STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

THERAPY STAFF SERVICES, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 93-4486BID

)

SCHOOL BOARD OF HILLSBOROUGH )

COUNTY, FLORIDA, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to written notice, a formal hearing was conducted in this proceeding before Daniel Manry, a duly designated Hearing Officer of the Division of Administrative Hearings, on August 24, 1993, in Tampa, Florida.

APPEARANCES

For Petitioners: M. Teresa Harris, Esquire

Post Office Box 90

St. Petersburg, Florida 33731

For Respondent: W. Crosby Few, Esquire

Few & Ayala

109 North Bush Street, Suite 202, Tampa, Florida 33602

STATEMENT OF THE ISSUE

The issue for determination in this proceeding is whether Respondent's award of a contract pursuant to a request for proposal was arbitrary, capricious, or beyond the scope of Respondent's discretion.

PRELIMINARY STATEMENT

Petitioner filed a formal written protest of Respondent's award of contract to another company for the provision of occupational and physical therapy services. The matter was referred to the Division of Administrative Hearings on August 9, 1993, and assigned to the undersigned on August 16, 1993. A formal hearing was scheduled for August 24, 1993.

At the formal hearing, Petitioner submitted 12 exhibits for admission in evidence. Petitioner's exhibits are identified in Petitioner's Prehearing Stipulation as Exhibits 2-5, 7-9, 11-12, and 14-15. Petitioner's Exhibit 16 in the Prehearing Stipulation was included in Petitioner's Exhibit 9. In addition, Petitioner submitted a copy of a statement of a team leader's responsibilities as Petitioner's Exhibit 20. Petitioner's Exhibits 2 and 3 were admitted in evidence over objection. Petitioner's Exhibits 4-5, 7-9, 11-12, 14-15, and 20 were admitted without objection.

Petitioner presented the testimony of seven witnesses. Petitioner's witnesses were: Mr. Richard Milroy, Petitioner's Vice President; Ms. Judith Seltrecht, Health Care Administrator for Bay Area Therapy; Sushma Acharya, an occupational therapist employed by Petitioner; Sangeeta Sharma, an occupational therapist employed by Petitioner; Ms. Kym Ledford, a physical therapist; Mr.

Phil Barnett, Regional Manager for Petitioner; and Mr. Peter Covert, Petitioner's President.

Respondent submitted five exhibits for admission in evidence. Respondent's Exhibit 1 is a letter from Petitioner dated July 9, 1993. Respondent's Exhibit

2 is a memorandum dated June 14, 1993. Respondent's Exhibit 3 is a copy of writing samples from therapists provided by Petitioner. Respondent's Exhibit 4 is a copy of the employment agreement used by Petitioner and its therapists. Respondent's Exhibit 5 is a copy of samples of work by one of Petitioner's therapists. Respondent's Exhibits 1-5 were admitted in evidence without objection.

Respondent presented the testimony of eight witnesses. Respondent's witnesses were: Mr. Michael Bubbly, President of Professional Health Care Services; Ms. Janifer Bliss, a licensed physical therapist and assistant team leader for Respondent; Mr. Joseph Boshart, President of the successful company; Ms. Myrna Robinson, Respondent's General Director of Special Instruction Services; Mr. William Joseph Borrer, Respondent's Supervisor of Purchasing and Warehousing; Ms. Elizabeth A. Argott, Respondent's Director of Exceptional Education; Ms. Mary Ellen Gillette, Respondent's Director of Physical, Mental Health, and Social Services; and Ms. Susan Hays, Respondent's Supervisor for Physical and Occupational Therapy.

A transcript of the formal hearing was not filed by either party.

Respondent timely filed proposed findings of fact and conclusions of law on September 2, 1993. Petitioner timely filed proposed findings of fact and conclusions of law on September 3, 1993. The parties' proposed findings of fact are addressed in the Appendix to this Final Order.

FINDINGS OF FACT

1. Respondent, like other public school systems in Florida, is required to provide therapy services for students in need of such services. The demand for therapy services far exceeds the available therapists. The shortage of therapists is expected to worsen in the foreseeable future.

