STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

TOXICOLOGY TESTING SERVICE, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 92-1779BID

)

DEPARTMENT OF CORRECTIONS, )

)

Respondent, )

)

and )

)

DOCTORS AND PHYSICIANS )

LABORATORIES, INC., )

)

Intervenor. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, William J. Kendrick, held a formal hearing in the above-styled case on April 2, 1992, in Tallahassee, Florida.

APPEARANCES

For Petitioner: Terry D. Hall, owner

Toxicology Testing Service, Inc. 5426 N.W. 79th Avenue

Miami, Florida 33166

For Respondent: Steven S. Ferst, Esquire

Assistant General Counsel Department of Corrections 2601 Blair Stone Road

Tallahassee, Florida 32399-2500

For Intervenor: Rantson E. Davis, Esquire

Davis & Davis, P.A. Suite B

1321 West Citizens Boulevard Post Office Drawer 491319 Leesburg, Florida 34749-1319

STATEMENT OF THE ISSUES

At issue in this proceeding is whether the decision of the respondent, Department of Corrections (Department), to award the subject bid to intervenor, Doctors and Physicians Laboratories, Inc. (Doctors), comported with the essential requirements of law.

PRELIMINARY STATEMENT

These proceedings arose as a result of an invitation to bid (ITB) issued by the Department on October 16, 1991, which sought to acquire appropriate services to perform drug tests on certain applicants for employment and existing employees of the Department. Following its review of the bids, the Department proposed to award the contract to Doctors.

Petitioner, Toxicology Testing Services, Inc., filed a formal protest challenging the selection of Doctors, as well as the propriety of the evaluation process. Subsequently, the matter was referred to the Division of Administrative Hearings for the assignment of a Hearing Officer to conduct a formal hearing pursuant to Section 120.57(1), Florida Statutes, and the petition of Doctors for leave to intervene was granted.

At hearing, petitioner called Jane Wagner Broyles, Robert McCabe, and Terry

1. Hall as witnesses, and its exhibits 1-4 were received into evidence. The Department called Jane Wagner Broyles and Cliff Clonan as witnesses, and its exhibits 1-7 were received into evidence. Additionally, joint exhibit 1 (the ITB and addendum) was received into evidence.

   
   

   The transcript of hearing was filed April 27, 1992, and the parties were granted leave until May 7, 1992, to file proposed findings of fact. Petitioner and the Department elected to file such proposals, and they have been addressed in the appendix to this recommended order.

   
   

   FINDINGS OF FACT

   
   

   Background

   
   

   1. On October 16, 1991, the Department of Corrections (Department) issued invitation to bid number 91-CO-5369 (hereinafter "the ITB"), which sought to secure appropriate services to perform drug tests on certain applicants for employment and existing employees of the Department. The deadline for submitting bids was established as 11:00 a.m., November 7, 1991. At the time of the deadline, the Department had received four bids, including those of petitioner, Toxicology Testing Service, Inc., and intervenor, Doctors and Physicians Laboratories, Inc. (Doctors). Petitioner's bid was $372,000, and Doctors' bid was $315,491.60.

      
      

   2. Based on its evaluation, the Department ranked Doctors first and petitioner second, with composite scores of 91.67 and 90.38, respectively, and proposed to award the contract to Doctors. Petitioner filed a timely formal written protest to contest the Department's decision, and charged that the Department materially departed from the evaluation criteria contained in the ITB.

      The Invitation to Bid

      
      

   3. Pertinent to this case, section 4.7 of the ITB established the evaluation criteria to be used in determining the acceptability of the bids as follows:

      
      

      4.7 Evaluation Criteria
      Criteria	Point Value
      1. References	5
      2. Firm Profile	5
      3. Firms Qualifications	15

   4. Understanding of Scope

      of Services 25

   5. Bid Price

50 100

And, section 4.7.5 of the ITB established the following methodology to be utilized in awarding points for the bid price criteria:

The award for bid price shall be determined as follows:

The Bidder who submits the lowest bid price will be awarded 50 points. All others bidders will be awarded points based on the following formula:

Bid Price Points = 50 X [1-A/B] where:

A = the difference between the percentage of the bid being evaluated and the low bid(s). B = the low bid.

