STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DERICK PROCTOR, )

)

Petitioner, )

)

vs. ) CASE NO. 91-5963BID

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent, )

and )

)

TCC NUMBER 3 LTD, INC., )

)

Intervenor. )

)

RECOMMENDED ORDER

Upon due notice, this cause came on for formal hearing on October 30, 1991 in Tallahassee, Florida, before Ella Jane P. Davis, a duly assigned Hearing Officer of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Thomas V. Infantino, Esquire

Post Office Drawer 30 Winter Park, Florida 32790

For Respondent: Ralph J. McMurphy, Esquire

Department of Health and Rehabilitative Services

1000 Northeast 16th Avenue Gainesville, Florida 32609

For Intervenor: B. Gray Gibbs, Esquire

Bette Branch Lehmberg, Esquire One - Fourth Street North

St. Petersburg, Florida 33701 STATEMENT OF THE ISSUE

Whether the bid submitted in the name of TCC Number 3 Ltd. was nonresponsive and whether Petitioner Proctor is therefore entitled to award of HRS Lease Bid No. 590:2306.

PRELIMINARY STATEMENT

The only bids for Lease No. 590:2306 were submitted on behalf of Petitioner Proctor and Intervenor, TCC Number 3 Ltd. Inc. (TCC), in response to an Invitation to Bid issued by Respondent, Department of Health and Rehabilitative

Services (HRS). HRS determined that the bid should be awarded to TCC, and Proctor timely filed his protest regarding that determination. This matter was subsequently transferred to the Division of Administrative Hearings for a formal proceeding pursuant to Sections 120.53 and 120.57(1) F.S.

Prior to formal hearing, Proctor's Motion to Amend his Formal Protest was granted.

HRS and TCC filed respective Motions to Dismiss. These motions, which are in effect motions for summary recommended order, were denied, subject to revisitation in this recommended order. See, Conclusions of Law, infra.

Petitioner presented the oral testimony of Derick Proctor, James Hartley, Thomas C. Little, Sylvia B. Smoot, and Mary Hawks. Petitioner presented the testimony of Ethel Cantrell and Sharon Lane by their depositions, which were admitted into evidence, subject to the objections contained in the depositions.

Respondent HRS presented the oral testimony of Donald J. Cerlanek. Intervenor TCC presented no witnesses.

The parties had seventeen joint exhibits admitted in evidence. Supplements to Joint Exhibits 3 and 4 were subsequently offered and accepted as Joint Exhibits 3A-3E and 4A-4D.

HRS offered no individual exhibits.

Petitioner additionally had admitted into evidence Proctor Exhibits 1 through 11. TCC additionally had admitted TCC Exhibits 1 through 4. In the course of hearing, by agreement of the parties, duplicative exhibits were withdrawn and the original exhibits relied upon to avoid duplication. The body of the transcript reflects this procedure but its table of contents does not.

The transcript was filed in due course, and all timely filed proposed findings of fact have been ruled on in the appendix to this recommended order, pursuant to Section 120.59(2) F.S.

FINDINGS OF FACT

1. Respondent HRS published ITB 590:2306 for existing rental space in the central area of Brooksville, Florida. The bid solicitation specified a bid opening time and date of 2:00 p.m. July 17, 1991.

   
   

2. Petitioner and Intervenor timely submitted sealed bids. They were the only two bidders. Neither they nor anyone else timely filed any protest of the bid specifications, and therefore the specifications are not subject to attack in this proceeding.

   
   

3. Petitioner received a notice of intent to award the bid for lease 590:2306 to Intervenor by letter from Respondent dated August 27, 1991 and timely filed its notice of intent to protest and formal bid protest. Petitioner accordingly has standing to bring this proceeding.

   
   

4. Intervenor is the intended awardee and as such has standing to intervene.

5. Petitioner submitted the property located at 7348 Broad Street, Brooksville, Florida, and showed in his bid submittal form that his proposed property contained 22,500 net square feet, with future expansion of 2,100 square feet available. When Petitioner submitted his bid, it included a floor plan, site plan, and a PUR 7068 form. A PUR 7068 form is a "Public Entity Crime Certification Statement," a sworn statement under Section 287.133(a) F.S.

   
   

6. The ITB included two separate requirements for bidders to establish that they have control over the property that they submit to HRS. HRS' purposes in requiring bidders to demonstrate control are to prevent bids based on total speculation, to establish a reasonable expectation that the bidder can meet his obligations if awarded the bid, and to establish a reasonable expectation that the property can be occupied on time.

