of price rigging in connection with a contract to provide milk and milk products to the School Board of Pinellas County between August, 1985 and August, 1986. John Hart also provided the School Board representatives with information indicating Land-O-Sun had been placed on a list of vendors prohibited from doing business with the federal government.

    
    

23. Based upon the information presented by John Hart at the June 1, 1990 Informal Hearing, the general counsel for the School Board sent a letter dated June 4, 1990 to all bidders advising them that the Superintendent of Schools intended to recommend rejection of the bid submitted by Land-O-Sun for Item 1 and to recommend award of the contract for that item to John Hart. The parties were advised that they could contest this recommendation by filing a written request for an administrative hearing within seven days from the date of receipt of the letter in which case the recommendation would be abated until after a hearing was completed. Land-O-Sun timely requested a hearing within the time frame set forth in the letter.

    
    

24. In its May 25, 1990 Notice of Protest, John Hart also challenged the proposed award of the contract on the grounds that the bid instructions were confusing. In the June 4, 1990 notification to the bidders, the general counsel for the School Board rejected John Hart's contention that the bid instructions were confusing. No evidence was presented in this case regarding the contention that the bid instructions were confusing.

    
    

25. Land-O-Sun was not provided with an opportunity to respond to or refute the information provided by John Hart at the Informal Hearing until after it received the June 4, 1990 notification of the proposed change in the recommendation and the formal administrative hearing process was initiated.

    
    

26. Prior to this formal administrative hearing, Land-O-Sun provided the School Board with information regarding investigations by both state and federal authorities concerning the Pinellas County bid rigging case. After reviewing the information, the School Board was uncertain whether Land-O-Sun was a qualified bidder so it decided to refer the case to the Division of Administrative Hearings to conduct a formal hearing.

27. Land-O-Sun purchased the assets of Pet Dairy in December, 1985. At the time of the purchase, Pet Dairy, through one of its employees, Lee

    F. Hallberg ("Hallberg"), was involved in a conspiracy with various other dairy companies to rig bid prices in connection with the award of contracts to supply milk, dairy products and fruit juices to the School Board of Pinellas County. The conspiracy commenced sometime prior to May of 1985 and involved contracts with the Pinellas County School Board for the school year beginning August, 1985 through August, 1986. The contracts were awarded in August, 1985, before Land-O-Sun acquired the assets of Pet Dairy. There is no indication that Land-O-Sun was aware of the existence of the conspiracy at the time of the purchase.

    
    

28. After Land-O-Sun acquired Pet Dairy in December of 1985, Mr. Hallberg remained with the company for an additional period of time and the company continued to supply products to the Pinellas County School Board pursuant to the contract for the 1985/1986 school year.

    
    

29. In 1987 or early 1988, Land-O-Sun was one of a number of dairy companies that was investigated by the Attorney General for the State of Florida in connection with the dairy industry school milk bidding process. A federal investigation also was begun.

    
    

30. From the time it first became aware of the investigation, Land- O-Sun cooperated fully with both the state and federal investigators.

    
    

31. After extensive negotiations, Land-O-Sun entered into a Settlement Agreement with the Florida Attorney General's Office on February 24, 1988. Pursuant to that Settlement Agreement, Land-O-Sun paid $225,843.36 to the State of Florida antitrust litigation fund. The state agreed not to bring civil or criminal charges against Land-O-Sun. The state also signed a Covenant Not to Sue Land-O-Sun and informed the Pinellas and Sarasota School Boards that Land-O-Sun had settled with the state and had cooperated with the investigation.

    
    

32. The federal investigation focused on the same conduct and contract as the state investigation and resulted in criminal antitrust charges being filed against Land-O-Sun pursuant to a Criminal Information dated June 19, 1989 (the "Information"). That Information was filed in connection with a plea arrangement which had been negotiated over several months preceeding the filing of the Information. In accordance with that plea arrangement, Land-O-Sun entered a guilty plea in United States v. Land-O-Sun Dairies Inc., Case No. 89-116-Cr-T13(A) in U.S. District Court for the Middle District of Florida. on July 25, 1989 to the Information charging that a single violation of Section 1 of the Sherman Antitrust Act involving a conspiracy to rig school milk contract bids in Pinellas County for the 1985-1986 school year. In accordance with the plea arrangement, Land-O-Sun was fined $325,000 and the guilty plea settled all civil or criminal charges which could have been brought against Land- O-Sun as a result of the federal investigation.

