STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
SOUTHERN PLAYBILL PUBLISHING, INC., )
)
Petitioner, )
)
vs. ) CASE NO. 90-7050BID
) PERFORMING ARTS CENTER AUTHORITY, )
)
Respondent, )
and )
)
MEDIA PUBLICATIONS, INC., )
)
Intervenor. )
)
RECOMMENDED ORDER
Pursuant to notice, a formal hearing was held in this case on November 20, 1990, at Fort Lauderdale, Florida, before Michael M. Parrish, a duly designated Hearing Officer of the Division of Administrative Hearings. At the hearing the parties were represented by the counsel listed below:
APPEARANCES
For Petitioner: Dan Paul, Esquire
Jorden Schulte & Burchette
701 Brickell Avenue, 24th Floor Miami, Florida 33131
For Respondent: Melinda S. Gentile, Esquire
Ruden, Barnett, McClosky, Smith, Schuster & Russell, P.A.
Post Office Box 1900
Fort Lauderdale, Florida 33302
For Intervenor: Paul R. Ezatoff, Esquire
Katz, Kutter, Haigler, Alderman, Davis, Marks & Ruthledge, P.A. First Florida Bank Building
215 South Monroe Street, Suite 400 Tallahassee, Florida 32301
STATEMENT OF THE ISSUES
The basic issue in this case is whether the Respondent should award a contract for the publication of certain programs to the Petitioner or to the Intervenor. The Petitioner contends that it is entitled to the subject contract. The Respondent and the Intervenor contend that the subject contract should be awarded to the Intervenor.
STATEMENT OF THE ISSUES
At the formal hearing in this case the Petitioner presented the testimony of two witnesses and also offered numerous documentary exhibits which were received in evidence. The Petitioner was also granted leave to file a late exhibit consisting of an affidavit of Elliot B. Barnett. The Affidavit was filed within the time allowed. The Respondent presented the testimony of dour witnesses and offered one exhibit which was received in evidence. The Intervenor presented the testimony of two witnesses and offered three exhibits which were received in evidence. At the request of the Intervenor, official recognition was also taken of five documents described in the requeSt. At the conclusion of the hearing the parties were allowed until December 3, 1990, to file their proposed recommended orders. All parties filed timely proposed recommended orders containing proposed findings of fact and conclusions of law. Specific rulings on all findings of fact proposed by all parties are contained in the Appendix hereto.
On December 4, 1990, the Respondent filed a renewed Motion For Involuntary Dismissa1. The issues raised by the renewed motion go to the heart of the matter at hand and are subsumed in the disposition of those andt other issues in the Conclusions of Law portion of this Recommended Order.
On December 5, 1990, the Internor filed a motion seeking to have the Hearing Officer determine that the Petitioner participated in this proceeding for an improper purpose within the meaning of Section 120.59(6)(e)1., Florida Statutes. A response to the motion was filed on December 21, 1990. The motion is addressed in the Conclusions of Law portion of this Recommended Order.
FINDINGS OF FACT
Facts stipulated to by all parties
The Performing Arts Center Authority ("Authority") was created in 1984 by special act of the legislature, Chapter 84-396, Laws of Florida (1984)("the Act"). It is a public body, corporate and politic, in Broward County, established for the limited purpose of planning, promoting, developing, constructing, and equipping, etc., facilities for holding any type of cultural, tourism or promotional events, civic, recreational, or similar events or activities. Chapter 84-396, Section 1. The Authority consists of seven members: three selected by the board of County Commissioners of Broward County who are not residetts of the City of Fort Lauderdale; three selected by the Commission of the City of Fort Lauderdale; and one selected by the Downtown Development Authority. Chapter 84-396, Section 2. All members must be residents of Broward County, and the Authority's jurisdiction is limited to the boundaries of Broward County. Chapter 84-396, Section 1.
Southern Playbill Publishing, Inc. ("Southern Playbill"), and Media Publications, Inc. ("Media Publications"), are corporations engaged in the business of publishing theater prograMs. Southern Playbill publishes "PLAYBILL" and Media Publications publishes "ENCORE!".
In February of 1990, the Authority informally and verbally initiated its search for a publisher for theater programs for the new Performing Arts Center in Broward County.
On August 20, 1990, the Authority sent a letter requesting proposals for theater program books.
Responses to the August 20, 1990 letter requesting proposals were submitted by Southern Playbill by Media Publications, and by Sun Controlled Ventures, Inc. (a company not a party to this proceeding).
On September 26, 1990, the Authority sent a letter to all three companies who responded to the August 20, 1990, letter requesting proposals, informing th&?rn that each of the three responses were non-responsive in some respect. Further, this letter indicated that the Authority sought new proposals for the publication of theater program books.
Southern Playbill sent a letter dated October 1, 1990, to the Authority.
In response to two requet;ts for additional information by Southern Playbill the Authority provided additional information to both remaining proposers, Southern Playbill and Media Publications, on October 4 and October 5, 1990.
Media Publications submitted a new proposal on October 10, 1990. With the permission of the Authority's Executive Director, Southern Playbill submitted a new "base bid" via fax on October 10; Southern Playbill was granted permission to file its supporting materials not later than close of business (5:30) on October 11.