   
   

   1. Item 1 on page 3 provides as follows:

      1. Control of property - This pertains to both the structure(s) and proposed parking areas. To submit a responsive bid, a prospective lessor must meet one of the following qualifications:

         a.) Be the owner of record of the facility and parking areas (submit copy of deed).

         b.) Be the lessee of space being proposed and present with bid, a copy of lease with documen- tation of authorization to sublease the

         facility and parking areas through the base lease term and all renewal option periods.

         c.) Submit documentation of an option to purchase the facility and/or parking areas. d.) Submit documentation of an option to lease the facility with authorization to in

         turn, sublease. Any lease must encompass the entire time period of the basic lease and any renewal option periods as required the state.

         e.) Submit form PUR. 7068 Sworn Statement of Public Entity Crimes (Attachment H).

         
         

   2. Page 12 provides, in part, as follows:

      In order for a bid proposal to be accepted the items 1 through 6 must be included in the bid proposal. Items 7 through 11 must be included, if applicable. [Items 11 and 13 state:]

      11. Documentation showing bidder as controller of property.

      13. Public Enemy [sic] Crime Certification Statement

      
      

7. A pre-bid conference attended by Petitioner made clear that evidence of control and the PUR 7068 form were two different items. Petitioner testified that he attached the PUR 7068 form as his sole basis for evidencing control of the building and parking spaces he submitted for lease, and acknowledged that, in fact, the form did not provide any information with regard to his control of the buildings or parking spaces offered for lease. Petitioner's assertion that his name on some of his site plans, etc. constitutes evidence of control is not persuasive. Such assertion is not in line with the ITB requirements or even common sense.

8. Petitioner Proctor owned the buildings he offered HRS in his bid submittal. Petitioner offered multiple buildings separated by parking areas and driveways. The property offered by Petitioner was to have built an awning- covered walkway between buildings but the walkway would have to be placed through the driveway area of the property. The expansion area for Petitioner's property designated in its bid submittal was composed of approximately 10 gated warehouse units which would be converted to office space.

   
   

9. Petitioner had leased a portion of the same premises to HRS for 15 years, and HRS was still leasing that portion at the time of the bid opening.

   At the time of the bid opening, another portion of the property Petitioner proposed to be leased to HRS was also already rented to other tenants, including a lease to the Florida Department of Labor which was not scheduled to expire until December 31, 1991, one day prior to HRS' proposed first day of occupancy under the ITB. The space leased to the Department of Labor would require some renovation for HRS' use, at least to connect it on the interior with the rest of the building. The remainder of the second, adjacent, building to be rented under Petitioner's bid would require more extensive renovation to create office spaces to meet HRS' needs. In addition to the Department of Labor, Petitioner was also renting space in the second building to a beauty salon, a book store, an office supply store, a clothing store, and a barber at the time of bid submittal and opening and at the time of the formal hearing. These latter tenants were on month-to-month leases.

   
   

10. In order to ensure that there would be time for necessary renovations before January 1, 1992 and further to ensure that the property would be available for occupancy on January 1, 1992, the ITB required in the following unequivocal language that all bidders file tenant acknowledgments of the bid/proposed lease with their bid submittal:

    
    

11. Existing Tenants: If the offered space or any portion thereof (including parking areas) is at present occupied or will be covered by an active lease(s) at the stated availability date, written documentation by the tenant indicating acknowledgment of the bid and ability to vacate premises by the proposed date must be included with the bid submittal. [Emphasis added]

1. Petitioner submitted no tenant acknowledgments from any of his tenants with his bid to HRS.

   
   

2. Even though Petitioner failed to submit evidence of control in the form of a deed and further failed to submit the required acknowledgments from tenants occupying the premises on the bid date, HRS did not immediately disqualify Petitioner's bid as nonresponsive. Instead, HRS evaluated Petitioner's bid simultaneously with Intervenor TCC's bid. HRS relied on old leases in its files and actual knowledge that monthly rent was paid to Petitioner for its own currently leased space, and HRS ignored the absence of tenant acknowledgments with Petitioner's bid. HRS followed this course of action despite the requirement of the ITB on page 7, item 1 under EVALUATION OF BIDS which unequivocally provides:

   
   

   Bids received are first evaluated to determine technical responsiveness. This includes submittal on bid submittal forms, inclusion of

   required information, data, attachments, signatures and notarization, etc. Non responsive [sic] bids will be withdrawn from further consideration.

