STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ICF KAISER ENGINEERS, INC., ) and KE REALTY SERVICES, INC., )

)

Petitioners, )

vs. ) CASE NO. 93-3034BID

) DEPARTMENT OF TRANSPORTATION, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Joyous D. Parrish, held a formal hearing in the above-styled case on June 25 and 30, 1993, in Tallahassee and Fort Lauderdale, Florida.

APPEARANCES

For Petitioner: Martha Harrell Chumbler

Carlton, Fields, Ward, Emmanuel, Smith & Cutler, P.A.

Post Office Drawer 190 Tallahassee, Florida 32302

For Respondent: Paul Sexton, Office of General Counsel

Department of Transportation

605 Suwannee Street, Mail Station 58

Tallahassee, Florida 32399-0458 STATEMENT OF THE ISSUES

The central issue in this case is whether the Department's decision to rescind an intended award to Petitioners and to reject all bids is arbitrary and capricious.

PRELIMINARY STATEMENT

This case began on May 7, 1993, when the Petitioner filed its notice of intent to protest the Department of Transportation's (Departments) decision to reject all bids on the request for proposal (RFP) designated as DOT 92-93-4008, state job no. 86100-3576/2508 regarding relocation assistance and property management for State Road 7 (SR 7). Thereafter, the Petitioners timely filed a formal bid protest and petition for formal administrative hearing and alleged that the Department's decision to reject all bids was arbitrary and capricious.

The case was forwarded to the Division of Administrative Hearings for formal proceedings on June 3, 1993, and the case was scheduled for hearing June 16-17, 1993. After a continuance was requested by the parties and granted, the matter was heard June 25 and 30, 1993. Petitioners presented the testimony of

James A. Wolfe (by telephone conference call), district director of production for the Department; Richard Chesser, district secretary for district 4; Claire Tronel, project manager with district 4; Linda Parsons, district 4 chief review appraiser; David Thomas, vice-president with ICF Kaiser Engineers, Inc.; and Terry Morris, director and corporate real estate broker for KE Realty Services. Petitioners' exhibits numbered 1 through 5 were admitted into evidence.

The Department presented the testimony of Richard Chesser, James Wolfe and Claire Tronel. Its exhibits 1 and 2 were admitted into evidence. The transcript of these proceedings was filed on July 22, 1993. Afterwards, the Petitioners filed an unopposed motion to extend the time to file the proposed recommended orders which was granted. The parties were granted leave until August 6, 1993, to file their proposed recommended orders. Specific rulings on the proposed findings of fact are included in the appendix at the conclusion of this order.

FINDINGS OF FACT

1. ICF Kaiser Engineers, Inc. is a foreign corporation authorized to do business in Florida.

   
   

2. KE Realty Services, Inc. is a Florida corporation which has its principal place of business in Fort Lauderdale, Florida.

   
   

3. On February 26, 1993, the Department issued a RFP to solicit offers on the SR 7 contract. This RFP was identified as RFP-DOT-92-93-4008. Proposals submitted in response to the request were to be opened March 26, 1993, and the bid tabulations were to be posted on April 29, 1993.

   
   

4. Four vendors submitted proposals in connection with the subject RFP: the Petitioners; Gulf Coast Property Acquisition, Inc. (Gulf Coast); The Urban Group; and Keith and Schnars, P.A.

   
   

5. Each proposal was scored based upon four criteria: technical plan; price; certified DBE; and executive judgment. The points available for each were preset and known to all vendors. The technical plan could receive a maximum of 75 points, price could receive 20 points, and each of the other criteria could receive 5 points. Obviously, the technical plan portion was the more weighted criterion.

   
   

6. The technical plan portion of each vendor's proposal was evaluated by a Technical Review Committee (TRC). This committee consisted of Claire Tronel, Kevin Szatmary, Steve Gonot, Lynda Parsons, Van Neilly, and Cheryl Balogh.

   
   

7. The membership of the TRC was not kept secret and Petitioners knew, and perhaps other vendors as well, who would be evaluating the proposals.

   
   

8. Each member of the TRC scored the proposals independently. The average of all of the independent scores for each proposal was then computed as the technical plan score. The vendors received the following technical plan scores: Petitioners a 67.42; Gulf Coast a 56.79; The Urban Group a 36.42; and Keith & Schnars a 29.71.

