STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

UNEQ, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 92-6824BID

) STATE OF FLORIDA, DEPARTMENT OF ) HEALTH AND REHABILITATIVE SERVICES, )

)

Respondent, )

and )

)

IT PRODUCTS, INC., )

)

Intervenor. )

)

RECOMMENDED ORDER

Notice was provided and on November 25, 1992, a formal hearing was held in this case. The authority for conducting the hearing is set forth in Section 120.57(1), Florida Statutes. Charles C. Adams was the Hearing Officer.

APPEARANCES

For Petitioner: John C. Pelham, Esquire

Pennington, Wilkinson & Dunlap, P.A. 3375-A Capital Circle, N.E. Tallahassee, Florida 32308

For Respondent: Robert L. Powell, Esquire

Department of Health and Rehabilitative Services

1323 Winewood Boulevard

Tallahassee, Florida 32301

For Intervenor: James Cody, Jr.

IT Products, Inc.

5303 East Colonial Drive Orlando, Florida 32807

STATEMENT OF ISSUES

The issues concern the question of the responsiveness of Intervenor's bid to the invitation to bid (ITB) 92-66BC. If the Intervenor is not responsive, then Petitioner asserts that it should be awarded the contract as the second ranked bidder. In particular Petitioner alleges that there are certain irregularities in the response by the Intervenor and that they constitute material deviations from the bid requirements. They are in turn:

1. Whether Intervenor failed to submit its price on the second addendum bid sheet as required or to acknowledge that its bid was being submitted in accordance with Addendum No. 2.

2. Whether Intervenor failed to include its references with its bid response.

3. Whether Intervenor failed to fill in the space on the bid form calling for cash discount terms.

4. Whether Intervenor failed to fill in the space on the bid form calling for delivery days.

5. Whether Intervenor failed to initial changes or corrections to its price quotation.

PRELIMINARY STATEMENT

When Petitioner and Respondent were unable to resolve Petitioner's challenge to the intent to award the subject contract to Respondent the case was forwarded to the Division of Administrative Hearings for a formal hearing. That hearing was held on the aforementioned date.

A prehearing stipulation was entered into between the Petitioner and Respondent. The Intervenor gained admission to the case at the hearing and joined in the prehearing stipulation.

Petitioner presented the testimony of William F. Cox and John C. Lyons.

Intervenor presented the testimony of James Vincent Cody, Jr. Joint Exhibits 1-

4 were admitted into evidence.

Following the filing of the transcript on December 11, 1992, Petitioner and Respondent filed proposed recommended orders. They have been considered. The fact finding suggested by the proposed recommended orders is commented on in an Appendix within the Recommended Order.

FINDINGS OF FACT

1. On September 14, 1992, Respondent mailed ITB No. 92-66BC to prospective bidders. The ITB called for "A bid for supplied items related to HRS data processing operations-Florida Project."

2. Within the ITB was given the following explanation concerning bid items and bid prices:

   
   

   ITEM Unit Bid

   NO. Quantity Description Price

   1. 1 each IBM 4234 Print Ribbon

      (per month) (no substitutes) $ ea.

   2. 30 each IBM 4202 Ribbon

      (per month) (no substitutes) $ ea.

   3. 50 each IBM 4019 Laser Toner

      (per month) (no substitutes) $ ea.

   4. 650 each IBM 2380/2381 Print Ribbon

      (per month) (no substitutes) $ ea.

   5. 5 boxes Continuous Self-adhesive

      (per month) Labels $ ea. (labels are blank with no printing)

      overall size 5 3/4" x 6" including

      pin feed holes, label size 5" x 17/16",

      white labels, 1,000 per box $ per

   6. 1 each IBM 6262 Mylar Film Ribbon

      (per month) (no substitutes) $ ea.

   7. 650 each IBM 6262 5 Mil. Ribbon

      (per month) (no substitutes) $ ea.

   8. 8 boxes IBM 3800 Toner (3/box)

      (per month) (no substitutes) $ ea.

   9. 1 roll IBM Splicing Tape

      (per month) (no substitutes) $ ea.

   10. 2 boxes IBM 3800 Developer (2/box)

   (per month) (no substitutes) $ ea.

