STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DITTLER BROTHERS, INC., )
)
Petitioner, )
)
and )
)
WEBCRAFT GAMES, INC., )
)
Intervenor, )
)
vs. ) CASE NO. 91-3481BID
) RFP NO. 91-011-LOT/TEN/P
STATE OF FLORIDA, )
DEPARTMENT OF LOTTERY, )
)
Respondent, )
)
and )
) SCIENTIFIC GAMES, INC., )
)
Intervenor. )
)
RECOMMENDED ORDER
Notice was provided and on November 26 and 27, 1991, December 12, 13, 19 and 20, 1991, and January 2 and 3, 1992 a formal hearing was held in this case. The authority to conduct the hearing is set forth in Section 120.57(1), Florida Statutes. The hearing location was Tallahassee, Florida. Charles C. Adams was the Hearing Officer.
APPEARANCES
For Petitioner: Betty J. Stephens, Esquire Dittler Brothers, Frank P. Ranier, Esquire Inc. McFarlin, Sternstein, Wiley
& Cassedy
Post Office Box 2174 Tallahassee, FL 32316-2174
For Intervenor: Thomas K. Equels, Esquire Webcraft Games, Inc. Holtzman, Krinzman & Equels
1500 San Remo Avenue, Suite 200 Coral Gables, FL 33146
For Respondent: Robert I. Scanlon, Esquire State of Florida, Assistant Attorney General Department of The Capitol, PL-01
Lottery Tallahassee, FL 32399-1050
For Intervenor: Clifford A. Shulman, Esquire Scientific Games, Adrian L. Friesner, Esquire Inc. Greenberg, Traurig, Hoffman,
Lipoff, Rosen & Quentel 1221 Brickell Avenue
Miami, FL 33131 STATEMENT OF ISSUES
The issues presented in this case concern the question of the responsiveness of Scientific Games, Inc. to the request for proposals (RFP) No. 91-011-LOT/TEN/P issued by the State of Florida, Department of Lottery associated with the purchase of Instant Game Tickets. The petition which Dittler Brothers, Inc. filed with the purchasing agency in challenge to the preliminary decision to find Scientific Games, Inc. the best responsive vendor also challenges the propriety of the evaluation process in examining the responses offered by the several vendors whom the purchasing agency had determined to be responsive to material requirements set forth in the RFP. The protesting vendor, Dittler Brothers, Inc., alleges that certain actions taken by the State of Florida, Department of Lottery in carrying out the evaluation to determine the best responsive vendor was done in a manner which was illegal, dishonest, fraudulent, arbitrary, unreasonable, capricious, or done in such a manner as to subvert or undermine the purposes and objectives of competitive bidding. See D.O.T. v. Groves-Watkins Constructors, 530 So.2d 912 (Fla. 1988).
PRELIMINARY STATEMENT
This dispute arose when Dittler Brothers, Inc. (Dittler) filed a formal protest to challenge the State of Florida, Department of the Lottery's (Department) decision finding Scientific Games, Inc. (Scientific) the best responsive vendor responding to the aforementioned RFP. The petition was filed on May 23, 1991 in accordance with Sections 24.109, 120.53 and 120.57, Florida Statutes and pursuant to Chapter 53ER87, Florida Administrative Code.
In turn the Department submitted the Formal Written Protest and Petition for Administrative Hearing from Dittler to the State of Florida, Division of Administrative Hearings for assignment of a hearing officer to conduct a hearing to resolve the dispute. The present hearing officer was assigned and the hearing held.
An amendment to the petition was filed on June 5, 1991.
On June 7, 1991 Scientific filed a Motion to Intervene which was granted. On June 13, 1991 Webcraft Games, Inc. (Webcraft) filed a Motion to Intervene. Webcraft was allowed limited intervention.
The respective positions of the parties find Dittler and Webcraft aligned on the question of the essential fairness in the process, with Dittler advancing the additional challenge to Scientific's responsiveness to the RFP verses the Department and Scientific who are proponents of the position that Scientific is responsive and that the process involved with the evaluation of responses to the RFP was acceptable.
On June 17, 1991 Dittler sought to compel the Department and Scientific to produce documents which were considered by the responding parties to be confidential, proprietary or trade secret information. Argument was entertained on this motion on June 20 and 21, 1991, as well as a motion by Scientific to
dismiss the petition based upon the alleged untimeliness of the filing of the formal written protest.
An order was entered denying the Motion to Dismiss, denying the Request for Production from Scientific and compelling the Department to produce certain documents and materials, with limitations placed upon the venue for review and the dissemination of the documents held by the Department.
Both Scientific and the Department sought relief from the requirements for production by filing interlocutory appeals to the First District Court of Appeal. Scientific also appealed the order on its Motion to Dismiss.
On August 17, 1991 the First District Court of Appeals in Scientific Games, Inc. v. Dittler Brothers, Inc., 586 So.2d 1128 (Fla. 1st DCA 1991) issued its order upholding the decision denying the Motion to Dismiss and granting Scientific and the Department's request for relief from the Hearing Officer's order requiring production of the disputed documents. The Court through its decision established an alternative opportunity for discovery related to these materials which was pursued in accordance with the Court's instructions.
On November 1, 1991 the Department filed a Motion to Dismiss the Dittler petition and that motion was joined in by Scientific. The basis for the motion was that in view of the fact that Dittler had failed to register with the Secretary of State prior to its submission of the response to the RFP, Dittler was not qualified to do business in Florida at that time and its response to the RFP must be declared materially nonresponsive leaving Dittler without the necessary standing to bring the bid protest at issue here. That Motion to Dismiss was denied by order entered November 15, 1991.
The hearing transcript which was filed includes an index which identifies the witnesses called and the order of their examination together with exhibit identification and admission into the record. In addition, the depositions of William G. Malloy, Charles Scanella, Roy Hogsed, Lawrence Herb, Barry Horenbein, John Davis and Richard Newell were admitted in part as described in the hearing transcript and orders pertaining to depositions of Charles Scanella, William G. Malloy, Lawrence Herb and Barry Horenbein which were entered on January 21 and 24, 1992.
The hearing transcript in its last installment was filed with the Division of Administrative Hearings on January 21, 1992. The parties had stipulated to extend the normal ten day period for filing proposed recommended orders. By such extension they waived the requirement that the Recommended Order be entered within thirty days of receipt of the transcript. See Rule 22I-6.031, Florida Administrative Code. By their stipulation the due date for filing proposed recommended orders and any associated memoranda in argument was February 11, 1992. The parties met the deadline. Dittler, the Department and Scientific submitted proposed recommended orders. Webcraft joined in the submission by Dittler consistent with Webcraft's opportunity to participate in the case. The proposed fact finding set forth in the proposed recommended orders is addressed in an appendix attached to the Recommended Order.
FINDINGS OF FACT
THE RFP
On April 25, 1991 the Department issued RFP No. 91-1011-LOT/TEN/P soliciting sealed proposals from qualified vendors to provide Instant Game Ticket printing and related services.
In accordance with Section 1.8 of the RFP questions that were pertinent to an understanding of the RFP or that would be needed to clarify its terms could be addressed in writing to the Issuing Officer for the Department. Per Section 1.9 questions must have been received by 12:00 noon on May 1, 1991 for the prospective proposer to be entitled to answers to the questions. That section to the RFP obligated the Department to give written responses to any questions timely received. There were timely questions. The answers to questions that had been posed by the prospective vendors which included Dittler, Scientific, Webcraft and British American Banknote (BABN) were provided by the deadline of May 3, 1991 which is set forth in Section 1.9 to the RFP. Those questions and answers led to the amendments number 1 and 2 to the RFP issued on May 6 and 9, 1991, respectively. The RFP as amended and questions and answers formed the basis for the prospective proposers' understanding of the RFP and its terms, conditions and specifications. For purposes here, the relevant change in amendment number 1 was associated with the paper weight of recyclable ticket stock in categories of ticket samples to be submitted with the proposals. The second amendment deleted the category of sample known as recyclable coated ticket stock.
None of the questions during the opportunity presented to improve the understanding or clarify the terms, conditions and specifications, found in the RFP were directed to the procedures set forth in the RFP describing the process of evaluation of proposals and entry into a contract with the best responsive vendor. Nor did any vendor take advantage of the opportunity within 72 hours of the availability of answers to questions that had been posed by the respective vendors and is provided in Section 1.9 to the RFP to challenge the terms, conditions and specifications of the RFP, especially as they would relate to the process of evaluation of responses to the RFP leading to the selection of the best responsive vendor and entry into a contract.
As contemplated by Section 1.9 to the RFP sealed proposals were received from the four vendors by the deadline of 2:00 p.m., May 13, 1991.
Section 1.9 called for technical proposals within the responses to the RFP to be opened by 2:00 p.m. on May 13, 1991 with the evaluation of those proposals to begin immediately following the opening. The cost proposals were to be separately opened following completion of the evaluation of technical proposals. The submissions by the vendors were to be ranked in order of preference based upon the evaluation of the technical and cost proposals in accordance with criteria set out in the RFP, followed by Notice of Intent to Negotiate with the higher ranked vendor posted at the Department's headquarters in Tallahassee, Florida. If the negotiations with the higher ranked or best responsive vendor did not prove successful, Section 1.9 called for the Department to negotiate with the other listed firms in descending order of their rank. Following the successful conclusion of negotiations with a responding vendor, a Notice of Award of Contract would be posted at the Department headquarters. The contract would be awarded and executed as soon as lawfully possible after the posting of the Notice of Award of Contract.
On May 13, 1991, the ticket samples that were part of the submissions by the vendors were turned over to the Department's security employees and kept in a secure place pending forensic testing called for in the RFP. The members of the evaluation committee who were selected to exercise the evaluation criteria were not afforded immediate access to those tickets pending the forensic testing and a presentation concerning the test results which was to be made to the Evaluation Committee by Department employees who were familiar with test procedures. This presentation of the test results was made on May 16, 1991.
Of the vendors who submitted proposals, Dittler had not been qualified by the Secretary of State to do business in Florida at the time it submitted its proposal on May 13, 1991, however, no mention was made of this when the Department made its preliminary agency decision finding Dittler a responsive vendor and ranking its proposal.
Concerning the work to be done by the Evaluation Committee, Section 5.3 sets out the Proposal Evaluation criteria where it states:
Proposals will be evaluated based on the following criteria:
The overall qualifications, experience, abilities of the firm, its participating staff members, and subcontractors, if any, to timely provide the requested commodities and services, and the extent of minority participation. This includes the relative
thoroughness and overall professional quality of the firm's proposed plan for providing the requested commodities and services.
Value: Not to exceed 20 points
The quality and appropriateness of the marketing plan.
Value: Not to Exceed 15 points
The quality and appropriateness of the Quality Control Plan.
Value: Not to Exceed 15 points
The overall security plan, including facility and procedures, with respect to whether the production of the game, manufacture of tickets, operation of the game, prize validation, etc., meet the security needs of the Florida Lottery and offer minimum possibilities of fraud, tampering, theft, counterfeiting, ticket alteration, or other security compromises. Value: Not to Exceed 25 points
Proposed Compensation. Value: Not to Exceed 25
The proposed compensation for providing the goods and services requested herein shall be evaluated as follows:
Column C of Attachment E of the prices bid for aluminized uncoated white ticket stock (10 point or heavier) will be totaled and divided by 200,000 to give an average cost per thousand tickets for this ticket stock. The average cost per thousand tickets for aluminized un-coated white ticket stock will be the price used in the cost comparison.
The maximum number of cost evaluation points (M in the formulas below) shall be one-third of the highest cumulative score (H
in the formula below) awarded to a Respondent for the criteria set forth in A through D.
The lowest average cost per thousand tickets (L in the formula below) as derived in paragraph 1 above shall be awarded the maximum number of cost evaluation points as determined in paragraph 2 above.
All other Respondents shall be awarded points based on the ratio of their average cost per thousand tickets (R in the formula) to the lowest average cost per thousand tickets.
Maximum Cost Evaluation Points (M) = 1/3 x H Cost Evaluation Points = L/R x M
The total value of points is equal to 100.