Sun Controlled Ventures declined to submit a new proposal by a memorandum dated October 3, 1990.
On October 23, 1990, at a special meeting of the Authority, both Southern Playbill Publishing and Media Publications made presentations to the Authority about their proposals for the theater prograMs. After considering all information, the staff recommended to the Authority that Media Publications be awarded the contract for the publishing of the theater prograMs. The Authority awarded the contract to Media Publications at this meeting by a 3-2 vote.
Jack Moss was the member of the Authority who made the motion to authorize the Authority to vote on which company to award the contract to. Subsequently he requested a new vote by letter.
Facts established at the hearing
In its Official List of Special Districts, the Department has classified the Authority as an "independent special district" within the meaning of Section 189.403, Florida Statutes.
Leslie Feldman is the President of Southern Playbill, and Michael Kram is the President of Media Publications. Mr. Kram was the Editor-in-Chief of Southern Playbill from 1979 until 1989.
PACE Management Corporation owns 100% of Media Publications and owns 80% of another corporation, PTG-Florida, Inc. Media Publications and PTG- Florida, Inc., are wholly separate entities; they are financially independent of each other and each provides different services. PTG-Florida, Inc., is in the business of theatrical presentation and Media Publications is in the program publishing business.
Media Publications was not created solely for the purpose of bidding on the program publishing contract which is the subject of this proceeding. Instead, it was created as part of a long-term plan by PACE Management Corporation to get into the publishing business, as had been announced publically as far back as April 18, 1990. Since its formation, Media Publications has published a number of programs for theaters nationwide.
After lengthy negotiations that began in early 1989, PTG-Florida, Inc., and the Authority signed a letter of intent to enter into an agreement for the p of Broadway shows, including Phantom of the Opera, at the Broward Center for the Performing Arts. The partnership between PTG- Florida and the Authority was announced at a press conference in February of 1990. Mr. Feldman attended the press conference and was aware from at least that date forward that PTG- Florida had an agreement with the Authority for the presentation of shows, although he was unaware of its terMs. The Authority did not enter into the final contract with PTG-Florida, Inc., until October 5, 1990, because the signing of that contract was dependent on the signing of a separate agreement between the Authority and the producer of Phantom of tee Opera, which was not accomplished until October 4.
Under its agreement with the Authority, PTG- Florida, Inc., will receive 75% of the revenue from theater programs, regardless of which company publishes them. If Media Publications is ultimately awarded the contract in this case, Media Publications will not share in the money to be received by PTG- Florida, Inc., pursuant to PTG-Florida, Inc.'s, agreement with the Authority.
When the Authority informally and verbally initiated its search for a program publisher, one of the first companies it contacted was Southern Playbil1. Within a month of initiating the search, the Authority had discussed the matter with representatives of Southern Playbil1. Those discussions culminated in early proposals by Southern Playbill and Sun Controlled Ventures, Inc., to publish programs for the Authority, and in a later proposal by Media Publications.
When the Authority initiated its search for a publisher of the theater programs, it had expected that a contract would be signed for the theater's introductory show, Phantom of the Opera, within the very near future. Unfortunately, negotiations for Phantom of the Opera were long and protracted, and for a brief period of time it was even doubtful whether a contract for Phantom of the Opera would be signed. Due to the long period of time that had elapsed and due to the Authority's desire to have all potential proposals based on uniform standards, by separate identical letters dated August 20, 1990, the Authority rejected all pending proposals and requested new proposals. The letters of g5 20, 1990, did not contain any mention of the Authority's Notice And Protest Procedures, nor did they contain any mention of any right to protest or otherwise seek relief from the decision to seek new proposals.
The letter of August 20, 1990, established a deadline of 5:00 p.m. on August 29, 1990, for submission of new proposals. The sole guidance as to what should be contained in the new proposals consisted of the following language in the letters of August 20, 1990:
In your proposal please address the following:
Editorial content Advertising Design
Printing time frames and deadlines Physical plan location
Advertising team location Corporate profile Financial statement
Proposed revenues to the Center
Please address how you will handle the following:
Phantom of the Opera
requires a flat guarantee for 96 performances February 26 through May 18,
1991, 260,000 in attendance.
Intimate Theater Commemorative Program
Southern Playbill did not file a notice of protest, a formal protest, or request for hearing concerning the rejection of all proposals by the August 20, 1990 letters. Instead, Southern Playbill, along with Media Publications and Sun Controlled Ventures, Inc., submitted new proposals.
On September 26, 1990, the Authority sent a letter to all three of the companies that had submitted new proposals. The letter of September 26, 1990, advised all three of the prospective publishers as follows:
We have had an opportunity to review the program book proposals submitted by each of your firms. After review by staff and legal counsel, it has become apparent that our request for proposals, dated August 20, 1990, caused confusion as to what information we were seeking. As a result of this confusion, each of the proposals received was non- responsive in some respect. Specific areas of concern include information in connection with the Intimate Theater, information regarding a commemorative program, the financial statements and the guaranty for Phantom of the Opera.
