STATE OF FLORIDA DIVISION OF ADMINISTRATIVE HEARINGS

TALLAHASSEE ASSOCIATES, LTD., )

)

Petitioner, )

)

vs. ) CASE NO. 91-1306BID

) STATE OF FLORIDA, DEPARTMENT ) OF STATE, )

)

Respondent, )

)

and )

)

CROSSLAND AGENCY, INC., )

)

Intervenor. )

)

RECOMMENDED ORDER

Pursuant to written notice a hearing was held in this case before Larry J. Sartin, a duly designated Hearing Officer of the Division of Administrative Hearings, on March 6, 1991, in Tallahassee, Florida. The hearing was held to consider a Motion to Dismiss filed by the Respondent and the Intervenor.

APPEARANCES

For Petitioner: Linda G. Miklowitz, Esquire

1589 Metropolitan Boulevard

Tallahassee, Florida 32308

For Respondent: Benjamin E. Poitevent

Assistant General Counsel Department of State Division of Licensing

The Capitol, Mail Station #4 Tallahassee, Florida 32399-0250

For Intervenor: M. Christopher Bryant, Esquire

OERTEL, HOFFMAN, FERNANDEZ & COLE, P.A.

2700 Blair Stone Road Post Office Box 6507

Tallahassee, Florida 32314-6507 STATEMENT OF THE ISSUES

Whether the Petitioner waived its right to protest a proposed award of a lease by the Respondent?

PRELIMINARY STATEMENT

This matter came before the undersigned upon the filing of a Motion to Dismiss filed by the Respondent and the Intervenor. Pursuant to written notice a motion hearing to consider the Motion to Dismiss was conducted on March 6, 1991. The Intervenor also filed Intervenor's Request for Official Recognition. The Intervenor's Request is hereby granted.

At the motion hearing the Petitioner presented the testimony of Ocie Allen. The following documents were accepted into evidence: a bid tabulation dated January 2, 1991, with a memorandum dated January 2, 1991 and Lease Evaluation Sheet attached; an updated bid tabulation dated February 4, 1991, with a memorandum dated January 24, 1991, and Lease Evaluation Sheet attached; and the Formal Written Protest, Request for Formal Hearing, and Motion for Stay filed by the Petitioner. The parties also stipulated to certain facts.

Following argument by the parties, the parties were informed that the undersigned intended to grant the Motion to Dismiss, by recommending dismissal of this matter in a Recommended Order. The parties were informed that they would be given an opportunity to file proposed recommended orders which would be considered by the undersigned.

Proposed recommended orders were to be filed on or before March 13, 1991.

The parties filed proposed recommended orders. The Respondent and Intervenor filed a joint proposed recommended order. The Petitioner's proposed recommended order was not filed until March 15, 1991. The Respondent and Intervenor were informed of the Petitioner's failure to file its proposed recommended order on or before March 13, 1991. Both the Respondent and Intervenor informed the undersigned that they had no objection to the Petitioner's proposed recommended order being considered.

The proposed recommended orders filed by the parties contain proposed findings of fact. A ruling on each proposed finding of fact has been made either directly or indirectly in this Recommended Order or the proposed finding of fact has been accepted or rejected in the Appendix which is attached hereto.

In the proposed recommended order filed by the Petitioner, the Petitioner has proffered a document titled Posting of Notice of Agency Decision. Although this document was rejected during the motion hearing as not being relevant, that ruling is reversed and it is hereby accepted into evidence.

The Respondent and Intervenor included proposed findings of fact and conclusions of law in their proposed recommended order concerning "costs" allegedly incurred by the Respondent in this proceeding. On March 22, 1991, counsel for the Respondent was informed by telephone that a motion hearing would have to be held to allow the Petitioner an opportunity to

be heard concerning whether the proposed findings of fact and conclusions of law should be made. Counsel for the Respondent informed the undersigned that the Respondent would prefer that the undersigned not make any findings of facts or conclusions of law concerning costs in order to insure that this Recommended Order is issued as soon as possible. Accordingly, no findings of fact or conclusions of law concerning "costs" incurred by the Respondent in this proceeding have been made.

Subsequent to the filing of proposed recommended order the Petitioner filed Petitioner's Motion to Strike. In the Motion, the Petitioner requests that portions of the proposed recommended order filed by the Respondent and Intervenor be struck. The Motion is hereby denied.