These criteria are associated with the overall Evaluation Review Process identified at Section 5.4 where it states:
The Secretary shall appoint an Evaluation Committee which shall prepare technical scores for all Responsive Proposals.
The cost proposal will thereafter be publicly opened and evaluated in accordance with the formula set forth in Section 5.3 E above.
Based on the technical and cost proposals, the Evaluation Committee shall rank, in order of preference, the Respondents deemed to be most highly qualified to perform the requested services.
The Department reserves the right to make site visits at its own expense to the Respondent's facilities before or after the
proposals have been ranked in order of preference.
Thereafter, the Secretary shall commence negotiations with the most highly ranked firm. Should the Lottery be unable to negotiate a satisfactory Contract with that firm at a price the Lottery deems to be fair, competitive, and reasonable, negotiations with that firm shall be terminated. The Lottery shall then undertake negotiations with the second most highly ranked firm.
Failing accord with that firm, the Lottery shall undertake negotiations with the third most highly ranked firm. Should the Lottery be unable to negotiate a satisfactory Contract with that firm, additional firms may be selected to participate in this negotiation process or negotiations may be reinstated following the original order or priority. Negotiations shall continue until an agreement is reached or all proposals are rejected. The Lottery reserves the right to reject all proposals at any time during negotiations.
An initial review was made of the responses to the RFP to determine facial compliance or responsiveness. This was done on May 13 and 14, 1991 by Cristina Brochin, counsel to the Department. She discussed her findings with Louisa Warren, a more senior attorney for the Department.
In the mind of Ms. Brochin the Dittler proposal was sufficient, while the Scientific proposal had a potential problem in that it did not set forth the amount of bond to be provided to insure performance under the contract called for in the RFP. This refers to the requirement in Section 6.5 of the RFP to give adequate evidence of the ability to post a performance bond. Ms. Brochin thought Scientific had failed to provide a notice on public entity crimes for its subcontractors. This was not a requirement of the RFP. Ms. Brochin found that Webcraft had failed to list its subcontractors, and likewise had failed to provide public entity crime affidavits for its subcontractors and had failed to provide a time line for limiting the ability to compromise its tickets.
The Evaluation Committee was convened at the Department on the morning of May 15, 1991. It consisted of Robert McKnight, Assistant Secretary of the Department; Bernie Edwards, Deputy Secretary of Marketing; Don Pribbenow, Questions and Document Examiner for the Florida Department of Law Enforcement; Dr. Arvid Mukes, Assistant Director of Graphic Arts at the Florida A & M University; Frank Carter, Director of Security for the Department and Brian Woods, Vice President of Marketing of Blockbuster Video. Mr. Woods withdrew from the Committee based upon a concern of a potential conflict of interest associated with a business relationship with one of the vendors. No contest was offered to the make up of the Evaluation Committee. On this date the remaining members of the Evaluation Committee were given general instructions by the Department's staff that they were not to talk to other committee members except in public meetings, that they were to read the proposals, to keep notes about the proposals, to make their own individual evaluations and to not score the proposals until the Evaluation Committee public meeting had been completed. An
explanation was made concerning the scoring criteria set forth in the RFP and an overview given of the schedule of events associated with the review process.
The evaluators were then given the opportunity to review the responses alone. The best part of May 15, 1991 into the evening was devoted to that task. The evaluators took notes as they went forward with that process.
On May 16, 1991 the Evaluation Committee met at the Department headquarters and undertook a discussion in a public setting relating to the marketing and overall qualification sections of the proposals. This was followed by a confidential review outside public scrutiny concerning quality control and security measures set forth in the proposals. Although the evaluators had reviewed the BABN materials on May 15, 1991, the BABN proposal was found nonresponsive by the evaluators in the public meeting of May 16, 1991 and did not undergo further consideration. BABN did not challenge the decision finding it nonresponsive. The reason why the BABN proposal was declared nonresponsive was the failure to submit samples of 10 point uncoated aluminized ticket stock. By contrast the Evaluation Committee found the proposals of Dittler, Scientific and Webcraft to be responsive. In doing so, with the knowledge of the impression of counsel Louisa Warren concerning deficiencies found in each proposal, the Evaluation Committee did not deem the Webcraft omission of a statement of time necessary to compromise its tickets; the Dittler omission of its ink product numbers, and Scientific's omission of the bond dollar amount in its bond commitment letter to be material deviations from the terms of the RFP and as such not subject to correction. Deeming these items to be minor irregularities the Department's staff contacted the vendors to clarify that information and the vendors cooperated in that endeavor.
There is a Section 4 to the RFP pertaining to Mandatory Requirements in which 4.1 to that Section is entitled Terms and states:
the Lottery has established certain mandatory requirements which must be included as part of any proposal. The use of the term "shall" "must" or "will" (except to indicate simple futurity) in this RFP indicate a mandatory requirement or condition.
The words "should" or "may" in this RFP indicate desirable attributes or conditions but are permissive in nature. Deviation from, or omission of, such a desirable feature will not by itself cause rejection of a proposal.
In Section 1.2 of the Glossary of Terms a responsive proposal is defined as, "means a proposal submitted by a responsive and responsible, or qualified offerer which conforms in all material respects to the Request for Proposals."
Section 4 goes on at 4.2 to describe what is meant by nonresponsive proposal where it states:
Proposals which do not meet all material requirements of the RFP or which fail to provide all required information, documents, or materials will be rejected as non- responsive. Material requirements of the RFP are those set forth in Section 3.1 and
without which an adequate analysis and comparisons of proposals is impossible. The Lottery reserves the right to determine which proposals meet the material requirements of the RFP and to accept proposals which deviate from the requirements of the RFP in a minor or technical fashion as determined by the Lottery.
Section 3, within which is found 3.1 entitled General Instructions, identifies information required by the vendors Respondent where it states:
General Instructions.
Respondents must reference their proposals to the section numbers in this RFP.
Respondents must state their agreement with the contractual requirements contained in this RFP.
Any additional terms and conditions proposed by a Respondent will be viewed by the Lottery as an exception to the RFP and may cause rejection of the proposal without further evaluation or consideration.
Proposals must include the following information and be presented in the following sequence:
Identification of Respondent per Section
of RFP.
Respondent's Affidavit (Attachment A).
Sworn Statement on Public Entity Crime (Attachment B).
Vendor Information Form (Attachment C).
Vendor Information Addendum (Attachment D).
List of sub-contractors (if applicable).
Statement from vendor saying they will abide by the Code of Ethics Rule 53ER88-79(3), F.A.C.
The statement required by Section 1.24.
Evidence of ability to provide a performance bond or other security required by Section 6.5.
All of the items required in Section 2.
All material or information required to be submitted as part of the Cost Proposal enclosed in a separate sealed envelope per Section 1.10 of the RFP.
Any other material or information required by this RFP which is not specifically enumerated above.
Any other information the Respondent desires to submit to further substantiate its qualifications for providing the goods and services.
Another reminder concerning requirements is set forth in Section 5.2, entitled REVIEW CRITERIA which says in relevant part:
Any proposal which does not meet all the mandatory material requirements set forth in Section 3.1 will be rejected by the Lottery as non-responsive.
As alluded to before, Lawrence Herb, the Department's forensic document examiner and Colin Benton, Chief of Investigations presented the Evaluation Committee with sample tickets that had been tested and the results of those tests. Following this presentation the individual Committee members assigned scores for each vendor in all categories other than the cost proposal, referred to at Section 5.3 as proposed compensation. It was the impression of the committee members that Scientific was the highest ranked responsive vendor in the technical proposal phase. Consequently, by averaging the aggregate scores unrelated to cost proposals Scientific received the most points while Dittler was second and Webcraft third.
On the next day, May 17, 1991, the cost proposals were opened by Department staff and the cost scoring accomplished by use of the mathematical formula contemplated by the RFP. The cost formula was based on the prices quoted for aluminized uncoated white ticket stock of 10 points or heavier weight. The technical and cost scores were then added together to determine the final ranking of the vendors. The compiled scores for the vendors were:
Dittler: | Technical | 56.80 |
Cost | 23.13 | |
Total | 79.93 | |
Scientific: | Technical | 69.40 |
Cost | 19.12 | |
Total | 88.52 | |
Webcraft: | Technical | 53.00 |
Cost | 19.55 | |
Total | 72.55 |
Based upon the results achieved in the scoring the Department on May 17, 1991, posted a Notice of Intent to Negotiate with Scientific, being the highest ranked proposer, and identifying that Dittler was running second and
Webcraft third. The formal written protest of Dittler mentioned in the Preliminary Statement ensued.
THE RESPONSIVENESS OF SCIENTIFIC'S PROPOSAL BOND COMMITMENT LETTER
According to Section 3.1(d)9. evidence of the ability of the vendor to provide a performance bond or other security as described in Section 6.5 is a mandatory material requirement.
Section 6.5 states:
The successful Respondent shall be required, at the time of executing the Contract with the Lottery, to post an appropriate performance bond or other security acceptable to the Lottery in the amount of $1,000,000.
The other acceptable forms of security are:
irrevocable letter of credit; Certificate of Deposit assigned to the Lottery (which must be obtained from a financial institution having its principal place of business in the State of Florida); U.S. savings bonds, notes and bills; general obligation bonds and notes of any political subdivision of the State of Florida; or corporate bonds of any corporation that is not an affiliate or subsidiary of the Contractor. The aggregate fair market value of securities pursuant to this clause must always exceed the amount stated above. Failure to post an additional bond or security within seven (7) days after notice of an increased Contract value, or notice that the market value of the securities is inadequate, shall be grounds for immediate termination for cause.
Respondents must submit with their proposal evidence that they will be able to provide the performance bond or other acceptable security. Such evidence may include, but is not limited to, a letter from an authorized agent of a bonding company or other entity committing to provide the performance bond or other acceptable security or indicating that the bond underwriter or other entity is processing a request to provide the bond or security and stating unequivocally that the bond or security will be available upon execution of the contract.
In response to this requirement Scientific submitted a letter from Rollins Burdick Hunter of Illinois, Inc. together with a power of attorney for an amount of up to $20,000,000 bond coverage. This letter from Rollins Burdick Hunter is dated May 13, 1991, the date upon which Scientific submitted its proposal with the letter. In pertinent part the letter states:
"RE: THE PRINTING OF INSTANT LOTTERY GAME TICKETS AND RELATED SERVICES FOR THE FLORIDA
LOTTERY- Florida Instant RFP (Bid No. 91-011-LOT/TEN/P
BID DATE: MAY 13, 1991
OBLIGEE: FLORIDA DEPARTMENT OF THE LOTTERY
Letter of Intent
We understand that bids are to be taken May 13, 1991 for this project. Please be advised that, subject to our underwriting requirements being met, if Scientific Games, Inc. is the successful bidder on this project and is awarded a contract and enters into said contract, we as surety will write an annual bond for the prosecution of the contract.
This Letter of Intent is valid for one hundred eighty (180) days from the bid date, May 13, 1991, and we assume no liability to you if we decide not to issue the referenced bonds beyond this one hundred eighty (180) day period.
You understand of course that the relationship between Scientific Games, Inc. and Continental Insurance Company is private, and we assume no liability to you if for any reason we decide not to issue the referenced bond(s).
On May 8, 1991 Ken Taylor of Scientific sent the RFP to Rollins Burdick Hunter, the bond broker for Scientific, in the interest of obtaining the letter of May 13, 1991 which letter has been described. The power of attorney for $20,000,000 that was submitted with the proposal by Scientific was from Continental Insurance Company and counsel to Continental Insurance Company James
E. Lee signed the Letter of Intent of May 13, 1991 together with William G. Malloy, President and CEO of Scientific.
Having considered the evidence presented concerning the adequacy of the bond commitment, the Letter of Intent complies with the requirements stated in Section 6.5 pertaining to a performance bond as the ability to provide that performance bond. The Letter of Intent is not perceived as equivocal. It is not only consistent with the requirement set forth in Section 6.5 to the RFP, it coincides with what the Department has found to be acceptable in a previous RFP related to advertising which had a similar requirement for a statement of commitment to provide a performance bond at the appropriate juncture. In the instance of the advertising RFP certain bond letters by vendors who responded to the advertising RFP failed to state the dollar amount of the bond in the letter of commitment and those vendors were given permission to submit clarifying letters as to the exact amount without a declaration that those vendors were non-responsive. The letter clarifying the bond amount which was submitted by Scientific on May 16, 1991 with permission from the Department is consistent
with the prior practice by the Department. This clarification by vendors in the
advertising RFP solicitation and in the present solicitation is a minor correction. It is a minor correction which does not afford unfair advantage to Scientific and does not inconvenience the Department. Moreover a strict reading does not lead to the conclusion that the bond commitment letter needed to restate the bond amount of one million dollars. It must only make it evident that the bond commitment letter is addressing the requirement for a one million dollar performance bond. The Scientific Letter of Intent provides ample evidence on that point.