    
    

33. The fines and penalties imposed against Land-O-Sun as a result of the federal and state investigations were minor in comparison with the fines imposed against the various other companies involved in the conspiracy.

34. Hallberg was the only individual employee of Land-O-Sun who was charged with any crime in connection with the price rigging conspiracy. Hallberg was terminated by Land-O-Sun as a result of the information obtained during the state and federal investigation.

    
    

35. Following the entry of the guilty plea to the federal criminal charge, Land-O-Sun was debarred from bidding on procurement and sales contracts of the executive branch of the federal government and placed on a list of parties excluded from federal procurement and non-procurement programs. However, there is no evidence that Land-O-Sun was debarred under Executive Order 12549, which is the provision referred to in Paragraph Q. Land-O-Sun's debarment from contracting with the Executive Branch of the Federal Government in no way affected its right to bid on state contracts.

    
    

36. Land-O-Sun has not been placed on the State of Florida's Convicted Vendor List. The Convicted VEndor's Lists is provided for in Section 287.133(3)(d), Florida Statutes, which was enacted by the 1989 Florida's Legislature session. It is not clear whether the List has, in fact, been established at this point in time.

    
    

37. Land-O-Sun's conviction was not disclosed on the bid proposal submitted by Land-O-Sun in response to the Invitation to Bid.

    
    

38. In addition to the Affidavit described in Findings of Fact 18 above, employees of Land-O-Sun have executed affidavits on at least two other occasions indicating that Land-O-Sun has been convicted of a public entity crime. Each of those affidavits were executed after consultation with the company's general counsel, Brian Kelly. Mr. Kelly has subsequently changed his opinion as to whether Land-O-Sun's conviction falls within the definition of a public entity crime under Section 287.133, Florida Statutes.

    
    

39. The value of the contract for Item 1 of the Invitation to Bid is approximately $1.27 million. Land-O-Sun's bid proposal for Item 1 was approximately six thousand six hundred dollars less than the bid proposal submitted by John Hart.

    
    

40. John Hart held the contract for supplying milk, milk products and milk shake mix to the School Board for the school year June 16, 1989 through June 16, 1990. In fulfilling that contract, John Hart has utilized some dairy products produced by Land-O-Sun. Since the expiration of the contract for the 1989/1990 school year, John Hart has continued to provide milk, milk products and milk shake mix to the School Board.

    
    

41. John Hart has never been convicted of any bid rigging or other public entity crime.

    
    

42. The School Board is concerned that awarding the contract to Land-O-Sun may somehow jeopardize federal funding for its breakfast program. However, no evidence or legal authority has been presented to

    establish that any such funding would be jeopardized by the award of the contract to Land-O-Sun.

    
    

    CONCLUSIONS OF LAW

    
    

43. The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, these proceedings. Section 120.53(5) and Section 120.57(1), Florida Statutes.

    
    

44. The purpose of competitive bidding was explicated in Hotel China & Glassware Co. v. Board of Public Instruction, 130 So.2d 78,81 (Fla. 1st DCA 1961), where the court stated as follows:

    
    

    Competitive bidding statutes are enacted for the protection of the public. They create a system by which goods or services required by public authorities may be acquired at the lowest possible cost. The system confers upon both the contractor and the public authority reciprocal benefits, and exacts from each of them reciprocal obligations. The bidder is assured fair consideration of his offer, and is guaranteed the contract if his is the lowest and best bid received.

    The principal benefit flowing to the public authority is the opportunity of purchasing the goods and services required by it at the best price obtainable. Under this system, the public authority may not arbitrarily or capriciously discriminate between bidders, or make the award on the basis of personal preference. (emphasis added)

    
    

45. Competitive bidding statutes should be construed to advance their purpose and to avoid their being circumvented. Webster v. Belote, 103 Fla. 976, 138 So. 721 (1931).

    
    

46. Section 120.53(5), Florida Statutes, establishes a statutory framework for resolution of protests arising from the contract bidding process. Pertinent to this case, Section 120.53(5) provides:

    
    

    1. Upon receipt of the formal written protest which has been timely filed, the agency shall stop the bid solicitation process or the contract award process until the subject of the protest is resolved by final agency action, unless the agency head sets forth in writing particular facts and circumstances which require the continuance of the bid solicitation process or the contract award process without delay in order to avoid an immediate and serious danger to the public health, safety and welfare.