In view of the fact that each of the proposals received was non-responsive in some respect, we have elected to reject all proposals and seek new proposals for the publication of program books for the Broward Center for the Performing Art'. Let me
clarify by indicating that we are seeking proposals for publication of a program book for Phantom of the Opera in the center's Au- Rene Theater for ninety-six (96) performances from February 26, 1991 through May 18, 1991, with a projected attendance of 260,000.
Additionally, we are seeking a proposal with regard to all productions in the Center's Intimate Theater from February 8, 1991 through May 26, 1991. Finally, we are requesting a proposal with regard to publication of a commemorative program specifically for the Gala Opening of the Center. In essence, there are the (3)
types of programs: The Phantom of the Opera program, the programs for productions in the Intimate Theater and the commemorative program.
In connection with each type of program, we are requesting that you address the following: editorial content, advertising, design, printing time frames and deadliies, physical plant location, advertising team location, and proposed gross revenues to the Center.
Generally, we request that you provide us with a corporate profile and your corporation's (as opposed to a parent corporation's) financial statement for your most recent fiscal year.
We would appreciate your submitting your proposals by October 6, 1990. The Performing Arts Center Authority reserves the right to reject any and all proposals.
We apologize for any confusion created by our prior request for proposals and pledge careful consideration of all new proposals received.
All three of the proposals submitted in response to the August 20, 1990, letter inviting new proposals failed to one extent or another to be fully responsive to thee Authority's concerns. This failure was in large part due to the somewhat vague and ambiguous wording of the Authority's August 20, 1990, letter and to the failure of the Authority to provide the prospective publishers with information necessary for a full response. In its response to the August 20, 1990, letter, Southern Playbill offered a guaranteed amount of $80,000, Sun Controlled Ventures, Inc., offered a guaranteed amount of $so,ooo, and Media Publications offered a guaranteed amount of $36,500.
Southern Playbill became annoyed by the September 26, 1990, rejection of all proposals and on October 1, 1990, wrote a long letter summarizing the history of its participation in the process and complaining about the manner in which the Authority was handling the matter. The letter concluded with a suggestion that the Authority more fully advise all potential publishers as to what the Authority had in mind so that everyone could submit what would,
hopefully, be a final proposa1. Southern Playbill's letter of October 1, 1990, did not purport to be a notice of protest, a formal protest, or a request for hearing concerning the September 26, 1990, rejection of all proposals.
On October 3, 1990, Sun Controlled Ventures, Inc., sent a memorandum to the Authority in which it stated that it did not intend to submit another proposal regarding the programs for Phantom of the Opera. In response to Southern Playbill's request for additional information, on October 4 and 5, 1990, the Authority provided additional information to both Southern Playbill and Media Publications.
Media Publications submitted a new proposal on October 10, 1990. That new proposal included more detailed information about the proposed intimate theater and commemorative programs, a detailed production timetable, and a letter from Media Publications' corporate parent guaranteeing performance should Media Publications default on its obligations. Acceptance of a corporate guarantee letter is an accepted practice when a corporation has not been in existence long enough to have its own financial statement.
With the permission of the Authority's Executive Director, Southern Playbill submitted a new "base bid" via FAX on October 10; Southern Playbill was granted permission to file its supporting materials not later than close cf business (5:30) on October 11. On October 11, Southern Playbill filed the remainder of its proposal, which consisted of a copy of its previous proposal with a new page 13 included and sample program materials deleted.
Staff determined that the proposals of both Southern Playbill and Media Publications were responsive. Although Authority staff opened Media Publicaticns' proposal prior to the deadline for submittal, ii was not publicly disclosed until Mr. Feldman asked to see it after the deadline had passed. Southern Playbill's proposal' were never opened before the deadline.
Southern Playbill and Media Publications were informed that the Authority would have to vote to select the publisher and approve the contract award and would consider the matter at its October 23, 1990, meeting. At that meeting, both Southern Playbill and Media Publications mcde presentations to the Authority about their proposals for the theater programs. After those presentations, the Authority's Executive Director, William Farkas, made a presentation to the :Board regarding each proposa1. Mr. Farkas stated that both Southern Playbill and Media Publications were well qualified to produce the theater prograMs. However, based on the fact that Media Publications guaranteed the Authority $16,000 more than Southern Playbill on a net basis and appeared more enthusiastic than Southern Playbill, plus the fact that Media Publications' parent company was financially stronger than Southern Playbill, Mr. Farkas recommended that Media Publications be awarded the contract. The Authority awarded the contract to Media Publications by a 3-2 vote.
The evidence supports the Authority's conclusions that Media Publications' parent company is financially stronger than Southern Playbil1. Media Publications submitted two years of audited financial statements for its parent and guarantor, Pace Management Corporation. Those financial statements showed that Pace Management was in sound financial condition and had in excess of $3 million in liquid assets. Southern Playbill submitted a compilation of its financial condition for one year, and refused the Authority's request that it provide additional financial information. The compilation revealed that Southern Playbill had only approximately $6,000 in liquid assets, that Southern Playbill had outstanding more than $600,000 in unsecured loans to Mr. Feldman
and affiliated companies, that the collectibility of those loans was questionable, and that Southern Playbill had a negative cash flow, all of which raised questions about the continued viability of the enterprise.