The language set forth in the Letter of Intent reminding the reader that the commitment is subject to underwriting requirements being met and the further comment that the commitment does not create liability to the Department if the bond contract is not completed between the private entities does not undermine the fundamental promise to write the bond. It is an adequate response because the RFP did not contemplate a bid bond being provided with the submission of a proposal. It contemplated a commitment to write a performance bond in the future to be available at the place in time where a contract was executed between the vendor and the Department.
LOBBYIST DISCLOSURE
According to Section 3.1(d)8., which refers to the need to include information concerning Section 1.24, that latter section pertaining to conflict of interest and disclosure and more particularly to the revelation of the affiliation of executive branch lobbyists, as defined by statute or activities by the lobbyist designed to influence the actions of the Department in connection with the RFP, the failure to disclose an executive branch lobbyist would be considered a breach of a mandatory material requirement to the RFP.
The consequence would be to cause the submission by a vendor to be declared non- responsive. Dittler alleges that Scientific failed to reveal the name of Barry Horenbein when filling out its proposal in response to Section 1.24 to the RFP. According to Dittler, Barry Horenbein was an executive branch lobbyist for Scientific in the relevant timeframe. That perception is incorrect.
The language is Section 1.24 concerning Conflict of Interest and Disclosure states:
The award hereunder is subject to the provisions of Chapters 24 and 112, Fla. Stat. Respondents must disclose with their proposals whether any officers, directors,
employees or agents are also an officer or an employee of the Lottery, State of Florida, or any of its agencies. All firms must disclose the name of any state officer or employee who owns, directly or indirectly, an interest of five percent (5%) or more in the Respondent's firm or any of its branches or affiliates.
All Respondents must also disclose the name of any employee, agent, lobbyist, or other person who has received or in the future will receive compensation of any kind for services related to this RFP, who is a previous employee of the Lottery, or who has or is required to register under Section 112.3215, Fla. Stat., in seeking to influence the actions of the Lottery in connection with this procurement.
Respondents must also disclose the amount of compensation paid or to be paid in the future to any person who seeks to influence the actions of the Lottery in connection with this procurement. Respondents must also disclose the existence of any contingency agreements whereby any person will be compensated in any amount or form and the compensation is in any respect dependent on the outcome of this procurement.
Each Respondent which has no disclosure to make under Section 1.24 must state affirmatively in its Proposal that it has no such disclosures to make. Failure to make any of the disclosure required by this section, or to make the affirmation required above, will result in rejection of the Proposal.
Scientific met the disclosure requirements by listing David Bausch, a former Department employee.
Barry Horenbein owns Florida Consultants, Inc. which provides lobbying services. Scientific at relevant times was his client. From December 10, 1986 until November 30, 1990 Horenbein had served as a legislative and executive branch lobbyist for Scientific under a yearly contract. This arrangement was pursuant to the proposal by Horenbein of November 25, 1986 on behalf of his company, Florida Consultants, Inc. in which he offered the services to Scientific in the area of legislative and administrative representation of Scientific as a lobbyist. On December 10, 1986 Gray Bethea, General Counsel to Scientific, confirmed the understanding between Horenbein and Scientific as to services that had been described in the offer of Horenbein dated November 25, 1986.
For his work Horenbein received compensation of $5,000.00 per month for the period beginning in 1988 and as recent as November 1, 1991, and, consistently used the same invoice identification of his services as being related to "governmental consulting and lobbying in the State of Florida".
Although there was no written documentation which would state any modification or termination of the business relationship between Horenbein and Scientific, there was a change in the position by oral agreement after November 30, 1990. The contract was for month to month to handle legislative lobbying matters for Scientific but not executive branch lobbying.
The change in status for Horenbein came about after a November 29, 1990, letter from Horenbein to the president of Scientific explaining that the consulting contract would expire on November 30, 1990. In the course of that correspondence Horenbein pointed out the expected changes that he perceived given the outcome of the gubernatorial elections in which the incumbent lost and a new governor came in. This correspondence of November 29, 1990 expressed the desire by Horenbein to continue on the basis of $5,000.00 a month fee as outlined in Gray Bethea's letter of January 5, 1990, which letter from Bethea spoke of a relationship on the same terms and conditions as the original suggestion of the relationship between the two parties which had been set out on
December 10, 1986 by Gray Bethea. The response to this November 29, 1990 letter was the oral agreement to allow representation in the area of legislative branch lobbying. The agreement between Scientific and Horenbein was not renewed in its entirety to include executive branch activities.
The reason that Scientific decided to change the duties of Horenbein in representing its interests was based upon the perception that the close association which Horenbein had with the outgoing Governor Martinez and his administration might be harmful to Scientific in the future in that the new administration of Governor Chiles was coming in and Scientific did not wish to have Horenbein continue contact with the Department or the executive branch in connection with Scientific's business in Florida.
In 1991, Horenbein registered in Florida as a legislative lobbyist but not as an executive branch lobbyist.
Horenbein did provide some services concerning lottery activities to the extent of sending newspaper clippings to Bethea about activities within the Department during the year 1991. This was a continuation of information to include Horenbein's speculation as to the possibility of the change of the head of the Department and the name of a potential candidate to be the Department head discussed in his correspondence of November 29, 1990.
On December 24, 1990 the Chairman of the Board of Scientific wrote to Dr. Marcia Mann, the new Department head, expressing, among other things, the common interest which Dr. Mann and the Chairman had in the University of South Florida. A copy of that letter was provided to Horenbein. Related to the letter from the Chairman to Dr. Mann, that letter was prepared based in part on information that had been provided by Horenbein to Scientific. The correspondence from the Chairman to Dr. Mann was prepared not only on newspaper clippings which Horenbein had submitted but on conversations which Horenbein had with his client Scientific.
Horenbein provided information to Scientific about the new leadership at the Department with the advent of the Chiles administration to include remarks about Secretary Marcia Mann and Assistant Secretary McKnight. Horenbein considered provision of information as part of consulting services for which he was paid a fee.
Although Horenbein had not seen the details of the subject RFP he advised Scientific that Scientific should "sharpen its pencils" and come in with a bid as low as they felt they could to get the contract. Horenbein told top officials within Scientific that he thought that the pricing in the RFP was going to be very important. He related this information in the same manner as he would have to any client under similar circumstances. This was considered by Horenbein to be part of his consulting relationship with his client Scientific.
Horenbein was made aware that certain representatives from Scientific were to come to Tallahassee for a meeting with Senator McKnight or Dr. Mann. Horenbein did not attend a meeting between those persons.
Horenbein saw Senator McKnight in a Tallahassee restaurant and welcomed him to Tallahassee and chatted with him. He also spoke to Senator McKnight the day the bid in this came out in this procurement.
On April 3, 1991 Horenbein attended a Lottery Commission Meeting at the Department headquarters. He was there for his own curiosity to see the new
Department administration of Dr. Mann function but acknowledges that it was also an attendance associated with his work for Scientific. Scientific had not asked him to attend this meeting. The topic of the meeting was not related to the present RFP. At the meeting he met Dr. Mann for the first time. Horenbein also saw Senator McKnight at the meeting and spoke with him. The topic of the RFP was not discussed with Dr. Mann or Senator McKnight on this occasion. In fact, Horenbein never discussed the subject RFP with any Department official or employee, nor sought to influence them in connection with the procurement for the advantage of his client Scientific. In his conversation with Senator McKnight on April 3, 1991 Horenbein complemented Senator McKnight concerning the Senator's legislative service in saying that he was "happy to see somebody of my integrity in the administration", referring to Senator McKnight's service in the Department.
Following the technical evaluation Scientific asked Horenbein to attend the cost bid opening on May 17, 1991, a session that all vendors were invited to attend. The reason Scientific asked Horenbein to attend was because of the short notice of the cost bid opening and having no other personnel available to Scientific to attend that session. The vendors had been advised of the cost bid opening by one day notice. All evaluations on the technical aspects had been scored prior to the cost bid opening and the scores in the cost bid opening were pursuant to a formula. As part of his attendance at the cost bid opening Horenbein picked up copies of Webcraft and Dittler's proposals and looked at them concerning the bottom line financial quotations by those vendors. He considered this part of his function as a lobbyist for Scientific. Because the petition by Dittler alluded to Horenbein and his activities, Horenbein was provided a copy of material that Scientific had obtained from the Department under a public records request on or about May 24, 1991. The material also included the cost quotes which Horenbein spoke of and evaluators score sheets and the evaluation summary. The decision to send the materials that had been obtained by a request for public information was made by counsel to Scientific, Bethea.
In addition to Senator McKnight, one of the other evaluators, Edwards, knew Horenbein before the advent of the RFP, but as stated before, had not discussed the RFP with him. Neither did Edwards nor McKnight know that Horenbein was a lobbyist for Scientific at the time of the RFP. Horenbein did not know the other evaluators Dr. Mukes, Carter or Pribbenow.
Horenbein had a conversation with Jack Peeples, an independent contractor to the Governor's office while at a restaurant in Tallahassee. This conversation was not at the instigation of the client Scientific.
Peeples held a contract with the Governor's office from February 1, 1991 to June 30, 1991 as advisor to the governor. He was not a state employee as such. In this conversation Horenbein stated that he thought it was, "sinful for Sonny Holtzman to be representing a lottery company in the position he was in" to which Peeples is said to have replied "You're probably right Barry, it shouldn't happen". Sonny Holtzman is mentioned as having an affiliation with Webcraft. Horenbein further stated to Peeples that the RFP disclosure requirement associated with the present case and that of the advertising RFP, as Horenbein stated, "I thought it was ridiculous because I had heard in the RFP that they were supposed to name the lobbyist and how much they made and I told Jack Peeples, I said 'Jack, you know you're going to be in business very shortly, would you want everybody in the world to know how much you were making on a particular client?'" The knowledge which Horenbein had of the disclosure requirements in the advertising and subject RFP came to him through comments
from other lobbyists. Horenbein also discussed with Peeples the possibility of the two of them getting together and doing some lobbying. The reason which Horenbein had in mind for opposing the disclosure requirements, especially related to the revelation of compensation was for his own purpose and not that of the client Scientific. Horenbein's specific objection to the RFP disclosure requirement was that he did not want clients to find out how much he was billing each of his clients and that he didn't think it was proper to put such a requirement in a RFP. He told Peeples that the disclosure provision should be changed. This remark was made in the Spring of 1991. When he made the comment Horenbein thought that Peeples was one of the close campaign people to Governor Chiles. He commented to Peeples because he thought that Peeples had substantial influence in the Governor's office. When he had this conversation Horenbein did not know whether the lobbyist disclosure provision was going to be placed in the advertising RFP or the present RFP. He did not know the details of Peeples' payment by the Governor's office as an independent contractor. Horenbein did not discuss the present RFP per se in his conversation with Peeples.
Peeples' affiliation with the Governor's office under the terms of his contract was not that of representative of the Governor's office or other department's of state government. Peeples was special counsel to the Governor for legal services. His duties included legal advise to the Governor, working in conjunction with designated staff, agency heads and other persons making available Peeples' full professional knowledge and opinions. He reported to the Governor in this capacity.
