STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

AT&T, )

)

Petitioner, )

)

vs. ) CASE NO. 92-6191BID

)

BROWARD COMMUNITY COLLEGE, )

)

Respondent, )

)

and )

)

NEC BUSINESS COMMUNICATION )

SYSTEMS, INC., )

)

Intervenor. )

)

RECOMMENDED ORDER

This matter was heard by William R. Dorsey, Jr., the Hearing Officer designated by the Division of Administrative Hearings, in Fort Lauderdale, Florida, on December 21, 1992.

APPEARANCES

For Petitioner, Robert J. Borrello, Esquire

AT&T Floyd, Pearson, Richman, Green, Weil, Brumbaugh & Russomanno

CourtHouse Center, 26th Floor

175 Northwest 1st Avenue Miami, Florida 33128-1817

For Respondent, James D. Camp, III, Esquire Broward Camp & Camp, P.A.

Community Suite 1070

College: 515 East Las Olas Boulevard Fort Lauderdale, Florida 33301

For Intervenor, Henry B. Handler, Esquire NEC Business Weiss & Handler, P.A. Communications One Boca Place

Systems, Inc.: 2255 Glades Road, Suite 218-A

Boca Raton, Florida 33431 STATEMENT OF THE ISSUES

1. Whether the staff of Broward Community College acted fraudulently, arbitrarily, capaciously, illegally, or dishonestly when recommending to the College Board of Trustees that it award the bid for a college-wide data and

   voice communications network (Bid No. 3656) to NEC Business Communications Systems, Inc.

   
   

2. Whether the staff abused its discretion in recommending to the Board of Trustees that the bid submitted by AT&T be found non-responsive.

   
   

3. Whether the specifications found in the college's amended bid solicitation documents concerning redundancy for the proposed communications network so disadvantaged AT&T that the matter should be bid for a fourth time.

PRELIMINARY STATEMENT

AT&T filed a formal protest under Section 120.53(5), Florida Statutes (1991), and Rule Chapter 6A, Florida Administrative Code, challenging the decision of Broward Community College (College) to award to NEC Business Communications Systems, Inc. (NEC), the contract to install a communications network at the College's four campuses based on the College's Invitation to Bid No. 3656.

AT&T filed a Notice of Protest on August 7, 1992, and a Formal Written Protest on August 18, 1992. The College requested the assignment of a Hearing Officer on October 6, 1992. The apparently successful bidder, NEC, intervened in the proceeding on November 17, 1992. The prehearing stipulation was filed on December 15, 1992. On December 18, 1992, after the prehearing stipulation was filed, AT&T moved to amend its bid protest to raise the issue of whether the Invitation to Bid required redundancy capabilities for both the voice and data aspects of the proposed system, contending that NEC's bid failed to meet those specifications.

The formal hearing began on December 21, 1992. At the opening of the hearing, AT&T'S motion to amend the bid protest was argued. It was denied to the extent that it attempted to challenge the responsiveness of the bid submitted by NEC, since that issue had never been raised in its formal written protest. AT&T was permitted to amend to raise the issues whether the College's bid solicitation documents were ambiguous as to the requirements that the proposed communications network be redundant for both voice and data communications, and whether AT&T was prejudiced by any such ambiguity. These issues were obliquely raised in its formal written protest. AT&T also moved to continue the hearing based upon the withdrawal of Mr. Robert Kemp as a witness for NEC shortly before his deposition was to have been taken on December 18, 1992. Mr. Kemp had been listed both as a fact and expert witness by NEC on its witness list. That motion was denied. AT&T then requested the Hearing Officer to draw an adverse inference from the NEC's decision to withdraw the witness from it witness list under the circumstances, but that motion was carried with the case.

AT&T'S evidence was presented through four witnesses, Daniel A. Zinn, Senior Account Executive for AT&T Business Communication Systems and Roger Schlage, Senior Account Manager of AT&T Paradyne testified in person. AT&T also offered portions of the deposition testimony of Isaac "Bud" Call, the College's Director of Instructional Support Services, and of Roy E. Freeman, the College's Special Assistant for Information and Research Services, by the designation of certain pages for consideration. AT&T'S exhibits 1-5 were received in evidence. The College called as its witnesses Susan Kuzenka, Senior Buyer in the College's Department of Purchasing; Janet Rickenbacker, the College's Director of Purchasing; Dr. Clinton D. Hamilton, the College's Vice President for Business Affairs; and Frank Ashford, a consultant retained by the College to evaluate the

claims made by AT&T after it filed its protest. The College's exhibits 3-7 were received into evidence, exhibit 1 was marked for identification, and exhibit 2 was never marked. Intervenor NEC called no witnesses. The transcript of the hearing was filed on January 25, 1993, and the parties filed proposed recommended orders by February 12, 1993. Rulings on proposed findings of fact are made in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. The College realized that it needed a new telecommunication system about three years ago, when it began to renovate some of its buildings. On June 8, 1992, the College issued an Invitation To Bid, No. 3656, to eight vendors to replace its fifteen-year-old AT&T Dimension Private Branch Exchange (PBX) System and install a voice and data communications network among the College's four campuses. The bids were to be opened at 2:30 p.m. on July 29, 1992. The College believed replacement of the existing PBX system would result in lower operating costs, permit the system to serve more functions and permit the system to expand as the College's needs grew.