The lowest bid price will be computed by multiplying the unit prices for Items 1, 2 and

3 for all three years by the estimated quantity. The estimated quantity is for bidding purposes only and is not a guarantee. The total annual cost for Items 1 and 2 for all three years will be added to determine the Total Cost for all three years. The vendor with the lowest Total Cost will be awarded the 50 points.

Negative points will not be awarded.

1. Pursuant to the provisions of section 5.13 of the ITB, the contract was to be awarded to the bidder that received the highest overall point total under the criteria established by section 4.7 of the ITB.

   
   

   The Department's evaluation and the protest

   
   

2. Based on its evaluation of the bids, the Department's evaluation committee awarded petitioner 49.34 points for its technical proposal (items 1-4 of the evaluation criteria) and Doctor's 41.67 points for its technical proposal. Bid price points were then established through a preexisting computer program, which derived 41.04 points for petitioner and 50 points for Doctors. When totalled, petitioner received 90.38 points and Doctors received 91.67 points. Accordingly, the Department proposed to award the contract to Doctors.

   
   

3. Petitioner filed a timely protest to contest such award. The gravamen of that protest is petitioner's contention that the Department applied a methodology other than that established by the ITB to derive the bid price points and that had it utilized the methodology established by the ITB petitioner would have received the most points and been the prevailing bidder. 1/

   
   

4. Consistent with petitioner's contention, the proof demonstrates that the computer program used to derive the bid price points and the methodology established by the ITB to derive such points differed with regard to the definition of A in the formula, discussed supra. In the computer program, factor A was defined as the difference between the price of the bid being evaluated and the low bid. In the ITB, factor A was defined as the difference between the percentage of the bid being evaluated and the low bid. The

   Department was not, however, aware of this dichotomy until the subject protest, believing that its ITB conformed with the methodology it had previously programed for its computer, and, at hearing, offered proof, which is credited, that use of the word "percentage" in the definition of A was a typographical error which should have read "price."

   
   

5. Notably, the Department heavily weighed price (50%) in its ITB, and it is apparent the Department intended to use a formula that would create a difference in price scoring that was relative to any difference in the bid prices. Use of the formula, as correctly defined in its computer program, would accomplish such goal. Use of the formula, as incorrectly defined by the ITB and interpreted by petitioner in these proceedings, would not accord any meaningful weight to price. 2/ Under such circumstances, it cannot be reasonably concluded that the Department departed from the essential requirements of law when it declined to apply the methodology as interpreted by petitioner to award the contract. Moreover, for the reasons that follow, petitioner has failed to demonstrate that the Department's decision to stand by its award based on the correctly defined methodology departed from the essential requirements of law.

   
   

6. Here, the proof demonstrates that petitioner, upon receipt and review of the ITB, was well aware that the formula for awarding points based on price was nonsensical, and most likely, in error. 3/ Notwithstanding, petitioner took no action under the provisions of general condition 6 and special condition 4.4 of the ITB to raise any question or seek any clarification or interpretation of the formula from the Department. 4/ Rather, petitioner submitted its best price offer, more likely than not, without reliance on the erroneous formula set forth in the ITB. 5/ Under such circumstances, it cannot be concluded that the Department's award of the contract, based on an application of the correct definition of factor A, accorded any bidder an unfair advantage or otherwise departed from the essential requirements of law.

   
   

   CONCLUSIONS OF LAW

   
   

7. The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of these proceedings. Sections 120.53(5)(d)2 and 120.57(1), Florida Statutes.

   
   

8. In the instant case, petitioner contends that the Department should be compelled to apply the methodology as contained in the ITB, albeit erroneously defined, and award it the subject contract. As the protestant, petitioner has the burden of establishing, by a preponderance of the evidence, that the Department's decision to award the contract based on the correctly defined methodology, as opposed to the erroneously defined methodology, departed from the essential requirements of law. Florida Department of Transportation v.