   
   

3. The portion of the ITB designated, Documents Required To Be Submitted With Bid Submittal For Existing Buildings on page 12, item 4. required bidders to submit "Scale Floor Plans showing present configurations with dimensions." Page 3 of 22, Item 9.(b) further required that, as a part of the bid submittal, bidders were to provide "A scaled (1/16" or 1/8" or 1/4" = 1'0") floor plan showing present configuration with measurements."

   
   

4. Contrary to the ITB requirement, Petitioner submitted a floor plan scaled at 1/20" = 1', which also failed to reflect the present configurations with all measurements. Petitioner's scaled floor plan submitted with his bid was prepared prior to the present addition to one building and contained a hand- drawn configuration without accurate measurements for the northwest corner of one building.

   
   

5. The term of the lease as shown on the ITB and Bid Submittal Form was 9 and one-half years with an option to renew for 2-5 year renewal periods.

   
   

6. At the time of the bid opening on July 17, 1991, the bid submitted by Petitioner failed to have any proposed rental rates shown for "Renewal Options: Option II years 1 through 5." HRS permitted Petitioner to correct or supplement its bid after the bid opening (same date and place) to cover this material omission.

   
   

7. Page 6, item 4 of the ITB provided for the property owner or other bidding entity to sign the bid submission. The pertinent part states:

   
   

   4. Each bid submitted shall be signed by the owner(s) corporate officers, or legal representative(s). The corporate, trade, or partnership title must be either stamped or typewritten beside the actual signature(s). If the Bid Submittal is signed by an Agent, written evidence from the owner of record of

   his/her authority must accompany the proposal. ALL BID SUBMITTAL SIGNATURES MUST BE WITNESSED

   BY TWO PERSONS. [Emphasis appears in ITB]

   
   

8. Petitioner Proctor signed his bid submittal in proper person.

   
   

9. TCC's bid submittal was signed by Sharon K. Lane, "Executive Director," of TCC Number 3 Ltd. Inc., Intervenor herein.

   
   

10. At all times material, TCC Number 3 Ltd. Inc. has been a Florida corporation. At the time of the bid opening, Ms. Lane was TCC's sole shareholder and "all officers." At the time of formal hearing, Ms. Lane remained the sole shareholder, but others had assumed some of the corporate offices. Her status at the time of the bid submittal was sufficient for her to bid on behalf of the TCC corporation and to execute the PUR 7068 form on that corporation's behalf.

    
    

11. Intervenor TCC submitted the required PUR 7068 form, but TCC submitted as sole evidence of control an undated, unrecorded "Contract for Sale and

    Purchase" by and between Hernando Plaza Ltd. as Seller and Intervenor TCC as Buyer, for the property which Intervenor was offering for lease to HRS. The best date assignable to this document is April 29, 1991. It was executed on behalf of Hernando Plaza Ltd. by Edward M. Strawgate and Harold Brown representing themselves as general partners of the limited partnership.

    
    

12. TCC's obligation to proceed to closing under the foregoing contract was contingent upon TCC's securing an anchor tenant. However, the contract requires TCC to take steps to secure an anchor tenant. By its terms, TCC may purchase the property with or without an anchor tenant, but the contract requires TCC, in seeking an anchor tenant, to set time limits for the lease arrangement with the proposed anchor tenant which do not necessarily accord with the timing of HRS' bid process.

    
    

13. HRS accepted TCC's contract to purchase from Hernando Plaza Ltd., as evidence of TCC's control of the premises offered by TCC for lease, believing it to constitute an option to purchase and the necessary evidence of control as required by the ITB. (See, Finding of Fact 6, supra.)

    
    

14. At the time of the bid opening, HRS had no reliable information as to what entity actually owned the property offered by TCC, and TCC had not disclosed to HRS that its contract to purchase the property was with a legal entity other than the record title owner of the property, which record title owner was and is the Victor and Lillian Brown Foundation (Brown Foundation). See, infra. Up to that date, at least, Hernando Plaza Ltd. had represented itself to TCC as the owner of the property.

    
    

15. The ITB did not require that an abstract of title be submitted with the bid, and HRS normally does not require an abstract from successful bidders, although the ITB contains provisions for future disclosure from successful bidders. (See, ITB item 5 under Requirements for Bidders to Submit Bids.) Absent some reason to "go behind" facial evidence of control, HRS attempts to protect itself by requiring successful bidders to put up an irrevocable letter of credit for one-half of one percent of the proposed lease rental obligation over the basic lease term as a penalty in the event a successful bidder cannot perform. (See, ITB page 4, item 10.)