FINDINGS OF FACT

1. In November, 1990, the Respondent, the Department of State, sought proposals for the lease of office space for its Division of Licensing.

   
   

2. On or prior to December 7, 1990, the proposal opening date, at least six proposals were received by the Respondent. Those proposals were designated by the Respondent as "Tallahassee Associates" (the Petitioner's proposal), "Crossland Agency" (the Intervenor's proposal), "Woodcrest A", "Woodcrest B", "T.C.S." and "DeVoe".

   
   

3. On January 2, 1991, the Respondent posted a standard form Bid Tabulation indicating that the following scores had been awarded to the following proposals:

   
   

   Proposal	Score
   Woodcrest A	82
   Woodcrest B	82
   Tallahassee Associates	73
   Crossland Agency	85
   DeVoe	54

   
   

4. The proposal of T.C.S. was not evaluated by the Respondent because it was determined to be non-responsive.

   
   

5. The Respondent also posted a copy of a memorandum dated January 2, 1991, with the January 2, 1991, Bid Tabulation. The memorandum was from John M. Russi, Director of the Division of Licensing, to Ira Chester, Chief of the Bureau of General Services. Mr. Russi indicated in the memorandum that the Intervenor would be awarded the lease.

   
   

6. Attached to Mr. Russi's January 2, 1991, memorandum was a Lease Evaluation Worksheet which indicated the scores which had been awarded by the evaluation committee to the responsive bidders for each of the criteria to be considered in determining the winning bidder.

   
   

7. Printed at the top-center of the January 2, 1991, Bid Tabulation was the following notice:

   FAILURE TO FILE A PROTEST WITHIN THE TIME PRESCRIBED IN SECTION 120.53(5), FLORIDA STATUTES, SHALL CONSTITUTE A WAIVER OF PROCEEDINGS UNDER CHAPTER 120, FLORIDA STATUTES. . . .

   
   

   The January 2, 1991, Bid Tabulation was posted at 1:00 p.m., January 2, 1991. Therefore, pursuant to Section 120.53(5), Florida Statutes, any bidder desiring to contest the Respondent's proposed award of the lease was required to file a notice of protest with the Respondent no later than 1:00 p.m., January 5, 1991, and a formal written protest on or before January 15, 1991.

   
   

8. T.C.S. filed a notice of protest and a formal written protest to the January 2, 1991, Bid Tabulation within the time periods prescribed by Section 120.53(5), Florida Statutes. T.C.S. contested the Respondent's determination that it was not responsive.

   
   

9. The Petitioner did not file a notice of protest or a formal written protest to the January 2, 1991, Bid Tabulation within the time periods prescribed by Section 120.53(5), Florida Statutes.

   
   

10. Pursuant to Section 120.53(5), Florida Statutes, the Respondent reviewed the formal written protest filed by T.C.S. and agreed that

    T.C.S. was responsive.

    
    

11. After agreeing that T.C.S. was responsive, the Respondent evaluated T.C.S.'s proposal and awarded points for each of the criteria to be considered.

    
    

12. Toward the end of January, 1991, after deciding that T.C.S.'s proposal was to be evaluated, the Respondent notified all other bidders of its decision in a document titled Posting of Notice of Agency Decision. The Posting of Notice of Agency Decision was signed by the Respondent's General Counsel and was addressed to "All Responsive Bidders". The Posting of Notice of Agency Decision provided, in pertinent part:

    
    

    Notice is hereby given that the Florida Department of State, Division of Licensing, is reviewing the bid tabulation which was posted at 1:00 P.M., January 2, 1991 for Lease No. 450:0070. The revised bid tabulation will be posted at 8:00 A.M. on February 4, 1991 at the Purchasing Office of the Department of State . . . . Failure to file a protest within the time prescribed in Section 120.53(5), Florida Statutes, shall constitute a waiver of proceeding under Chapter 120, Florida Statutes. Any person interested in the new tabulation should contact . . . after the posting time listed above.

13. The Petitioner filed a notice of protest and a formal written protest challenging the Posting of Notice of Agency Decision within the times prescribed by Section 120.53(5), Florida Statutes. The Respondent dismissed this formal written protest by final order dated February 22, 1991.