   J.W.C. Co., Inc., 396 So.2d 778 (Fla. 1st DCA 1981), and Florida Department of Health and Rehabilitative Services v. Career Service Commission, 289 So.2d 412 (Fla. 4th DCA 1974).

   
   

9. Competitive bidding requirements, such as those imposed upon the Department, have as their purpose and object the following:

   
   

   [T]o protect the public against collusive contracts; to secure fair competition upon equal terms to all bidders; to remove not

   only collusion but temptation for collusion and opportunity for gain at public expense; to close all avenues to favoritism and fraud in various

   forms; to secure the best values for the [public] at the lowest possible expense; and to afford an equal advantage to all desiring to do business with the [government], by affording an opportunity for an exact comparison of bids.

   
   

   Wester v. Belote, 103 Fla. 976, 138 So. 721, 723-24 (Fla. 1931); Harry Pepper & Associates, Inc. v. City of Cape Coral, 352 So.2d 1190-92 (Fla. 2d DCA 1977).

   
   

10. In soliciting and accepting competitive bids, an agency has wide discretion, and its decision, if based on an honest exercise of this discretion, will not be overturned even if reasonable persons my differ with the outcome. See D.O.T. v. Groves-Watkins Constructors, 530 So.2d 912 (Fla. 1988), and Liberty County v. Baxter's Asphalt & Concrete, Inc., 421 So.2d 505 (Fla. 1982). Its discretion, while broad, is not, however, unbridled. It must exercise such discretion in a manner that is not illegal, dishonest, fraudulent, arbitrary, or in any other way that would subvert the purpose of competitive bidding. See

    D.O.T. v. Groves-Watkins Constructors, supra; Caber Systems v. Department of General Services, 530 So.2d 325 (Fla. 1st DCA 1988); Couch Construction Company, Inc. v. Department of Transportation, 361 So.2d 172 (Fla. 1st DCA 1978); and Wood-Hopkins Contracting Company v. Roger J. Au & Sons, Inc., 354 So.2d 446 (Fla. 1st DCA 1978).

    
    

11. Pertinent to this case, Section 287.057(1), Florida Statutes, provides:

    
    

    . . . An invitation to bid shall be issued which shall include a detailed description of the commodities or contractual services sought; the date for submittal of bids; and

    all contractual terms and conditions applicable to the procurement of commodities or contractual services, including the criteria which shall include, but need not be limited to, price, to

    be used in determining acceptability of the bid. . .

    No criteria may be used in determining acceptability of the bid that was not set forth in the invitation to bid. The bid shall be awarded with reasonable promptness by written notice to the qualified and responsive bidder who submits the lowest responsive bid. This bid must be determined in writing to meet the requirements and criteria set forth in the invitation to bid.

    
    

12. The Department complied with the provisions of section 287.057(1), by, inter alia, establishing the criteria to be used in determining acceptability of the bid. Unfortunately, the formula it published in the ITB, pursuant to which points would be awarded for the price criteria, contained a typographical error in the definition of factor A. Notwithstanding, the Department evaluated the bids based on the correctly defined formula, and proposed to award the contract to Doctors based on such evaluation. Petitioner asserts, however, that such action was improper, and contends that the Department should be compelled to apply the formula as written in the ITB, albeit erroneous, and award it the contract. For the reasons that follow, it is concluded that petitioner has failed to demonstrate that the Department's action departed from the essential requirements of law.

13. Here, the Department heavily weighed price in its ITB, and it is apparent the Department intended to use a formula that would create a difference in price scoring that was relative to any difference in the bid prices. That the formula, as defined by the ITB, was erroneous and failed to accomplish the Department's goal was apparent, and no bidder was shown to have relied on the erroneously stated formula in establishing the price it bid. Under such circumstances, it can hardly be said that the department's evaluation and award, based on the correctly defined formula, was illegal, dishonest, fraudulent, arbitrary, or otherwise subversive of the purpose of competitive bidding.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be rendered dismissing the subject bid

protest.