    
    

16. Hernando Plaza Ltd.'s certificate from the Florida Secretary of State expired December 31, 1981. That fact was advertised and the certificate cancelled July 16, 1982. At that time, Edward M. Strawgate was listed as a general partner and Harold Brown was listed as a limited partner of Hernando Plaza Ltd. Hernando Plaza Ltd. had been administratively dissolved for failure to file its annual report. Subsequent to the time that Intervenor submitted its bid proposal, but prior to formal hearing, Hernando Plaza Ltd. was reinstated by the Florida Secretary of State. Once reinstated, the limited partnership's ability to act related back and validated its prior actions.

    
    

17. At all times material, the record title of the property offered by Intervenor TCC for lease to HRS was owned by "Harold Brown, Lillian Brown and Muriel Kahr as Trustees of the Victor and Lillian Brown Foundation." This title is derived from a recorded June 30, 1967 warranty deed from Hernando Plaza Ltd., which deed was admitted in evidence at formal hearing. The warranty deed was not attached to TCC's bid submittal. Neither TCC, the corporation, nor Sharon

    K. Lane, individually, held any authority as agent to submit a bid to HRS on behalf of the record title owner, the Brown Foundation.

18. There is also in evidence a recorded December 18, 1985 Amendment to Lease between the Brown Foundation and City National Bank. That Amendment to Lease also was not attached to TCC's bid submittal to evidence control of the premises TCC was offering to lease to HRS. That Amendment to Lease also recites that Hernando Plaza Ltd. leased back the subject property from the Brown Foundation by a lease dated June 30, 1967. The June 30, 1967 lease was not recorded, was not part of TCC's bid submittal, and is not in evidence. The December 18, 1985 Amendment to Lease goes on to recite that Hernando Plaza Ltd. has assigned its lessee interest under the June 30, 1967 lease to City National Bank by a March 14, 1978 assignment. There is also in evidence a recorded March 14, 1978 "Assignment of Lessee's Interest in Lease from Hernando Plaza Ltd. to City National Bank." This assignment was not part of TCC's bid submittal. The December 18, 1985 Amendment to Lease goes on to further recite that the Brown Foundation has "agreed to give and grant to [Hernando Plaza Ltd.] an option to purchase the property." The remainder of the December 18, 1985 Amendment to Lease details the terms or conditions of the option to purchase granted by the Brown Foundation to Hernando Plaza. For instance, in order to exercise that option to purchase the subject property from the Brown Foundation, Hernando Plaza Ltd., among other requirements, would have to demonstrate that all the terms of the unrecorded June 30, 1967 lease are "in good standing." One may reasonably infer that "in good standing" would at a bare minimum mean that the rents under the lease are paid current at the time the option is exercised, but what the other terms of the lease might be are subject to pure conjecture.

    TCC's bid submittal did not include documentation that the June 30, 1967 lease was "in good standing." There is also in evidence a recorded June 7, 1989 Trustee's Deed (quitclaim deed of the trustee's interest) from City National Bank's successor bank/trustee to Hernando Plaza Ltd. The Trustee's Deed also was not attached to TCC's bid submittal.

    
    

19. On the date of bid submittal/opening neither TCC, the corporation, nor Sharon K. Lane, individually, held any authority as agent to submit a bid on behalf of Hernando Plaza Ltd. or City National Bank's successor.

    
    

20. At formal hearing, TCC submitted an October 24, 1991 written hearsay statement by Harold Brown as Trustee of the Brown Foundation to the effect that Hernando Plaza Ltd.'s December 18, 1985 option to purchase the property from the Brown Foundation was "in full force and effect" and that the June 30, 1967 lease back from the Brown Foundation to Hernando Plaza Ltd. was "in full force and effect and that the lessee is in good standing thereunder." Assuming these items may be considered in this proceeding pursuant to Section 120.58 (1) F.S. as supplementing or explaining direct evidence, they still do not clarify in any way what all the terms of the unrecorded 1967 lease are or that those terms will remain in good standing on the date in the future that Hernando Plaza Ltd. elects to exercise its option, if it elects to exercise its option to purchase the property from the Brown Foundation so that Hernando Plaza Ltd. may, in turn, convey the property to TCC, pursuant to Hernando Plaza Ltd. and TCC's April 29, 1991 contract for sale and purchase.

    
    

21. Oddly enough, there is further explanatory hearsay that on October 24, 1991, Harold Brown was a trustee of the Brown Foundation and that he also was the sole limited partner of Hernando Plaza Ltd., although TCC's contract with Hernando Plaza for sale and purchase previously indicated Harold Brown was one of two general partners.