   
   

3. On September 24, 1992, Addendum No. 1 was prepared related to the items that were being bid. It stated:

   
   

   The purpose of this Addendum #1 to the above referenced HRS bid invitation is to: (a) Clarity the individual IBM product specifications with IBM stock numbers (b) increase the quantity for item #1, and (c) extend the bid opening date. These changes are as follows:

   
   

   ITEM Unit Bid

   NO. Quantity Description Price

   1. Increase quantity IBM 4234 Print Ribbon of IBM 4234 Print Auto-Inking Ribbon (Auto-Inking) IBM Stock #1380160 from 1 ea./mo.

      to "30 ea./mo.". $ ea.

   2. Same Quantity IBM 4202 Ribbon as previously IBM Stock #1040150

      specified $ ea.

   3. Same Quantity IBM 4019 Laser Toner

      High Yield

      IBM Stock #1380200 $ ea.

   4. Same Quantity IBM 2380/2381 Print Ribbon

      IBM Stock #1040930 $ ea.

   5. Same Quantity Continuous Self-Adhesive

      Labels $ ea.

   6. Same Quantity IBM 6262 Mylar Film

      Ribbon

      IBM Stock #1040400 $ ea.

   7. Same Quantity IBM 6262 5 Mil. Ribbon

      High Contract

      IBM Stock #1040300 $ ea.

   8. Same Quantity IBM 3800 Toner

      IBM Stock #1669122 $ ea.

   9. Same Quantity IBM Splicing Tape

      IBM Stock #4165880 $ /cn. of 72 rolls

   10. Same Quantity IBM 3800 Developer

   2/box

   IBM Stock #1162223 $ /box

   
   

4. Addendum No. 1 also moved the bid opening date from September 24, 1992, until September 30, 1992.

   
   

5. Addendum No. 2 was issued on September 28, 1992, concerning bid items. It stated:

   
   

   The purpose of this 2nd Addendum to the above referenced bid invitation is to incorporate the "packaging" (3 per box) on item #8 and to add/clarify the individual "units" on which "Unit Bid Prices" shall be based. These changes are as follows:

   
   

   ITEM			Unit Bid
   NO.	Quantity	Description	Price

   
   

   1. Increase quantity IBM 4234 Print Ribbon of IBM 4234 Print Auto-Inking Ribbon (Auto-Inking) IBM Stock #1380160 from 1 ea./mo.

      to "30 ea./mo.". $ ea.

   2. Same Quantity IBM 4202 Ribbon as previously IBM Stock #1040150

      specified $ ea.

   3. Same Quantity IBM 4019 Laser Toner

      High Yield

      IBM Stock #1380200 $ ea.

   4. Same Quantity IBM 2380/2381 Print Ribbon

      IBM Stock #1040930 $ ea.

   5. Same Quantity Continuous Self-Adhesive

      Labels $ ea.

   6. Same Quantity IBM 6262 Mylar Film

      Ribbon

      IBM Stock #1040400 $ ea.

   7. Same Quantity IBM 6262 5 Mil. Ribbon

      High Contract

      IBM Stock #1040300 $ ea.

   8. Same Quantity IBM 3800 Toner

      IBM Stock #1669122 $ ea.

   9. Same Quantity IBM Splicing Tape

      IBM Stock #4165880 $ /cn. of 72 rolls

   10. Same Quantity IBM 3800 Developer

   2/box

   IBM Stock #1162223 $ /box

6. The second addendum changed the bid opening date to October 9, 1992.

   
   

7. Petitioner and Intervenor received the addenda.

   
   

8. Notwithstanding the attempts at clarification concerning the bid items, Item No. 6 continued to be problematic in that the description of the ribbon type was Mylar Film; however, the stock number shown opposite the item identified was for nylon ribbon. Respondent intended to purchase Mylar ribbon.

   
   

9. Intervenor was made aware that the agency desired Mylar ribbon by its Item No. 6. This information was imparted before the bid opening. Although William F. Cox, Respondent's employee who was responsible for the ITB has no specific recollection of discussing the problem about Item No. 6 with a representative from Petitioner's corporation, John C. Lyons, a representative for Petitioner's corporation does recall a discussion. Lyons' understanding in conversation with Cox was that disposition would be made concerning item 6 after a winning vendor had been selected, that disposition having to do with rectification of the confusion surrounding the item description and stock number.