Senator McKnight established that when he was hired as the Assistant Secretary of the Department by Governor Chiles he had conversation with the Governor's Chief of Staff concerning Senator McKnight's duties as Assistant Secretary. Senator McKnight identified one occasion in which he had a meeting in the Governor's office to discuss the administration's views of the Department. His recollection is that this was held in the office of the Chief of Staff Mr. Krog, with Peeples in attendance. Senator McKnight only knew of Mr. Peeples as being a close, personal friend and advisor to the Governor, to Senator McKnight's understanding of that association. During this meeting in the Governor's office the issue of lobbyist disclosure was emphasized by the Governor's office to Senator McKnight and he was advised that it would mean no contact whatsoever between lobbyists and members of this lottery staff from the point of view of the Governor. Senator McKnight was told that the Lottery operation had to be "squeaky clean".
The Governor's office did not discuss the RFP nor influence the drafting of the RFP beyond this conversation with Senator McKnight.
Notwithstanding the protestation by Horenbein to Peeples, Section 1.24 to the present RFP contained the disclosure requirements that Horenbein had complained about.
FINANCIAL DISCLOSURE AND PENDING LITIGATION
As identified in Section 1.1, the project in question is a major procurement as defined in Section 24.103, Florida Statutes. As such, the requirements set forth in Section 24.111(2), Florida Statutes, were incumbent upon the vendors. The RFP also speaks to the matters of financial disclosure at Section 3.1(d). Scientific did the things necessary to comply with those requirements when it submitted its proposal on May 13, 1991. (In this connection Section 1.19 pertaining to the assignment of the contract, if one is entered into, and Section 1.34 pertaining to change of financial conditions
which are material adverse circumstances which occur between the time of the submission of the proposal and the award of a contract and continuing during the life of the contract are not items to be considered in this dispute. They are issues which potentially might have to be resolved between the vendor that the Department attempts to contract with and the Department.)
Scientific when it submitted its proposal on May 13, 1991, by cover letter, alerted the Department to a potential change in its financial condition and ownership when it alluded to an asset purchase agreement between Scientific and a company formed by members of Scientific's senior management and the firm Centre Capital Investors L.P., an affiliate of Lazard Freres & Co. That asset purchase agreement date is from April 30, 1991. Scientific had this to say about that agreement in its transmittal letter:
"On April 30, 1991, a company formed by members of Scientific Games' senior management and Centre Capital Investors L.P., an affiliate of Lazard Freres & Co., entered into an Asset Purchase Agreement with Bally Manufacturing Corporation, Scientific Games,
In., and Scientific Games of California, Inc., for the purchase of the instant ticket and video lottery business of Scientific Games.
The closing of the transaction is anticipated to take place within several months and is subject to the consents of various state governments and other customary closing conditions. No change in the operation or name of Scientific Games is expected and no interruption of services to customers will occur. As further details become available, Scientific Games will provide information to the Florida Lottery.
Notwithstanding the pending asset purchase agreement, it is the Scientific group that submitted the proposal who must comply with the financial disclosure requirements. That is the respondent referred to in the definitional section of the RFP at 1.2 under Glossary of Terms. It is the vendor that is defined in Section 24.104, Florida Statutes. It is the group that submitted the proposal as defined in Section 24.111(2), Florida Statutes.
Scientific was not expected under the terms of the RFP and associated requirements of law to submit vendor information forms on the purchasing group. That purchase was not consummated until a closing held on October 1, 1991.
At the time that the proposal was submitted by Scientific the purchasers did not control by direct or indirect means the entity Scientific which submitted the proposal. Scientific and the purchaser had different boards of directors. Scientific was controlled by Bally Manufacturing Corporation and the purchasing group was controlled by Centre Capital Investors, L.P.
Section 24.111(2), Florida Statutes, requires the Department to investigate the financial responsibility of the vendors who responded. That financial investigation took place to a degree not especially evident when examining the record. Details are sketchy. However, the requirement was responded to. More significantly Section 24.111(2), Florida Statutes, and the
RFP present the necessary opportunity to evaluate the implications of the asset purchase before contracting with Scientific.
Section 24.111(2)(f), Florida Statutes, makes it necessary for a vendor to provide:
a disclosure of the details of any bankruptcy, insolvency, reorganization, or any pending litigation of the vendor.
The asset purchase agreement is not such an event. In particular it does not constitute the form of reorganization spoken to in that section.
Concerning pending litigation, Scientific did not reveal the existence of the case of Toon Construction Company v. Scientific Games Inc. On May 7, 1991 the parties dismissed an interlocutory appeal before the Supreme Court of the State of Georgia involving that litigation. The litigation had been settled by the parties as of May 13, 1991 when the proposal by Scientific was submitted in response to the RFP. The attorneys for the parties had not dismissed the associated case between those litigants in the Superior Court of the State of Georgia. That dismissal took place on May 14, 1991. Under the circumstances Scientific has not failed to comply with the provision in Section 24.111(2)(f), Florida Statutes, for revealing pending litigation. It did make the Department aware of two other pieces of pending litigation.
EVALUATION COMMITTEE AND PROCESS
Other than the reference in Section 5.4 to the RFP wherein the Secretary of the Department is required to appoint an Evaluation Committee, no requirement is stated concerning the composition of the Committee or the credentials of its members.
The Evaluation Committee was chaired by Robert McKnight, Assistant Secretary of the Department.
Committee Member Edwards had been the person most responsible for policy decisions in the development of the RFP document, with assistance in the drafting and in the processing of proposals given by the attorneys Louisa Warren and Cristina Brochin and with assistance by Robert Fiero, then Director of Administrative Services for the Department.
In preparing for their participation in the full Committee activities involved in the evaluation process, having considered the criticisms of the amount of time available spoken to by witnesses for Dittler and the remarks of the Committee members concerning the opportunity to review the materials in preparation to carry out the assignment of scores, the evaluators are found to have had an adequate opportunity to prepare themselves to carry forth their duties as Committee members.
The committee members indicated that they had sufficient time to evaluate the proposals to the RFP. In this connection Committee Chairman, Senator McKnight, made it clear that the committee members could take as much time as they needed to conclude the evaluation session which all members attended on May 16, 1991. He also asked the committee members during that meeting if they had had enough time for review. Other committee members did not ask the Chairman for additional time to review the materials found within the proposals.
ORAL PRESENTATIONS
Section 1.1 to the RFP explains that the RFP in the activities which lead to the execution of a contract are associated with the Department policies set out in Rules 53ER87-10 through 53ER87-11, 53ER87-13 through 53ER87-19 and 53ER91-10, Florida Administrative Code together with Chapter 24, Florida Statutes. The vendors were provided copies of those materials. Dittler contends that the RFP by its term required compliance with Rule 53ER87-13(5)(i), Florida Administrative Code. That Section states:
(i) When it is considered in the best interest of the State, the Department can acquire goods and services, including major procurement through a competitive negotiation process.
A Formal Request for Proposal will be let stating general requirements to be met and that award of the contract will be through a competitive negotiation process.
A selection committee appointed by the Secretary or a designee will review all of the proposals and shall select no less than three proposals as finalists deemed to be most highly qualified to perform the required services.
The finalists will be notified that they are expected to make a formal presentation to the committee.
Based on the presentations, the committee shall select no less than three, whenever possible, proposals in order of preference deemed to be the most highly qualified to perform the requested services.
The Secretary or a designee shall negotiate a contract with the most highly qualified firm. Should the Secretary or a designee be unable to negotiate a satisfactory contract with the firm considered to be the most qualified at a price the Department determines to be fair, competitive, and reasonable, negotiations with that firm shall be terminated. The Secretary or a designee shall then undertake negotiations with the second-most qualified firm, the Secretary or a designee shall terminate negotiations with that firm and shall then undertake negotiations with the third-most qualified firm. Should the Secretary or a designee be unable to negotiate a satisfactory contract with any of the selected firms, additional firms may be
selected in accordance with this rule, or negotiations may be reinstated following the original order of priority. Negotiations shall continue in accordance with this rule until an agreement is reached or all proposals are rejected.
It is this formal presentation which Dittler equates with the need to have an oral presentation.
While the RFP through its terms concerning the procedures for selecting a vendor appears to incorporate features under Section 53ER87- 13(5)(i), Florida Administrative Code especially the aforementioned subsections
4 and 5, it also tends to incorporate the alternative procedures for gaining a contract which are set forth in Rule 53ER87-13(5)(b)(c)(d) and (e), Florida Administrative Code, which describe a request for proposal evaluation process where a bid price is quoted when the proposal is submitted. This is as contrasted with subsection (i) where the price is arrived at through negotiations following the ranking of vendors based upon the presentation made to the Evaluation Committee wherein three finalist are selected.
The process in this RFP, generally stated, calls for a price quotation, a ranking of vendors based upon a point system that includes points assigned for pricing together with other factors. It does not contemplate under sub (i) a formal presentation to the Evaluation Committee, also referred to as an oral presentation, before entering into a second phase in the process associated with an attempt to negotiate with the best responsive vendor at a price that the Department is satisfied with. Failing the ability to find an acceptable price from the best responsive vendor the Department then attempts to negotiate with the second ranked vendor and then if need be, the third. That corresponds in the hierarchy of rankings to negotiations first with Scientific and then with Dittler and Webcraft if necessary. This hybrid approach to the use of both alternative methods for arriving at a contract as set forth in Rule
53 ER 87-13(5), Florida Administrative Code, is spoken to in Sections 1.1, 1.9, 2.5, 3.1, 4.2, 5.2, 5.3 and 5.4 to the RFP.
As stated before, the vendors did not take issue with the blending of concepts set forth in the various provisions of Rule 53 ER 87-13(5), Florida Administrative Code, which deleted any reference to the expectation of the formal presentation to the Committee called for in sub (i). By failing to challenge the procedures for assessment or evaluation within the time allowed in Section 1.25, the parties acquiesced in this arrangement.
The process of evaluation described in the RFP is not ambiguous. It does not call for a formal presentation and that requirement may not be inferred. By not reminding the Department that the approach for evaluation employed selected portions from separate alternatives for conducting the process, an approach which the vender might consider contrary to the structure set forth in the rule, within the time frame available for filling a formal written protest, the vendor waived the right to direct the criticism in its petition. That protest should have been filed within 72 hours of the availability of the answers to questions propounded by the vendors to the Department under Section 1.9 to the RFP. That was not done and Dittler and the other vendors must accept the arrangement where formal presentations are not called for and need not be allowed.
Concerning the request to present, James Cooney, the Dittler consultant/lobbyist, was aware of the requirements of the RFP when he attended
the public session of the evaluation process which took place on May 16, 1991. He requested the opportunity to make an oral presentation from a staff member who was not part of the Evaluation Committee. Cooney was principally interested in being able to respond to the questionable provisions within the response by Dittler to the RFP brought up in discussion by the Evaluation Committee. He did not intend by that request to provide the type formal presentation contemplated by sub (i) to Rule 53 ER 87-13(5), Florida Administrative Code. Neither was Dittler in a position to make that formal presentation on May 16, 1991. Nor did the other vendors come to the evaluation session prepared to make a formal presentation, although Scientific in its cover letter transmitting its proposal stated its willingness to make an oral presentation if requested. Cooney was not allowed to advance his explanations concerning questions about the Dittler proposal. It would have been inappropriate to allow him to do so. The result would have been to give Dittler a competitive advantage. The appropriate arrangement for clarifying minor irregularities technical oversights was upon the impetus by the Department, not the vendors. In any event, these concerns which Cooney intended to address were not disqualifying items in the response to the RFP by Dittler.
CONTACTS BETWEEN THE DEPARTMENT AND SCIENTIFIC
OUTSIDE THE RFP WHICH MAY HAVE AFFECTED THE DEPARTMENT'S PERCEPTION OF THE RESPONSE BY SCIENTIFIC TO THE RFP.
In its proposed fact finding Dittler argues that certain contacts set forth in its Paragraphs 88 through 91 constituted communications outside the RFP process which were improper and intended to disparage the impartiality of the procurement process at issue. That suggestion is not accepted. The contacts which were made did not impair the impartiality of the procurement process.
REVIEW STANDARDS USED BY THE EVALUATION COMMITTEE
In Paragraphs 92 through 104 of the Dittler proposed fact finding it is suggested that the method of assessment employed by the evaluators, to include the willingness by the Committee to allow the cost formula to be exercised independent of their participation, was not done in a manner consistent with the RFP and was thus unacceptable.