   
   

9. To determine the price score, the lowest priced proposal received the maximum number of points (20). The other proposals received a fraction of the twenty points available based upon the relation of their price to the lowest price. According to the formula, Keith & Schnars received the highest price

   score (20), then The Urban Group (17.20), Gulf Coast (15.60), and finally, Petitioners (10.60). Petitioners received the lowest price score because it submitted the highest priced proposal. The ratio of its price with the lowest priced proposal multiplied by 20 resulted in the 10.60 score.

   
   

10. The scores for the DBE criterion are not in dispute but were assigned as follows: Petitioners, 5.0; Gulf Coast, 5.0; The Urban Group, 0.0; and Keith & Schnars, 2.0.

    
    

11. The TRC did not know the prices submitted with the proposals until it had completed the technical scores for each vendor.

    
    

12. The final criterion, executive judgment, was determined by the Selection Committee which consisted of: Rick Chesser, James Wolfe, and Joseph Yesbeck. This committee considered two factors in assigning its five points. First, the vendor's ability to do the work; and second, the cost of the work.

    
    

13. The scores for executive judgment were: 0 for The Urban Group and Keith & Schnars because their technical proposals were poor; 1 for Petitioners because, while their technical proposals were good, their price was high; and 5 for Gulf Coast.

    
    

14. Following tabulation of all criteria scores, the vendors were ranked as follows: Petitioners with 84.02; Gulf Coast with 82.39; The Urban Group with 53.62; and Keith & Schnars with 51.71.

    
    

15. On April 29, 1993, the Department posted the foregoing tabulation and its intent to award the SR 7 contract to Petitioners on May 3, 1993.

    
    

16. Thereafter, allegations of impropriety and/or conflict of interest were raised by an unsuccessful vendor. The claims were: that members of the TRC had family members who were either employed by or under contract to Petitioners; that Petitioners had conversations with Department employees prior to the submission of the proposals regarding a revised Department budget for the SR 7 contract; and that an employee of the Department served as the registered agent for Petitioners. Gulf Coast met with the Department and alleged that improprieties had occurred or conflicts of interests existed that had affected the technical evaluation of the bids.

    
    

17. Based upon the allegations, the Selection Committee decided to avoid the appearance of any impropriety and to rescind the intent to award to Petitioners and to reject all proposals submitted.

    
    

18. The decision reached by the Selection Committee was hurried as the Department believed it was bound, by law, to reach such decision before 8:00 a.m., May 4, 1993. A complete investigation into the truthfulness of the charges was not finished prior to the imposed deadline.

    
    

19. On May 5, 1993, the Department posted its formal notice of its intent to reject all proposals. The basis for such decision was "perceived improprieties in the selection process and possible conflict of interest."

    
    

20. There were no actual conflicts of interest in the review of the subject proposals. Further, there were no actual improprieties in the proposal review or scoring.

21. With regard to the allegations related to family members employed by Petitioners, no such conflict existed. Claire Tronel's husband has a contract with Petitioners unrelated to any of the issues of this case. Such contract is well-known in the industry and was known to the vendors prior to the assessment of these proposals. Further, the Department knew of such relationship prior to Ms. Tronel being selected for membership on the TRC.

    
    

22. Mr. Tronel is not an officer, partner, director, or proprietor of either Petitioner. Nor does he have a direct or indirect ownership interest in more than a five percent of the total assets or capital stock of either company.

    
    

23. Ms. Tronel had refrained from serving as a scoring member of earlier technical review committees because of her husband's contractual relationship. Ms. Tronel's supervisor was aware of the relationship Mr. Tronel had to Petitioners and did not consider his limited business relationship to be a conflict.

    
    

24. Ms. Tronel was chosen to serve on the TRC because of her experience in right-of-way services, and the relative lack of experience of some of the other committee members.

    
    

25. Before serving on the TRC, Ms. Tronel consulted with the district general counsel in order to determine whether her participation would violate Florida Statutes or the Department's ethical standards.

    
    

26. After receiving advice and making same known to her supervisors, it was decided Ms. Tronel should serve as a committee member.

