STATE OF FLORIDA DIVISION OF ADMINISTRATIVE HEARINGS

ELIZABETHAN DEVELOPMENT, INC., )

)

Petitioner, )

)

vs. )

)

DEPARTMENT OF HEALTH AND ) CASE NO. 90-4064 BID

REHABILITATIVE SERVICES, )

)

Respondent, )

)

and )

)

NORTHERN LIFE INSURANCE CO., )

)

Intervenor. )

)

RECOMMENDED ORDER

The final hearing in this case was held in Tampa, Florida, before Donald D. Conn, Hearing Officer, Division of Administrative Hearings, on July 12, 1990.

APPEARANCES

For Petitioner: Alan Taylor

P. O. Box 7077

Winter Haven, Florida 33883-7077

For Respondent: Jack Farley, Esquire

4000 W. Martin Luther King, Jr., Boulevard 5th Floor, Room 520

Tampa, Florida 33614-9990

For Intervenor: Mark A. Brown, Esquire

Theo J. Karaphillis, Esquire

P. O. Box 3239

Tampa, Florida 33601 STATEMENT OF THE ISSUE

The issue in this case is whether Elizabethan Development, Inc. (Petitioner) has standing to protest the award by the Department of Health and Rehabilitative Services (Respondent) of Lease Number 590:2154 to Northern Life Insurance Company (Intervenor), and if so, whether Intervenor was the lowest responsive bidder.

PRELIMINARY STATEMENT

On July 9, 1990, Intervenor filed a Motion to Dismiss Petition as Frivolous, and at the commencement of the hearing Intervenor filed a Supplemental Motion to Dismiss Petition as Frivolous. The Respondent joined in both Motions. The parties agreed to the introduction of one joint composite exhibit. Argument was presented on the record concerning the Motions to Dismiss, and a ruling thereon is set forth herein. Intervenor has also moved for an award of attorney's fees and costs under Section 120.57(1)(b)5, Florida Statutes, if the Petitioner's protest is found to be frivolous. However, since the Findings of Fact regarding the merits of Petitioner's protest set forth herein are recommendations and are not final, a ruling on the issue of attorney's fees and costs must be reserved until a Final Order is entered adopting these Findings, and the time for appeal has run. Therefore, jurisdiction is retained for this limited purpose in order to allow the parties to file a copy of the Final Order entered in this case, and to notify the undersigned when the time for appeal has expired.

No transcript of the hearing was filed. The parties were allowed to file proposed recommended orders, including proposed findings of fact, within ten days following the hearing. A ruling on the Intervenor's timely filed proposed findings of fact are contained in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. On or about January 26, 1990, the Respondent sought competitive bids for Lease Number 590:2154 for the lease of certain office space in Brandon, Florida.

   
   

2. The bid opening occurred on March 1, 1990, and Intervenor was determined to have submitted the lowest responsive bid. In addition to Intervenor's bid, the only other bid received in response to this invitation to bid was from Regina M. Hasey, for whom Petitioner purports to act as agent in this proceeding.

   
   

3. A condition set forth in the invitation to bid was that bids would remain valid for a minimum of forty-five days following the bid opening. There is no dispute that Regina M. Hasey withdrew her bid and terminated her offer on April 18, 1990, after the expiration of this forty-five day period. Petitioner's representative admitted that he knew of Hasey's termination of her offer prior to the filing of this protest, and that he had been copied on the letter of April 18, 1990 withdrawing her bid.

   
   

4. On or about May 8, 1990, the Department notified Hasey of its intent to award this lease to Intervenor, and on May 10, 1990, the Petitioner filed its notice of protest concerning this award claiming that Intervenor's bid was not responsive to the parking requirements in the invitation to bid.

   
   

5. Petitioner is designated in the Hasey bid as agent for Hasey, and it is clear that Petitioner did not submit this bid in its own right, but rather solely as agent for Hasey.

   
   

6. Petitioner's protest was filed without any reasonable inquiry by Petitioner into the facts surrounding the Respondent's invitation to bid, Intervenor's bid, and the legal consequences of the withdrawal of Hasey's bid. As a result of Petitioner's protest, the award of Lease Number 590:2154 to Intervenor has been delayed, at this stage of the proceeding, for almost three

   months, and the Respondent and Intervenor have had to incur legal expenses to oppose Petitioner's protest and proceed with this award. There is no evidence in this record to indicate that Petitioner filed this protest in an attempt to change the agency's mind regarding the award of this lease to Intervenor, and in fact there is no possible basis upon which this award could have been made to Petitioner after Hasey withdrew her bid. As such, Petitioner's protest was entirely frivolous. See Mercedes Lighting and Electrical Supply v. Department of General Services, et al., 12 F.A.L.R. 1912 (Fla. 1st DCA 1990).

   
   

   CONCLUSIONS OF LAW

   
   

7. The Division of Administrative Hearings has jurisdiction over the parties, and the subject matter in this cause. Sections 120.53(5) and 120.57(1), Florida Statutes.