The approaches taken were not illegal, dishonest, fraudulent, arbitrary, unreasonable, capricious or done in a manner which is designed to subvert or undermine the purposes and objectives of competitive bidding. Related to the cost proposal, that formula was a mechanical exercise. When the cost results were completed by staff they needed only to be added to the scores which had been assigned by the evaluators for features in the proposal outside the price quotations. The decision by the Committee to rely upon the staff to exercise the formula on cost and add in those scores with the scores arrived at
by the evaluators on items other than cost did not violate the spirit and intent set forth in the RFP for assigning overall scores to include the cost component. In this connection the staff that served to support the Evaluation Committee in its activities acted appropriately.
CLAIM OF THE USE OF UNARTICULATED CRITERIA PERTAINING TO THE "TIE-IN" OF THE EMPHASIS ON EDUCATION AS PART OF THE MARKETING PLAN
Dittler claims that the evaluators acted arbitrarily and in a capricious manner in placing emphasis on an educational "tie-in" in the marketing plan. Dittler complains about giving credit to Scientific for such
emphasis in a setting where the RFP did not contemplate the relationship between the educational purposes for which the Florida Lottery was created and the marketing plan prepared by the respective vendors. Dittler goes so far as to assert that this unspoken requirement to promote education in the marketing statement constitutes the use of unarticulated criteria in the evaluation process, in that those criteria concerning education are not found in the RFP.
Under Section 2: SPECIFICATIONS, is found the statement of PURPOSE AND OVERVIEW. At Section 2.1 it states:
In accordance with Chapter 24, Fla. Stat., the Florida Department of the Lottery has been charged with the responsibility "to operate the state lottery . . . so as to maximize revenues in a manner consonant with the dignity of the state and the welfare of its citizens." The Contractor will support the Lottery in its mission by providing the requisite services identified in Section 2 of the RFP for the Lottery's instant ticket games. The lottery's objective for issuing the RFP is to enter into a Contract with the most highly qualified Respondent who will provide secure gaming products, maximize the sale of instant tickets, and develop game support services which are efficient and assure product knowledge and availability to all lottery retailers and lottery players of Florida.
* * *
The Lottery is committed to an aggressive marketing plan for instant tickets. It is essential that throughout the Contract period innovative game concepts be developed to assure the growth of instant ticket sales.
Further explanations concerning the marketing plan are set forth in Section 2.4.B which states:
Between July 1, 1990 and April 1, 1991, the Lottery has released the instant ticket games outlined in Attachment F. Using this information as guidance, Respondents shall provide a detailed strategy and plan for the production of tickets for the fiscal year ending June 30, 1992. This strategy must include projected revenues, game names, ticket quantities, duration, game play, prize structures, and a rationale and plans for advertising, promotion and market research.
Respondents shall provide at least five (5) alternative game names for each game included in the plan.
The game design and rationale proposed must be creative and directed toward meeting the Lottery's sales goal of $12 million per week with a prize structure of 50%. The plans must include specified methodology for determining game selection, the game break schedule, and supporting market research.
The quality and the experience of the Respondent's marketing representative who will be assigned to the Lottery, and the Respondent's marketing, design, advertising and promotional experience with other state lotteries shall be clearly stated. Any offering or proposed feature that is considered by the Respondent as an extra cost item must be fully described as such in the proposal as such. The price for such extra cost items shall be provided separately in the sealed Cost Proposal under "Other Options".
As described at 5.3.B the marketing plans were graded on their quality and appropriateness.
While the requirement to "tie in" the educational purposes for which the lottery was created is not stated in exact terms, it was not inappropriate for Scientific to place that emphasis and for the evaluators to credit Scientific for its marketing idea. Nor was it inappropriate for the Dittler proposal to be less well received by the absence of such emphasis upon education in its marketing statement.
Section 1.1 to the RFP made the vendors aware of that activities involved in the pursuit of a contract are conducted in accordance with Chapter 24, Florida Statutes, among other controlling legal requirements. Section 24.111(1), Florida Statutes, states in part:
In all procurement decisions, the department shall take into account the particularly sensitive nature of the state lottery and shall consider the competence, quality of product, experience, and timely performance of the vendors in order to promote and ensure security, honesty, fairness, and integrity in the operation and administration of the lottery and the objective of raising net revenues for the benefit of the public purpose described in this act.
Sections 24.102, 24.121 and 24.1215, Florida Statutes, also emphasize the public education purposes of the lottery.
Scientific offered its marketing emphasis on education based upon the knowledge of Chapter 24, Florida Statutes, newspaper clippings commenting on the lottery's emphasis on education and past speeches of the Secretary of the Department which placed that emphasis.
REQUIREMENTS FOR A MINORITY PROGRAM
Section 2.4 A.2. describes the requirements for minority participation expected of vendors responding to the RFP. It states:
The Lottery is committed to participation by minorities among its vendors and retailers. The Lottery encourages the use of Minority Business Enterprises as subcontractors whenever the use of such firms is reasonably feasible. Each Respondent should include with its proposal its plans for the use of Minority Business Enterprises as subcontractors, and should set forth any other plans which it has which will positively impact the minority business community. Respondents will receive consideration in the evaluation based on their meaningful use of Minority Business Enterprises.
When the RFP calls for the inclusion of a plan for the use of a Minority Business Enterprises as subcontractors, it contemplates a more detailed explanation than was provided by Dittler in its proposal where it said: "As discussed above, Dittler has specific plans to include minority participation if awarded the contract." Dittler also stated concerning minority participation:
Dittler is committed to and encourages minority participation in its contracts using Minority Female Loan and Small Businesses.
We are proud of out track record and, if awarded this contract, intend to include MBE/WBE participants whereever possible.
Concerning the exact intentions in this RFP it was stated:
Dittler does not anticipate the use of a subcontractor for any of the date generation, production or support services by the Lottery.
As Dittler concedes it did not have a detailed minority participation plan referring to the names of subcontractors it would use with minority ownership certification. Scientific Games and Webcraft's proposals did contain a listing of subcontractors who are minority certified who were proposed to be used if the contract was awarded to one of those vendors.
Under the circumstances it was appropriate for the evaluators to mark down Dittler concerning its minority participation. Contrary to Dittler's assertion it was not enough to state the intention to use minority certification without a more detailed statement. Having failed to give a more detailed statement it was not arbitrary and capricious for the evaluators to deduct points from Dittler concerning the requirement for a minority participation plan in that the minority participation plan was part of the evaluation criteria set out at Section 5.3.A.
STATEMENTS ON TICKET COMPROMISEABILITY
Dittler in its fact proposals at Paragraphs 116 through 119 places emphasis on the misunderstanding by committee member Pribbenow as to distinctions between compromiseability and alterability concerning a statement on compromiseability contained in the Dittler proposal. Dittler also questions a willingness by the Committee to allow Webcraft to amend its proposal to include a statement on the length of time that the Webcraft tickets would withstand compromiseability while not allowing Dittler a chance to explain the statement in the Dittler proposal concerning compromiseability that concerned Pribbenow. Although these criticisms are legitimate they do not pertain to items of such magnitude to demonstrate illegality, dishonestly, fraudulent practice, arbitrariness, unreasonableness, capriciousness or that the actions were done in such a manner as to subvert or undermine the purposes and objectives in competitive bidding.
ACCOUNT REPRESENTATIVE
At Section 2.4A.1. concerning the vendors organization and credentials, in pertinent part it has this to say about the account representative:
The Respondent shall identify the actual persons who will be assigned major roles in the fulfillment of the work obligations outlined on Section 2 herein. The responding firm shall state that each person is available to perform the work if the responding firm is awarded the Contract.
In accessing information concerning the account representative that assessment is performed under the criteria set forth at Sections 5.3.A. and 5.4.
In carrying out the evaluations concerning the account representative, the evaluators expressed concern that the Dittler account representative had duties in other jurisdictions which would unduly interfere with her ability to meet the needs of the Florida Lottery in servicing the account. It did not appear to have a similar concern about Scientific and its account representative. The Committee also commented on the amount of experience by the designated account representative as an item of concern. There were remarks about the relative placement of the account representative in her organizational hierarchy, that is to say the number of persons in the organizational chain between the account representative and the Chief Executive Officer.
The action taken by the evaluation committee concerning the account representatives was not inappropriate.
TICKET TESTING
Section 2.2B. to the RFP, as amended, called for the submission of the following ticket samples:
Aluminized uncoated white card stock, minimum the 10 point or heavier.
Aluminized coated white card stock, minimum 10 point or heavier.
Recyclable ticket stock, minimum 8 point or heavier.
Pursuant to Section 2.4.D.4.
. . . each respondent must submit one book of tickets of each type of ticket stock proposed. The tickets will be subjected to testing by the Evaluation Committee to determine whether they meet the criteria set forth in Section 2.3.A5(c). . . .
In the question and answer phase of the process BABN had asked the question if the vendors sample tickets could deviate from the requirements for submission of samples and if the Department would extend the time for submitting samples. The answer alluded to the requirements as to types of tickets which were called for up to that point which included categories 1 and 2 under Section 2.2B. BABN was told that they would not be given additional time to submit samples. All vendors were made aware of the question and answer.
Prior to the receipt of the proposals on May 13, 1991, a decision was made by the Department, by Evaluation Committee member Carter and one or more other persons employed by the Department to only test 10 point uncoated ticket stock samples. That decision was reached because that was the type of ticket stock currently in use by the Department and the Department was not intending to change the type of ticket stock in this procurement.
Dittler submitted four samples of tickets. It had this to say about its uncoated 10 point ticket:
A game produced over three years ago for the Vermont Lottery on uncoated 10 point foil.
Since the time this game was produced, all of Dittler's customers have requested coded stock. The bar code on this ticket was the first use of a variable bar code for validation of instant tickets in the United States. We submit this particular sample to confirm for the Lottery that Dittler can produce instant tickets on uncoated stock, and not for security evaluations.
Dittler made this choice to submit this 10 point uncoated ticket stock realizing that the tickets submitted would be subject to testing. Dittler was not entitled to condition the submission by stating that it was not offered for security evaluations. It was the only aluminized uncoated 10 point stock it submitted. Therefore it had to be offered for all purposes to include security testing. Having failed to meet the requirement to submit a ticket for security testing it was not in compliance with the technical requirements of the RFP. It constituted a failure to meet the requirements set out in Section 3.1(d)10 for providing all items required in Section 2. The failure to comply with the requirement for submission of the ticket for testing made the proposal not responsive under Sections 4.2 and 5.2A in that it failed to meet a mandatory material requirement. The Dittler lack of compliance was similar to the problem with BABN which failed to offer the category of required tickets for testing. Notwithstanding the fact that the RFP called for all categories of tickets
submitted to be subjected for testing and only one category was tested, this does not excuse the noncompliance with the requirements of the RFP by Dittler. Under the facts here the decision to test only one category of tickets did not constitute an arbitrary and capricious act on the part of the Department where the RFP calls for the testing of all categories.
Lawrence Herb a forensic specialist for the Department with considerable experience as a document examiner tested the tickets which he received on May 13, 1991. He tested only the one category ticket at the instruction of Carter.
When Herb tested the one category of ticket he was unaware of the disclaimer in the Dittler proposal concerning its tickets where it was stated that the tickets were not for security purposes.
After the decision was reached to test only one category of ticket, Carter did not make persons other than Herb and Colen Benton who were involved with ticket testing aware of that choice.
In addition to having been told on May 13, 1991 to only test the 10 point uncoated ticket stock, Carter had told Herb Thursday or Friday the week before the Monday that the proposals were received that only the 10 point uncoated aluminized ticket stock would be tested.
Carter did not receive the Dittler proposal for review as an evaluator until May 15, 1991. Consequently, he did not know of the disclaimer in the Dittler proposal concerning the 10 point uncoated ticket stock that Dittler submitted when Carter made the decision to only test that category of ticket and communicated that decision to the testors.
None of the vendors were made aware that only the 10 point uncoated ticket stock would be tested before submitting their proposals.