    
    

22. Hernando Plaza Ltd.'s option to purchase the property from the Brown Foundation must be exercised by Hernando Plaza Ltd. before Hernando Plaza Ltd. can honor its contract to purchase/sell to TCC. Since there is no record

    evidence that the June 30, 1967 lease from the Brown Foundation as lessor to Hernando Plaza Ltd. as lessee will be in good standing on whatever future date Hernando Plaza Ltd. attempts to exercise its option with the Brown Foundation, one may only speculate both as to when and if TCC will be able to purchase the property from Hernando Plaza Ltd. TCC has only an option to become owner of the subject property at some unspecified date conditioned upon Hernando Plaza Ltd.'s first successfully exercising its option from the Brown Foundation and further conditioned upon all the terms of TCC's contract with Hernando Plaza Ltd.

    Apparently, TCC's only recourse to enforce its contract with Hernando Plaza Ltd. is a Circuit Court action for specific performance.

    
    

23. TCC also submitted a site plan and floor plan with its bid submittal. The ITB required that offices on outside walls must provide windows. TCC's plans did not reflect windows in two sides of the building, but given HRS' retaining the right to partially design and locate its own halls and offices during the building's renovation, TCC's failure to show windows in the two outside walls is not, in and of itself, a material, disqualifying deviation from the ITB so as to unilaterally render TCC's bid nonresponsive.

    
    

24. HRS staff member Donald J. Cerlanek prepared a bid synopsis of each bid. This involved completing a form from the HRS leasing manual which illustrates the characteristics of each of the bids.

    
    

25. The bid requirements included evaluation criteria and a maximum amount of points which could be awarded for each criteria item.

    
    

26. Five HRS bid evaluation committee members executed no conflict of interest forms. These were: Thomas C. Little Jr., David Thomley, Sylvia Smoot, Harvey Whitesides, and Mary Hawks.

    
    

27. All committee members were given copies of the bid synopsis form to use in evaluating the properties submitted by Petitioner and Intervenor.

    
    

28. Some of the committee members did not obtain or review the actual bid submissions of each of the bidders, but all of them had access to the bid submissions and read the bid synopsis forms for both Petitioner's and Intervenor's bid submittals.

    
    

29. The bid evaluation committee members, except for Mary Hawks, made site visits to the properties submitted by Petitioner and Intervenor. Ms. Hawks essentially acted only as a facilitator or conduit for the evaluations of the other four evaluators as set out infra. The four site evaluators took notes regarding each location.

    
    

30. The four site evaluators each assigned numerical weights to each item of evaluation criteria except for the rent and renewal rent portions of the evaluation criteria.

    
    

31. Although on their site visits some committee members visiting TCC's site may have seen a color version of an artist's rendering of what TCC's project could look like after renovation was complete, a black and white version of the same artist's rendering was attached to TCC's bid submittal to which all committee members had access, and it is found that this situation in and of itself presented no false or misleading information nor constituted any prejudice to a fair bid process/evaluation. Likewise, although some evaluators discussed expansion prospects with TCC's and/or Proctor's on-site representatives, the evidence is credible and persuasive that each evaluator who

    visited the sites assessed the projects' respective expansion prospects substantially upon what they saw on each site and had experienced in Proctor's existing facility. The points awarded and reasons for the recommendations of each evaluator who visited the sites were reasonably based on specific needs of HRS. These specific needs of HRS were reasonably articulated by the two evaluators who made on-site inspections and who also testified at formal hearing and were reasonably set out in writing in the written notes of the two other evaluators who did not testify.

    
    

32. Thomas C. Little, Jr., testified that he found the Intervenor's property superior as a result of the security problems at Petitioner's locations, the closer proximity of the courthouse, hospital, and health department to Intervenor's property and the superiority of a single building offered by Intervenor versus multiple buildings offered by Petitioner. Additionally, he found the esthetics of Petitioner's buildings lacking and expansion offered by Petitioner limited and was concerned that HRS would outgrow the space due to the fact that their service area is one of the most rapidly growing in Florida. His contemporaneous notes were to the same effect. Sylvia Smoot, also a member of the evaluation committee, testified that she found Intervenor's facility superior based on its proximity to the courthouse, hospitals, and other key locations, and its flexibility of design and concentration of space in one building. She further found Petitioner's location lacking as a result of the three separate buildings, its limited expansion room, and the necessity for redirecting clients between buildings, and the difficulty for elderly and handicapped clients accessing Petitioner's building. Her contemporaneous notes were to the same effect. Evaluators Whitesides and Thomley made substantially similar contemporaneous notes justifying their scoring of the two bidders.

    
    

33. Three of the four site evaluators met as a group following the site visits and discussed the properties submitted by Petitioner and Intervenor.