   
   

10. Prior to bid opening Cox had reached as many bidders as he felt time would allow him to contact concerning the problem with Item No. 6. Time was of the essence in that the contract which Respondent had with the existing vendor who supplied the items sought by the ITB was expiring and the federal government from whom funding for this activity was being received was insisting on moving the project forward. This reason for bidding was to change from a sole source purchasing arrangement to a purchase under competitive bidding. The existing vendor was a sole source and the ITB was designed to substitute competitive bidding for that approach.

    
    

11. Cox was unsure how he would deal with responses pertaining to Item No.

1. One alternative was that if he had two responsive bids which included reference to Mylar ribbon that would suffice. Another option would be to throw out Item No. 6 and consider the award on the basis of the other nine items. Intervenor bid Mylar ribbon on Item No. 6 together with a number of other vendors who submitted responsive bids for Mylar ribbon on Item No. 6. Petitioner bid nylon ribbon on Item No. 6. All ten vendors who submitted responses were found responsive to the ITB. Because Intervenor had bid Mylar ribbon on Item No. 6 and other vendors had also bid Mylar ribbon on Item No. 6,

   Cox elected the option to leave Item No. 6 in the price quotation for determining the ranking for vendors. The decision to award the overall contract was decided on the basis of price in the aggregate for the ten items in question.

   
   

   1. Although Petitioner had bid nylon ribbon on Item No. 6, this was to the Petitioner's advantage in comparison to other vendors concerning the price competition. The reason for this finding is that nylon ribbon is a less expensive ribbon than Mylar ribbon.

      
      

   2. When the bids were opened on October 9, 1992, the basis for assessing compliance with the terms of the ITB was controlled by the terms of the ITB; Chapter 287, Florida Statutes; Chapter 13A, Florida Administrative Code, and Chapter 13A, Florida Administrative Code, as interpreted by Mr. Cox without benefit of any additional guidelines which Respondent may have established for assessing responsiveness. That approach was not irregular.

   3. The price quotations for line items within the bid blank offered by Intervenor were set out in the ITB and Addendum No. 1. Addendum No. 2 was not attached. Petitioner attached both addenda to its response and set out the prices on the addenda. Petitioner did not set out the prices on the ITB.

      
      

   4. Notwithstanding the failure to submit Addendum No. 2 with its response, Intervenor was aware of its requirements when submitting its response. While it is the ordinary expectation that Addendum No. 2 would have been submitted, this oversight does not constitute a material deviation from the requirements set out in the ITB. The basic description of the ten items that were being bid remained consistent beginning with the ITB and continuing through the addenda. An examination of the price responses by the Intervenor when compared to Petitioner's responses and those made by other vendors does not lead to the conclusion that the failure to use the blank for Addendum No. 2 compromised the Intervenor's response. This finding is made with the knowledge of the language under general conditions to the ITB referring to sealed bids where it says "all bid sheets and this form must be executed and submitted in a sealed envelope. . . . Bids not submitted on attached bid form shall be rejected. All bids are subject to the conditions specified herein. Those which do not comply with these conditions are subject to rejection." Because of what Mr. Cox perceived as possible confusion by the vendors concerning the number of attempts to clarify the terms of the items to be bid, he did not feel that a vendor should be penalized for not recording the price quotations on the addenda. This perception is acceptable. Finally, additional evidence concerning the underlying similarities between the initial invitation to bid and the addenda is borne out by the fact that both the Petitioner and Intervenor in recording the price quotations in two places in their responses were consistent in those quotations.

      
      

   5. Included within the ITB was a section entitled "Background Statement." It stated:

      
      

      The computer related supplies which will be purchased from this bid/contract will be used by the department's data center in Tallahassee and statewide district service centers in the timely provision of a range of critical client services. The ability of the department's statewide data processing network to deliver these services in a responsive manner is critical to the very livelihood of many of these individuals. For this reason, the department will require that responding vendors provide a minimum of three (3) company references and provide other pertinent information, as required, to substantiate

      that the company is capable by experience and resources, to fulfill the provisions of this contract in a timely, competent and professional manner.

      
      

   6. The requirement for providing three company references was not one which made it incumbent upon the vendor to submit the references with the response to the ITB.