    
    

27. The contractual relationship between Mr. Tronel and Petitioner did not effect Claire Tronel's evaluation of the proposals. In fact, if the scores assigned by Ms. Tronel to the technical plans of each proposal were subtracted from the average scores, the margin between Petitioners' technical score and the next highest score would widen.

    
    

28. Ms. Tronel showed no favoritism or bias in favor of Petitioners.

    
    

29. Gulf Coast did not complain about improper conflicts related to their proposal yet Michael Sheridan, the son of TRC member Linda Parsons, is employed by O.R. Colan, an appraisal firm which was listed as a subcontractor in Gulf Coast's proposal.

    
    

30. Perhaps Gulf Coast did not complain about Ms. Parsons' membership on the TRC because Ms. Parsons' relationship to Michael Sheridan is also widely known in the vendor community. Petitioners knew of such relationship but did not dispute the accuracy or fairness of Ms. Parsons. If Ms. Parsons' score were deleted from the scoring, Gulf Coast would have received the highest score.

    
    

31. Ms. Parsons, who is the chief review appraiser, generally serves on the technical review committee for projects which include appraisal services. Since her son became an employee of O.R. Colan, Ms. Parsons has served on technical review committees which evaluated proposals submitted by O.R. Colan and those submitted by vendors who listed O.R. Colan as a subcontractor.

    
    

32. Michael Sheridan is not an officer, partner, director, or proprietor of either Gulf Coast or O.R. Colan and does not own, either directly or indirectly, more than five percent of the total assets or the capital stock of either company.

33. While Ms. Parsons has been instructed not to serve on technical review committees in the future when her son is reflected as a participant in one of the proposals, she has not been instructed to refrain from participating whenever her son's employer participates in a proposal.

    
    

34. Ms. Parsons showed no favoritism toward Gulf Coast in her evaluation of the proposals.

    
    

35. The facts do not support even an appearance that Ms. Parsons showed any favoritism toward Gulf Coast.

    
    

36. Ms. Tronel and Ms. Parsons did not disregard their public duties in favor of a private interest. Therefore, no impropriety by reason of their participation resulted.

    
    

37. The Department's decision to rescind the award to Petitioners and to reject all bids was also premised, in part, on concerns regarding contacts between Petitioners and the Department employees before proposals were submitted. Petitioners contacted the Department to ask questions because during the course of preparing its proposal an issue of pricing became apparent. An inconsistency between the amounts that they were developing for the project and the amounts reflected in the Department's work program budget for the project became obvious.

    
    

38. Because of the disparity between the Department's budget for the project and the prices that Petitioners developed, Mr. Thomas became concerned that he was misinterpreting the RFP.

    
    

39. Mr. Thomas called the Department and spoke, first, to Van Neilly and, subsequently, to Claire Tronel about his concerns. Ms. Tronel confirmed that all services, including appraisal, were to be included in the proposals submitted.

    
    

40. Ms. Tronel did not tell Mr. Thomas that the Department intended to revise its budget for the project, nor did Mr. Thomas tell Ms. Tronel or Mr. Neilly what Petitioners' price for the SR 7 proposal would be.

    
    

41. Subsequently, the Department did revise its budget for the SR 7 contract by forty to fifty percent. The revised budget exceeds the price bid by Petitioners.

    
    

42. The Department's work program budget is a public document which lists all of the projects planned by the Department for a five-year period and includes the Department's price estimate for each project.

    
    

43. Petitioners submit bids for Department projects and normally submit proposal prices which exceed the Department's budget. Petitioners normally submit proposals which are highly ranked for their technical quality.

    
    

44. It was not improper for Petitioners to ask the question regarding the inclusion of appraisal services and it was not improper for a Department employee to confirm that appraisal services were to be included in the project. It is common practice for vendors to call Department employees before the submittal of proposals. However, vendors are warned not to rely upon information which is not provided to them in writing.

45. In addition, it would be improper for a Department employee to share information with one vendor, which could be advantageous to that vendor, without also providing the information to all other vendors. Petitioners received no information which gave them an advantage over the other vendors.

    
    

46. Rick Conner is a Department employee who was, until recently, the resident agent for KE Realty Services, Inc. Mr. Conner served in this position without compensation. He was not involved in any way in the RFP or the evaluation of the subject proposals. His role as resident agent had no effect on the scoring of proposals, and was not a factor in the Department's decision to rescind the award to Petitioners.