   
   

2. Two vendors, NEC and AT & T, submitted bids.

   
   

3. The College already has gone through two prior bids for the new PBX system, which did not result in contracts with any of the bidders. AT&T had submitted a bid in response to each of those attempts to let a contract for replacement of the College's communications system.

   
   

4. The process of developing the bid specifications was initiated by the College's Vice President for Business Affairs, Dr. Clinton Hamilton, who asked those who would be using the communications system (the Registrar, the Learning Resources Department, the Provost, and others) to explain their needs so they could be incorporated in the new system. He also asked College employees familiar with information systems and telecommunication systems to help draft the bid documents to incorporate the functions the users desired.

   
   

5. The College received assistance from a committee made up of representatives of the State's Department of General Services, Division of Communications; the State Department of Education; Miami Dade Community College; Nova University; and the School Board of Broward County. These groups reviewed the proposed bid specifications before each of the College's three attempts to let a contract and advised the College on them. The College made a careful effort to craft its specifications to ensure it would purchase the most appropriate communications system for its needs.

   
   

6. The College currently has separate and independent voice and data communications systems. For data, each of the College's locations (South campus, Central campus, North campus and the College's administrative center in Fort Lauderdale) use more than one data circuit (AT&T Exhibit 5; Bid page D-1). For example, the eight controllers at the South campus are connected to the Fort Lauderdale Center by a pair of data circuits. The 15 controllers at the Central campus are linked to the Fort Lauderdale Center by four data circuits. If the controllers associated with one data circuit should go down for some reason, those connected to the other data circuits at campus will continue to operate, and the campus will only suffer "partial paralysis."

   
   

7. The bid at issue seeks a single "voice and data T-1 network" to link each of the campuses to Fort Lauderdale Center in a unified system, which eliminates the need for separate voice and data systems.

8. The new system is designed so that controllers at each campus will communicate with the mainframe computer at Fort Lauderdale Center through T-1 trunk lines, the same lines connecting the voice telephone system at each campus. Each campus will have its own PBX system, and the T-1 lines will allow users at each campus to place telephone calls to extensions at all campuses internally, i.e., without leaving the College's own network. They can also use the local Southern Bell network to place calls if all internal lines are in use, just as the Southern Bell network is used to place calls to numbers outside the College's campuses.

   
   

9. Connection of the voice system (the PBX equipment) and data terminals at each of the College's three campuses to the Fort Lauderdale Center requires the use of multiplexors, devices which improve efficiency in networks by concentrating and combining signals and switching them over connecting links (i.e., the T-1 circuits) to other locations or devices.

   
   

10. The bid solicitation document requires a multiplexor known as a "40- Series" multiplexor at each campus to perform the concentrating and combining role. The bid solicitation document also specifies a single multiplexor of a more complex type, a "45-Series" multiplexor, at the Fort Lauderdale Center. This multiplexor performs the switching function to redirect signals from one location to another.

    
    

11. The bid solicitation document instructs bidders to supply a Comsphere 6800 Network Management System, which is a type of software to operate the hardware components. Comsphere is manufactured by a wholly owned subsidiary of AT & T, known as "AT&T Paradyne." This software manages the entire network, and allows remote troubleshooting of any problems on the network, Comsphere's system can automatically dial out to the AT&T Paradyne Center in Largo, Florida, so that a technician can investigate and often solve problems without the need to send anyone to a campus to perform maintenance.

    
    

12. On July 7, 1992, the College held a bidders conference to explain the bid documents and their requirements, in order to insure that the bids the College received would be accurate and complete. During that conference, the vendors were told: (1) any price corrections must be initialed or the bid would be disqualified; (2) all pages of the bid documents which contain signature lines had to be signed; (3) bidders could not modify the general conditions or special conditions of the bid documents; and (4) any questions about the specifications would be answered only by written addendum. The same instructions can be found in text of the bid solicitation document (AT&T Exhibit 4).

    
    

13. The College issued Addendum One to its bid documents on July 9, 1992, Addendum Two on July 14, 1992, and Addendum Three July 22, 1992. Addendum Two is the source of the dispute here.

    
    

14. As is the College's practice, all bids were opened publicly after the hour for the receipt of bids had passed on July 29, 1992. Each bid submission had two parts. The first was a bid summary sheet containing a required format for the vendor's price. The second part of the submissions were bound volumes explaining how the vendor would satisfy each of the specific requirements in the bid specifications. During the bid opening, a College employee opened the sealed envelopes containing the vendor's bid summary sheet, and read aloud the prices found on each bidder's summary sheet. Page 13, paragraph 19.6 of the Bid Specifications told bidders that the bid summary sheets must recite the total

    bid price for the entire system, which had to include any upgrades to the standard features of the vendor's equipment so that the equipment provided would meet the College's specifications.