In conducting his tests on the 10 point uncoated ticket stock Herb utilized testing methods used by the Department, testing methods that he had seen employed by the current vendor Scientific in its California printing plant and other tests that were not required by the Department standards or the California operation of Scientific. The choice of testing methods, generally described, was not inappropriate nor designed to give advantage to Scientific.
Although not in compliance with the requirement to provide tickets for security testing, Dittler's tickets were tested and scores assigned to the test results. The consequence was to treat the Dittler position on security testing of its tickets as being responsive. This was more advantageous treatment than Dittler was entitled to.
The ticket testing began on 4:00 p.m. until approximately 10:00 or 11:00 p.m. on May 13, 1991. Work was done from 8:00 a.m. until approximately 11:00 p.m. on May 14, 1991, and on May 15, 1991, work was done from 8:00 a.m. until 11:00 p.m. Some of this time was devoted to generating written reports which were offered to the Evaluation Committee. No test took longer than 24 hours to conclude. Deference need not be paid to the criticisms by Dittler concerning the possibility of a more lengthy testing session.
The same test were performed on each vendor's ticket samples. A detailed forensic report based upon the test results, together with a summary of that report commenting on the categories of marketability, compromisability, and
alterability and general comments constituted the reporting. Each member received copies of the report and the summary to that report and the actual tickets were made available for examination by the committee members.
Under general comments there was a discussion of the appearance of the tickets and other factors. Whether these comments concerning the appearance and associated factors are matters within the parameters of forensic ticket testing, this did not cause any significant disadvantage to Dittler in the criticisms directed under general comments concerned content of construction and security features, matters which Dittler had conceded in its disclaimer.
On balance, as Dittler apparently had anticipated, its 10 point uncoated ticket did not perform well when subjected to testing. The other vendors' tickets in this category were acceptable.
The presentation by the forensic examiner Herb did not include recommendations as to ranking or scoring and did not promote undue influence in the decision making by the committee members in dealing with security issues.
It was appropriate for the evaluators to assign scores under Sections 5.3C and 5.3D of the RFP when taking into account the results of the forensic testing.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter and the parties to this action pursuant to Sections 120.53(5) and 120.57(1), Florida Statutes.
Dittler bears the burden of proving its accusations by a preponderance of evidence. Florida Department of Transportation v. J. W. C. Co., Inc., 396 So.2d 778 (Fla. 1st DCA 1981).
In determining whether the proof is preponderant, the standard to be applied is that announced in the case of Scientific Games, Inc. v. Dittler Brothers, Inc., 586 So.2d 1128 (Fla. 1st DCA 1991). Citing favorably to Groves- Watkins, supra the Scientific Games decision emphasizes that the trier of fact is not in position to second guess the members of the Evaluation Committee by determining whether he or other reasonable and well-informed persons might have arrived at a contrary result. The Department is given wide discretion in this bidding process and if its decision is based on an honest exercise of that discretion it may not be overturned, even in the instance where it would appear erroneous and even if reasonable persons might disagree with that result. As stated before the decision is one in which it must be ascertained whether the Department acted in a manner which was illegal, dishonest, fraudulent, arbitrary, unreasonable, capricious or in a way that would subvert or undermine the purposes and objectives of this competitive bidding process. See also Wood- Hopkins Contracting Co. v. Roger J. Au & Sons, Inc., 354 So.2d 446 (Fla. 1st DCA 1978); Garcia-Allen/Turner v. State Department of Transportation, 533 So.2d 820 (Fla. 1st DCA 1988), rev. denied 542 So.2d 1333 (Fla. 1989); Liberty County v. Baxter's Asphalt Concrete, Inc., 421 So.2d 505 (Fla. 1982); C.H. Barco Contracting Co. v. Department of Transportation, 43 So.2d 796 (1st DCA 1986); Caber Systems v. Department of General Services, 530 So.2d 25 (Fla. 1st DCA 1988) and Couch Construction Co., Inc. v. Department of Transportation, 361 So.2d 172 (Fla. 1st DCA 1978).
By this standard of review Dittler has failed in its proof.
To begin with Dittler waived any objections that it might have to the terms, conditions and specifications of the RFP by failing to file a written protest within 72 hours of the availability of the answers to questions that were supplied in accordance with Section 1.9 to the RFP. See Section 120.53(5), Florida Statutes, and Capelitti Bros., Inc., v. Department of Transportation,
499 So.2d 855 (Fla. 1st DCA 1986), rev. denied, 509 So.2d 1117, Florida Statutes (1987). Consequently, Dittler and other parties to this case must accept the terms established in the RFP as controlling. This includes the procedures for evaluation which adopt various aspects of the possible alternatives for conducting competitive bidding set out in Rule 53 ER 87-13(5), Florida Administrative Code. This approach, which did not contemplate a formal presentation or oral presentation as addressed in Rule 53 ER 87-13(5)(i), Florida Administrative Code, is acceptable in the absence of a successful challenge to the approach announced in the RFP.
By failing to remind the Department that it had selectively employed the alternatives for arriving at competitive bidding that are described in Rule
53 ER 87-13(5), Florida Administrative Code, within the time allotted for such an attack, it also lost the opportunity to insist that the Department strictly apply the rule as written, exclusive of the opportunity to select features from the alternative methods for conducting a competitive process solicitation. Without a timely challenge being offered to the procedural approach described in the RFP, in this setting, the Department is not considered to have the duty to strictly apply the rules as written. Had a timely challenge to the procedures for competitive bidding set forth in the RFP been made, then the issues could have been appropriately joined and a decision reached on whether the agency correctly applied its rules. See Boca Raton Artificial Kidney Center, Inc. v. Department of Health and Rehabilitative Services, 493 So.2d 1055 (Fla. 1st DCA 1986); Kearse v. Department of Health and Rehabilitative Services, 474 So.2d 819 (Fla. 1st DCA 1985); and Gadsden State Bank v. Lewis, 384 So.2d 343, (Fla. 1st DCA 1977). This was not done and the procedures for assessment in the competitive process must stand.
Finally, while the procedures may be awkward in their terms, they are not ambiguous.
Section 287.012(16), Florida Statutes, which has application here states:
Responsive bidder or responsive offer means a person or firm who has submitted a bid or proposal which conforms in all material respects to the invitation to bid or request for proposal.
In this connection, not every deviation from the invitation to bid is deemed material. It is only those deviations which afford one vendor a substantial advantage over the other vendors so as to restrict and stifle competition that will be considered material. See Tropabest Foods, Inc. v. Department of General Services, 493 So.2d (Fla. 1st DCA 1986). There is also the concern that the deviation not deprive the governmental agency of the necessary assurance that the contract called for would be entered into, performed and guaranteed according to the requirements in the execution of the contract. See Robinson Electrical Company, Inc. v. Dade County, 417 So.2d 1032 (Fla. 3rd DCA 1982).
As described in the fact finding, Section 4.2 defines nonresponsive proposals for purposes of this RFP as does Section 5.2 A. The list of material requirements are set forth in Section 3.1 which has been described in the fact finding. When considering the issue of material deviation measured against the statute, decisional law and the terms set forth in the RFP, the only material deviation shown is that related to the failure by Dittler to provide for testing the called for uncoated aluminized white card stock, 10 point or heavier. Nonetheless, under the circumstances in the review process addressed in the fact finding the product was tested and scored and that decision by the Department is not disturbed in the balance of this discussion.
The bond performance commitment given by Scientific met the requirements of 6.5 to the RFP.
The Scientific disclosure statement related to Section 1.24 to the RFP need not have revealed the name of Barry Horenbein for reasons described in the fact finding. The activities by Horenbein do not constitute executive branch lobbying under Section 112.3215(1)(a) and (b), Florida Statutes, which states:
"Lobbyist" means a person who for compensation, remuneration or commission, on behalf of another person lobbies an agency or who is principally employed for governmental affairs by another person to lobby on behalf of that other person. . . .
"Lobbies" means seeking on behalf of another person, to influence an agency with respect to the decision of the agency in the area of policy or procurement.
The rules of the Florida Commission on Ethics through its "Guide to the Executive Branch Lobby Registration Act" promulgated pursuant to Chapter 112, Florida Statutes, describes types of activities that are not considered to be executive lobbying under that act. This includes participation at a bid conference held by the agency after the bid specification have been set and announced by the agency. The submission of a bid or proposal in response to an agency solicitation is likewise not considered to be lobbying. By contrast, if a lobbyist seeks to influence the content of the agency's request for proposal or specifications on behalf of another person, it is for the most part considered to be lobbying. What Horenbein did for this client Scientific in the relevant time period associated with the RFP process did not constitute lobbying within the meaning of Section 112.3215(1), Florida Statutes, or the RFP. His attempts in discussion with Peeples in the restaurant for Horenbein's own purposes concerning pending RFPs by the Department were not designed to benefit another person, namely his client Scientific. His provision of newspaper clippings, discussion of senior Department personnel, advice on submission of a competitive cost proposal, attendance at the April 3, 1991 Lottery Commission meeting and attendance at the cost proposal opening on May 17, 1991 and eventual familiarity with particulars in the RFP process do not constitute lobbying as defined in the statute or the RFP. Nor was the compensation paid by Scientific to Horenbein payment for attempts to influence the Department in connection with this procurement.
Scientific presented the necessary vendor information from the entity that had submitted the proposal. It was not required to reveal the details to provide information on those individuals who were involved in the purchase of
assets from the existing vendor either by the terms of Section 24.111(2), Florida Statutes, or the RFP. This asset purchase was not a reorganization under Section 24.111(2)(f), Florida Statutes. The pending buy-out on May 13, 1991 at the time that the proposal was submitted by Scientific, which had begun with the signing of the letter of intent for purchase of assets by senior management within Scientific and Centre Capital, was not concluded until October 1, 1991. At the time the proposal was submitted on May 13, 1991, the purchasing group did not have direct or indirect control of the affairs of the operations of Scientific, the proposer. The RFP and Section 24.111(2), Florida Statutes, allows the Department the latitude to consider the implications of the sale before entering into a contract with the purchasing group. This is an opportunity not afforded Dittler in this challenge. Nothing concerning the pendency of the sale of assets presented Scientific with any competitive bid advantage in its treatment by the evaluators when assigning scores to the proposals.
Scientific adequately addressed the disclosure requirements for setting out pending litigation as described in Section 24.111(2)(f), Florida Statutes.
The other challenges which Dittler has offered to the process used by the Department in its evaluation and decision to find Scientific the best responsive vendor are unavailing. For reasons set forth in the fact finding and upon the consideration of the review standard incumbent upon the fact finder, the actions of the evaluators and the staff serving them were acceptable and may not be set aside.
Upon consideration of the facts found and the conclusions of law reached, it is,
RECOMMENDED:
That a Final Order be entered which finds that the Scientific proposal is responsive;
That Scientific is the best responsive vendor in the hierarchy of ranking, followed by Dittler and Webcraft;
That allows the process to proceed to the negotiation phase; and That dismisses the Dittler administrative petition.
DONE and ENTERED this 9th day of March, 1992, in Tallahassee, Florida.
CHARLES C. ADAMS, 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 March, 1992.
APPENDIX Case No. 91-3481BID
The following discussion is given concerning the proposed fact finding by the parties.
Dittler's Facts:
Paragraph 1 is subordinate to facts found.
Paragraph 2 is not necessary to the resolution of the dispute.
Paragraphs 3 and 4 are subordinate to facts found with the exception of suggesting that Horbein has been an executive branch lobbyist continuously.
Paragraphs 5 through 9 are subordinate to facts found. Paragraph 10 is contrary to facts found.
Paragraph 11 is recitation of legal argument. Paragraph 12 is subordinate to facts found.
Paragraph 13 is a accurate portrayal of the testimony but does not lead to the conclusion that the activities by Hornbein beyond November 19, 1990 constituted any lobbying activities which required disclosure of his name nor did the facts suggested in Paragraphs 14 through 19 fall into that category.
Paragraph 20 is subordinate to facts found. Paragraphs 21 and 22, see discussion of Paragraph 13.
Paragraph 23, the reference to April 4 is corrected to be April 3, 1991.
The second sentence is contrary to facts found. The remaining portion of Paragraph 23 is subordinate to facts found.