   
   

2. Respondent historically has been unable to obtain a sufficient number of therapists by direct hire. Respondent has relied on contract services to obtain therapists. Such contract services have been provided by Professional Health Care Services ("Professional"), Cross Country Health Care ("Cross Country"), and Petitioner.

   
   

3. In November, 1992, Petitioner was awarded a contract to provide occupational and physical therapy services for the remainder of the 1992-1993 school year. Petitioner provided the number of therapists required by Respondent in a timely manner.

4. Virtually all of the therapists provided by Petitioner during the 1992- 1993 school year were foreign nationals. Some of the therapists had inadequate written and verbal communication skills in the English language. The lack of such communication skills created problems for the faculty, staff, and students, and was the subject of complaints by some parents.

   
   

5. Some of the therapists provided by Petitioner during the 1992-1993 school year had no transportation to travel from school to school to perform their regular duties. Respondent determined that the supervision provided by Petitioner was inadequate in light of the communication and transportation problems peculiar to some of the foreign nationals Petitioner provided as therapists.

   
   

6. When competent therapists are provided through contract services, Respondent typically attempts to hire such therapists as full time employees in the school system. Provisions in the contract between Petitioner and the therapists provided by Petitioner make it economically impractical for Respondent to hire competent therapists provided by Petitioner. The contract prohibits a therapist from competing with Petitioner (the "non- compete clause") and, alternatively, requires that Petitioner be reimbursed for costs incurred in obtaining the therapist's work permit and temporary license and requires that Petitioner be compensated based on a percentage of an individual therapist's salary. Neither the therapist nor Respondent typically have the funds necessary to make such payments in lieu of the non-compete clause.

   
   

7. Petitioner does not permit Respondent to evaluate the therapists provided by Petitioner prior to accepting the therapists. Respondent has no opportunity to interview a therapist and make an independent determination of the therapist's communication skills or means of transportation.

   
   

8. For the 1993-1994 school year, Respondent issued a request for proposals to provide 11 occupational therapists and 10 physical therapists who were permanently licensed or, alternatively, a combination of therapists and therapist assistants. The request for proposal was issued to approximately 85 providers. The only providers that responded were Petitioner, Cross Country, and Professional.

   
   

9. Each company that submitted a proposal had a prior business history with Respondent. Respondent is familiar with the management personnel of each company.

   
   

10. The successful proposal was selected based on three categories of information provided in each proposal. The categories were: therapist or agency qualifications; scope of services; and cost of services. Each responsive company was required to provide information in regard to: the company itself; the availability of therapists, their license status, and their supervision; the costs to Respondent; and the ability of Respondent to recruit the therapists provided by the company.

    
    

11. Representatives from each of the three companies that submitted proposals were invited to be interviewed concerning their company's respective proposal. Each representative was interviewed by members of Respondent's administrative staff including Ms. Sue Hays, Supervisor of Occupational and Physical Therapy, Ms. Liz Argott, Director of Exceptional Student Education, Ms. Myrna Robinson, General Director of Special Instructional Services, Mr. Bill Borrer, Supervisor of Purchasing, and Ms. Mary Gillette, Director of Physical/Mental Health and Social Services.

12. Each representative was asked questions that were applicable to all three companies as well as questions that were unique to the specific proposal of each company. The three main issues discussed with Petitioner concerned communication problems posed by foreign nationals, temporary licensing, and adequate supervision.

    
    

13. Respondent had previously advised Petitioner to pursue its proposal even though Petitioner represented that virtually all of its therapists would be temporarily licensed. At the interview following the submission of proposals, however, Petitioner notified Respondent that Petitioner would agree to be a secondary vendor only if Petitioner had a minimum of 10 therapists working for the School Board.

    
    

14. At the conclusion of the interviews, each of the companies submitting proposals was awarded a numerical score. Cross Country received a score of 410 points. Professional received a score of 331 points. Petitioner received a score of 296 points.