Southern Playbill's compila ion did not disclose a November 16, 1989, Final Judgment against it in the amount of $254,550.74, which information should be disclosed on a financial statement. Further, Southern Playbill never disclosed a July 9, 1990, Final Judgement against it in the amount of $256,000, nor did Southern Playbill disclose that it had granted a U.C.C. Security Interest in all of Southern Playbill's business on an ongoing basis, all accounts, and all the rest of its personal property and other assets to Graphic Productions Company pursuant to a Settlement Agreement which was incorporated into the Final Judgment. If Southern Playbill fails to pay the required $7,500 monthly payment required by the Judgment and Settlement Agreement, Southern Playbill's entire business may be in jeopardy, since the Security Agreement allows Graphic Productions to take possession of and sell Southern Playbill's business, or exercise such other remedies as are available under the Uniform Commercial Code.
The Performing Arts Center Authority has adopted Notice And Protest Procedures for the disposition of disputes regarding proposed awards of contracts. Those procedures include the following relevant provisions:
Notification.
Bid Solicitation: The Authority shall provide notice of its decision or intended decision concerning a bid solicitation by: (1) advertising for bids, and (2) distribution of bidding documents by hand delivery or United States mai1.
Contract Award: The nctice of a decision or intended decision ori contract award or bid rejection shall be given by posting the bid tabulation at the location where the bids were opened or by certified United States mail, return receipt requested to each bidder.
Protest.
Any person who is affected adversely by the Authority's decision or intended decision shall file with the
Executive Director of the Authority a notice of protest in writing within 72 hours, excluding Saturday, Sunday and legal holidays, after receipt of the bidding documents or after the beginning of the posting period or other receipt of the notice of the Authority's decision or in.tended decision on contract award or bid rection
if the protest is directed toward contract award or bid rejection.
Thereafter a forinal written protest must be filed with tiie Executive
Director within ten (10) days after the date the notice of protest was filed. The formal
written protest shall state with specificity and particularity the facts add law upon which the protest is based.
Failure to file a notice of
protest or failure to file a formal written protest within the time prescribed in section 120.53(5), Florida Statutes, shall constitute a waiver of protest proceedings under Chapter 120, Florida Statutes. Any protest filed prior to posting of the bid tabulation or receipt of the notice of the agency decision or intended decision will be considered abandoned unless renewed within the time limit provided for protests.
Authority Action.
(a) ...
(b) ...
(c) ...
If the protest is not sold by mutual agreement within said 7 days and if there is a disputed issue of material fact,
the protest shall be referred to the Division of Administrative Hearings of tbe Department of Administration, State of Florida ("Division"), for proceedings under Section 120.57(1).
(e) ...
Southern Playbill filed a Notice of Protest pursuant to the Authority's Notice And Protest Procedures on October 24, 1990, and notified the Authority the following day that it intended its October 24 letter to be a Formal Protest within the meaning of the Authority's Procedures. On October 26, 1990, Media Publications noti:ied the Authority of its desire and intent to participate as a party in all proceedings to resolve Southern Playbill's protest. Southern Playbill subsequently served a Formal Protest on the Authority's law firm on Friday, November 2, 1990, and has taken the position that the October 24 letter was not a Formal Protest. Southern Playbill never filed its November 2, 1990, Formal Protest with the Authority's Executive Director, and the Executive Director never expressly authorized the Formal Protest to be filed late or to be filed at any place other than the Authority's offices. On Friday, November 2, 1990, the Authority's General Counsel advised legal counsel for Southern Playbill that he would accept service on behalf of the Authority's Executive Director of Southern Playbill's Formal Protest at the General Counsel's office in Miami, Florida. In accordance with such agreement, the document was hand delivered to the office of the Authority's General Counsel on November 2, 1990. The Authority's General Counsel thereafter delivered a copy to the Authority's Executive Director.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties to and the su]ject matter of this proceeding. See Section 120.57(1), Florida Statutes, and the Notice And Protest Procedure adopted by the Performing Arts Center Authority.
The Performing Arts Center Authority was created by Chapter 84-396, Laws of Florida, which contains the following relevant provisions:
Section 1. Performing Arts Center authority. -- There is hereby created and established the Performing Afts Center Authority, hereinafter referred to as the "authority," a public body, politic and corporate, in Broward County, for the purpose
of planning, promoting, constructing, acquiring, owning, reconstructing, extending, enlarging, repairing, remodeling, improving, relocating, equipping, maintaining, and operating
facilities for holding any type of cultural, tourism, or promotional event, civic, recreational, or similar event or activity. Such purpose is hereby deemed to be a public purpose the fulfillment of which is an urgent public necessity.
Section 4. General powers. -- The Authority may:
Adopt bylaws for the regulation of
its affairs and the conduct of its business. (2) ...
(3) ...
(4) Plan, develop, purchase, lease, or otherwise acquire, demolish, construct, reconstruct, improve, extend, enlarge, relocate, equip, repair, maintain, operate, and manage facilities.
(5) ...
Acquire by lease, grant, purchase, gift, or devise from any source, including a governmental unit, any real or personal property, or any estate or interest therein, that is necessary, desirable, or convenient for the purpose of this act....