    
    

34. All four of the site evaluators made recommendations to accept the property for lease proposed by Intervenor, but they did not all confer and jointly develop a single recommendation to the facilities manager.

    
    

35. The points assigned by each of the four site evaluators for the properties proposed by Petitioner and Intervenor were as follows:

    
    

    Evaluation Committee TCC Number

    Member's Names Proctor's Points 3's Points

    Thomley 75 98

    Little 78 93

    Whitesides 74 95

    Smoot 80 91

    307 377

    
    

36. The rent portion of the evaluation criteria was ascertained by applying present value methodology as set forth in the HRS leasing manual to the annual rents offered by the bidders.

    
    

37. The discount factor was 8.32 percent. The present value of Proctor's bid was $1,934,038 and the present value of TCC's bid was $2,028,316.

    
    

38. The leasing manual is considered advisory only. It advises present values be made, a determination of the difference in amounts be calculated and a

    comparison of the difference be made to determine a percentage. Thereafter, the percentage is applied to the maximum amount of points allocated for rent in the evaluation criteria. The lowest present value receives the maximum number of points allocated, and, thus, Proctor was awarded 35 points. TCC received 33 points, based upon the fact that its present value of rent was close to the present value submitted by Proctor.

    
    

39. No penalty is imposed to a bidder whose rental amounts is higher than the lowest bidder.

    
    

40. No benefit is conferred upon the lowest cost bidder over the next lowest bidder.

    
    

41. Mary Hawks, Manager for Administrative Services, Department of Health and Rehabilitative Services, received each of the individual evaluation recommendations from Thomley, Little, Whitesides and Smoot.

    
    

42. As a result of travel restrictions placed on the HRS, the four site evaluators and Ms. Hawks, who was also a fifth committee member, did not meet as a group following the site visits although three of the four site evaluators did meet collectively following the site visits. (See Finding of Fact 43-44, supra.)

    
    

43. The committee members could have met by telephone conference call but Mary Hawks found it unnecessary to do so because there was such a clear evaluation in favor of Intervenor based on the total composite evaluation scores of 377 for Intervenor and only 307 for Petitioner, out of a total of 400 points. She assigned no points herself but approved their recommendations and forwarded a single recommendation in favor of TCC for ultimate approval by HRS management.

    
    

44. Mary Hawks had spoken to the evaluation committee members subsequent to the evaluation and no member had expressed any reservation regarding his/her evaluation or a need to meet to discuss anything additional regarding the bid evaluation.

    
    

45. The HRS Intent to Award to TCC subsequently issued.

    
    

46. The evaluation process and formula for rent evaluation are not among the more commonly used methods but were reasonable and rational and fairly applied to the bids in this case.

    
    

47. No conflict of interest in the evaluation committee members was demonstrated by Petitioner in these proceedings.

    
    

    CONCLUSIONS OF LAW

    
    

48. The Division of Administrative Hearings has jurisdiction of the parties and subject matter of this cause. See, Sections 120.53 and 120.57(1) F.S.

    
    

49. Pursuant to the foregoing statutory provisions, this is a de novo proceeding, and the status of the Petitioner and Intervenor as the only bidders evaluated by HRS, however erroneously, determines their standing to participate in this formal hearing. The substantial interests of Petitioner and Intervenor have been clearly demonstrated, and, accordingly, all pending motions for dismissal or for summary recommended order dismissing either one due to lack of standing are denied.

50. Petitioner, as protestant of the intended bid award, has the burden to demonstrate that the winning bidder, TCC, is, for one reason or another, not a responsive bidder and that the protestant's bid was the best responsive bid.

    
    

51. On its face, the ITB states that control may be evidenced merely by attachment of an "option to purchase." The ITB states no further requirements concerning the internal provisions of the option to purchase. TCC attached to its bid a conditional contract to purchase. This document constitutes a conditional "option to purchase." However, it is axiomatic that the ITB requirement intended that any option to purchase submitted to demonstrate a bidder's control of the property must be an option to purchase between the bidder and the correct entity, that is, an entity which clearly has a sufficiently unequivocal interest in the proposed property that it can convey title to the bidder (potential lessor) in time for the bidder to fulfill its obligations if awarded the lease. To not make this logical and reasonable inference from the ITB's bare terms would permit a bidder to attach any type of speculative, spurious, "wildcat" document from any stranger to the transaction even if that document clearly did not demonstrate any proof of control in the bidder, which control is the primary purpose of the requirement in the first place.