    
    

47. There was no evidence offered at the hearing to suggest that the relationship between Rick Conner and KE Realty gave the appearance of impropriety.

    
    

48. Petitioners expended approximately $40,000 in the preparation of the proposal; and, if there is a rebid, will incur additional amounts to prepare a new proposal.

    
    

49. Petitioners hired additional employees for the SR 7 contract, so that it could report in its proposal that it had the staff on hand to begin work immediately. If the SR/7 Contract is not rebid until late 1993 or early 1994, the opportunity to recoup the overhead expenses associated with these additional employees will be lost.

    
    

50. In addition, Petitioners' ability to rebid is adversely affected by the Department's decision since Gulf Coast made a copy of the proposal and may now benefit from the technical ideas and suggestions developed by Petitioners.

    
    

    CONCLUSIONS OF LAW

    
    

51. The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, these proceedings.

    
    

52. Petitioners have standing to bring this proceeding and the matter was initiated in a timely manner.

    
    

53. Petitioners bear the burden of proving, by a preponderance of the evidence, that the Department has acted arbitrarily by rejecting all bids. Florida Department of Transportation v. J.W.C. Co., 396 So.2d 778 (Fla. 1st DCA 1981).

    
    

54. An agency is to be accorded wide discretion in carrying out the bidding process and its decisions are not to be disturbed unless the agency has acted illegally, dishonestly, fraudulently, or arbitrarily. Department of Transportation v. Groves-Watkins Constructors, 530 So.2d 912 (Fla. 1988). However, "an agency is not permitted by law to avoid the bid protest procedure by rejecting all bids for arbitrary or capricious reasons." Caber Systems, Inc.

    v. Department of General Services, 530 So. 2d 325, 338 (Fla. 1st DCA 1988).

    
    

55. An arbitrary action is one not supported by facts or logic. Agrico Chemical Company v. Department of Environmental Regulation, 565 So.2d 759 (Fla. 1st DCA 1989). In this case, the Department's decision to rescind its initial decision and to reject all bids was ill-advised and not supported by facts or logic. The Department was not able to adequately investigate the unsupported allegations made by Gulf Coast. The decision to rebid to avoid the appearance

    of impropriety presumed the vendors or the public believed, or could reasonably believe, the employees acted inappropriately. Such was not the case. The decision to rebid was an overreaction to the unfounded claims made by an unsuccessful vendor who, although aware of the relationships complained of, did not raise the issues until after it determined it was not the successful bidder. This eleventh hour complaint, if fully investigated, should have been rejected. As the decision to rebid was not guided by reason, such decision must be rejected as arbitrary.

    
    

56. No statutory or regulatory standard was violated by the TRC members or Petitioners.

    
    

57. Rule 14-17.011, Florida Administrative Code, sets forth the Department's standards for ethical conduct by its employees. The rule provides, in part:

    
    

    (2) Interpretation and Statement of Ethical Policy.

    (a) Employees of the Department of Transportation are expected to honor the ethical obligation inherent in public service. These obligations go beyond mere legal obligations and demand from the employee a greater sensitivity to his or her conduct,

    as well as the public's perception of such conduct. This Ethical Conduct rule is intended to provide direction to employees as they undertake the important service which has been entrusted to them--public service.

    * * *

    (c) Employees must safeguard their ability to make objective, fair and impartial decisions. Therefore, employees cannot accept benefits of any sort under circumstances in which it could be inferred by a reasonable observer that the benefit was intended to influence a pending or future decision of such employee. Employees must avoid any conduct which might undermine public trust.

    * * *

    (e) Employees of the Department are expected to comply with the provision of this rule and related statutes in determining what to do when confronted with conflicts of interest or offers of gifts, gratuities, funds, favors, or employment. In all situations, employees of the Department are expected to make decisions and take appropriate actions which maintain proper and professional relationships with members of industry and the public. This will enable employees to avoid any real or perceived improper activity. Avoiding such situations helps present an image which will promote public respect and confidence in the Department and its employees.