Lease, rent, or contract for the operation or management of any part of any of the facilities of the authority.
(8) ...
Contract for the operation of concessions an or in any of the facilities of the authority, or at its discretion operate such concessions as it deems desirable.
Advertise and promote within or without the state any of the facilities and activities of the authority.
(11) ...
(12) Cooperate with and contract with the government of the United States or the State of Florida or any agency, instrumentality, or political subdivision of either, or with any municipality, district, corporation, partnership, association, person, or individual in providing for or relating to
the authority in carrying out the provisions and purposes of this act.
Section 5. Bid procedures. -- All contracts for constructing, dmolishing, improving, extending, enlarging, relocating, repairing, or equipping of faciliiies of the authority in the amount of $7,590 or more shall be awarded by the authority to the best qualified bidder, as determined by the authority, after consideration of all relevant factors including the purposes and provisions of this act and the competitiveness of all bids received. The authority shall, at least 30 days prior to
the award of such contract, publication one time in a newspaper of general circulation in
Broward County a notice requesting bids on such contract. The authority may for any reason reject all bids and request new bids in the same manner as bids here first requested. This section does not apply to the purchase, lease, or acquisition of a site.
The Performing Arts Center Authority is an independent special district within the meaning of Section 189.403(3), Florida Statutes.
Although the Authority has adopted a portion of the procedures in Chapter 120, Florida Statutes, the Authority is not an "agency" within the definition of the term "agency" in Chapter 120, Florida Statutes. "The term
`agency,' as used in Chapter 120, does not apply to all units of government." Green v. Carson, 515 So.2d 1007 (Fla. 1st DCA 1987). Because the Authority was created by a special act which does not make Chapter 120 applicable; because the Authority operates entirely within Broward County and has no power outside that county and is not comparable in jurisdiction to a statewide or regional agency; and because membership in the Authority is limited to persons who are residents of Broward County; the Authority is not subject to the requirements of Chapter 120, See Booker Creek Preservation, Inc. v. Pinellas Planning Council, 433 So.2d 1306 (Fla. 2d DCA 1983); Hillsborouqh County Env. Protect. Comm. v Williams, 426 So.2d 1285 (Fla. 2d DCA 1983); Siddeeg v. Tallahassee Memorial Hospital, 364 So.2d 99 (Fla. 1st DCA 1978), except to the extent that the Authority has specifically adopted port.ions of Chapter 120 as part of its rules of procedure.
Even if the Authority were an agency within the meaning of Chapter 120, the bid solicitation and protest procedures of Section 120.53(5) would still not be applicable to it in this case. Section 120.53(5) by its own terms applies only to agencies which enter into contracts under Sections 282.302- 282.313, or Chapters 255, 287, or 334 through 339, Florida Statutes. As discussed below, the contract for theater program services does not fall within the scope of y of those statutes. Therefore, the provisions of Section 120.53(5) do not apply to the Authority.
In the special act which created the Authority, the legislature provided that the Authority must seek competitive bids or proposals only for those contracts in excess of $7,500 which are for the "constructing, demolishing, extending, enlarging, relocating, repairing, or equipping of
facilities of the authority.', Chapter 84-396, Section 5, Laws of Florida, Section 3 of the Act defines "facilities" in terms of real property and capital improvements:
(5) "facilities" means facilities or sites for holding any type of cultural, tourism, or promotional event, or civic, recreational, or similar event or activity, and includes property, auditoriums, theaters, music halls, and buildings, structures, utilities, parks, parking areas, roadways, and all other facilities and properties reasonably
necessary or desirable to carr out the purposes of this act.
The contract award challenged in this proceeding is for the publication of theater programs. As such, it is not a contract for the "constructing, demolishing, extending, enlarging, relocating, repairing, or equipping of facilities." Further, it is clear that Section 5 was intended to apply only to contracts which required the Authority to spend in excess of
$7,500, and not to contracts which resulted in revenue to the Authority. Therefore, the Authority is not required by its enacting legislation to competitively bid the program contract, unless there is some other constitutional or statutory provision requiring competitive bidding.
None of the general laws governing competitive solicitation apply to a special district like the Authority or to contracts of the type involved in this proceeding. For example, Chapter 255 applies to state agency buildings under the purview of the Department of General Services. Sections 282.303-282.313 provide for procedures and standards relating to information resources management within the executive branch of state government, and Chapters 334 through 339 pertain only to the public transportation system. Chapter 283, Florida Statutes, applies to contracts for "printing," but the theater program publishing contract is not a printing contract within the meaning of Chapter
283. None of these statutes apply to the theater program contract at issue here.
Southern Playbill has asserted that Chapter 287, Florida Statutes, governs the Authority's solicitation and award of the subject contract.