    
    

15. When the bids were opened, representatives of AT & T, AT&T Paradyne, and NEC were present. As the bid summary sheets were opened and the prices announced, no one from AT&T objected to the prices read out or contended there was an error in AT&T'S pricing.

    
    

16. The College's Director of Purchasing, Janet Rickenbacker, and the senior buyer handling the acquisition, Susan Kuzenka, then reviewed the extensive responses to the specifications submitted by the two bidders. They determined that NEC was the low responsive bidder. The amount AT&T bid based on the bid summary sheet found in its sealed bid was $1,558,836.57, NEC's bid was

    $1,549,895.15. 1/

    
    

17. After the bid opening, Mr. Zinn of AT&T had two conversations with Ms. Kuzenka about the AT&T bid. These conversations focused on the conflict in the entry for system maintenance on the bid summary sheet for AT&T which had been opened and read aloud on July 22, 1992, and the backup data for the system maintenance figure found in a section of AT&T'S bid response documents. On the bid summary page, AT&T had listed its "four-year maintenance totals M[onday] through F[riday] 8 a.m. through 5 p.m." as $755,536.16. But on page 53 of its bound bid response, AT&T listed the "total maintenance" cost as $530,204.00. This lesser figure is consistent with other maintenance price information found on page 61 of the AT&T bound bid documents, which set out total monthly maintenance costs for Monday through Friday maintenance from 8:00 a.m. to 5:00

    p.m. for all four college locations as $11,045.92 per month. If this monthly figure is multiplied by the maintenance term (48 months) the sum is the

    $530,204.00 shown on page 53.

    
    

18. During his first conversation, however, Mr. Zinn told Ms. Kuzenka that the higher figure of $755,536.16 was correct, because AT&T had neglected to add in the maintenance for the AT&T Paradyne multiplexor in the entries in the bound bid documents at pages 53 and 61.

    
    

19. During a second conversation, Mr. Zinn reversed his position and indicated that he had added the maintenance for the multiplexor twice, which resulted in an erroneously high figure of $755,536.16 on the bid summary sheet, and that the $530,204 figure on page 53 was correct.

    
    

20. One week after the bid opening, on August 5, 1992, AT&T sent a fax letter to Ms. Kuzenka, which confirmed Mr. Zinn's second conversation, and stated that the correct maintenance price was the $530,204.00 found on page 53 of the AT&T bid, rather than the $755,536.16 figure found on its bid summary sheet. Ms. Kuzenka had not asked anyone from AT&T to submit this price change to its bid, and it was not accepted by the College, under its standard policy that price changes will not be accepted once a sealed bid has been received and opened. The College has consistently adhered to this practice through the entire term of Ms. Kuzenka's employment.

    
    

21. While a lower maintenance price can be found in one portion of the voluminous response of AT&T to the Bid Specifications, the figure on the bid summary sheet controls. See the "Special Instructions" found at page 5 of the bid solicitation documents (AT&T Exhibit 4).

22. A bidder should not be permitted to look for ambiguities in the supporting documentation to contradict clear entries of price components found on its bid summary sheet. Use of the bid summary sheet permits the College to rely on a specific portion of the bid submission, which will be comparable from bidder to bidder, and to avoid wading through voluminous and perhaps internally inconsistent submissions to try to determine exactly what the bidder's price is. The "Special Instructions" state: "Bidder must use bid pages provided by the College and submit bid in the order issued; failure to do so will result in rejection of your bid" (AT&T'S Exhibit 4).

    
    

23. Over and above the maintenance price differential, the College staff found the submission by AT&T to be materially non-responsive to the Invitation to Bid. Ms. Kuzenka found five problems with the AT&T submission, which led her to conclude that the response submitted by AT&T failed to meet the bid specifications: (1) AT&T qualified or modified the terms and conditions of the specifications; (2) price corrections were not initialed by AT & T; (3) the maintenance contract was partially assigned to another vendor; (4) the bid was not signed by AT&T on all pages which have required signature lines; and (5) AT&T failed to provide a qualification statement.

    
    

    Modification of terms and conditions

    
    

24. The College's bid document stated in paragraph 54.1 that the terms and conditions of the bid and purchase order constitute the contract and "no other terms and conditions apply" (Tr. 157).

    
    

25. The maintenance agreement, titled "Product Agreement," which is appended to the AT&T Service Offerings and Support Plan is a standard AT&T form (College Exhibit 6). It contains a provision in paragraph 20G., which states "THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LOCAL LAWS OF THE STATE OF NEW JERSEY" (emphasis in original). The general conditions of the bid required that the contract be governed by Florida law (Tr. 152).