58. The Department's action in rejecting all bids because of the appearance of impropriety and possible conflicts of interest is not supported by the provisions of Rule 14-17.011(2), Florida Administrative Code, as there were no conflicts of interest and any so-called appearance of impropriety was known to the vendors before the submission of the proposals. Only after the evaluation process did the unsuccessful vendor become offended by the relationships.

    
    

59. Section 120.53(5)(b), Florida Statutes, does not require that an agency make a final decision to resolve a bid protest or potential bid protest within seventy-two hours of the agency's notice of intended award. The seventy- two hour deadline limits the time within which an affected person may give notice of his intent to protest; it does not limit the time within which an agency may decide how to resolve issues raised in connection with such a notice of intent.

    
    

60. The Department mistakenly believed that it was required to resolve the issues raised by a vendor before the end of the seventy-two hour period. Had the Department taken more time to examine the facts of the issues, it could have rendered an informed, reasoned decision. In this case, however, the Department rendered a decision based upon speculation and unfounded perceptions. The resulting decision was not guided by reason or supported by facts and therefore, is arbitrary.

RECOMMENDATION

Based on the foregoing, it is, hereby, RECOMMENDED:

That the Department of Transportation enter a final order awarding job no.

86100-3576/2508 for the SR 7 project to Petitioners.

DONE AND RECOMMENDED this 17th day of September, 1993, in Tallahassee, Leon County, Florida.

JOYOUS D. PARRISH

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 17th day of September, 1993.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-3034

Rulings on the proposed findings of fact submitted by the Petitioners:

1. Paragraphs 1 through 23, 25, 26, 28, 29, 31 through 48, 50, 51, and 53 through 61 are accepted.

1. Paragraph 24 is rejected as a statement of law, not fact.

2. Paragraph 27 is rejected as irrelevant.

3. The first sentence of paragraph 30 is accepted; the remainder rejected as irrelevant.

4. Paragraph 49 is rejected as irrelevant.

5. Paragraph 52 is rejected as argument or comment.

Rulings on the proposed findings of fact submitted by the Respondent:

1. Paragraphs 1 through 17, 21, and 22 are accepted.

2. While paragraphs 18 through 20 accurately state the rationale expressed by the selection committee (one member of which changed his opinion after a thorough review of the facts), the ultimate facts expressed by the paragraphs (for example, that there was an appearance of impropriety) are rejected as not supported by the weight of the credible evidence. Not one person from the public or from the other vendors testified. The Department took the unfounded allegation of an unsuccessful bidder (not even corroborated at trial) as proof that an appearance of impropriety existed.

3. Paragraph 23 is rejected as argument, conclusion of law, or contrary to the weight of credible evidence.

4. Paragraph 24 is rejected as contrary to the weight of credible evidence.

5. Paragraph 25 is rejected as irrelevant or argument.

6. Paragraph 26 is rejected as irrelevant or argument.

7. The first two sentences of paragraph 27 are accepted; the remainder rejected as irrelevant or argument.

8. Paragraphs 28 and 29 are rejected as argument.

9. Paragraph 30 is rejected as contrary to the weight of the credible evidence.

10. Paragraph 31 is rejected as argument and contrary to the weight of the credible evidence.

11. Paragraph 32 is rejected as argument.

COPIES FURNISHED:

Paul Sexton

Assistant General Counsel Department of Transportation 605 Suwannee Street

Tallahassee, Florida 32399-0450

Martha Harrell Chumbler

CARLTON, FIELDS, WARD, EMMANUEL, SMITH & CUTLER, P.A.

First Florida Bank Building

215 South Monroe Street, Suite 500 Post Office Drawer 190 Tallahassee, Florida 32302

Ben G. Watts, Secretary Department of Transportation

ATTN: Eleanor F. Turner, Mail Station 58 Haydon Burns Building

605 Suwannee Street

Tallahassee, Florida 32399-0458

Thornton J. Williams General Counsel

Department of Transportation

562 Haydon Burns Building 605 Suwannee Street

Tallahassee, Florida 32399-0458

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.