However, that statute only applies to units of the executive branch of state government (Section 287.012(1)); as a local, independent special district having limited power exercisable only within Broward County, the Authority is not an "agency" of the executive branch of government governed by the statute. See, , 1978 Op. Att'y Gen. of Fla. 078-19 ("In the absence of a statutory requirement, a public body is under no obligation to let a contract under competitive bidding or to award the contract to the lowest bidder;" the Broward County Housing Authority is not a state agency within the purview of Chapter 287 so as to be required to contract by competitive bidding); 1978 Op. Att'y Gen. of Fla. 078-88 (St. Augustine Airport Authority is not subject to requirements of Chapter 287); 1975 Op. Att(y Gen. of Fla. 075-56 (Sarasota-Manatee Airport Authority not subject to competitive bidding requirements of Chapter 287); 1974 pp. Atty Gen. of Fla. 074-7 ("special districts and other separate statutory entities are not considered to be agencies of the state" subject to the requirements of Chapter 287). Further, while certain provisions of Chapter 287 apply to contracts for the purchase of services, the contract at issue here does not involve the "purchase" of services (or anything else) by the Au hority.
Since the Authority will receive revenue from the company who publishes
programs, the Authority is actually sellirnn a license to the winning company allowing it to publish the programs on behalf of the Authority. Although the program publisher may be purchasing a license from the Authority, the Authority is purchasing nothing from the publisher so as to bring itself within the scope of the State Purchasing Law. Finally, even assuming that the Authority were governed by Chapter 287, and assuming that this contract involved the purchase of services, the publication of theater programs is an "artistic service" within the meaning of Section 287.012(4)(b)1.; as such, it is exempt from the competitive solicitation requirements of Section 287.057
The Authority is not required by any provision of Florida Statutes or its enacting legislation to award the contract at issue by competitive bid procedures. Since there is no statutory requirement that the Authority award contracts like the one at issue here by competitive bidding or proposals, the Authority "has no obligation to establish a bidding procedure and may contract in any manner not arbitrary or capricious." Volume Services v. Canteen Corporation, 369 So.2d 391, 395 (Fla. 2d DCA 1979); accord Eggart v. Westmark,
45 So.2d 505 (Fla. 1950); Berbusse v. North Broward Hospital District, 117 So.2d 550 (Fla. 2d DCA 1960).
In Volume Services Division of Interstate United Corporation v. Canteen Corporation, 369 So.2d 391 (Fla. 2d DCA 1979), the court addressed a number of issues regarding the manner in which special districts may enter into contracts. The court's observations in Volume Services, supra, include the following:
There is no common law rule requiring public agencies to let contracts through competitive bids. In the absence of specific constitutional or statutory requirements, a public agency has no obligation to establish a bidding procedure and may contract in any manner not arbitrary or capricious. Eggart
v. Westmark, 45 So.2d 505 (Fla. 1950); William A. Berbusse, Jr., Inc. v. North Broward Hospital Dist., 117 So.:2d 550 (Fla. 2d DCA 1960); 10 D. McQuillir, Municipal
Corporations, Section 29.31 (3d Ed. 1966); 64 Am.Jur.2d Public Works and Contracts Section
34 (1972). Even when the receipt of bids is required by law, a public agency has no obligation to let a contact to particular bidder -- the lowest, the lowest and beat or the lowest responsible bidder -- in the absence of a directive to that effect in the controlling legislation.
In William A. Berbusse, Jr., Inc. v. North Broward Hospital Dist., supra at 551, the low bidder attacked the award of a construction contract by a public hospital district to a higher bidder. The legislative act which created the district specified that construction contracts should be awarded "to the lowest responsible bidder, provided it is to the Owner's interest to accept the bid." In affirming an award of the contract to the higher bidder, this court said:
A public body is not required unqualifiedly to award the contract to the low bidder unless there exists a statutory requirement.
In the final analysis, depending upon the weight given to the various categories of figures and the other factors, both sides can make a case for their respective positions.
No doubt this is what prompted the lower court's conclusion that subjective considerations played an important part in the award of this contract. But, as we have pointed out, TSA was not required to award this contract solely upon the basis of an objective comparison of percentage bids.
The nonpaid members of TSA have been given the responsibility of operating Tampa Stadium in the best interest of the citizens of Tampa and Hillsborough County. They fully complied with the governing legislation applicable to the award of the concessions contract. There is no suggestion of any fraud or overreaching in the determination to award the contract to Interstate. Canteen can make a strong case that its bid was more favorable, but we cannot say that TSA's decision was arbitrary, capricious or beyond the scope of its discretion. As our supreme court said in Culpepper v. Moore, 40 So.2d 366, 370 (Fla.
1949):
So long as such a public agency acts in good faith, even though they may reach a conclusion on facts upon which reasonable men may differ, the courts will not generally interfere with their judgment, even though the decision reached may appear to some persons to be erroneous.
Applying the foregoing to the instant case, the Authority "has no objection to establish a bidding procedure and may contract in any manner not arbitrary or capricious." Accordingly, the Authority is entitled to exercise a wide range of discretion in determining how it will contract and with whom it will contract, and any decision it makes in that regard must be sustained absent a showing that the decision was "arbitrary, capricious, or beyond the scope of its discretion."