Paragraphs 24 through 34 are subordinate to facts found. Paragraphs 35 and 36 are contrary to facts found.
Paragraphs 37 and 38 are subordinate to facts found.
Paragraph 39 is not necessary to the resolution of the dispute. Paragraph 40 is contrary to facts found as is Paragraph 41.
Paragraphs 42 through 44 are not necessary to the resolution of the dispute.
The first two sentences of Paragraph 45 are subordinate to facts found.
The remaining sentences in Paragraph 45 and Paragraph 46 are contrary to facts found.
Paragraphs 47 through 49 are subordinate to facts found.
Paragraph 50 is subordinate to facts found with the exception of its suggestion that Scientific was undergoing a reorganization.
Paragraphs 51 and 52 concerning the buy out as discussed by the evaluators is not considered to have influenced the decision on responsiveness of Scientific nor inappropriately influence the scores assigned to Scientific.
Paragraph 53 is not relevant.
Paragraph 54 constitutes legal argument.
Paragraph 55 is contrary to facts found with the exception of the remarks attributable to evaluation committee members. Their impression did not influence the outcome and to the extent that they believe that the asset purchase was an adverse change, their opinion did not comport with the legal requirement for disclosure.
Paragraph 56 is contrary to facts found. Paragraph 57 is not relevant information.
Paragraphs 58 through 60 are contrary to facts found. Paragraph 61 is subordinate to facts found.
Paragraphs 61 and 62 are subordinate to facts found.
The discussion in Paragraphs 63 through 67 concerning the Webcraft proposal is not relevant to the extent that it was not plead and Webcraft has not offered a petition speaking to the relative merits of its proposal.
Paragraphs 68 through 71 in its first two sentences are subordinate to facts found. The remainder of Paragraphs 71 through 72 are not necessary to the resolution of the dispute.
Paragraphs 73 through 75 are subordinate to facts found.
Paragraph 76 is rejected in that the process of review by the trier of fact does not call for an assessment in substitution of the witnesses who testified as to the length of time necessary to read the material.
Paragraph 77 is contrary to facts found.
Paragraph 78 constitutes recitation of legal argument. Paragraphs 79 and 80 are subordinate to facts found.
Paragraph 81 is contrary to facts found in that there are other pertinent provisions of the administrative rule that play a role.
Paragraphs 82 and 83 are subordinate to facts found. Paragraphs 84 and 85 are contrary to facts found.
Paragraph 86 is subordinate to facts found. Paragraph 87 is contrary to facts found.
Paragraphs 88 through 91 in the suggestion of impropriety in the contacts by Scientific with the Department is rejected.
Paragraphs 92 through 104 in the suggestion that the evaluators acted inappropriately in their review standard is rejected.
Paragraphs 105 through 109 are subordinate to facts found. Paragraph 110 is contrary to facts found.
Paragraphs 111 and 112 are subordinate to facts found.
Paragraph 113 is an incorrect portrayal by Dittler of the requirements of the RFP.
Paragraph 114 is subordinate to facts found. Paragraph 115 is contrary to facts found.
Paragraphs 116 through 124 are subordinate to facts found.
Concerning paragraphs 125 and 126 the facts do tend to show that criticism was not directed to Scientific about its account representative as contrasted with criticisms of Dittler but this doesn't change the case outcome.
Paragraphs 127 through the first sentence of Paragraph 130 are subordinate to facts found. The latter sentence to Paragraph 130 constitutes legal argument.
Paragraph 131 is subordinate to facts found.
The first sentence of Paragraph 132 is contrary to facts found. The latter sentence is subordinate to facts found.
Paragraphs 133 and 134 are not necessary to the resolution of the dispute.
Paragraphs 135 through the first sentence of Paragraph 139 are subordinate to facts found. The last sentence in Paragraph 139 and Paragraphs 140 through all sentences save the last sentence in Paragraph 141 are not necessary to the resolution of the dispute.
Paragraph 141 in the last sentence is contrary to facts found.
Paragraphs 142 through 144 are not necessary to the resolution of the dispute.
As to Paragraph 145 it is not incumbent that those matters be attended that are suggested in the first sentence. The second sentence is contrary to facts found.
Paragraph 146 is not necessary to the resolution of the dispute. Paragraphs 147 through 149 are subordinate to facts found.
Paragraphs 150 through 153 with the exception of the last sentence of Paragraph 153 are not necessary to the resolution of the dispute. The last sentence in Paragraph 153 is contrary to facts found.
Paragraphs 154 and 155 are subordinate to facts found as is Paragraph 156 in its first sentence. The last sentence in Paragraph 156 is contrary to facts found.
Paragraph 157 is subordinate to facts found as is Paragraph 158 in its first sentence. The last two sentences in Paragraph 158 are rejected in that the vendors are not able to substitute their judgment as to appropriate testing.
Paragraph 159 is subordinate to facts found.
Paragraphs 160 through 162 are not necessary to the resolution of the dispute.
Paragraph 163 is subordinate to facts found.
Department's Facts:
Paragraphs 1 through 21 are subordinate to facts found. Paragraph 22 is not relevant.
Paragraphs 23 through all sentences in Paragraph 28 with the exception of the last sentence are subordinate to facts found. The last sentence in Paragraph 28 is not necessary to the resolution of the dispute.
Paragraphs 29 through 34 are subordinate to facts found. Paragraph 35 is not necessary to the resolution of the dispute.
Paragraphs 36 through all sentences in Paragraph 51 with the exception of the last sentence are subordinate to facts found. The last sentence is not necessary to the resolution of the dispute.
Paragraphs 52 through first sentence in Paragraph 55 are subordinate to facts found. The last sentence in Paragraph 55 is not necessary to the resolution of the dispute.
Paragraphs 56 through the first sentence in Paragraph 57 are subordinate to facts found. The last sentence in that Paragraph is not necessary to the resolution of the dispute nor is Paragraph 58 nor the first two sentences of Paragraph 59. The remaining sentences in Paragraph 59 are subordinate to facts found.
Paragraph 60 is not necessary to the resolution of the dispute. Paragraph 61 through 66 are subordinate to facts found.
NOTE: Scientific employees were not involved in the appropriation of the RFP nor did not make attempts to influence the outcome of the appropriation.
Paragraph 67 is not necessary to the resolution of the dispute. Paragraphs 68 through 70 are subordinate to facts found.
Scientific's Facts:
Paragraph 1 is not necessary to the resolution of the dispute. Paragraphs 2 through 19 are subordinate to facts found.
Paragraphs 20 and 21 are not necessary to the resolution of the dispute.
Paragraphs 22 through the first two sentences in Paragraph 39 are subordinate to facts found. The last sentence in Paragraph 39 is not necessary to the resolution of the dispute.
The first sentence in Paragraph 40 is subordinate to facts found. The last sentence in Paragraph 40 constitutes legal argument.
Paragraphs 41 through 48 are subordinate to facts found. Paragraph 49 is not necessary to the resolution of the dispute. Paragraphs 50 through 78 are subordinate to facts found.
Paragraph 79 is not necessary to the resolution of the dispute.
Paragraph 80 through all sentences in Paragraph 113 are subordinate to facts found with the exception of the last sentence which is not relevant in that it is not part of the proposal.
Paragraphs 114 through 116 are subordinate to facts found. Paragraph 117 is not necessary to the resolution of the dispute. Paragraphs 118 through 122 are subordinate to facts found.
Paragraph 123 is not relevant in that it was not set out in the proposal concerning use of minorities in other states.
Paragraphs 124 through the first sentence in Paragraph 126 is subordinate to facts found.
The last sentence in Paragraph 126 is not necessary to the resolution of the dispute.
Paragraphs 127 through 135 are subordinate to facts found.
Paragraphs 136 through 140 are not necessary to the resolution of the dispute.
Paragraphs 141 through 143 are subordinate to facts found. Paragraphs 144 and 145 are contrary to facts found.
Paragraph 146 is rejected in that it is not the opinion of the evaluator that matters but the language in the Section.
Paragraphs 147 through 152 are subordinate to facts found.
Paragraph 153 is not necessary to the resolution of the dispute.
Paragraph 154 overlooks the unwillingness of the Department to allow additional time to produce a ticket given the response they made to BABN.
Paragraph 155 is not necessary to the resolution of the dispute nor are Paragraphs 156 and 157.
Paragraph 158 is subordinate to facts found.
COPIES FURNISHED:
Marcia Mann, Secretary Department of Lottery
250 Mariot Drive Tallahassee, FL 32301
Betty Steffens, Esquire Frank P. Ranier, Esquire McFarlin, Sternstein, Wiley
& Cassedy
Post Office Box 2174 Tallahassee, FL 32316-2174
Robert Scanlon, Esquire Department of Legal Affairs The Capitol
Tallahassee, FL 32399-1050
Thomas K. Equels, Esquire Holtzman, Krinzman & Equels 1500 San Remo Avenue, Suite 200 Coral Gables, FL 33146
Clifford A. Schulman, Esquire Adrian L. Friesner, Esquire Greenberg, Traurig, Hoffman,
Lipoff, Rosen & Quentel 1221 Brickell Avenue
Miami, FL 33131
Jim Trucks
BABN Technologies Corporation
129 White Oak Drive Newnan, GA 30265
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 top 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 |
|---|---|
| Jul. 17, 1995 | Final Order filed. |
| Mar. 18, 1992 | Scientific`s Exceptions to the Recommended Order filed. |
| Mar. 09, 1992 | Recommended Order sent out. CASE CLOSED. Hearing held 11/26-27, 12/12,13,&20/91, 01/2 &03/92. |
| Feb. 12, 1992 | Webcraft Games, Inc.`s Position Regarding Proposed Recommended Order filed. |
| Feb. 11, 1992 | Scientific`s Proposed Recommended Order filed. |
| Feb. 11, 1992 | Florida Department of the Lottery`s Proposed Recommended Order filed. |
| Feb. 11, 1992 | Petitioner`s Proposed Recommended Order w/(certified copy of Bozell`s Final Order; Webcraft Games, Inc.`s Position Regarding Proposed Recommended Order filed. |
| Jan. 24, 1992 | Order sent out. (Re: Ruling on Objections). |
| Jan. 21, 1992 | Order sent out. (RE: Rulings on Objections). |
| Jan. 21, 1992 | Petitioner`s Responses to Objections to Specific Questions and Answers from the Deposition of William G. Mallory filed. |
| Jan. 21, 1992 | Petitioner`s Responses to Objections to Specific Questions and Answers from the Deposition of Charles Scanella filed. |
| Jan. 21, 1992 | Transcript (Volumes 13 & 14) filed. |
| Jan. 16, 1992 | Dittler's Changes to the Transcription of the May 16, 1991, Evaluation Committee Meeting filed. (From Betty J. Steffens) |
| Jan. 14, 1992 | Webcraft Games, Inc.`s Responses to Objections to Specific Questions From Barry Horenbein`s Deposition filed. |
| Jan. 09, 1992 | Letter to CCA from Frank P. Rainer (re: changes to the transcription of the May 16, 1991, Evaluation Committee Meeting) filed. |