    
    

26. AT&T argues that the standard product agreement it attached to its bid response had not been signed by a representative of AT & T, and that the College had the right to accept or reject the terms of the Service Offerings and Support Plans and the attachments to it. This is true, but the inclusion in its bid response of the New Jersey choice of law provision certainly creates an ambiguity over the applicable law, if AT&T'S bid were accepted. This ambiguity would be completely avoided had it not been proposed by AT & T, in contravention of the bid's general conditions. Paragraph 2 of the Product Agreement states "Terms and conditions on any non-AT&T order form shall not apply." Fairly read, AT&T was attempting to have its duties under its standard Product Agreement governed by the laws of New Jersey, not the laws of Florida. As a matter of sovereignty, Florida agencies do not subject themselves to foreign law. The College acted within its legitimate range of discretion when it rejected the choice of law provision as inconsistent with its bid documents. The same problem is caused by similar language in paragraph 12F of the AT&T Service Agreement (College Exhibit 5).

    
    

27. The AT&T Product Agreement also has an integration clause, Paragraph 20H, stating that it constitutes the entire agreement of the parties, and supersedes any other oral or written agreements. This provision also attempts to modify the terms and conditions of the bid specifications to give the terms of AT &T's Service Offerings and Support Plan priority over the specifications. The College was entitled to reject this as inconsistent with the bid

    specifications. The same problem is presented by similar language in paragraph 12G of the AT&T Service Agreement (College Exhibit 5).

    
    

28. The Service Offerings and Support Plan also contained a provision allowing AT&T to assign the agreement, which violates the anti-assignment provisions of paragraph 56.1 of the bid specifications.

    
    

29. AT&T'S bid response stated that the College would be required to pay the cost for installing any additional cable. The bid specifications required vendors to inspect existing facilities at the College during a pre-bid walk- through, so that bidders could determine whatever cabling would be needed, and incorporate all necessary cable in their bid price. AT&T'S attempt to make the College liable for any cabling over and above that estimated by AT&T when submitting its bid is inconsistent with the bid specifications. The AT&T submission includeds a statement that the College was obligated to pay for the cost of a site survey to be performed by the project manager before the execution of the contract. Yet a site survey had already been performed, and the bidder's price was to have been inclusive of a total system, with no additional cost to the College for items such as surveys.

    
    

30. Finally, the AT&T Service Offerings and Support Plan required the College to provide, at the College's expense, a secured and protected area for storage of tools and equipment near the equipment room, which was not part of the bid specifications. At the walk-through, AT&T should have determined whatever its security needs were and included those costs in its bid price.

    
    

31. In essence, AT&T submitted preprinted forms without tailoring them to the carefully crafted requirements of the College's bid specifications. It cannot now disavow the contents of its forms which violate or fail to conform to these specifications. The time to review the company's standard forms was before they were submitted in its bid response, not afterward.

    
    

    Price correction

    
    

32. There is a price correction on page 48 of the AT&T bid which is not initialed. The bid specifications require that "all corrections, manual or written or white-out must be initialed by the person signing the bid" (Bid Specifications, page 63, paragraph C). This was not done. The specifications stated "Failure to initial price corrections will result in the rejection of your bid" (AT&T Exhibit 4, page 5, numbered paragraph 2).

    
    

    Assignment provisions

    
    

33. There was also confusion in the AT&T bid arising from the attachment of two proposed maintenance agreements, one from AT&T itself, another from AT&T Paradyne. The two maintenance contracts are not identical. 2/ College personnel believed that one contract was for part of the equipment, while the other contract was for another block of equipment. The College had been concerned about the difficulty in having to deal with different companies; it had drawn its specifications so that the bidder would be the single entity responsible to the College for maintenance. The submission of a proposed maintenance contract from an entity other than the bidder was inconsistent with the bid specifications.

    Signature

    
    

34. Not all pages with signature lines had been signed by AT&T'S representative. These included page D1, which had a bearing on the equipment allowance being provided for the existing system traded in by the College. While AT&T regards these failures as trivial, the College went to pains to require bidders to sign pages with signature lines. Page 5 of the Bid Specifications stated: "Failure to sign all pages with a signature line will

    result in the rejection of your bid" (AT&T Exhibit 4, page 5, numbered paragraph 3). It is not arbitrary for the College to insist that these requirements be followed or to enforce the penalty stated in the specifications.

    
    

    Qualifications statement

    
    

35. The special conditions for the bid required that vendors submit a qualifications statement listing similar work done for others (Tr. 168; Bid Specifications Section 25.1 at page 25). The College intended to consult those listed to determine whether they were satisfied with the equipment the vendor installed and the service it provided. AT&T did not provide that list, but rather provided an annual report which contains no customer references. This was not responsive to the bid. The College had experience with AT&T'S fifteen- year-old Dimension system, but not with the new equipment AT&T bid. The failure to submit the qualifications statement deprived the College of the opportunity to check with entities which had purchased the equipment AT&T had bid, something it had been careful to require of bidders.