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

AGENCY FINAL ORDER

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

STATE OF FLORIDA DEPARTMENT OF TRANSPORTATION

ICF KAISER ENGINEERS, INC., )

KE REALTY SERVICES, INC., )

)

Petitioners, )

) DOAH CASE NO. 93-3034BID

vs. ) DOT CASE NO. 93-0198

) DEPARTMENT OF TRANSPORTATION, )

)

Respondent, )

)

FINAL ORDER

This proceeding was initiated by a formal bid protest filed by ICF KAISER ENGINEERS, INC., AND KE REALTY SERVICES, INC. (ICF/KAISER) on May 17, 1993, in

response to a DEPARTMENT OF TRANSPORTATION (DEPARTMENT) notice of intent to rescind the intended award of State Job No. 86100-3576/2508 to KAISER/KE and reject all bids.

BACKGROUND

This matter was referred to the Division of Administrative Hearings. Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Joyous D. Parrish, held a formal hearing in this case on June 25 and 30,1993 in Tallahassee and Tampa, Florida, respectively. Proposed recommended orders were filed by KAISER/KE and the DEPARTMENT and a recommended order was issued on September 17, 1993. The DEPARTMENT'S Staff filed exceptions on October 7, 1993, and KAISER/KE filed its Motion to Strike on October 18, 1993.

RULINGS ON FILED EXCEPTIONS

The Hearing Officer's findings are supported by competent substantial evidence. The relevance of those facts are dealt with in the conclusions of law. Therefore the exceptions filed by the Department are rejected.

FINDINGS OF FACT

The Hearing Officer's Findings of Fact are supported by competent substantial evidence and are adopted and incorporated herein.

CONCLUSIONS OF LAW

1. The following conclusions of law stated in the Recommended Order are accepted and incorporated herein in their entirety: Paragraph Nos. 57, 59 and

1. The last sentence in Paragraph No. 58 is also accepted and incorporated herein.

   
   

   1. In this case, the DEPARTMENT'S rationale for rejecting all bids was that there was an appearance of impropriety and possible conflicts of interest on the part of DEPARTMENT personnel involved in ranking the proposals submitted by the bidders. KAISER/KE has alleged that the DEPARTMENT'S action was arbitrary and capricious.

      
      

   2. A capricious action is one which is taken without thought or reason or irrationally. An arbitrary decision is one not supported by facts or logic, or despotic. Agrico Chemical Company v. Department of Environmental Regulation,

      565 So.2d 759, 763 (Fla. 1st DCA 1989). The review for arbitrariness is limited, an agency's action needs to show only a rudimentary rationality to be supportable. Adam Smith Enterprises Inc. v. Department of Environmental Regulation, 553 So.2d 1260, 1273 (Fla. 1st DCA 1989). The review is limited to whether the agency has considered all relevant factors, given good consideration to those factors and has used reason rather than whim to reach its final decision. Adam Smith, 553 So.2d at 1273.

      
      

   3. A decision to reject all bids because of the appearance of impropriety is both rational and supported by logic. The DEPARTMENT maintains a policy in Rule 14-17.011(2) to avoid even the appearance of conflicts of interest in order to promote public confidence in the DEPARTMENT and its employees. The DEPARTMENT'S Contractual Services Acquisition procedure clearly seeks to promote public confidence in the acquisition of contractual services and to avoid the appearance and opportunity for favoritism. DEPARTMENT action to reject all bids because of the appearance of impropriety and possible conflicts of interest is clearly supported by the provisions of its Contractual Services Acquisition procedure and Rule 14-17.011(2). While the facts of this case support the conclusion that additional deliberation on the part of the decision-makers might

      have resulted in a different result, it nevertheless can and must be considered an appropriate decision where facts support the decision to reject all bids where there exists a claimed appearance of impropriety. An actual improper act should not be required.,

      
      

   4. The Hearing Officer erred in concluding, on page 13 of the Recommended Order, that the DEPARTMENT'S action in rejecting all bids because of the appearance of impropriety is not supported by the provisions of Rule 14- 17.011(2). An agency's interpretation of its rules is entitled to great weight and may not be set aside unless clearly erroneous. Pan American World Airways Inc. v. Florida Public Service Commission, 427 So.2d 716, 719 (Fla. 1983). Reedy Creek Improvement District v. Department of Environmental Regulation, 486

      So.2d 642, 648 (Fla. 1st DCA 1986). The DEPARTMENT presented clear testimony on the meaning, purpose and implementation of the language in Rule 14-17.011(2) and the Hearing Officer accepted this testimony by accepting the DEPARTMENT'S Proposed Finding of Fact Nos. 21 and 22.

