STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

TOPLIS & HARDING, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 91-4453BID

)

DEPARTMENT OF LABOR AND )

EMPLOYMENT SECURITY, )

)

Respondent. )

)

RECOMMENDED ORDER

A hearing was held in this case in Tallahassee, Florida on July 29, 1991, before Arnold H. Pollock, a Hearing Officer with the Division of Administrative Hearings.

APPEARANCES

For the Petitioner: Robert L. Russell, JD, ARM

Risk Management Consultant Toplis & Harding, Inc.

222 S. Riverside Plaza Chicago, Illinois 60606

For the Respondent: Edward A. Dion, Esquire

Department of Labor and Employment Security

Suite 307, Hartman Building 2012 Capital Circle, Southeast Tallahassee, Florida 32399-0657

For the Intervenor: Thomas J. Jones, Esquire

P.O. Drawer 810 Tallahassee, Florida 32302

STATEMENT OF THE ISSUES

The issue for consideration herein is whether the Respondent, Department of Labor and Employment Security, erred in awarding the contract in response to its Proposal No. 91-064-AS to some firm other than the Petitioner.

By Petition And Notice Of Protest dated July 10, 1991, the Petitioner herein, Toplis & Harding, Inc., (Toplis), formally notified the Respondent, Department of Labor and Employment Security, (Department), that it was protesting the bid tabulation in this procurement as scored by the Department, and the following day, July 11, 1991, filed its Formal Notice of Protest regarding the same matter. Thereafter, by letter dated July 17, 1991, the Department forwarded the file to the Division of Administrative Hearings for appointment of a Hearing Officer, and by Notice of Hearing dated July 19, 1991,

the undersigned set the case for hearing in Tallahassee on July 29, 1991, at which time it was heard as scheduled.

At the hearing, Petitioner presented the testimony of Robert L. Russell, its head of risk management, and introduced Petitioner's Exhibits 1 through 4. Petitioner's Exhibits 5 - 7 for Identification were offered but not received into evidence. Respondent presented the testimony of Ann Lee Clayton, Director of the Department's Division of Worker's Compensation but introduced no exhibits.

No transcript was presented. Only the Department submitted Proposed Findings of Fact which have been incorporated in this Recommended Order. Petitioner submitted a written summation and final argument which has been carefully considered in the preparation of this Recommended Order.

FINDINGS OF FACT

1. At all times pertinent to the allegations herein, the Respondent, Department, was the state agency responsible for the administration of the Florida Worker's Compensation Act. One division of the Department deals with the regulation of worker's compensation self insurers and self insurance funds.

   
   

2. Petitioner is a 75 year old insurance adjusting and service company consisting of nearly 400 employees and 31 offices in the United States. For the purpose of this procurement, Toplis is the head of a joint venture also utilizing the services of the Fred R. White companies of Dallas, a subcontractor, and Florida agent Lee A. Black.

   
   

3. In January, 1991, Toplis broadened its service base to include risk management consulting which is the primary function of Mr. Fred White, head of the Fred R. White companies, mentioned above as one of the partners in the joint venture. The other party, L. A. Black & Associates, is an agency for Travelers, Hartford, and Lloyds of London in Florida and is a certified minority business enterprise in this state.

   
   

4. On April 15, 1991, Ann Clayton became the Director of the Respondent's Division of Worker's Compensation and after reviewing the administrative function of that division, determined there was a need for a study of the solvency and liquidity of self insurers and self insurance funds under the jurisdiction of the Division as well as the different ways in which those funds are regulated by the Division. In furtherance of this decision, she appointed Joe Mastrovito, Chief of the Bureau of Self Insurance, to prepare a request for proposals for such a study.

   
   

5. The RFP in issue here, developed as a result of those directions, was distributed on June 5, 1991, and required proposals in response thereto by July 3, 1991. At paragraph 2.8 of the RFP, the proposer was required to show evidence:

   ... that the contract team includes individuals or firms which, by

   virtue of education, experience, certification and/or licensure, provides expertise in the areas of law, actuarial science, government, accounting, business management, and insurance (including claims, underwriting, and risk management).

   
   

6. The provision went on to require that the contractor designate in the technical proposal at least one individual within the contract team with expertise in each of the above areas. The contractor was required to provide resumes for each designated team member which was to include information concerning education, experience, and current employment.

   
   

7. This requirement for a recitation of contractor qualifications was also contained in paragraph 3.3, PROPOSAL FORMAT, of the RFP, where the foregoing request for a recitation of qualifications was repeated almost verbatim.

   
   

8. Six firms, including Petitioner, submitted timely proposals in response to the RFP. The responses were evaluated by a team composed of Ms. Clayton and Mr. Mastrovito, as well as an actuary and an attorney, both of whom were also from the Department. This committee determined that Petitioner's proposal was nonresponsive in that the resumes of Joyce Armstrong, Fred White, and Lee Black did not support the qualifications listed for them in the RFP in the areas of economics, actuarial science, and government, respectively.

   
   

9. Specifically, with regard to Ms. Armstrong, designated by Petitioner as its expert in the area of economics, her resume included with the RFP reflects that she "studied" economics at Southern Illinois University in 1976, but no employment in the field of economics, either before or after that date, was listed.

   
   

10. Mr. White's expertise in actuarial science, was claimed on the basis of his resume statement that he is currently completing requirements for membership in his accrediting societies, but the resume reflects no prior work experience in that field.