DONE AND ENTERED in Tallahassee, Leon County, Florida, this 20th day of May 1992.

WILLIAM J. KENDRICK

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 May 1992.

ENDNOTES

1/ Petitioner's protest also contended that since the evaluation committee did not actually compute the bid price points, as opposed to the computer, and tally the totals, that the integrity of the bid process was somehow compromised. Such contention is not persuasive where, as here, the only functions delegated by such committee were merely mechanical.

2/ The proof demonstrates that, literally read, the methodology, as defined by the ITB, represents a gross error of algebra and is mathematically invalid.

Only by indulging certain assumptions, as suggested by petitioner, to further define its terms can any rational meaning be ascribed to the formula. However, to indulge such assumptions, renders the formula meaningless as a tool to create a difference in price scoring that is relative to any difference in bid prices.

As heretofore noted, petitioner's price was $372,000 and Doctor's price was

$315,491.60, a difference of $56,508.40. Applying the formula, as suggested by petitioner in this proceeding, would derive it a score of 49.99 points even though its bid was significantly higher than Doctors. Moreover, applying petitioner's interpretation, it could have bid $10,000,000 and still received

49.99 points. Under such circumstances, application of the formula, as suggested by petitioner, would not accord any meaningful weight to price.

3/ According to Robert McCabe, petitioner's marketing director, "It was a very confusing formula. We tried different interpretations of it, but we just couldn't make any sense out of that." [Tr. p. 38]

4/ In its proposed recommended order, petitioner suggests, as a finding of fact, that respondent knew of the problem with the formula before the bid opening and could have corrected it. Such suggestion is contrary to the persuasive proof. At most, the record demonstrates that Terry Hall, petitioner's director, spoke with respondent's representative, Jane Broyles, the day before bid opening, at a time when petitioner's bid had already been submitted, and asked her how the formula worked. Ms. Broyles advised petitioner she did not know the workings of the formula, and that the bids were simply put into the computer to derive the scores.

5/ The interpretation petitioner has advocated in these proceedings is itself nonsensical. Petitioner was well aware upon receipt of the ITB that price had been accorded a heavy weight by the Department; knew that the formula, as phased in the ITB, was nonsensical; and concedes here that application of the formula, as suggested by it, does not accord any meaningful weight to price. Under such circumstances, it is not reasonable to conclude that petitioner relied on its interpretation in formulating its bid response.

APPENDIX

Petitioner's proposed findings of fact contained on pages two and three are addressed as follows:

(1)-(4) Addressed in paragraph 3, otherwise rejected as subordinate or not relevant.

1. Addressed in footnote 4.

2. & (7) Addressed in paragraph 7.

1. Addressed in footnote 4.

2. Rejected as contrary to the more persuasive proof. See findings 7-9. Petitioner's proposed findings of fact contained on page four are addressed as follows:

1. Rejected as contrary to the more persuasive proof. See footnote 4.

2. Rejected as contrary to the more persuasive proof. See finding of fact number 9.

3. Rejected as contrary to the more credible proof. See paragraph 9.

4. To the extent pertinent, addressed in paragraph 8 and footnote 2.

5. Rejected as contrary to the more credible proof. See paragraph 9 and footnote 5.

The Department's proposed findings of fact are addressed as follows:

1-7. To the extent pertinent, addressed in paragraph 1, otherwise unnecessary detail.

8-12. Addressed in paragraphs 3-5.

13-15. Addressed in paragraph 6 and footnote 1.

1. Not relevant.

2. Not a finding of fact.

   18-35. Addressed in paragraphs 3, 5, and 7-9, otherwise subordinate.

   36-71. Addressed in paragraphs 6-9, and footnotes 2-5. Otherwise rejected as subordinate, argument or recitation of testimony.

   72-79. Addressed in paragraphs 8 and 9, and footnote 1. Otherwise rejected as subordinate, argument or recitation of testimony.