    
    

52. Intervenor TCC argued that the only entity with which Intervenor could have legitimately contracted to purchase the proposed property was the seller under the contract, Hernando Plaza Ltd., and that because Harold Brown was both a signator for Hernando Plaza Ltd. on its April 29, 1991 contract for sale with TCC and currently is also a trustee of the Brown Foundation, his status constitutes sufficient evidence of control for bid purposes. This argument is not persuasive. In the first place, the issue is whether the bid submitted by TCC was responsive by including those documents required by the ITB to be included at the time that the bid was submitted. See, Roberts v. HRS, 13 FALR 3355 (1991); Intercontinental Properties, Inc. v. HRS, et al, 13 FALR 3308 (1991). TCC's attachment to the ITB of its contract to purchase with an entity other than the record marketable title holder was insufficient to show control. The situation required some attachment that clearly evidenced the required control in TCC or in Hernando Plaza Ltd. as a conduit of the required control to TCC. Either some showing of agency from the record title holder or some showing that Hernando Plaza Ltd. could convey title to TCC in time to meet HRS' needs seems minimally necessary.

    
    

53. To demonstrate control at formal hearing, bidder TCC relied on all interests in the property having merged in non-title holder Hernando Plaza Ltd., yet when TCC submitted its bid, TCC did not attach documentation to show that such a merger of interests had occurred. Considering the further evidence presented at formal hearing, and assuming arguendo, but not ruling, that on October 29, 1991, Harold Brown was sole trustee of the Brown Foundation and that on that date he was competent to declare the 1967 lease to be "in good standing," that situation alone is no guarantee that the 1967 lease back from the Brown Foundation to Hernando Plaza Ltd. (which lease is not in evidence) was in good standing on the date of bid submittal or will still be in good standing when and if Hernando Plaza Ltd. exercises its option to purchase from the Brown Foundation, or that Hernando Plaza Ltd. then will timely convey title to bidder TCC. As proven at formal hearing, TCC has only an option to become owner of the subject property at some unspecified date conditioned upon Hernando Plaza Ltd.'s successfully exercising its option with the Brown Foundation at some prior unspecified date, which option between the Brown Foundation and Hernando Plaza Ltd. is further conditioned upon all terms of the 1967 lease remaining in good

    standing. Therefore, TCC's interest in the property is too speculative to qualify as sufficient evidence of necessary control.

    
    

54. Having determined that Intervenor TCC is not a responsive bidder, the next issue is whether or not Petitioner Proctor should be awarded the lease. The answer is clearly in the negative. Although Petitioner has proven that TCC's bid was nonresponsive solely on the issue of control, Petitioner has failed to prove that Petitioner's bid was responsive.

    
    

55. The ITB herein included one requirement for the bidder to submit documentary evidence of control of the property to be leased, and gave examples of the types of documents to be submitted, such as a deed, an option or a lease. One of the five examples listed, apparently in error, was a PUR form 7068. However, for an owner, a copy of the deed was specifically required. Submission of evidence of control of the parking spaces to be included in the lease was likewise required by the ITB. There was also another separate requirement and checklist regarding submission of evidence of control, and the difference between the PUR form 7068 and a document evidencing control was made clear at the prebid conference. In addition, the bid solicitation had a separate requirement for the submission of tenant acknowledgments if any portion of the property to be leased was either leased to others at the time of the bid or would be leased to others at the time HRS was to take occupancy. The wording of the ITB's requirement for tenant acknowledgments is not fairly open to any other interpretation. Although Petitioner proved at formal hearing that he owned at least the building(s) in question, he did not submit adequate evidence of control of the buildings and all parking areas with his bid submission; he submitted no copy of a deed with his bid; and he has never submitted the necessary tenant acknowledgments. Therefore, his bid is nonresponsive on substantial requirements of the ITB and should be rejected. See, Roberts v. HRS and Intercontinental Properties, Inc. v. HRS et al, supra, and Boozer v. HRS, 11 FALR 4823 (1989).

    
    

56. Additionally, Petitioner's building and site plans were significantly flawed and did not meet the ITB requirements, and HRS subverted the fairness of the competitive bid procedure when it permitted Petitioner to amend its rental rates after the bid opening. One can hardly imagine a practice more prejudicial to a fair bid letting.

    
    

57. The receipt of only nonresponsive bids means that the ITB must be reissued if HRS still desires to do so.

RECOMMENDATION

Upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Health and Rehabilitative Services enter a Final Order finding that:

1. The bid of TCC Number 3 Ltd. is nonresponsive;

   
   

2. The bid of Derick Proctor is nonresponsive;

   
   

3. Declining to award the bid for Lease No. 590:2306 to either bidder.

RECOMMENDED this 20th day of December, 1991, at Tallahassee, Florida.