    
    

11. A similar situation pertains in the case of Mr. Black, designated by Petitioner as its expert in the area of government. Here, Petitioner's narrative indicates that Mr. Black held a "senior position" with the United States Department of Housing and Urban Development, yet his resume makes no reference to any government service or experience.

    
    

12. At the hearing, Petitioner attempted to introduce affidavits from Mr. Black, Mr. White, and Ms. Armstrong in an effort to bolster their credentials. However, these affidavits, which were objected to by Respondent, were not received into evidence and were not considered by the undersigned.

    
    

13. The evaluation committee also failed two of the other five offerors as being unresponsive to the RFP and a second two of the five as having a conflict of interest which disqualified them from award. Only Sterling Partners, Inc. was considered both responsive to the RFP and without a conflict of interest. Both of these categories are "pass/fail" criteria. It was only after an offeror passed both of those that its response was scored on the basis of the other

    factors for evaluation. Since Petitioner and the other four disqualified submittors did not pass the first two qualifications, they were not scored on the technical proposals or price. Only Sterling Partners, Inc. was, receiving

    83 out of a possible 100 points. Since Sterling Partners, Inc. was the only offeror to survive the evaluation process, the team recommended a contract be issued to it.

    
    

    CONCLUSIONS OF LAW

    
    

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

    
    

15. In any case involving a contest of a proposed award by an unsuccessful bidder, the burden of proof rests with that unsuccessful bidder to establish it is entitled to the award, Florida Department of Transportation v. J.W.B., Inc.,

    396 So.2d 778 (Fla. 1 DCA 1981). As an unsuccessful bidder protesting the proposed award here, Petitioner has the burden to establish that the Department's consideration of its proposal as non-responsive, and the evidenced intention by it to award the contract to Sterling Partners, Inc., resulted from illegality, fraud, oppression, or misconduct, and was not the result of a fair, full and honest exercise of the Department's discretion, Liberty County v. Baxter's Asphalt and Concrete, Inc., 421 So.2d 305, (Fla. 1982)

    
    

16. It is well accepted that an agency has wide discretion in evaluating bids and awarding contracts, but it may not act arbitrarily or capriciously, nor can it subvert the award process through bias, fraud, favoritism, illegality or dishonesty, Department of Transportation v. Grove-Watkins Constructors, 530 So.2d 912 (Fla. 1988). Nonetheless, an agency has wide discretion in soliciting and accepting bids, and as a general rule, a decision which is based on an honest exercise of that discretion will not be overturned even if reasonable persons disagree with the outcome, C. H. Barco Contracting Company v. State, Department of Transportation, 483 So.2d 796 (Fla. 1 DCA 1986).

    
    

17. Petitioner asserts that since five of the six offerors who responded to the RFP here were disqualified without evaluation of their proposals on technical grounds or on price considerations, and since Sterling Partners, Inc. was the only bidder whose submittal was evaluated against those criteria, the process was illegal, biased and, perhaps, even fraudulent.

    
    

18. Petitioner attempted to supplement its proposal by the introduction at hearing of the affidavits of Ms. Armstrong, Mr. White and Mr. Black, in an effort to show that their credentials and their expertise was sufficient to meet the contractor qualifications requirements as contained in the RFP. The affidavits were not received into evidence. A review of that information presented by the Petitioner to the evaluation committee clearly indicates that the information the committee had was insufficient to establish the "expert" status of the three individuals, and such expert determination was an integral and indispensable portion of the proposal. It may well be that these three individuals are highly qualified, but the submittal made by the Petitioner, as it was compared against the evaluation criteria by the committee, did not contain sufficient evidence to support such a conclusion. It would be totally unfair to the other offerors and improper to allow a modification for Petitioner only at this stage of the proceedings and in this forum.

    
    

19. The requisite qualifications for proposers was clearly stated in the terms of the RFP, and the language involved did not contain such terms of art as

might reasonably be misconstrued or misunderstood by a reasonably competent offeror. Since, therefore, the requirements to clearly outline the expertise in the specified areas that the contractor was claiming for its team members is clearly stated in the terms of the RFP, and since, here, the submittal by Petitioner did not, clearly, satisfy these requirements, the determination by the committee that Petitioner's submittal did not meet these requirements was appropriate and was neither arbitrary nor capricious. Clearly, there was a paucity of evidence in support of expertise.

In addition, there is no showing of any fraud, illegality, or inherent unfairness in the evaluation process, nor any indication of bias, favoritism or dishonesty on the part of the Department's evaluators.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore:

RECOMMENDED that a Final Order be entered denying the protest of Petitioner herein, Toplis & Harding, Inc. as to Proposal # 91-064-AS.

RECOMMENDED in Tallahassee, Florida this 12th day of September, 1991.

ARNOLD H. POLLOCK

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 12th day of September, 1991.

COPIES FURNISHED:

Edward A. Dion, Esquire

Department of Labor and Employment Security Suite 307, Hartman Building

2012 Capital Circle, Southeast Tallahassee, Florida 32399-0657

Robert L. Russell, Esquire

ARM, Risk Management Consultant Toplis & Harding, Inc.

222 South Riverside Plaza Chicago, Illinois 60606

Thomas Jones, Esquire Holland & Knight

Post Office Drawer 810 Tallahassee, Florida 32302

Frank Scruggs, Secretary

Department of Labor and Employment Security

303 Hartman Building

2012 Capital Circle, Southeast Tallahassee, Florida 32399-2152

Stephen Barron General Counsel DLES

307 Hartman Building

2012 Capital Circle, Southeast Tallahassee, Florida 32399-2152

Docket for Case No: 91-004453BID

Orders for Case No: 91-004453BID