    
    

14. On or about January 31, 1991, more than four weeks after the posting of the January 2, 1991, Bid Tabulation, Ocie Allen spoke by telephone with Phyllis Slater, the Respondent's General Counsel. Ms. Slater told Mr. Allen that all proposals would be reevaluated as a result of T.C.S.'s protest. Mr. Allen was a lobbyist for the Petitioner in January, 1991.

    
    

15. On February 4, 1991, the Respondent posted another standard form Bid Tabulation indicating that the following scores had been awarded to the following proposals:

    
    

    Proposal	Score
    Crossland Agency	83
    Woodcrest A	80
    Woodcrest B	80
    Tallahassee Associates	71
    T.C.S.	71
    DeVoe	51

    
    

    The differences in the scores of the proposals which had been listed on the January 2, 1991, Bid Tabulation, which are reflected in the February 4, 1991, Bid Tabulation were caused by automatic changes in the scores resulting from the addition of T.C.S. and the fact that T.C.S. had the lowest priced bid. The points awarded for the "rental" criterion, which was worth up to 25 points, were determined by a mathematical formula by which the scores of each bidder are calculated based upon the proposed rental charges of all bidders. The award of points for this criterion was determined objectively based upon the mathematical formula. By adding another bidder, T.C.S., the points awarded to all the proposals automatically changed. The scores of the proposals which had been listed on the January 2, 1991, Bid Tabulation, were not otherwise changed. Nor were the proposals of any bidder reevaluated.

    
    

16. The Respondent also posted a copy of a memorandum dated January 24, 1991, with the February 4, 1991, Bid Tabulation. The memorandum was from John M. Russi, Director of the Division of Licensing, to Ira Chester, Chief of the Bureau of General Services. Mr. Russi indicated the following in the memorandum:

    
    

    Pursuant to the settlement stipulation signed by Counsel for T.C.S. Associates on January 23, 1991, in reference to the Bid Protest filed January 11, 1991, the attached "Lease Evaluation Work Sheet" is provided for you to re-post.

    After reevaluating six bid proposals, the

    evaluating committee concludes that Crossland Agency should be awarded this bid. Each bidder needs to be notified by certified mail of this action.

    . . . .

    
    

17. Attached to Mr. Russi's January 24, 1991, memorandum was a Lease Evaluation Worksheet which indicated the scores of the responsive bidders which had been awarded by the evaluation committee for each of the criteria to be considered in determining the winning bidder.

    
    

18. On February 6, 1991, the Petitioner filed a notice of protest to the February 4, 1991, Bid Tabulation. The Petitioner filed a Formal Written Protest, Request for Formal Hearing and Motion for Stay with the Respondent on February 18, 1991. These documents were filed within the time periods specified in Section 120.53(5), Florida Statutes.

    
    

19. The Petitioner's Formal Written Protest was filed with the Division of Administrative Hearings by the Respondent on February 28, 1991.

    
    

20. Crossland Agency, Inc., was allowed to intervene in the proceeding.

    
    

21. On March 1, 1991, the Respondent and Intervenor filed a Motion to Dismiss. A motion hearing was conducted on March 6, 1991, to consider the Motion to Dismiss.

    
    

    CONCLUSIONS OF LAW

    
    

22. The Division of Administrative Hearings has jurisdiction of the parties to and the subject matter of this proceeding. Section 120.57(1), Florida Statutes (1989).

    
    

23. Section 120.53(5), Florida Statutes, governs the procedures for resolving challenges to proposed agency decisions arising out of the State's contract bidding process. The statute provides that notice of an intended award of contract, other than one arising out of a bid solicitation, may be given by posting the bid tabulation at the location where the bids were opened. Section 120.53(5)(b), Florida Statutes, provides, in pertinent part, the following:

    
    

    (b) Any person who is affected adversely by the agency decision or intended decision shall file with the agency a notice of protest in writing within 72 hours after the posting of the bid tabulation or after receipt of the notice of the agency decision or intended decision and shall file a formal written protest within 10 days after the date he filed the notice of protest. Failure to file a notice of protest or failure to file a formal written protest shall constitute a waiver of proceedings under this chapter. . . .

    [Emphasis added].