    2. The agency, on its own initiative or upon the request of a protestor, shall provide an opportunity to resolve the protest by mutual agreement between the parties within 7 days, excluding Saturdays, Sundays, and legal holidays, of receipt of a formal written protest.

       1. If the subject of a protest is not resolved by mutual agreement within 7 days, excluding Saturdays, Sundays and legal holidays, of receipt of the formal written protest and if there is no disputed issue of material fact, an informal proceedings shall be conducted pursuant to Section 120.57(2) and applicable agency rules before a person whose qualifications have been prescribed by rules of the agency.

       2. If the subject of a protest is not resolved by mutual agreement within 7 days, excluding Saturdays, Sundays, and legal holidays, of receipt of the formal written protest and if there is a disputed issue of material fact, the agency shall refer the protest to the division for proceedings under Section 120.57(1).

          
          

47. Under the provisions of Section 120.53(5)(c), the School Board was bound, absent circumstances not present here, to stop the bid solicitation process pending resolution of John Hart's protest by final agency action. Under the framework of 120.53(5)(d), final agency action could only occur through mutual agreement of the parties, an informal proceeding pursuant to Section 120.57(2), Florida Statutes, or a formal proceeding pursuant to Section 120.57(1), Florida Statutes. See, Cianbro Corporation v. Jacksonville Transportation Authority, 473 So.2d

    209 (Fla. 1st DCA 1985).

    
    

48. The provision of Section 120.53(5)(d), which provides an opportunity to resolve a protest by "mutual agreement between the parties", does not permit the School Board to unilaterally reevaluate its decision. Such resolution can only occur "between the parties"; which must include, at a minimum, the successful bidder, the protestant, and the contracting agency. Since Land-O-Sun did not participate or concur in the decision to change the recommendation to award the contract to John Hart, there existed disputed issues of material fact. John Hart's protest could only be resolved by a formal 120.57(1) proceeding.

    
    

49. As set forth in the Preliminary Statement of this Recommended Order, John Hart's contention that Land-O-Sun did not timely file a Notice of Protest of the proposed reversal of the recommendation for awarding the contract is rejected. The circumstances leading up to referral of this case to the Division of Administrative Hearings are somewhat confusing. While the case originally came to the Division of Administrative Hearings on Land-O-Sun's protest of the decision to change the recommendation to award the contract to John Hart, the School Board's informal meeting with John Hart on June 1, 1990 and the subsequent notification to all bidders of the School Board's change in its proposed recommendation are outside the scope of Section 120.53(5). Therefore, it was John Hart's protest of the May 23 bid tabulation and proposed recommendation to award the contract to Land-O-Sun which should have been referred to the Division of Administrative Hearings. Thus, while Land-O- Sun has been listed as the Petitioner in this case, this case should be viewed as a formal hearing on John Hart's timely protest of the School Board's May 23 bid posting and stated intention to recommend award of the contract to Land-O-Sun. In any event, both John Hart and Land-O-Sun have been provided a full and fair opportunity to be heard.

50. The Florida Legislature during its 1989 session enacted a new statute to authorize the disqualification of convicted vendors from the public bidding process. Chapter 89-114, 1989 Laws of Florida 307 codified at Sections 287.132 - 133, Florida Statutes (1989). That statute provides as follows:

    
    

    287.132- Legislative intent with respect to integrity of public contracting and purchasing process.

    Recognizing that the preservation of the integrity of the public contracting and purchasing process of the state is vital and is a matter of interest to all the people of the state, the Legislature determines and declares that:

    1. The procedures of public entities for determining with whom they transact business exist to secure for the public the benefits of free, fair, and open competition among those persons whose conduct reflects good citizenship.

    2. The opportunity to bid on public entity contracts or to supply goods and services to public entities or to otherwise transact business with public entities is a privilege, not a right.

    3. In order to preserve the integrity of the public contracting and purchasing process, the privilege of transacting business with public entities should be denied to persons involved in certain crimes.

    4. Persons involved in certain crimes should be denied the privilege of transacting the business with public entities and the opportunity of obtaining economic benefit through the transaction of business of any kind with public entities.