There are no doubt better ways for the Authority to have chosen a contractor for the publication of its programs. Surely much of the confusion and delay which has plagued this project could have been minimized or avoided if the Authority had taken a more formal and structured approach to the selection of a contractor and had more skill fully advised the potential contractors as to the nature of the project and the nature of the information sought from the contractors. But clumsy as it was, the Authority's procedure for selecting a contractor appears to have been free from any bias or improper consideration. Specifically, there is no persuasive evidence that the Authority acted fraudulently, arbitrarily, illegally, or dishonestly. Absent such a showing, the
only remaining question is whether the Authority has abused its discretion. Here, as in the Volume Services case, supra, a strong case can be made in favor of the selection of either Southern Playbill or Media Publications. The Authority's reasons for choosing one over the other are reasonable. Therefore, as noted in Culpepper v. Moore, 40 So.2d 366, 370 (Fla. 1949):
So long as a public agency acts in good faith, even though they mad reach a conclusion on facts upon which reasonable men may differ, the courts will not generally interfere with their judgment, even though the decision reached may appear to some persons to be erroneous.
There being no showing of any illegal or improper conduct on the part of the Authority in the process leading up to the selection of Media Publications, there is no basis for setting aside that choice.
Media Publications has argued that the Petitioner in this case has waived its right to protest the contract award in this case, asserting that the Petitioner failed to fail its formal written protest in the manner and within the time specified in the Authority's Notice And Protect Procedures. The argument is supported by citation to Xerox Corporation v. Florida Department of Professional Regulation, 489 So.2d 1230 (Fla. 1st DCA 1986). The facts here are distinguishable form those in the Xerox case. In Xerox the court addressed the effect of what it described as "informal and imprecise oral communications" with agency personnel Here, there was a precise, specific agreement between counsel for Southern Playbill and the Authority's General Counsel to allow service of the formal written protest in a manner different from the manner specified in the Authority's procedures. While the wisdom of entering into such agreements is certainly subject to question, once a party has relied upon the agreement, it would be distinctly unfair to penalize a party for its reliance. This is especially so where, as here, there is no showing that the manner in which the formal protest was served had any impact upon the rights of any other party.
Southern Publisher has argued that the contract award in this case should be reversed because of the Authority's failure to comply with various provisions of Chapter 120, Florida Statutes, particularly, provisions of Section 120.53(5), Florida Statutes. Those arguments fail because the Authority is not subject to the provisions of Section 120.53(5), Florida Statutes, and the statutory language relied upon by Southern Playbill has not been included in the Authority's Notice And Protest Procedures.
A final matter to be addressed is the Intervenor's motion seeking a determination by the Hearing Officer that the Petitioner has participated in this proceeding for an "improper purpose." The quoted term is defined as follows at Section 120.59(6)(e)1., Florida Statutes:
"Improper purpose" means participation in a proceeding pursuant to S. 120.57(1) primarily to harass or to cause Unnecessary delay or for frivolous purpose or to needlessly increase the cost of licensing or securing the approval of an activity.
The parties have not cited, and the Hearing Officer's research has not uncovered, any judicial decisions applying or interpreting the "improper purpose" language of Section 120.59(6), Florida Statutes. The language of Section 120.59(6), Florida Statutes, is very similar to the language of Section 120.57(1)(b)5. The last-mentioned statutory provision has been addressed by the courts, specifically in Mercedes Lighting and Electrical Supply, Inc. v. State, Department of General Services, 560 So.2d 272 (Fla. 1st DCA 1990), where the court noted that Section 120.57(1)(b)5., Florida Statutes, is not as far- reaching as Rule 11 of the Federal Rules of Civil Procedure. The narrow construction given to Section 120.57(1)(b)5., Florida Statutes, suggests that a similar construction should be given to Section 120.59(6), Florida Statues. Construed narrowly, Section 120.59(6) requires a showing that a party's participation was "primarily" for one of the reasons itemized in the statute. The record in this case is insufficient to establish that the Petitioner had as its primary purpose one of the improper reasons defined in the statute. To the contrary, the Petitioner's primary purpose of participating in this proceeding appears to have been its earnest desire to be awarded the subject contract. The mere fact that its efforts are unsuccessful does not expose it to liability under Section 120.59(6), Florida Statutes.
Based on all of the foregoing, it is RECOMMENDED that the Performing Arts Center Authority issue a Final Order in this case to the following effect:
Awarding the subject contract for printing programs to Media Publications, Inc., and
Dismissing the Petition in this case.
DONE AND ENTERED in Tallahassee, Leon County, Florida, this 28th day of December 1990.
MICHAEL M. PARRISH
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 28th day of December, 1990.
APPENDIX TO RECOMMENDED ORDER IN CASE NO. 90-7O5OBID
The following are my specific rulings on all proposed findings of fact submitted by all parties.
Findings submitted by Petitioner:
Paragraph 1: Rejected as an oversimplification. More detailed findings have been made on this subject.
Paragraph 2: Rejected as an over simplification and as not fully consistent with the greater weight of the evidence or with the stipulated facts.
Paragraph 3: Accepted in substance, but with numerous additional clarifying details.
Paragraphs 4 and 5: Accepted in substance. Paragraph 6: Rejected as irrelevant and immateria1.
Paragraph 7: Rejected as contrary to the greater weight of the evidence. Paragraphs 8 and 9: Accepted in
Paragraphs 10 and 11: Rejected as oversimplifications and as not fully consistent with the greater weight of the evidence.