| Jan. 09, 1992 | Webcraft Games, Inc.`s Responses to Objections to Specific Questions from Barry Horenbein`s Deposition; Dittler Brother, Inc.`s Responses to Objections to Specific Questions From Lawrence Herb`s Deposition; Dittler Brothers, Inc.`s Responses to Objections |
| Jan. 09, 1992 | Scientific Games, Inc.`s Objections to Specific Questions and Answers From William G. Malloy`s Deposition; Scientific Games, Inc.`s Objections to Specific Questions and Answers From Charles Scanella`s Deposition filed. |
| Jan. 03, 1992 | Transcript (Volumes 1 - 12) filed. |
| Jan. 02, 1992 | Final Hearing Held Jan. 2-3, 1992; for applicable time frames, refer to CASE STATUS form stapled on right side of Clerk`s Office case file. |
| Dec. 19, 1991 | The Florida Lottery`s Objections to Specific Questions From Lawrence Herb`s Deposition filed. |
| Dec. 18, 1991 | Scientific Games, Inc.`s Objections to Specific Questions From Lawrence Herb`s Deposition; Scientific Games, Inc.`s Objections to Specific Questions From Barry Horenbein`s Deposition filed. |
| Dec. 12, 1991 | CASE STATUS: Hearing Partially Held, continued to 1/2/92; 9:20am; Tallahassee) |
| Dec. 06, 1991 | Exhibit List filed. (From Frank P. Rainer) |
| Dec. 06, 1991 | Exhibit List filed. (From Frank P. Rainer) |
| Dec. 06, 1991 | Second Amended Notice of Hearing sent out. (hearing set for Dec. 19-20, 1991; 9:00am; Tallahassee). |
| Dec. 05, 1991 | Scientific Games, Inc`s Revised and Supplemental Exhibit List w/Respondent`s Prehearing Compliance filed. |
| Dec. 04, 1991 | Scientific Games, Inc.`s Revised and Supplemental Exhibit List w/Respondent`s Prehearing Compliance filed. |
| Nov. 26, 1991 | CASE STATUS: Hearing Partially Held, continued to Dec. 12-13, 1991; Tallahassee). |
| Nov. 25, 1991 | Scientific Games Response to Pre-Hearing Order filed. |
| Nov. 25, 1991 | Scientific Games Response to Pre-Hearing Order filed. |
| Nov. 22, 1991 | Respondent`s Prehearing Compliance filed. |
| Nov. 22, 1991 | Notice of Taking Deposition Duces Tecum filed. (From Clifford A. Schulman) |
| Nov. 22, 1991 | Subpoena Ad Testificandum (2); Subpoena Duces Tecum filed. (From Frank P. Rainer) |
| Nov. 22, 1991 | Petitioner, Dittler Brothers` Prehearing Statement filed. |
| Nov. 22, 1991 | Notice of Taking Deposition Duces Tecum filed. (From Clifford A. Schulman) |
| Nov. 20, 1991 | (Petitioner) Amended Notice of Taking Deposition filed. |
| Nov. 20, 1991 | Amended Notice of Hearing sent out. (hearing set for 12/12-13/91; at 9:00am; in Tallahassee) |
| Nov. 19, 1991 | Dittler Brothers` Request for Production of Documents From Department of The Lottery filed. |
| Nov. 18, 1991 | (Petitioner) Notice of Taking Deposition filed. |
| Nov. 15, 1991 | Order sent out. (RE: Motion to Dismiss, denied). |
| Nov. 15, 1991 | Order sent out. |
| Nov. 14, 1991 | (Petitioner) Notice of Taking Deposition Duces Tecum filed. |
| Nov. 13, 1991 | Dittler Brothers, Inc.`s Response to Respondent`s Motion to Dismiss filed. |
| Nov. 12, 1991 | Intervenor Scientific Games, Inc.`s Notice of Adoption of Respondent`s Motion to Dismiss and Memorandum of Law filed. |
| Nov. 12, 1991 | (Petitioner) Amended Notice of Taking Deposition filed. |
| Nov. 07, 1991 | Intervenor Scientific Games, Inc.`s Motion for Pre-Trial Conference filed. |
| Nov. 06, 1991 | (Petitioner) Notice of Taking Deposition filed. |
| Nov. 04, 1991 | (Respondent) Memorandum of Law in Support of Motion to Dismiss; Respondent`s Motion to Dismiss Dittler`s Petition for Formal Administrative Hearing w/Exhibits 1&2 filed. |
| Nov. 04, 1991 | Letter to Frankie Lawrence from James F. Trucks (re: where to direct all future notices) filed. |
| Nov. 04, 1991 | Amended Notice of Hearing sent out. (hearing set for Nov. 26-27, 1991, 9:00am; Tallahassee) |
| Oct. 31, 1991 | Letter to CCA from R. Scanlan (re: avail hearing dates) filed. |
| Oct. 28, 1991 | Letter to CCA from Frank P. Rainer (re: Order of 10/21/91) filed. |
| Oct. 21, 1991 | Order sent out. (Re: Discovery opportunity). |
| Sep. 18, 1991 | ORDER(From First DCA-Respondent`s Motion for rehearing or clarification of this court`s opinion is denied) filed. |
| Sep. 09, 1991 | Scientific Games, Inc.`s reply to Dittler`s Motion for rehearing filed. |
| Aug. 08, 1991 | First DCA Opinion filed. |
| Jul. 31, 1991 | Scientific Games, Inc.`s supplemental appendix to its amended reply to Respondent`s response to Petition for review of non-final administrative action filed. |
| Jul. 31, 1991 | Scientific Games, Inc.`s Amended reply to Respondent`s response to Petition for review of non-final administrative action filed. |
| Jul. 25, 1991 | Scientific Games, Inc.`s reply to Respondent`s response to Petition for review of Non-Final Administrative action filed. |
| Jul. 25, 1991 | Scientific Games, Inc. Supplemental Appendix to its reply to Respondent`s response to Petition for Non-Final Administrative Action filed. |
| Jul. 23, 1991 | Reply of Florida Department of the Lottery to response of Dittler Brothers, Inc. filed. |
| Jul. 23, 1991 | Scientific Games` Inc`s Motion for clarification and Extension of time to serve its reply filed. |
| Jul. 23, 1991 | Notice of Filing The Transcript of The Deposition of Richard A. Newell; Deposition of Richard A. Newell filed. (from Clifford Schulman) |
| Jul. 19, 1991 | ORDER(First DCA Order cases are consolidated) filed. |
| Jul. 18, 1991 | Scientific Games, Inc`s response to Order to show cause and to Respondent`s Motion to dismiss or strike part of the Petition for review of non-final Administrative Action filed. |
| Jul. 18, 1991 | Scientific Games, Inc.`s reply to Dittler Brothers, Inc.`s response to Court Order and response showing cause to court Order filed. |
| Jul. 15, 1991 | cc Letter to J. Wheeler (DCA) from C. Schulman (re: response to court orders) filed. |
| Jul. 15, 1991 | Motion to dismiss or strike part of the Petition for review of non-final administrative action filed. |
| Jul. 11, 1991 | Order sent out. (Re: Motion to Compel answers by deposition, denied). |
| Jul. 10, 1991 | DCA Case Number 1-91-02063 filed. |
| Jul. 03, 1991 | Amended Petition for review of non-final administrative action or, in the alternative, Petition for writ of prohibition filed. |
| Jul. 03, 1991 | Scientific Games, Inc.`s Notice of filing supplements to its appendix filed. |
| Jul. 03, 1991 | Notice of Service of Petitioner`s Answers to Interrogatories filed. |
| Jul. 02, 1991 | Scientific Games, Inc.'s Request for Oral Argument filed. |
| Jul. 02, 1991 | Petition for review of non-final administrative action or, in the alternative, Petition for writ of prohibition filed. |
| Jul. 02, 1991 | Scientific Games, Inc.`s Motion for Review of Order Denying Stay filed. |
| Jul. 02, 1991 | FL Dept of the Lottery`s Motion to Stay; Petition for Write of Certiorari and/or Petition for Review of Non-Final Administrative Action; Appendix to Petition for Write of Certiorari (all filed in 1st DCA-documents tagged) filed. |
| Jul. 01, 1991 | (Petitioner) Notice of Propounding Interrogatories to Intervenor, Scientific Games, Inc. filed. |
| Jun. 27, 1991 | Order sent out. (Re: Motion for Stay, denied). |
| Jun. 27, 1991 | Transcript (Hearing on Pending Motions) filed. |
| Jun. 27, 1991 | (Respondent) Notice of Filing; Interrogatories to Petitioner; Motion for Compelling Answer w/Exhibits A-H; Florida Department of Lottery Response to Discovery Order; Florida Department of Lottery`s Motion for Stay filed. (From Robert I. Scanlan) |
| Jun. 27, 1991 | Scientific Games, Inc.`s Motion for Stay filed. (From Clifford Schulman) |
| Jun. 24, 1991 | Order sent out. (re: Discovery) |
| Jun. 24, 1991 | (Petitioner) Response to Requests for Admissions of Scientific Games,Inc. filed. (From Betty J. Steffens) |
| Jun. 21, 1991 | CASE STATUS DOCKETED: Hearing Partially Held, continued to date not certain. |
| Jun. 20, 1991 | Order sent out. (re: Webcraft Games, Inc Motion to Intervene). |
| Jun. 20, 1991 | (Petitioner) Notice of Service of Petitioner`s Answers to Interrogatories filed. (From Betty J. Steffens) |
| Jun. 20, 1991 | CC Letter to Betty Steffens from Clifford A. Schulman (re: Documents)filed. |
| Jun. 20, 1991 | Intervenor Scientific Games, Inc.`s Motion for a Protective Order filed. (from Clifford A. Schulman) |
| Jun. 20, 1991 | Scientific Games, Inc.`s Amended Request for Admissions for Dittler; Intervenor Scientific Games, Inc.`s Memorandum of Law in Support of Motion to Dismiss Dittler`s Petition for Formal Administrative Hearing w/Exhibits A-E filed. (From Clifford A. Schulma |
| Jun. 19, 1991 | (Petitioner) Response to Request for Admissions of Scientific Games, Inc. filed. (From Betty Steffens) |
| Jun. 19, 1991 | (Respondent) Notice of Taking Corporate Deposition filed. (from Robert I. Scanlan) |
| Jun. 19, 1991 | Letter to CCA from James F. Trucks (re: statement) filed. |
| Jun. 18, 1991 | Intervenor Scientific Games, Inc.`s Motion to Dismiss Dittler`s Petition for Formal Administrative Hearing w/Exhibits A-D filed. (From Clifford A. Schulman) |
| Jun. 17, 1991 | Notice of Taking Deposition; Motion to Compel Intervenor to Produce Documents and Notice of Hearing filed. (From Betty Steffens) |
| Jun. 17, 1991 | CC Letter to Robert Scanlan from Clifford A. Schulman (re: Petition to Intervene); Intervenor Scientific Games, Inc.`s Response and Objections to Petitioner`s Request for Production; Intervenor Scientific Games, Inc.`s Response in Opposition to Webcraft`s |
| Jun. 17, 1991 | (Petitioners) Motion for Order Compelling Discovery of Confidential Information and Memorandum of Law in Support w/exhibit-A-D filed. (From Betty Steffens) |
| Jun. 14, 1991 | Webcraft Games, Inc. Motion to Intervene & attachment filed. (From Thomas K. Equels) |
| Jun. 13, 1991 | Webcraft Games, Inc. Motion to Intervene & attachment filed. (From Thomas K. Equels) |
| Jun. 12, 1991 | Order sent out. (Re: Scientific Games, Inc., granted intervention). |
| Jun. 12, 1991 | (Respondent) Response to Request to Produce; Notice of Service of Defendants Answers to Interrogatories filed. (From Robert I. Scanlan) |
| Jun. 11, 1991 | Dittler Brother, Inc. Request to Intervenor for Production of Documents and Things filed. (from Frank P. Rainer) |
| Jun. 10, 1991 | Notice of Appearance; Scientific Games, Inc.`s Motion to Intervene filed. (from Clifford A. Schulman) |
| Jun. 07, 1991 | Order sent out. (Re: Petitioner`s Motion to expedite Discovery granted). |
| Jun. 06, 1991 | Notice of Propounding Interrogatories to Respondent, Department of Lottery; Dittler Brothers, Inc. First Request for Production of Documents and Things filed. (from Betty Steffens) |
| Jun. 06, 1991 | Petitioner`s Motion to Expedite Discovery filed. (From Betty J. Steffens) |
| Jun. 06, 1991 | Notice of Hearing sent out. (hearing set for June 21, 1991; 9:00am; Tallahassee) |
| Jun. 06, 1991 | Agency referral letter; Notice of Amendment to Petition; Amendment to Petition Dated May 22, 1991 of Dittler Brothers, Inc.; Letter to M. Mann from S. Coker (Petition for Formal Administrative Hearing) filed. |
| Issue Date | Document | Summary |
|---|---|---|
| May 11, 1992 | Agency Final Order | |
| Mar. 09, 1992 | Recommended Order | Bid on lottery ticket stock. Issues of responsiveness of number (1), evaluation process and consistency of overall process with agency rules. |