    To these ends, it is the intent of the Legislature to provide sufficient authority to the state, its departments and agencies, and political subdivisions to ensure the integrity of public contracting and purchasing.

    * * *

    287.133(1)(b) "Convicted" or "conviction" means a finding of guilt or a conviction of a public entity crime, with or without an adjudication of guilt, in any federal or state trial court of record relating to charges brought by indictment or information after July 1, 1989, as a result of a jury verdict, non-jury trial, or entry of a plea of guilty or nolo contendere.

    * * *

    287.133(1)(g) "Public entity crime" means a violation of any state or federal law by a person with respect to and directly related to the transaction of business with any public entity or with an agency or political subdivision of any other state or with the United States, including, but not limited to, any bid or contract for goods or services to be provided to any public entity or an agency or political subdivision of

    any other state or of the United States and involving antitrust, fraud, theft, bribery, collusion, racketeering, conspiracy, or material misrepresentation. (emphasis supplied)

    
    

51. In order for a bidder to be disqualified pursuant to Sections

    287.132 and 287.133, the clear wording of Section 287.133(1)(b), requires a finding that the bidder be found guilty of a public entity crime relating to charges brought by indictment or information after July 1, 1989. The evidence in this case established that Land-O-Sun was convicted of a crime for which charges were brought by Information prior to July 1, 1989. While the actual plea of guilty was not entered until July 25, 1989 and the judgement was not entered until September 14, 1989, it is the date of the Information that is controlling for purposes of determining whether a crime constitutes a public entity crime under Section 287.133. Thus, Land-O-Sun has not been convicted of a public entity crime as defined in Section 287.133, Florida Statutes (1989). 1/

    
    

52. John Hart contends that a "public entity crime" for purposes of Sections 287.132 and 287.133 should include any crime where the finding of guilt or conviction occurred after July 1, 1989. However, such an interpretation is not consistent with the clear wording of the statute. The language of a statute must be given its plain and obvious meaning. Holly v. Auld, 450 So.2d 217 (Fla. 1984). State v. Egan, 287 So.2d 1 (Fla. 1973); Boca Raton Artificial Kidney Center v. Department of Health and Rehabilitative Services, 493 So.2d 1055 (Fla. 1st DCA, 1986).

    
    

    ...The Legislature must be understood to mean what it has plainly expressed, and this excludes construction. The legislative intent being plainly expressed, so that the act read by itself or in connection with other statutes pertaining to the same subject is clear, certain and unambiguous, the courts have only the simply and obvious duty to enforce the law according to its terms... Even where a court is convinced that the Legislature really meant and intended something not expressed in the phraseology of the act, it will not deem itself authorized to depart from the plain meaning of the language which is free from ambiguity. If a legislative enactment violates no constitutional provision or principal, it must be deemed its own sufficient and conclusive evidence of the justice, propriety and policy of its passage. Courts have then no power to set it aside or evade its operation by forced and unreasonable construction. If it has been passed improvidently the responsibility is with the Legislature and not the courts. Whether the law be expressed in general or limited terms, the Legislature should be held to mean what they have plainly expressed, and consequently no room is left for construction, ...

    Van Pelt v. Hilliard, 78 So. 693 (Fla. 1918).

53. John Hart argues that there is an ambiguity in the Statute because Section 287.133(3)(a) 3 refers to a person who "has been convicted of a public entity crime subsequent to July 1, 1989" without any reference to a requirement that the criminal charge giving rise to the conviction occur subsequent to that date. However, as indicated above, the term "conviction" is specifically defined to refer to charges brought by indictment or information after July 1, 1989. There is no basis for disregarding the clear language of Section 287.133(1)(b).

    
    

54. While employees of Land-O-Sun have executed affidavits indicating that the company has been convicted of a public entity crime, the evidence established that those affidavits were executed on the basis of a misinterpretation of the law. The affidavit submitted to the School Board was not part of the bid package and the erroneous conclusion contained in the affidavit that Land-O-Sun has been convicted of a public entity crime is not binding for purposes of determining whether Land-O- Sun should be disqualified pursuant to Section 287.132-133, Florida Statutes.