   
   

8. An agency has wide discretion in awarding contracts to responsible bidders, and its exercise of that discretion will not be overturned unless it is arbitrary or capricious, or evidences the agency's bad faith. Department of Transportation v. Groves-Watkins Contractors, 530 So.2d 912, 914 (Fla. 1988); Baxter's Asphalt and Concrete, Inc. v. Department of Transportation, 475 So.2d 1284 (Fla. 1st DCA 1985); Capelletti Brothers v. Department of General Services,

   432 So.2d 1359 (Fla. 1st DCA 1983); Liberty County v. Baxter's Asphalt and Concrete, Inc., 421 So.2d 505 (Fla. 1982); Wood-Hopkins Contracting Co. v. Roger

   J. Au and Son, Inc., 354 So.2d 446 (Fla. 1st DCA 1978). Agencies do not have unbridled discretion, however, and must act in a reasonable manner in the award of contracts. Couch Construction Co. v. Department of Transportation, 361 So.2d 172, 175 (Fla. 1st DCA 1978).

   
   

9. In order to protest an agency's intent to award a lease, a party must demonstrate that it has a substantial interest, or standing, in the outcome of the bid award. Preston Carroll Co., Inc. v. Florida Keys Aqueduct Authority,

   400 So.2d 524 (Fla. 3rd DCA 1981). An essential element of standing is that the party establish that it timely filed a bid which remains valid and has not been subsequently withdrawn. Westinghouse Electric Corp. v. Jacksonville Transportation Authority, 491 So.2d 1238 (Fla1st DCA 1986).

   
   

10. It was not disputed at hearing that Petitioner was acting as agent for Regina M. Hasey, who filed the only bid other than Intervenor's, and that Petitioner did not file this bid on its own behalf, or in its own right. It is also not disputed that Hasey withdrew her bid on April 18, 1990, after the expiration of the forty-five day period following the bid opening, and that Petitioner's representative knew of this withdrawal prior to filing this protest. Such withdrawal and

    termination of Hasey's offer was authorized under a specific condition in the invitation to bid.

    
    

11. Under these facts, it is clear that Petitioner's substantial interests were not, and could not be, affected by the award of Lease Number 590:2154 to Intervenor since Hasey, for whom Petitioner acted as agent, had withdrawn her bid prior to Respondent's award to Intervenor. Hasey no longer had a viable bid after April 18, 1990, and therefore, Petitioner lacks standing to protest Respondent's award of this lease to Intervenor.

    
    

12. Jurisdiction must be reserved for the limited purpose of deciding Intervenor's Motion for the Entry of an Order Awarding Attorney's Fees and Costs after the entry of a Final Order in this case and the expiration of the time for appeal. Since the Intervenor's motion for an award under Section 120.57 (1)(b)5, Florida Statutes, is premised on a finding that Petitioner's protest in this case was entirely frivolous due to its lack of standing, and since at this stage of the proceeding, the Findings of Fact set forth herein are recommendations, and are not final, it would be inappropriate to enter a ruling on the award of fees and costs before the Respondent has an opportunity to review the record in this case and to enter a final ruling. A finding by the Respondent, based upon its review of this record, that is contrary to the Findings of Fact set forth herein could affect the ruling to be entered on the Intervenor's Motion, and for this reason, jurisdiction must be retained for the limited purpose of allowing consideration of this issue at the more appropriate stage in this proceeding when the essential facts of this matter have been established by final order, and the time for appeal has expired.

RECOMMENDATION

Based on the foregoing, it is recommended that the Respondent enter a Final Order dismissing Petitioner's protest for lack of standing, and awarding Lease Number 590:2154 to Intervenor.

DONE AND ENTERED this 27th day of July, 1990, in Tallahassee, Leon County, Florida.

DONALD D. CONN

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 27th day of July, 1990.

APPENDIX

Rulings on Intervenor's Proposed Findings of Fact:

1. Adopted in Findings 1 and 2.

2. Adopted in Finding 3. 3-4. Adopted in Finding 4.

1. Rejected as procedural matters and otherwise as unnecessary.

2. Adopted in Finding 3.

3. Rejected as unnecessary.

4. Adopted in Findings 3 and 4.

5. Adopted in Finding 6.

10-11. A ruling has been reserved on the issue of an

award of attorney's fees and costs, and these proposed findings are solely related to that issue which

has not been addressed in this Recommended Order.

Copies furnished:

Jack Farley, Esquire District 6 Legal Office

4000 West Dr. Martin Luther King, Jr., Blvd. 5th Floor, Room 520

Tampa, FL 33614-9990

Alan Taylor

P. O. Box 7077

Winter Haven, FL 33883-7077

Mark A. Brown, Esquire

Theo J. Karaphillis, Esquire

P. O. Box 3239 Tampa, FL 33601

R. S. Power, Agency Clerk 1323 Winewood Blvd. Building One, Room 407 Tallahassee, FL 32399-0700

John Miller, General Counsel 1323 Winewood Blvd.

Tallahassee, FL 32399-0700

Docket for Case No: 90-004064BID

Orders for Case No: 90-004064BID