STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

GLOBAL MARKETING OF NORTH CAROLINA, )

)

Petitioner, )

)

vs. ) CASE NO. 91-2222F

)

DEPARTMENT OF ENVIRONMENTAL )

REGULATION, )

)

Respondent, )

)

FINAL ORDER

Pursuant to the written stipulation of counsel, the Division of Administrative Hearings, by its duly designated Hearing Officer, Don W. Davis, dispensed with a formal hearing in the above-styled case and agreed to issue a Final Order in this matter after review of written submissions made by the parties on or before July 12, 1991. The following appearances were made in the course of this proceeding.

APPEARANCES

For Petitioner: Donna H. Stinson, Esquire

Suite 100, The Perkins House

118 North Gadsden Street Tallahassee, Florida 32301

For Respondent: Cynthia K. Christen, Esquire

Department of Environmental Regulation 2600 Blairstone Road, Room 654

Tallahassee, Florida 32399-2400 STATEMENT OF THE ISSUES

The primary issue for determination is whether Respondent was substantially justified in the rejection of Petitioner's bid, the subject of previous litigation in Division of Administrative Hearings Case No. 90-6962BID.

PRELIMINARY STATEMENT

In Division of Administrative Hearings Case No. 90- 6962BID, Respondent tentatively determined Petitioner's bid response to be non-responsive. By letter dated October 12, 1990, Respondent notified Petitioner of Respondent's intent to award the subject bid to another party. Petitioner timely filed a notice of protest and a formal hearing was held before the Division Of Administrative Hearings on November 20, 1990.

A Recommended Order, concluding that Petitioner's bid was responsive, was submitted by the undersigned on December 19, 1990. Respondent's Final Order, dated February 18, 1991, adopted the Hearing Officer's recommendation and

awarded the bid to Petitioner. On April 5, 1991, Petitioner timely filed a Petition for Attorney's Fees pursuant to Section 57.111, Florida Statutes.

Proposed findings of fact were submitted by the parties and are addressed in the appendix to this recommended order.

FINDINGS OF FACT

1. Respondent issued an Invitation To Bid (ITB) for Bid No. 91-04, entitled "Granular Activated Carbon (GAC) Filter Installations and Exchanges" in September, 1990.

   
   

2. Two bids were received in response to Respondent's ITB 91-04; one from Petitioner for a composite total price of $748,355.00 and one from Continental Water Systems, Inc. (Continental), for a total composite price of $904.475.00. An intended contract award was delayed until the bids were evaluated. Subsequently, Respondent determined to award the bid to Continental on October 12, 1990.

   
   

3. The issue in the ensuing bid dispute in Division of Administrative Hearings Case No. 90-6962BID was the responsiveness of Petitioner's bid on carbon specifications to be used in water filters. The bid document did not require manufacturers' specifications, requiring instead only generic specifications or a description of the product to be used. Respondent awarded the bid to Continental after determining Petitioner's bid to be nonresponsive, although the bid appeared facially responsive.

   
   

4. In the course of evaluating the bids, Respondent's personnel went beyond the bid submissions and telephoned the manufacturer of the carbon proposed to be used in Petitioner's bid submittal. The manufacturer confirmed the content of Petitioner's bid that a lot analysis and hand selection could be done to select lots of carbon of a specified iodine number of 950 or greater in satisfaction of Respondent's specifications. Absent such a selection process, no manufacturer in this country produces a standard carbon which meets Respondent's bid specifications.

   
   

5. While the ITB required bidders to submit specifications for products, it did not require submission of manufacturer's specifications. However, Petitioner's bid submittal included the manufacturer's specification sheet for an activated charcoal product known as GAC 30. The iodine number 950 appeared on the sheet with an asterisk next to it. At the bottom of the page was a typed note explaining that lots with this iodine rating would be specifically selected to meet or exceed all bid requirements.

   
   

6. In reviewing Petitioner's bid, Respondent's personnel were aware that Petitioner had been using selected lots of GAC 30 in fulfilling a previous bid award for the same project from the Department of Agriculture and Consumer Services which specified carbon with an iodine number of 950. Further, Respondent's personnel knew that lot analyses were provided to the Department of Agriculture and Consumer Services to confirm the carbon's standards. As a result of that knowledge, a provision for an analysis of each carbon lot to be used was included in Respondent's ITB.

   
   

7. On October 9, 1990, when Respondent's employee telephoned the manufacturer whose specification sheet was submitted by Petitioner, he was orally informed that while the iodine number for GAC 30 is 900, the actual iodine number for GAC 30 is often above 950 and that lot selections of carbon

   could be made meeting or exceeding 950. Later, per the employee's request for written confirmation, he received a facsimile letter dated October 10, 1990, from the manufacturer. Without regard for these findings, Respondent rejected Petitioner's bid because the actual manufacturer's specification for the carbon proposed by Petitioner did not meet bid requirements. 1/

   
   

8. While Respondent's personnel deemed it appropriate to consider information from the manufacturer of GAC 30 that its actual specifications were different from those submitted by Petitioner, the manufacturer's confirmation of Petitioner's explanation that lots would be selected to meet bid requirements was rejected.

   
   

9. Petitioner is a corporation which, at the time of the bid submittal, had its principal office in Winter Haven, Florida. At that time, Petitioner had

   12 employees.

   
   

10. Petitioner is a prevailing small business party and was awarded the bid by Final Order of Respondent dated February 18, 1991.

    
    

11. In the course of the administrative litigation culminating in Respondent's Final Order, Petitioner incurred attorney's fees in excess of

    $15,000.