    
    

24. The Respondent posted its bid tabulation giving notice of its intended award of lease on January 2, 1991. The Petitioner took no action to file a notice of protest or formal written protest within the time periods specified in Section 120.53(5)(b), Florida Statutes. The Respondent and Intervenor have argued that the Petitioner, therefore, waived its right to challenge the Respondent's proposed award pursuant to the portion of Section 120.53(5)(b), Florida Statutes, emphasized above. The Respondent and Intervenor are correct.

    
    

25. This matter is similar to the facts involved in Xerox Corporation v. Department of Professional Regulation, 489 So.2d 1230 (Fla. 1st DCA 1986). In Xerox, Xerox filed a notice of protest to a contract award posted on August 29, 1985, by the Department of Professional Regulation within the time required by Section 120.53(5)(b), Florida Statutes. Xerox did not, however, file a formal written protest within the time period for filing a formal written protest because of an alleged oral representation of Department of Professional Regulation personnel that a decision had not been made concerning how the contract should be awarded despite the posting. On October 2, 1985, Xerox was notified by letter of the Department of Professional Regulation's proposed contract award. Xerox filed a notice of protest and a formal written protest to the October 2, 1985, notice within the time periods specified in Section 120.53(5)(b), Florida Statutes. The Department of Professional Regulation dismissed the protest as untimely and the First District Court of Appeal affirmed the dismissal.

    
    

26. In affirming the dismissal of Xerox's challenge in the Xerox case, the court concluded that Xerox had failed to file a formal written protest to the posting of the bid tabulation of August 29, 1985, within the time period required by Section 120.53(5)(b), Florida Statutes. Therefore, pursuant to the unambiguous language of Section 120.53(5)(b), Florida Statutes, the court concluded that Xerox had waived its right to challenge the decision of the Department of Professional Regulation. The court also concluded that the oral communications to Xerox concerning the effect of the posting of the bid tabulation were "insufficient in form and substance to overcome the effect of the prior formal notice as to the necessity of a timely protest."

    
    

27. Although the facts in this case are not identical to the facts in Xerox, the difference in facts is not sufficient to justify reaching a different legal conclusion in this case. The crucial fact in Xerox is also a fact in this case: the Petitioner failed to comply with the requirements of Section 120.53(5)(b), Florida Statutes. Therefore, the Petitioner waived its right to challenge the Respondent's proposed lease award. Any oral or written communications by the Respondent's General Counsel took place after the time periods of Section 120.53(5)(b), Florida Statutes, had run. The General Counsel's communications were also contrary to the explicit notice on the January 2, 1991, Bid Tabulation that challenges to the Respondent's proposed decision must be filed in conformity with Section 120.53(5)(b), Florida Statutes. Having been put on notice of the requirements of Section 120.53(5)(b), Florida Statutes, and the consequences of failing to meet those requirements,

    subsequent communications to the Petitioner cannot revive the Petitioner's right to challenge the Respondent's decision after those rights have already been waived.

    
    

28. Admitting that it missed the January 2, 1991, point of entry to challenge the Respondent's proposed contract award, the Petitioner has argued that the Respondent gave the Petitioner another point of entry to challenge the Respondent's action when it posted the February 4, 1991, Bid Tabulation. This argument is rejected. Once the Petitioner waived its right to proceedings under Section 120.53(5), Florida Statutes, by failing to challenge the Respondent's proposed award, it lost its standing to challenge subsequent actions by the Respondent concerning the proposed contract award. T.C.S.'s timely challenge to the Respondent's proposed award did not revive the Petitioner's rights. Nor did the action of the Respondent in concluding that T.C.S.'s proposal was responsive and in evaluating T.C.S.'s proposal substantially affect the Petitioner.

    
    

29. If the Respondent and T.C.S. had not reached a settlement of the challenge brought by T.C.S., their dispute would have been referred to the Division of Administrative Hearings (unless there were no disputed issues of fact). Section 120.53(5)(d)2, Florida Statutes. The Petitioner's rights, if any, to participate before the Division of Administrative Hearings in T.C.S.'s challenge would have been subordinate to the principal issues raised by T.C.S. The Petitioner could not have sought an award of the contract to itself because it waived that right when it failed to file a notice of protest or formal written protest. See Humana of Florida, Inc. v. Department of Health and Rehabilitative Services, 500 So.2d 186 (Fla. 1st DCA 1986); and Lewis Oil Company v. Alachua County, 496 So.2d 184 (Fla. 1st DCA 1986). The fact that the dispute with T.C.S. was resolved before it was referred to the Division of Administrative Hearings should not bestow on the Petitioner rights which it would not have had if the dispute had not been quickly settled.