Paragraphs 12 and 13: Accepted in substance.
Paragraph 14: First two sentences rejected as an over simplification. More detailed findings have been made on this subject. Last sentence is rejected as irrelevant.
Paragraph 15: Accepted in substance, but with numerous additional clarifying details.
Paragraph 16: Rejected as subordinate and unnecessary details and as argument. Paragraph 17: Rejected as argument.
Paragraphs 18 and 19: Accepted in substance.
Paragraph 20: Rejected as not fully supported by the evidence. Paragraphs 21 and 22: Accepted in substance.
Findings submitted by Respondent:
Paragraphs 1, 2, and 3: Accepted.
Paragraph 4: Rejected as subordinate and unnecessary details. Paragraph 5: Accepted in substance with unnecessary details omitted. Paragraphs 6, 7, 8, 9, and 10: Accepted in substance.
Paragraph 11: Accepted in substance with unnecessary details omitted. Paragraphs 12 and 13: Rejected as subordinate and unnecessary details. Paragraph 14: Accepted in substance with unnecessary details omitted.
Paragraphs 15 and 16: Rejected as subordinate and unnecessary details and as irrelevant.
Paragraph 17: Accepted.
Paragraphs 18, 19, and 20: Accepted in substance with unnecessary details omitted.
Paragraph 21: Rejected as irrelevant. Paragraph 22: Accepted.
Paragraphs 23 and 24: Rejected as subordinate and unnecessary details. Paragraph 25: Accepted in substance.
Paragraph 2 6: Accepted in substance with some subordinate and unnecessary details omitted.
Paragraphs 27 and 28: Accepted in substance.
Paragraph 29: First three sentences accepted in substance. Last sentence rejected as argument or conclusion of law.
Paragraph 30: Accepted in substance.
Paragraph 31: First two sentences accepted. Last sentence rejected as irrelevant.
Paragraphs 32, 33, 34, 35, 36 37, and 38: Accepted in substance. Findings submitted by Intervenor:
Paragraphs 1, 2, and 3: Accepted.
Paragraph 4: Rejected as subordinate and unnecessary details. Paragraph 5: Accepted in substance with unnecessary details omitted. Paragraphs 6, 7, 8, 9, and 10: Accepted in substance.
Paragraph 11: Accepted in substance with unnecessary details omitted. Paragraphs 12 and 13: Rejected as subordinate and unnecessary details. Paragraph 14: Accepted in substance with unnecessary details omitted.
Paragraph 15: Rejected as subordinate and unnecessary details and as irrelevant.
Paragraph 16: Accepted.
Paragraphs: 17, 18, and 19: Accepted in substance with unnecessary details omitted.
Paragraph 20: Rejected as irrelevant. Paragraph 21: Accepted.
Paragraphs 22 and 23: Rejected as subordinate and unnecessary details. Paragraphs 24, 25, and 26: Accepted in substance.
Paragraph 27: First three sentence accepted in substance. Last sentence rejected as argument or conclusion of law.
Paragraphs 28 and 29: Accepted in substance.
Paragraph 30: First two sentences accepted. Last sentence rejected as irrelevant.
Paragraphs 31, 32, 33, 34, 35, and 36: Accepted in substance.
COPIES FURNISHED:
Dan Paul, Esquire
Jorden Schulte & Burchette
701 Brickell Avenue, 24th Floor Miami, Florida 33131
Melinda S. Gentile, Esquire Ruden, Barnett, McClosky, Smith,
Schuster & Russell, P.A. Post Office Box 1900
Fort Lauderdale, Florida 33302
Paul R. Ezatoff, Esquire
Katz, Kutter, Haigler, Alderman, Davis, Marks & Ruthledge, P.A.
First Florida Bank Building
215 South Monroe Street, Suite 400 Tallahassee, Florida 32301
Mr. William Farkas Executive Director
Performing Arts Center Authority 624 S.W. 2nd Street
Fort Lauderdale, Florida 33312
Ms. Jane Podgurski General Manager
Performing Arts Center Authority 624 S.W. 2nd Street
Fort Lauderdale, Florida 33312
NOTICE OF RIGHT TO SUBMIT EXCEPTIONS
All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the final order in this case concerning agency rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.
| Issue Date | Proceedings |
|---|---|
| Dec. 28, 1990 | Recommended Order (hearing held , 2013). CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Dec. 28, 1990 | Recommended Order | Broward Performing Arts Center Authority is not subject to Ch 120 bidding requirements and may contract in any reasonable manner. |
LOUIS CIANCIOLA vs UNITED ARTISTS THEATRE CIRCUIT, INC., D/B/A UNITED ARTISTS, 90-007050BID (1990)
CONSTRUCTION INDUSTRY LICENSING BOARD vs. NORMAN B. CLARK, 90-007050BID (1990)
ALEJANDRO RODRIGUEZ vs DEPARTMENT OF STATE, DIVISION OF LICENSING, 90-007050BID (1990)
JIM HORNE, AS COMMISSIONER OF EDUCATION vs ALAN KRULICK, 90-007050BID (1990)