    
    

    CONCLUSIONS OF LAW

    
    

12. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter. Section 57.111 and Section 120.57(1), Florida Statutes.

    
    

13. Petitioner bears the burden of establishing its classification as a small business party, that it prevailed in the prior action, and that the underlying action resulted from agency action. The burden then shifts to Respondent to demonstrate that its actions were substantially justified or that special circumstances exist which would make an award of attorney's fees unjust. Gentele v. Department of Professional Regulation, Board of Optometry, 513 So.2d 672 (Fla. 1st DCA 1987).

    
    

14. In this case there was no rational justification for rejection of Petitioner's bid. Respondent cannot show that its actions were substantially justified in view of the facial responsiveness of the bid and the subsequent confirmation of that responsiveness from the carbon manufacturer. Respondent is further impeded in such a showing by the knowledge of Respondent employees concerning Petitioner's previous usage of GAC 30, knowledge exemplified by their inclusion in the ITB of bid requirements that lot analysis of carbon be provided in confirmation of bid specifications.

    
    

15. Respondent's argument that knowledge of the responsiveness of Petitioner's bid accrued only at the final hearing in DOAH Case No. 90-6962BID is unpersuasive in the face of a lack of rational justification at the time of bid award for rejection of Petitioner's bid. By that time Respondent not only was aware of the facial responsiveness of the bid, it had been confirmed by the inquiries of Respondent's own personnel.

    
    

16. Although the court addressed an award of attorney fees pursuant to Section 120.57(1)(b)(10), Florida Statutes, a portion of the opinion in Dr. C.J. Courtenay, v. Department of Health and Rehabilitative Services,16 FLW D1511

    (Fla. 5th DCA opinion filed June 6, 1991), is appropriate for quotation here and reads as follows:

    
    

    The bid procedure was fashioned to discourage discriminatory governmental awards and to assure the procurement of the best value in exchange for public funds. When the procedure is not followed, those objectives are not achieved. Potential bidders either may decline to participate in bidding or may be tempted to add premiums to the bids for having to deal with the bureaucracy. The best that this court can do is to award attorney's fees to the challenging bidder who must have more courage than a Mississippi riverboat gambler. The bidder must gamble on winning during the original bidding procedure, but if he loses as a result of an unfair procedure, he must then gamble that he will prevail in a three-stage procedure--once before the hearing officer, once before the agency, and, finally, before the appellate court. The stakes of the gamble are that he will be reimbursed the costs and attorney's fees to obtain that which he was originally guaranteed statutorily--an oppor- tunity to obtain an award in a fair arena.

    
    

17. The agency has failed to prove a reasonable basis in law and fact to support rejection of Petitioner's bid. No special circumstances have been shown that would make an award of fees unjust.

CONCLUSION

Based on the foregoing, it is hereby ordered that the Department of Environmental Regulation pay to Petitioner, for attorney fees and costs incurred, the amount of $15,000.

DONE AND ORDERED this 9th day of August, 1991, in Tallahassee, Leon County, Florida.

DON W.DAVIS

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 9th day of July, 1991.

ENDNOTE

1/ As noted with greater detail in the recommended order issued in DOAH Case No. 90-6962BID, both Petitioner and Continental, the competing bidder tentatively awarded the bid, in actuality bid the same carbon product.

APPENDIX TO FINAL ORDER, CASE NO. 91-2222F

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

Petitioner's Proposed Findings.

1.-8. Adopted in substance, though not verbatim.

9. Adopted by this reference.

Respondent's Proposed Findings.

1.-2. Adopted in substance, not verbatim. 3.-6. Rejected, cumulative.

7. Included in substance, though not verbatim. 8.-9. Adopted but not verbatim.

10. Rejected as not relevant for purposes of determining whether Respondent's ultimate action was reasonable.

11.-13. These two findings reflect Respondent's requirement for provision of specifications, not manufacturer's specifications. Rejected in this form as cumulative, the essence of these findings is included in substance in a more condensed fashion in the foregoing findings of fact.

1. Rejected, unneeded.

2. Adopted in substance.

16.-17. Rejected, not supported by weight of the evidence.

18. Adopted in substance.

19.-21. Rejected, not supported by weight of the evidence.

22. Rejected, not relevant or supported by weight of evidence. 23.-26. Adopted in substance.

COPIES FURNISHED:

Donna H. Stinson, Esq.

Suite 100, The Perkins House

118 North Gadsden Street Tallahassee, FL 32301

Cynthia K. Christen, Esq. Department of Environmental

Regulation

2600 Blairstone Road, Room 654

Tallahassee, FL 32399-2400

Carol M. Browner, Secretary Department of Environmental

Regulation

2600 Blair Stone Road Tallahassee, FL 32399-2400

Daniel H. Thompson, Esq. General Counsel

Department of Environmental Regulation

2600 Blair Stone Road Tallahassee, FL 32399-2400

A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL REVIEW PURSUANT TO SECTION 120.68, FLORIDA STATUTES. REVIEW PROCEEDINGS ARE GOVERNED BY THE FLORIDA RULES OF APPELLATE PROCEDURE. SUCH PROCEEDINGS ARE COMMENCED BY FILING ONE COPY OF THE NOTICE OF APPEAL WITH THE AGENCY CLERK OF THE DIVISION OF ADMINISTRATIVE HEARINGS AND A SECOND COPY, ACCOMPANIED BY FILING FEES PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL, FIRST DISTRICT, OR WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE PARTY RESIDES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED.

Docket for Case No: 91-002222F

Orders for Case No: 91-002222F