ELLA JANE P. DAVIS, Hearing Officer Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 20th day of December, 1991.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 91-5963BID

The following constitute specific rulings pursuant to Section 120.59(2)

F.S. upon the parties' respective proposed findings of fact (PFOF): Proctor's 74 PFOF:

The following PFOF are accepted, except to the extent they are unnecessary, subordinate, or cumulative to the facts as found in the recommended order (RO). Unnecessary, subordinate, or cumulative material has not been utilized: 1-3, sentence 1 of PFOF 4, 5-6, 9, 11-12, sentence 1 of PFOF 13, sentence 1 of PFOF

16, 17-26, sentence 1 of PFOF 29, 30-33, 35-36, sentences 1 and 4 of PFOF 38,

39-41, 44-54, 56-57, 60-61, 63.

The following PFOF are rejected because they are not FOF as framed but constitute a proposed conclusion of law (PCOL) or are rejected because they constitute mere legal argument: sentences 2 and 3 of PFOF 4, sentence 2 of PFOF 16, 34, 43.

The following PFOF are rejected because, as framed, they constitute mere recitation of isolated, unreconciled testimony or other record evidence or are not supported by the greater weight of the credible record evidence as a whole. However, the subject matter is covered in the RO as proven and supported by the competent, substantial evidence in the record: 10, sentence 2 of PFOF 13, 14-

15, sentence 2 of PFOF 29, sentences 2 and 3 of PFOF 38, 55, 58.

PFOF 7-8 are accepted as modified because parts are unnecessary, subordinate, or cumulative to the facts as found and other parts are mere recitations of unreconciled portions of the record and legal argument.

The following PFOF are accepted in part but not utilized because parts are unnecessary, subordinate, or cumulative to the facts as found, and other parts are rejected as immaterial to the dispositive issues herein, although correctly quoted from the record: 68-73.

The following PFOF are rejected as immaterial or not dispositive: 27-28, 37, 42, 59, 62, 65, 67, 74.

The following PFOF are covered in preliminary material: 64, 66.

HRS 21 PFOF:

The following PFOF are accepted except to the extent they are unnecessary, subordinate, or cumulative to the facts as found in the RO. Material unnecessary, subordinate, or cumulative has not been utilized: 1-4, 6-8, 11-12, 16-19.

The following PFOF are rejected because they are not FOF as framed but constitute PCOL or are rejected because they constitute mere legal argument: 5, 9-10, 14-15, 21.

The following PFOF are rejected because, as framed, they constitute mere recitation of isolated, unreconciled testimony or other record evidence or are not supported by the greater weight of the credible record evidence as a whole. However, the subject matter is covered in the RO as proven and supported by the competent, substantial evidence in the record: 20.

PFOF 13 is accepted as modified to correctly reflect the credible record evidence as a whole.

TCC Number 3 75 PFOF:

The following PFOF are accepted except to the extent they are unnecessary, subordinate, or cumulative to the facts as found in the RO. Material unnecessary, subordinate, or cumulative has not been utilized: 1-31, 34-38, 42- 45, 47-48, 56, 58-60, 64-69, 71-75.

The following PFOF are rejected because they are not FOF as framed but constitute PCOL or are rejected because they constitute mere legal argument: 32.

The following PFOF are rejected because, as framed, they constitute mere recitation of isolated, unreconciled testimony or other record evidence or are not supported by the greater weight of the credible record evidence as a whole. However, the subject matter is covered in the RO as proven and supported by the competent, substantial evidence in the record: 33, 40-41, 53-55, 57, 61-63, 70.

The following PFOF are rejected as immaterial or as not dispositive: 39, 46, 49, 51-52.

PFOF 50 is not a sentence, but the subject matter is covered in the RO as understood.

COPIES FURNISHED:

Thomas V. Infantino, Esquire Infantino & Berman

Post Office Drawer 30 Winter Park, FL 32790

Ralph McMurphy, Esquire

HRS District 3 Legal Office 1000 Northeast 16th Avenue Gainesville, FL 32609

B. Gray Gibbs, Esquire Sam Power, Clerk

Bette B. Lehmberg, Esquire Department of Health and Suite 800 Rehabilitative Services One 4th Street North 1323 Winewood Boulevard

St. Petersburg, FL 33701 Tallahassee, FL 32399-0700

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should consult with 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.

Docket for Case No: 91-005963BID

Orders for Case No: 91-005963BID