    
    

36. Deciding how to treat these inadequacies is a matter of discretion. Staff recommended rejection of the AT&T bid for genuine instances of noncompliance with specific requirements of the bid specifications the College had carefully crafted. This action cannot be characterized as arbitrary.

    
    

    The College's decision

    
    

37. The College's purchasing department recommended to Dr. Hamilton that the bid be awarded to NEC as the low responsive bidder. A bid tabulation was posted on August 7, 1992, awarding the contract to NEC and rejecting AT&T'S bid.

    
    

    The protest

    
    

38. AT&T filed a Notice of Protest, and later a Formal Written Protest on August 18, 1992, which dealt with a number of technical aspects, but did not claim that NEC's rival submission failed to conform to the bid specifications. Dr. Hamilton advised the College's president that, to be fair to both bidders, an outside consultant should be retained to evaluate the issues raised by AT&T in its Formal Written Protest. This was done, and the College retained Technology Associates for $8,600 to report to the College on the issues raised by AT & T. Technology Associates found that AT&T did not meet the emergency 911 requirements outlined in the College's bid documents. Southern Bell requires that when 911 calls are made from the College, the telephone system be capable of identifying to the police dispatcher which campus, which room and which extension number originated the emergency 911 call. The consultant also found that NEC's system met this requirement. AT&T did not attempt to refute this determination at the final hearing.

    
    

39. The consultant found that AT&T'S proposed system was "over designed," in that it included elements not required by the bid documents. AT&T argues that Addendum Two, issued on July 14, 1992, 14 days before the bid opening, was

    so ambiguous with respect to necessary redundancy that the two bidders were bidding on fundamentally different systems, so that the matter should be bid for a fourth time.

    
    

40. The portion of the addendum at issue states:

    
    

    The College requires two additional T-1 lines; not one as previously stated, to be added to diagram D-2 to ensure redundancy. A T-1 line is to connect North Campus with Central Campus and an additional T-1 line is to connect Central Campus with South Campus. (Tr. 85)

    
    

    Addendum Two explains that these lines are required to "ensure the ability to redirect calls if required, enabling the system to be fully redundant" (Tr. 86- 87, emphasis added).

    
    

41. The addendum directed only the addition of two T-1 lines. This can be done, as NEC proposed, by connecting additional T-1 lines, one from the PBX at the North Campus to the PBX at the Central Campus and the other from the PBX at the Central Campus to the PBX at the South Campus. AT&T chose to feed each of the PBX installations at the North Campus, Central Campus and South Campus first into its own additional 45-Series multiplexor (the complex multiplexor, see Finding 10 above) so that a 45-Series multiplexor will handle T-1 connections from North Campus to a 45-Series multiplexor at Fort Lauderdale center, and to a 45-Series multiplexor at Central Campus. The PBX at Central Campus, because it has its own 45-Series multiplexor, then can be connected by T-1 lines to the 45- Series multiplexors at North Campus, South Campus and Fort Lauderdale Center. The PBX at South Campus, through its 45-Series multiplexor, then can connect to the 45-Series multiplexors at Central Campus and Fort Lauderdale Center (this configuration is shown on the final page of AT&T Exhibit 5). This is a more complex way to provide the T-1 connections between North and Central Campus and Central and South Campus than the addendum required, and uses four 45-Series multiplexors rather then one. AT&T argues its more complex solution was necessary so that both voice and data systems would be redundant, thus meeting the requirement in the addendum that the system be "fully redundant."

    
    

42. The problem with the approach taken by AT&T is that it fails to follow the language of Addendum Two. There is no reference to alternative routing or redundancy for data, the redundancy is required to redirect calls, i.e., PBX or voice components. See the final quotation in Finding 40, above. Redundancy for data transmissions, something the AT&T solution provides, was not required. AT&T'S solution is overdesigned.

    
    

43. This is not a pivotal issue, however, because for the reasons stated in the foregoing findings, the submission by AT&T was properly rejected by College staff as non-responsive to the terms of the Invitation to Bid. NEC is the low responsive bidder.

    
    

    Software certification

    
    

44. AT&T argues in pages 16 through 20 of its proposed recommended order that the bid of NEC fails to conform to the requirements of the Invitation to Bid. AT&T had not raised the issue of whether the bid of NEC was responsive in its Formal Written Protest, and the attempt to do so at the beginning of the final hearing was rejected. As a result, this is not an issue which should have been addressed in the proposed recommended order. Nonetheless, it may be easily

    disposed of. The bid documents require that each bidder provide the College with a certification that the bidder:

    
    

    [O]wns, leases or controls the software it offers in response to this bid. If the bidder does not own the software, their certificate must include the source from which the software shall be obtained, and that the bidder has a right to sell or lease this software (Bid Specifications at 26, AT&T Exhibit 4.)

    
    

    The bidder also must certify that it is "eligible to maintain and support the software." (Id.)