    
    

30. The Petitioner has also argued that its challenge should not be dismissed because "the assurances of the respondent's general counsel that all proposals would be considered equally in the reevaluation is a waiver and estops the department from seeking to dismiss the second and instant petition." This argument is rejected. In order to conclude that the Respondent is estopped in this case there must be proof that (1) the Respondent has made a representation as to a material fact that is contrary to a later asserted position; (2) the Petitioner relied on the Respondent's representation; and (3) the Petitioner changed its position detrimentally by relying on the Respondent's representation. See Moore

    v. Department of Revenue, 536 So.2d 1050 (Fla. 1st DCA 1988); and Tri- State Systems, Inc. v. Department of Transportation, 500 So.2d 212 (Fla. 1st DCA 1986), rev. denied, 506 So.2d 1041 (1987).

    
    

31. The Petitioner has failed to prove that estoppel should be applied in this case. The only detriment to the Petitioner in this case occurred when the Petitioner ignored the Respondent's unambiguous notice that failure to comply with the time periods specified in Section 120.53(5)(b), Florida Statutes, would constitute a waiver of its right to challenge the Respondent's proposed decision. Although the Respondent

    may have subsequently indicated that it was changing its position by informing the Petitioner that it could challenge later actions of the Respondent as a result of T.C.S.'s action, any reliance on such a representation did not result in any detriment to the Petitioner; the detriment had already occurred. Nor was there any detriment to the Petitioner when the Respondent took the position, subsequent to the issuance of the Notice of Proposed Agency Decision and Ms. Slater's telephone conversation with Mr. Allen, that the Petitioner's challenge should have been filed within the statutory time periods after posting of the January 2, 1991, Bid Tabulation. Again, the detriment to the Petitioner had already occurred long before the Respondent changed its position.

    
    

32. The Respondent and Intervenor have also argued in their proposed recommended order that this case should be dismissed because of the failure of the Petitioner to post a bond as required by Section 255.25, Florida Statutes (Supp. 1990). This issue was not raised in the Motion to Dismiss. Nor was it raised during the hearing to consider the Motion to Dismiss. The parties have not presented any evidence or stipulated to any facts concerning this issue. Therefore, no decision concerning this issue will be made.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it

is

RECOMMENDED that a final order be issued by the Respondent granting

the Motion to Dismiss and dismissing this case, with prejudice.

DONE and ENTERED this 22nd day of March, 1991, in Tallahassee, Florida.

LARRY J. SARTIN

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 March, 1991.

APPENDIX TO RECOMMENDED ORDER

The parties have submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted.

The Petitioner's Proposed Findings of Fact

Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection

1 3, 5 and 9.

2 12-13.

3 15-16 and 18-21.

1. See 14.

2. 15. The weight of the evidence failed to prove that the scores of the bidders for the "option period" criterion reflected on the January 2, 1991, Bid Tabulation were modified or reconsidered on the February 4, 1991, Bid Tabulation. The suggestion that "the department had discretion to change scores in any of the remaining eight categories" is a conclusion of law and is rejected.

3. These proposed facts are not relevant to the issue raised in the Motion to Dismiss. Nor was any evidence presented to support these proposed findings.

4. 12. The last sentence is a conclusion of law and is rejected.

Proposed Findings of Fact of the Respondent and Intervenor

Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection

1 1-2.

1. 3 and 7.

2. 5-6 and hereby accepted.

4 8-12.

5 See 14.

6 15 and 17.

1. 18. The last sentence involves an issue not raised in the Motion to Dismiss or at the motion hearing. Nor was any evidence presented to support these proposed findings.

2. See the Preliminary Statement.

COPIES FURNISHED:

Linda G. Miklowitz, Esquire 1589 Metropolitan Boulevard

Tallahassee, Florida 32308

Benjamin E. Poitevent Assistant General Counsel Department of State

The Capitol, MS #4

Tallahassee, Florida 32399-0250

M. Christopher Bryant, Esquire Post Office Box 6507 Tallahassee, Florida 32314-6507

Honorable Jim Smith Secretary of State The Capitol

Tallahassee, Florida 32399-0250

Docket for Case No: 91-001306BID

Orders for Case No: 91-001306BID