    
    

15. Petitioner scored lowest among the three companies that submitted proposals.

    
    

16. Cross Country recruits approximately 80 percent of its therapists within the United States. Cross Country provides transportation and housing for its therapists. Both Cross Country and Professional provide permanently licensed therapists.

    
    

17. Petitioner's proposal was not the lowest in cost. Petitioner would have charged an additional $1.80 per hour for each therapist in order to provide the supervision required under the circumstances. Moreover, the difference between Petitioner's actual score and a perfect score of 30 for cost of services would not be sufficient to raise Petitioner's score by the amount needed to give Petitioner the second highest score.

    
    

18. The matter was submitted to Respondent on July 20, 1993. The contract for primary vendor was awarded to Cross Country and the contract for secondary vendor was awarded to Professional.

    
    

19. Respondent's decision was reasonable under the circumstances and was not arbitrary and capricious. Cross Country was the lowest and best proposal. Respondent followed its specifications in the request for proposals and properly utilized the evaluation system prescribed in the request for proposals.

    
    

20. Petitioner would have provided temporarily licensed therapists in violation of the specifications in the request for proposals. Respondent did not implicitly waive the express requirement for permanently licensed therapist when Respondent advised Petitioner to pursue its proposal. The request for proposal also sought proposals for assistant therapists which Petitioner was willing to recruit. Even if Respondent was willing to accept temporarily licensed therapists from a secondary vendor, Respondent did not learn until the interview with Petitioner that Petitioner was unwilling to function as a secondary vendor unless Petitioner had a minimum of 10 therapists employed by Respondent.

21. Respondent had a legitimate concern over the ability of therapists provided by Petitioner to communicate verbally and in writing in the English language. While the parties to this proceeding dispute the significance of that issue, Respondent would not have the right to interview prospective therapists and make an independent determination of the ability of the therapist to communicate at a level necessary to provide effective services in the school system. For the same reason, Respondent had no way to make an independent determination of whether a prospective therapist had adequate transportation to perform the services required by Respondent.

    
    

22. Respondent historically has been unable to obtain a sufficient number of therapists through direct hires. Respondent was effectively precluded by the terms of the contract between Petitioner and the individual therapists from hiring competent therapists in permanent positions within the school system.

    The demand for therapy services far exceeds the supply of therapists. The shortage of therapists is expected to worsen in the foreseeable future. The ability to hire competent therapists as permanent members of the staff is a reasonable and legitimate factor for Respondent to consider in determining the highest and best proposal.

    
    

    CONCLUSIONS OF LAW

    
    

23. The Division of Administrative Hearings has jurisdiction over the subject matter of this proceeding and the parties thereto. The parties were duly noticed for the formal hearing.

    
    

24. Petitioner has standing in this proceeding. This proceeding involves a request for proposal rather than an invitation to bid. Compare Preston Carroll Company, Inc. v. Florida Keys Aqueduct Authority, 524 So.2d (Fla. 3d DCA 1981).

    
    

25. Petitioner's objection to the testimony of a representative of Cross Country is overruled. No authority was cited by counsel for Petitioner, and none was found, for the proposition that vendors who have a right to intervene and who fail to do so are precluded from testifying for Respondent with regard to the nature and quality of their services.

    
    

26. Petitioner has the burden of proof in this proceeding. The burden of proof in an administrative proceeding is on the party asserting the affirmative of the issue unless the burden is otherwise established by statute. Young v. State, Department of Community Affairs, 567 So.2d 2 (Fla. 3d DCA 1990); Florida Department of Transportation v. J.W.C. Co., Inc., 396 So.2d 778 (Fla. 1st DCA 1981); Balino v. Department of Health and Rehabilitative Services, 348 So.2d 349 (Fla. 1st DCA 1977).