    
    

45. In its certification, NEC stated:

    
    

    NEC is the manufacturer of the NEAX2400 IMS that has been proposed to Broward Community College. As the manufacturer, we developed all software utilized on the NEAX2400. NEC owns all the rights to the software and has over 600 software engineers in Dallas dedicated to maintain and support the software. (AT&T Exhibit 4, final page)

    
    

    AT&T objects that this certification goes only to NEC's hardware, and does not constitute a certification that NEC has the rights to convey to the College the software necessary to operate the Comsphere 6800 Network Management System, which is a product of AT&T Paradyne.

    
    

46. When reviewing the submissions of both bidders, the College staff found that their software certifications were equivalent. Both companies certified that they had the right to sell the software to operate the system each offered to the College. The College is entitled to rely on the certification given to it by NEC. If NEC is wrong, and does not have the right to provide the necessary software because AT&T or AT&T Paradyne will refuse to permit it to use that software, NEC may be liable in damages for failure to meet its contractual obligations to the College. NEC did not offer at the hearing evidence on why it believes it is entitled to use the software for the Comsphere 6800 Network Management System, because AT&T's attempt to raise this issue had been rejected when AT&T's motion to amend its Formal Written Protest of August 18, 1992 was denied.

    
    

    CONCLUSIONS OF LAW

    
    

47. The Division of Administrative Hearings has jurisdiction over this matter. Sections 120.53(5) and 102.57(1), Florida Statutes (1991).

    
    

48. The College complied with the requirements of Section 235.31, Florida Statutes (1991), and Chapter 6A-2.016, Florida Administrative Code, by seeking bids from at least three prospective bidders for the College-wide PBX system. It sought bids from eight bidders, although only two actually submitted bids.

    
    

49. In a bid protest proceeding, the role of the Hearing Officer is a narrow one--to determine whether the purpose of the competitive bidding process has been subverted by the agency's proposed decision to award the contract to

    the bidder selected. Department of Transportation v. Groves-Watkins Constructors, 530 So.2d 912, 914 (Fla. 1988). These proceedings are not like ordinary Section 120.57(1) hearings, which are de novo proceedings to evaluate the agency's proposed action. The Hearing Officer does not review the evidence at the final hearing to reevaluate independently the agency's decision on which bidder should receive the contract. The only issue is whether the agency's proposed action is fraudulent, arbitrary, illegal or dishonest. Scientific Games v. Dittler Brothers, 586 So.2d 1128, 1131 (Fla. 1st DCA 1991); Intercontinental Properties v. Department of Health and Rehabilitative Services, 606 So.2d 380, 386 (Fla. 3rd DCA 1992).

    
    

50. After the College determined that AT&T'S bid was unresponsive, it was incumbent on AT&T to demonstrate the responsiveness of its own bid. Intercontinental Properties v. Department of Health and Rehabilitative Services, 606 So.2d 380, 384 (Fla. 3rd DCA 1992). It has been unable to do this, for its bid was deficient in a number of material respects, which are set forth in Findings 24 through 36, above.

    
    

51. An agency may waive minor irregularities in a bid response, Rule 60A- 1.002(13), Florida Administrative Code, but variations which are not minor cannot be waived. The test for determinating whether an irregularity is a minor one which can be waived has two parts, according to the appellate courts. The first part of the test asks whether treating the defect as minor would "deprive the . . . [agency] of its assurance that the contract would be entered into, performed and guaranteed according to its specified requirements"; the second part asks whether the defect "would adversely affect competitive bidding by placing a bidder in a position of advantage over other bidders or by otherwise undermining the necessary common standard of comparison," Robinson Electrical Co. v. Dade County, 417 So.2d 1032, 1034 (Fla. 3rd DCA 1982); see also, Tropabest Foods, Inc., v. Department of General Services, 493 So.2d 50, 52 (Fla. 1st DCA 1986).

    
    

52. The bid of AT&T fails the first prong of the test because it modified the terms and conditions of the bid specifications. See Findings 25-30, 33 and

1. The College was careful to seek assistance from users and other governmental and education entities in drafting the specification to see that it would purchase an appropriate system. The bid of AT&T varied the choice of law provision, contained an integration clause in the product acquisition and maintenance contracts designed to supersede the specifications, attempted to retain the right to assign the maintenance duties in violation of the specifications, and to split maintenance duties between AT&T and a non-bidder (AT&T Paradyne), attempted to make the College liable for additional cable, costs for storage and security of AT&T equipment, and the cost of a site survey. The failure to include a qualification statement listing similar work done for others meant the College could not consult other businesses with similar systems to see if those installations went satisfactorily and if the equipment worked as AT&T represented, which undermined the necessary common standard of comparison. To accept the AT&T bid would be to accept less than what the bid specification documents called for. These defects are not waivable minor irregularities under the first prong of the Robinson Electrical test.