      
      

   7. The ITB is silent on the use of the information concerning references, that is to say the verification of those references and how that might be

      achieved. The vendor is only responsible for providing the information. Respondent may then use the information in any manner it desires. Although it is the ordinary practice of the Respondent to check the references prior to posting the intent to award, nothing in the ITB makes it incumbent upon the Respondent to do so and the vendor will not be held accountable for the Respondent's failure to comply with its customary practice by not checking the references prior to the posting of the intent to award.

      
      

   8. Intervenor did not provide the references with its response to the ITB. When Cox reminded Intervenor that it had not provided the references, the references were faxed to Cox on the day that the results concerning the ITB were posted. Two of the three references were checked on the day of posting following the posting. The third reference was not available to confirm the suitability of this vendor to supply the bid items in question. Moreover, the items being bid were from a single manufacturer, IBM. The vendors who were participating in the response, including Petitioner and Intervenor, were companies who had business affiliations with IBM that allowed necessary access to the bid items being sought. In summary, there was no requirement to provide references with responses and Intervenor did supply information about its references in a timely manner and the treatment of those responses by Respondent was appropriate.

      
      

   9. Within the general conditions to the bid is language to the affect that "all corrections made by bidder to his bid price must be initialled." Intervenor in Item No. 5 found within the basic bid blank and Addendum No. 1 changed bid by obliterating information and substituting the price $3.95 per box. This was an irregularity. The manner in which the irregularity was addressed by Mr. Cox minimized its influence and caused it to be other than a material deviation from the terms of the ITB. When Mr. Cox opened the Intervenor's response and discovered this change to Item No. 5 which had not been initialled he held up the response and said, "I have a bid with a change here I want to show it." This was presented in front of other vendors who were in attendance at the bid opening. Petitioner was not in attendance. A member of Respondent's staff other than Cox also saw this display and heard the remarks. This approach demonstrated that the Respondent had not made the changes in the person of its employee and by inference verified that the change had been made by the Intervenor. The nature of the change does not leave ambiguity concerning the intention by the Intervenor in that the prior entry on Item No. 5 within the basic invitation to bid blank and Addendum No. 1 had been obliterated leaving only the price quotation in the amount of $3.95 thus this problem is a minor irregularity and not a material deviation from the terms concerning the ITB.

      
      

   10. The delivery time contemplated for providing the bid items was ten working days by shipment FOB destination. This was as announced in Paragraph

1. Although the front page to the ITB carries with it a blank for recording the delivery date where it says "delivery date will be days after receipt of purchase order", it was not necessary for a vendor to fill that number of days in. The reason is that the number of days had already been established by the terms of the ITB and no latitude was presented to a vendor to suggest otherwise. If a vendor chose to fill in the ten days required by Paragraph 11 by placing the number ten on the lead sheet to the ITB, this was a redundant act.

   
   

   1. Likewise on the lead sheet to the ITB is found a blank for recording the "cash discount terms". Reference to cash discount terms was not a specific requirement within the ITB, especially as it relates to a comparison of

      responses by the vendors in deciding who would be awarded the contract. Therefore, the failure by the Intervenor to record its cash discount terms on the lead sheet to the ITB in a setting in which Petitioner had offered such information is not a deviation from the requirements set out in the ITB. Under general conditions at Paragraph 4.b. concerning discount, it is stated "cash discounts for prompt payment shall not be considered in determining the lowest net cost for bid evaluation purposes." Nothing in the remaining text found in the ITB was contrary to that statement.

      
      

   2. The price difference between the responsive bid by the Intervenor and the responsive bid by the Petitioner was $102 in a setting in which Intervenor had the lowest price and Petitioner had the second lowest price.

      
      

      CONCLUSIONS OF LAW

      
      

   3. The Division of Administrative Hearings has jurisdiction over the subject matter and the parties to this action pursuant to Section 120.57(1), Florida Statutes.

      
      

   4. Under Section 287.012, Florida Statutes, Intervenor and Petitioner are qualified bidders and responsive bidders for this project.