      
      

   5. Public confidence in the competitive contracting process is essential to effective and economical competition. It shows that the DEPARTMENT'S actions were taken to preserve the integrity and the effectiveness of competitive bidding. While reasonable persons may disagree with the DEPARTMENT'S rationale, such disagreement is not a basis for overturning its action. The law is clear, an agency's honest exercise of discretion may not be overturned even if it may appear erroneous and even if reasonable persons may disagree. Liberty County v. Baxter's Asphalt and Concrete Inc., supra, at 507.

      
      

   6. Evidence related to injuries suffered by KAISER/KE as a result of the DEPARTMENT'S decision is not pertinent to whether the DEPARTMENT'S actions were without thought or reason or unsupported by facts or logic. The claimed injury to KAISER/KE'S reputation cannot demonstrate that the DEPARTMENT'S action was arbitrary or capricious, as it occurred after the DEPARTMENT'S actions. Further, the business injuries suffered by KAISER/KE are not unique. If such injuries could serve as a basis to overturn a decision to reject all bids, as arbitrary and capricious, then all decisions to reject all bids would be arbitrary and capricious.

      
      

   7. The record however does contain competent substantial evidence to support the Hearing Officer's finding that there was no appearance of impropriety in this case. This Finding is implicit in the Hearing Officer's Findings of Fact and was made explicit in the rejection of the DEPARTMENT'S proposed finding of fact that there was an appearance of impropriety. The DEPARTMENT may not reweigh the evidence but must accept the Hearing Officer's finding if it is supported by competent substantial evidence. A review of the entire record reveals testimony which could support an inference that there was no appearance of impropriety. Based on the Hearing Officer's Finding that there was, in fact, no appearance of impropriety, the DEPARTMENT'S decision to reject all bids because of an appearance of impropriety was arbitrary and capricious.

BASED ON THE FOREGOING, it is

ORDERED that the DEPARTMENT'S action rescinding the intended award of State Job No. 86100-3576/2508 to KAISER/KE and reject all bids is hereby set aside, and it is further

ORDERED that Job No. 86100-3576/2508 is hereby awarded to KAISER/KE.

DONE AND ORDERED this 16th day of December, 1993.

BEN G. WATTS, P.E.

Secretary

FLORIDA DEPARTMENT OF TRANSPORTATION

Haydon Burns Building Tallahassee, Florida 32399

NOTICE OF RIGHT TO APPEAL

THIS ORDER CONSTITUTES FINAL AGENCY ACTION AND MAY BE APPEALED BY PETITIONER PURSUANT TO SECTION 120.68, FLORIDA STATUTES, AND RULE 9.110, FLORIDA RULES OF APPELLATE PROCEDURE, BY FILING A NOTICE OF APPEAL CONFORMING TO THE REQUIREMENTS OF RULE 9.110(D), FLORIDA RULES OF APPELLATE PROCEDURE, BOTH WITH THE APPROPRIATE DISTRICT COURT OF APPEAL, ACCOMPANIED BY THE APPROPRIATE FILING FEE, AND WITH THE DEPARTMENT'S CLERK OF AGENCY PROCEEDINGS, HAYDON BURNS BUILDING, 605 SUWANNEE STREET, M.S. 58, TALLAHASSEE, FLORIDA 32399-0458, WITHIN THIRTY

(30) DAYS OF RENDITION OF THIS ORDER.

COPIES FURNISHED:

Joyous D. Parrish Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

Paul Sexton

Assistant General Counsel DEPARTMENT OF TRANSPORTATION

Haydon Burns Building, MS 58 605 Suwannee Street

Tallahassee, Florida 32399-0458

Martha Harrell Chumbler

Carlton, Fields, Ward, Emmanuel, Smith & Cutler, P.A.

500 First Florida Bank Building Post Office Drawer 190 Tallahassee, Florida 32302

Rick Chesser, Secretary District IV

3400 West Commercial Boulevard Fort Lauderdale, Florida 33301

Melvin L. Wilson, General Counsel District IV

3400 West Commercial Boulevard Fort Lauderdale, Florida 33301

Docket for Case No: 93-003034BID

Orders for Case No: 93-003034BID