   
   

   1. The attempt to alter the price for maintenance violates the second prong of the Robinson test. See Findings 16 and 20 and endnote 1. By definition, anything that affects price in a bid is not a minor irregularity. Mercedes Lighting v. Department of General Services, 560 So.2d 272, 278 (Fla. 1st DCA 1990). The bid of AT&T is about $9,000 higher than the bid of NEC.

   2. The decision of the College to treat the AT&T bid as nonconforming is not arbitrary. An arbitrary action is one "not supported by facts or logic . .

      ." Agrico Chemical Co. v. State, Department of Environmental Regulation, 365 So.2d 759, 763 (Fla. 1st DCA 1979). The evidence amply supports the decision to reject AT&T'S bid.

      
      

   3. There has been no showing that the College's decision to find the AT&T bid unresponsive, and to award the bid to NEC, was the result of anything other than an honest exercise of discretion as that standard as been enunciated by the Supreme Court of Florida in Liberty County v. Baxter's Asphalt & Concrete, Inc.,

      421 So.2d 505 (Fla. 1982); and Department of Transportation v. Groves-Watkins Constructors, 530 So.2d 912 (Fla. 1988). The matters the College has relied on in its determination that the AT&T bid was unresponsive are sustained by the entries on the bid documents AT&T submitted. The College also relied on independent technical advice in determining that the configuration of the system designed by NEC meets the bid specifications, and that the configuration offered by AT&T is over-designed. The record is bereft of any evidence that the expert is wrong in his conclusion that the AT&T system does not comply with requirement that the system permit the pinpointing of 911 emergency calls, but that NEC's system meets this requirement.

      
      

   4. Although AT&T was permitted to amend its bid protest to raise the issue of whether the parties were basing their bids on different concepts of what the College was asking for in its Addendum Two, AT&T has not shown that these differences in approach were legally significant. The addendum asked for something relatively straightforward, the addition of two T-1 lines, one connecting North and Central Campus, the other connecting Central and South Campus. NEC did this in its bid submission. AT&T came up with a significantly more complex proposal, which provided data redundancy as well as voice redundancy, which Addendum Two did not specifically request. Its system is over-designed. It was not arbitrary for the College to reject the more expensive proposal submitted by AT & T.

      
      

   5. With respect to that portion of its Motion to Amend Bid Protest which sought to raise the issue of whether NEC's bid met the bid requirements because its software certification was inadequate, that matter was never raised until immediately before the final hearing. The issue came too late. What is relevant here is that NEC claimed in its bid submission that it has the authority to provide to the College all software necessary to run the hardware it will provide. Should it be wrong in this, it will pay the consequences. This question of whether NEC has the authority to provide the College with the Comsphere 6800 software as part of the sale of its hardware to the College raises contractual matters which are most appropriately resolved by the Article V courts. See, Peck Plaza Condominium v. Division of Florida Land Sales, 371 So.2d 152, 154 (Fla. 1st DCA 1979). Perhaps if the matter had been raised in the Formal Written Protest, or at an earlier point in the case that just before the taking of evidence, the issue whether the Division of Administrative Hearings has jurisdiction to make a determination of NEC's rights to use the Comsphere software as part of a bid protest proceeding would have been squarely presented. Had it been raised earlier, the College's expert could have addressed the matter either in its report, or at final hearing. AT&T'S failure to raise this issue until the eleventh hour makes it unnecessary to address the issue head-on.

      
      

   6. There is no showing that the testimony of Mr. Kemp related to any issue properly raised in this case. No inference against NEC arises from the decision not to call him as a witness.

RECOMMENDATION

It is RECOMMENDED that a final order be entered by the Board of Trustees of Broward Community College awarding Bid No. 3656, the rebid of the College-wide PBX system, to NEC for a bid price of $1,549,895.15.

DONE AND ENTERED in Tallahassee, Leon County, Florida, this 9th day of March 1993.

WILLIAM R. DORSEY, JR.

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 1993.

ENDNOTES

1/ Due to ambiguities in supporting documents contained in its bid submission, AT&T has claimed that its bid was for other amounts. In a letter to Ms. Kuzenka on August 5, 1992, to it contended that its bid was for $1,333,504.39 (AT&T Exhibit 3), while in its formal written protest it stated that its bid was for

$1,303,504.41 (Formal Written Protest of August 18, 1992, at 2). The amount of AT&T'S bid is the amount contained in the separate pricing submission which the bid documents required it to submit: $1,558,836.57.

2/ The AT&T Paradyne Maintenance Agreement at least contained a provision acknowledging that it would be "construed in accordance with and governed by the local laws of the State of Florida" (College Exhibit 4, paragraph 19E). Compare Findings 25 and 26.

APPENDIX

Rulings on findings proposed by AT & T.

1. Adopted in Finding of Fact 1. 2-4. Adopted in Finding of Fact 6.

1. Rejected as unnecessary. The importance of the system to the College is shown by the consultations described in Finding of Fact 4.