    
    

27. Petitioner must demonstrate by a preponderance of the evidence that Respondent's award of a contract pursuant to a request for proposal was arbitrary, capricious, or beyond the scope of Respondent's discretion. Capeletti Brothers, Inc. v. State Department of General Services, 432 So.2d

    1359, 1363 (Fla. 1st DCA 1983); System Development Corp. v. Department of Health and Rehabilitative Services, 423 So.2d 433, 434 (Fla. 1st DCA 1982); Glatstein

    v. City of Miami, 399 So.2d 1005 (Fla. 3d DCA 1981). Petitioner failed to satisfy its burden of proof.

28. Respondent's decision was reasonable under the circumstances and was neither arbitrary, capricious, nor beyond the scope of Respondent's discretion. Respondent followed its specifications in the request for proposals and properly utilized the evaluation system prescribed in the request for proposals.

    
    

29. Petitioner's proposal provided temporarily licensed therapists in violation of the specifications in the request for proposals. The requirement for permanently licensed therapists was based in part on Respondent's prior business experience with temporarily licensed therapists. Respondent did not implicitly waive the express requirement for permanently licensed therapists.

    
    

30. Conduct relied upon as a basis for implied waiver must make out a clear case of waiver. Taylor v. Kenco Chemical & Mfg. Corp., 465 So.2d 581, 587 (Fla. 1st DCA 1985); Fireman's Fund Insurance Company v. Vogel, 195 So.2d 20, 24 (Fla. 2d DCA 1967). The conduct of Respondent in advising Petitioner to proceed with Petitioner's proposal did not make out a clear case of waiver. Respondent reasonably considered all proposals for both primary and secondary vendors and for therapist assistants. Respondent did not demonstrate a clear intent to waive the requirement for permanently licensed therapists to be provided by the primary vendor.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a Final Order denying Petitioner's

written formal protest.

RECOMMENDED this 29th day of September, 1993, in Tallahassee, Florida.

DANIEL MANRY

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399

(904) 488

Filed with the Clerk of the Division of Administrative Hearings this 29th day of September, 1993.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-4486BID

Petitioner's Proposed Findings Of Fact. 1.-3. Irrelevant and immaterial

4.-11. Accepted in substance

1. Rejected as inconsistent with credible and persuasive evidence

2. Accepted in substance

3. Irrelevant and immaterial 15.-18. Accepted in substance

1. Irrelevant and immaterial

2. Rejected as inconsistent with credible and persuasive evidence

21.-22. Accepted in substance 23.-27. Irrelevant an immaterial

1. Accepted in substance

2. Rejected as inconsistent with credible and persuasive evidence

30.-31. Accepted in substance

32. Rejected for lack of credible and persuasive evidence

33.-35. Irrelevant and immaterial

1. Rejected as inconsistent with credible and persuasive evidence

2. Accepted in substance

38.-41. Rejected as inconsistent with credible and persuasive evidence

42. Irrelevant and immaterial 43.-44. Accepted in substance

45.-46. Rejected as inconsistent with credible and persuasive evidence

47.-48. Irrelevant and immaterial

49. Rejected as inconsistent with credible and persuasive evidence

50.-51. Irrelevant and immaterial

1. Rejected as inconsistent with credible and persuasive evidence

2. Accepted in substance, but credible and persuasive evidence showed that particular therapists who were foreign trained in fact caused some problems for Respondent

3. Rejected as inconsistent with credible and persuasive evidence

4. Rejected as inconsistent with credible and persuasive evidence

5. Accepted in substance Respondents' Proposed Findings Of Fact.

1. Accepted as part of preliminary statement

2. Irrelevant and immaterial

3. Rejected as recited testimony 4.-9. Accepted in substance

10.-15. Rejected as recited testimony

1. Accepted in substance

2. Rejected as recited testimony

COPIES FURNISHED:

Dr. Walter L. Sickles, Superintendent School Board of Hillsborough County Post Office Box 3408

Tampa, Florida 33601-3408

M. Teresa Harris, Esquire Post Office Box 90

St. Petersburg, Florida 33731

W. Crosby Few, Esquire Few & Ayala

109 North Bush Street, Suite 202 Tampa, Florida 33602

Honorable Betty Castor Commissioner of Education The Capitol

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: 93-004486BID

Orders for Case No: 93-004486BID