    
    

55. Paragraph Q of the Special Conditions to Bid contained in the Invitation to Bid provides for disqualification of a bidder who has been debarred pursuant to Executive Order 12549. While the evidence established Land-O-Sun has been debarred from participating in contracts with the executive branch of the federal government, no evidence was presented to establish that Land-O-Sun has been debarred under Executive Order 12549. Executive Order 12549 deals with grants, contracts of assistance, loans and loan guarantees and does not address procurement programs. Therefore, Land-O-Sun's bid was not in violation of Paragraph Q of the Special Conditions to Bid.

    
    

56. Section 287.133(2)(a) and (b) provide for the automatic exclusion of any bidder who has been placed on the Convicted Vendors List. There is no evidence in this case indicating that Land-O-Sun has been placed on the State's Convicted Vendors List. John Hart contends that Land-O-Sun's absence from this list is directly attributable to Land-O-Sun's failure to notify the Department of General Services of its conviction on a timely basis as required by Section 287.133(3)(b). However, such notification is only required if an entity has been convicted of a public entity crime as defined in the statute. As set forth above, Land-O-Sun has not been convicted of a public entity crime and, therefore, was not required to provide any notification to the Department of General Services.

    
    

57. John Hart contends that even if Land-O-Sun is not disqualified under Sections 287.132 and 287.133, John Hart should be deemed the lowest and best bidder for the contract involved in this case. Specifically, John Hart argues that, even though Land-O-Sun was the low bidder, the School Board is not required to award the contract to the lowest bidder and the School Board has the authority and duty to reject a bid for a school milk contract from an entity that has been convicted of rigging a school bid in another district. Since the difference in price between John Hart and Land-O-Sun is minor compared to the total contract amount, John Hart contends that the School Board should exercise its discretion and award the contract to John Hart as the lowest and best bidder.

    However, the evidence indicates that Land-O-Sun's involvement in the bid rigging scheme was the result of its unwitting acquisition of a company that had already become involved in the conspiracy. Land-O-Sun's full cooperation in the investigations and the substantial penalties that it has already paid, mitigate against further penalizing the company by disqualifying it from bidding on this contract. Furthermore, the evidence that John Hart has been fulfilling the existing contract with the School Board by utilizing product produced by Land-O-Sun, and that he may utilize Land-O-Sun product in fulfilling the new contract if it is awarded to John Hart, would be an anomalous result and contrary to the purposes of the bidding statutes to require the School Board to pay John Hart a higher price for providing the same products that could be obtained from Land-O-Sun for less money.

    
    

58. In sum, no evidence was produced to demonstrate that Land-O- Sun's bid proposal should be rejected pursuant to Sections 287.132 and 287.133, Florida Statutes and/or Paragraph Q of the Special Conditions to Bid.

RECOMMENDATION

Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Palm Beach County School Board enter a Final Order awarding the contract for Item 1 in Invitation to Bid #91C-5R to Land-O-Sun Dairies, Inc.

DONE AND ORDERED in Tallahassee, Leon County, Florida, this 22nd day of August, 1990.

J. STEPHEN MENTON 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 August, 1990.

ENDNOTES

1/ For a review of the provisions and history of Section 287.132-133, Florida Statutes, See, Powell, Rights and Duties of Vendors and Government Agencies under Florida's New Public Contracting Law, 17,

F.S.U. Law Review 481 (Spring 1990). The author of this very thorough analysis emphasizes the exclusively prospective nature of the status and concludes that the charges must have been brought by indictment or criminal information after July 1, 1989. Id. at 491.

APPENDIX

All of the parties have submitted Proposed Recommended Orders. The following constitutes my rulings on the proposed findings of fact submitted by the parties.

The Petitioner's Proposed Findings of Fact

Proposed Finding Paragraph Number in the Findings of Fact of Fact Number in the Recommended Order Where Accepted or

Reason for Rejection.

1. Addressed in substance in Findings of Fact 27 and 28.

2. Addressed in substance in Findings of Fact 29, 32 and 34.

3. Addressed in substance in Findings of Fact 30, 32 and 35.

4. Addressed in substance in Findings of Fact 31.

5. Addressed in substance in Findings of Fact 33.

6. Addressed in substance in Findings of Fact 3 and 15.

7. Addressed in substance in Findings of Fact 20.

8. Addressed in substance in Findings of Fact 18.

9. The first sentence is rejected as a summary of testimony rather than a finding of fact. The second sentence is Addressed in substance in Findings of Fact 19. The third sentence is rejected as constituting argument rather than a finding of fact.