   COPIES FURNISHED:

   
   

   Terry D. Hall, owner

   Toxicology Testing Service, Inc. 5426 N.W. 79th Avenue

   Miami, Florida 33166

   
   

   Steven S. Ferst, Esquire Assistant General Counsel Department of Corrections 2601 Blair Stone Road

   Tallahassee, Florida 32399-2500

   
   

   Rantson E. Davis, Esquire Davis & Davis, P.A.

   Suite B

   1321 West Citizens Boulevard Post Office Drawer 491319 Leesburg, Florida 34749-1319

   
   

   Harry K. Singletary, Jr., Secretary Department of Corrections

   1311 Winewood Boulevard

   Tallahassee, Florida 32399-2500

   
   

   Louis A. Vargas General Counsel

   Department of Corrections 1311 Winewood Boulevard

   Tallahassee, Florida 32399-2500

   =================================================================

   AGENCY FINAL ORDER

   =================================================================

   
   

   STATE OF FLORIDA

   DIVISION OF ADMINISTRATIVE HEARINGS

   
   

   TOXICOLOGY TESTING SERVICE, INC.,

   
   

   Petitioner,

   
   

   vs. CASE NO. 92-1779B1D

   DOC CASE NO. 92-10

   DEPARTMENT OF CORRECTIONS,

   
   

   Respondent,

   and

   
   

   DOCTORS AND PHYSICIANS LABORATORIES, INC.,

   
   

   Intervenor.

   /

   
   

   FINAL ORDER

   
   

   This matter comes before the Department of Corrections (the "Department") for consideration and final agency action after an administrative hearing was conducted before William J. Kendrick, Hearing Officer, Division of Administrative Hearings, Department of Administration. A Recommended Order was rendered by the Hearing Officer on May 20, 1992. No exceptions were filed thereto by Petitioner.

   
   

   Based upon the complete record submitted to the Department by the Division of Administrative Hearings, together with the Recommended Order, the Department makes the following findings:

   
   

   FINDINGS OF FACT/CONCLUSIONS OF LAW

   
   

   1. The Department adopts and incorporates into this Final Order the Recommended Order, including the Findings of Facts and Conclusions of Law; except to the extent that any Conclusions of Law conflict with the Conclusions of Law contained in the Department's Proposed Recommended Order.

      
      

   2. As recommended by the Hearing Officer, the Department hereby awards the contract on Invitation to Bid No. 91-CO-5369 to Doctors and Physicians Laboratories, Inc.

This order may be appealed within thirty days by filing a notice of appeal with the agency and the district court of appeal. Except in cases of indigence, the court will require a filing fee and the agency will require payment for preparing the record on appeal. For further explanation of the right to appeal, refer to Section 120.68, Florida Statutes, and the Florida Rules of Appellate Procedure.

DONE AND ORDERED this 2d day of June, 1992 in Tallahassee, Florida.

HARRY K. SINGLETARY, JR., SECRETARY

Department of Corrections 2601 Blairstone Road

Tallahassee, FL 32399-2500

(904) 488-2326

Copies furnished to:

Terry D. Hall (via certified mail) Toxicology Testing Service, Inc.

5426 N.W. 79th Avenue Miami, Florida 33166

Ranston E. Davis, Esquire Davis & Davis

1321 West Citizens Boulevard Suite B

P.O. Drawer 491319

Leesburg, Florida 34749-1319

William J. Kendrick, Hearing Officer Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

Jim Morris

Bureau of General Services - Department of Corrections 2601 Blairstone Road

Tallahassee, Florida 32399-2500

Jane Broyles

Bureau of General Services Department of Corrections 2601 Blairstone Road

Tallahassee, Florida 32399-2500

Shawn Baldwin Bureau of Personnel

Department of Corrections 2601 Blairstone Road

Tallahassee, Florida 32399-2500

Steven S. Ferst

Assistant General Counsel Department of Corrections 2601 Blairstone Road

Tallahassee, Florida 32399-2500

Filed in the official records of the Department of Corrections on this

2nd day of June, 1992.

LESLIE S. RODES, Agency Clerk

Docket for Case No: 92-001779BID

Orders for Case No: 92-001779BID