      
      

   5. This purchase was established through a competitive bidding process as required by Section 287.057, Florida Statutes.

      
      

   6. Petitioner bore the burden of proof to establish that Intervenor was unresponsive to the ITB. See Florida Department of Transportation v. J.W.C.,

      396 So.2d 778 (Fla. 1DCA 1981). It did not meet that burden. The Intervenor has offered a responsive bid and the actions by the Respondent in considering the responses to the ITB offered by Petitioner, Intervenor and other vendors was appropriate. See Department of Transportation Groves-Watkins Constructors, Inc., 530 So.2d 912 (Fla. 1988); Harry Pepper & Associates, Inc. v. City of Cape Coral, 352 So.2d 1190 (Fla. 2nd DCA 1977); Liberty County v. Baxter's Asphalt & Concrete, Inc., 421 So.2d 505 (Fla. 1982); Aurora Pump, Division of General Signal Corp. v. Gould Pumps, Inc., 424 So.2d 70 (Fla. 1st DCA 1982); Intercontinental Properties, Inc. v. State of Florida, Department of Health and Rehabilitative Services and Coliseum Lanes, Inc., 17 FLAW D2030 (3rd DCA 1992) and Central Florida Equipment Rentals of Dade County v. The Lowell Dunn Company, 586 So.2d 1171 (Fla. 3rd DCA 1991).

      
      

   7. The discrepancies which were pointed out related to the response to the ITB offered by the Intervenor were minor irregularities as defined at Rule 13A-1.001(32), Florida Administrative Code, which states:

      
      

      Minor Irregularity--A variation from the Invitation to bid/request for proposal terms and conditions which does not affect the price of the bid/proposal, or give the bidder or offerer an advantage or benefit not enjoyed by other bidders or offerers, or does not adversely impact the interest of the agency.

      
      

   8. As contemplated by Section 287.042, Florida Statutes, Respondent has proven that it has incurred costs for the transcript in the amount of $448 and employee time for the witness Cox in the amount of $176 for a total of $764.

RECOMMENDATION

Upon consideration of the findings of facts found and the conclusions of law reached, it is, recommended that a Final Order be entered which dismisses the bid protest of the Petitioner and awards the contract to Intervenor, together with costs in the amount of $764.

RECOMMENDED this 14th day of January, 1993, in Tallahassee, Florida.

CHARLES C. ADAMS

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 14th day of January, 1993.

APPENDIX CASE NO. 92-6824BID

The following discussion is given concerning the proposed facts of the parties:

Petitioner's Facts

Paragraphs 1 through 5 with the exception of the last subparagraph to Paragraph 5 are subordinate to facts found. The last subparagraph to Paragraph

5 is rejected as the reason for deciding that the Intervenor had complied with the requirements for references.

Paragraph 6 is subordinate to facts found with the exception of the discussion related to Mr. Lyons and his understanding of what must be done in making changes through the initialling process. Mr. Lyons insights do not set aside the perception that the failure to initial by Intervenor was a minor irregularity.

Paragraph 7 is subordinate to facts found.

As to Paragraph 8, the fact that Mr. Cox did not make a specific determination about Item No. 6 related to the response by the Petitioner did not disadvantage the Petitioner in a way that should cause a change in the outcome.

Paragraphs 9 through 11 are subordinate to facts found.

Respondent's Facts

Paragraphs 1 through 8 are subordinate to facts found. Paragraph 9 is not necessary to the resolution of the dispute. Paragraphs 10 through 28 are subordinate to facts found.

COPIES FURNISHED:

John C. Pelham, Esquire

Pennington, Wilkinson & Dunlap, P.A. 3375-A Capital Circle, N.E. Tallahassee, Florida 32308

Robert L. Powell, Esquire Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32301

James Cody, Jr.

IT Products, Inc.

5303 East Colonial Drive Orlando, Florida 32807

John Slye, General Counsel Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, FL 32399-0700

John C. Lyons, Senior Account Manager

321 West Exchange Street Akron, OH 44302

Associated Computer Stipulations 1801 North Meridian Road Tallahassee, FL 32303

SAI/Delta, Inc.

Suite 1014

670 North Orlando Avenue Maitland, FL 32751

Best Line Office Machines, Inc. Post Office Box 37381 Pensacola, FL 32526-0381

FRC Office Products Post Office Box 10163

Jacksonville, FL 32247-0163

Matrix Data Corporation Post Office Box 36150 Cleveland, OH 44136

Center Office Products 625 West Gaines Street Tallahassee, FL 32304

Computer Solutions/Connecting Point 4405 Bayou Boulevard

Pensacola, FL 32503

Forms Management, Inc. Post Office Box 4004 Tallahassee, FL 32315

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: 92-006824BID

Orders for Case No: 92-006824BID