10. Addressed in substance in Findings of Fact 21 and 25.

11. Addressed in substance in Findings of Fact 23.

12. Rejected as argument rather than a finding of fact.

13. Rejected as constituting a summary of testimony rather than a finding of fact.

14. The first sentence is rejected as argument rather than a finding of fact. The second two sentences are rejected as constituting a summary of testimony rather than a finding of fact. The fourth sentence is Addressed in substance in Findings of Fact 40.

The Respondent's Proposed Findings of Fact

Proposed Finding Paragraph Number in the Findings of Fact of Fact Number in the Recommended Order Where Accepted or

Reason for Rejection.

1. Addressed in substance in Findings of Fact 1 and 3.

2. Addressed in substance in Findings of Fact 4, 5, 6 and 7.

3. Addressed in substance in Findings of Fact 9, 10, 11, 12, and 17.

4. Addressed in substance in Findings of Fact 13 and 20.

5. Addressed in substance in Findings of Fact 21 and 22.

6. Addressed in substance in Findings of Fact 23.

7. Addressed in substance in Findings of Fact 23, 26 and 32.

8. Addressed in substance in Findings of Fact 27, 31 and 32.

9. Addressed in substance in Findings of Fact 35.

10. Addressed in part in Findings of Fact 36.

11. Addressed in substance in Findings of Fact 28 and 38.

12. Addressed in substance in Findings of Fact 19.

13. Rejected as irrelevant.

14. Addressed in Findings of Fact 26 and 42.

15. Addressed in Findings of Fact 39.

The Intervenor's Proposed Findings of Fact

Proposed Finding Paragraph Number in the Findings of Fact of Fact Number in the Recommended Order Where Accepted or

Reason for Rejection.

1. Addressed in substance in Findings of Fact 3.

2. Addressed in substance in Findings of Fact 2.

3. Addressed in substance in Findings of Fact 14.

4. Rejected as constituting argument rather than a finding of fact.

5. Rejected as constituting legal argument rather than a finding of fact.

6. Rejected as unnecessary.

7. Addressed in substance in Findings of Fact 32.

8. Rejected as unsupported by competent substantial evidence.

9. Addressed in substance in Findings of Fact 41.

10. Rejected as irrelevant.

11. Rejected as irrelevant.

12. Rejected as irrelevant.

13. Addressed in substance in Findings of Fact 18 and 38.

14. Rejected as unsubstantiated by competent substantial evidence and as constituting argument rather than a finding of fact.

15. Rejected as irrelevant. As set forth in Conclusions of Law 15, Land-O-Sun was not obligated to file a Notice with the Department of General Services.

16. Rejected as irrelevant. As set forth in Conclusions of Law 16, Land-O-Sun had no obligation to notify the Department of General Services. Furthermore, even if it had notified the Department of General Services, it would have been entitled to a hearing prior to being placed on the Convicted Vendors List.

17. Rejected as vague and ambiguous and as irrelevant.

18. Addressed in substance in Findings of Fact 26.

19. Addressed in substance in Findings of Fact 39.

20. Addressed in substance in Findings of Fact 40.

21. Addressed in substance in Findings of Fact 40.

22. Rejected as irrelevant.

23. Addressed in substance in Findings of Fact 23.

24. Addressed in the conclusions of law.

25. Addressed in substance in Findings of Fact 20.

Copies furnished:

Robert Rosillo

Office of General Counsel

The School Board of Palm Beach County, Florida

3970 RCA Boulevard, Suite 7010 Palm Beach Gardens, Florida 33410

Alex Ferrer, Esquire Arnold Shevin, Esquire STROOCK, STROOCK and LAVAN

Southeast Financial Center

200 South Biscayne Boulevard Suite 3300

Miami, Florida 33131-2385

James D. Wilkerson, Jr., Esquire Schuler, Wilkerson & Halvorson, P.A. The Barristers Building

1615 Forum Place, Suite 4D West Palm Beach, Florida 33401

Abbey G. Hariston, Esquire The School Board of Palm

Beach County, Florida

3970 RCA Boulevard, Suite 7010 Palm Beach Gardens, Florida 33410

Docket for Case No: 90-003702BID

Orders for Case No: 90-003702BID