2. Accepted in Finding of Fact 6.

3. Accepted in Finding of Fact 1.

4. Rejected as subordinate to Finding of Fact.

5. Accepted in Finding of Fact 7.

6. Accepted in Finding of Fact 8.

7. Accepted in Finding of Fact 9.

8. Accepted in Finding of Fact 10.

9. Accepted in Finding of Fact 11.

10. Accepted in Findings of Fact 1 and 2.

11. Accepted in Finding of Fact 14.

12. The date of the Addendum was July 14, 1992, see the Prehearing Stipulation. The remainder of the argument in this proposal is dealt with in findings below.

13. The proposed finding from page 2 of Addendum Two is adopted in Finding of Fact 40. The proposed Finding of Fact from page 9 of Addendum Two is rejected as unsupported by the record. See Section 120.57(1)(b)8., Florida Statutes.

14. Rejected as argument, which is addressed in Findings of Fact 40-42.

19-20. Rejected, see Finding of Fact 40. Redundancy was to be for the redirection of calls.

21. Rejected, see Finding of Fact 40. 22-23. Rejected as unnecessary.

24. Rejected, see Finding of Fact 40.

25-27. Rejected as arguments, not findings of fact.

1. Rejected as unnecessary.

2. Rejected as irrelevant because it constitutes an attempt to modify the bid after its opening.

3. Rejected as argument. The Addendum is clear that it seeks redundancy with respect to calls, see Finding of Fact 40. AT&T cannot now amend it bid, claiming that it should be treated as a bid for $111,000 less than NEC's.

4. Accepted in Finding of Fact 16.

5. Accepted in Finding of Fact 17.

6. Rejected, see Finding of Fact 17 for a fuller discussion.

7. Rejected. AT&T is attempting to change its price, see Finding of Fact 22.

8. Rejected as inconsistent with Finding of Fact 18.

9. The argument with respect to allowances is not significant since the additional discount included in the figure for "total allowances" still does not bring the bid of AT&T below that of NEC. What is most significant is that all the pages were not signed. See Finding of Fact 34.

10. Rejected, see Finding of Fact 16 and endnote 1.

11. Generally adopted in Finding of Fact 37.

12. Rejected, see Finding of Fact 26.

13. Rejected, see Finding of Fact 34.

41-52. Rejected as irrelevant and unnecessary. See also Findings of Fact 44-46. The attempt to supplement the evidence as proposed in AT&T'S proposed Finding of Fact

46 and endnote 13 is improper for the reasons stated in the ruling on the motions to strike. The appended material, which is not part of the evidence, has not been considered. See also Conclusion of Law 57.

Rulings on proposals made jointly by Broward Community College and NEC Business Communication Systems, Inc.

1. Accepted in Findings of Fact 1 and 2.

2. Accepted in Finding of Fact 1.

3. Accepted in Finding of Fact 3.

4. Accepted in Finding of Fact 4.

5. Accepted in Finding of Fact 5.

6. Sentence 1 accepted in Finding of Fact 2, sentence 2 rejected as unnecessary.

7. Accepted in Finding of Fact 12.

8. Accepted in Finding of Fact 14. 9-11. Accepted in Finding of Fact 13. 12-14. Accepted in Finding of Fact 14.

1. Accepted in Finding of Fact 15.

2. Accepted in Finding of Fact 16.

3. Accepted in Findings of Fact 17-20. 18-20. Accepted in Finding of Fact 20.

21. Rejected. Even if the total allowance figure includes a discount, as well as a trade-in value for the used equipment, the total bid of AT&T is still above that of NEC.

33. Rejected as unnecessary.

34-35. Accepted in Finding of Fact 38.

36. Generally accepted in Findings of Fact 39 and 42. That the AT&T proposal provided voice compression when it had not been required in the bid documents is not significant, except as it may have added to the amount of AT&T'S bid.

37-38. Accepted in Finding of Fact 42.

1. Accepted in Finding of Fact 43.

2. Rejected as unnecessary.

3. Adopted in Finding of Fact 43.

4. Accepted in Conclusion of Law 55.

5. Accepted in Finding of Fact 43.

COPIES FURNISHED:

Robert J. Borrello, Esquire

Floyd, Pearson, Richman, Green, Weil, Brumbaugh & Russomanno

CourtHouse Center, 26th Floor

175 Northwest 1st Avenue Miami, Florida 33128-1817

James D. Camp, III, Esquire Camp & Camp, P.A.

Suite 1070

515 East Las Olas Boulevard Fort Lauderdale, Florida 33301

Henry B. Handler, Esquire Weiss & Handler, P.A.

One Boca Place

2255 Glades Road, Suite 218-A Boca Raton, Florida 33431

Clinton D. Hamilton

Office of the Vice President for Business Affairs

Broward Community College Fort Lauderdale Center

225 East Las Olas Boulevard Fort Lauderdale, Florida 33301

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 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.

Docket for Case No: 92-006191BID

Orders for Case No: 92-006191BID