STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

LEE MENTAL HEALTH CENTER, INC., ) d/b/a RUTH COOPER CENTER FOR ) BEHAVIORAL HEALTHCARE, )

)

Petitioner, )

)

vs. )

)

DEPARTMENT OF HEALTH AND ) CASE NO. 96-2999BID REHABILITATIVE SERVICES, )

)

Respondent, )

and )

) LUTHERAN MINISTRIES OF FLORIDA, ) INC., )

)

Intervenor. )

)

RECOMMENDED ORDER

Robert E. Meale, Hearing Officer of the Division of Administrative Hearings, conducted the final hearing in Ft. Myers, Florida, on July 15 and 16, 1996.

APPEARANCES

For Petitioner: Carl Joseph Coleman, Esquire Fowler White

Post Office Box 1567

Ft. Myers, Florida 33902

For Respondent: Susan Mastin Scott

Senior Health Attorney Department of Health and

Rehabilitative Services Post Office Box 60085

Ft. Myers, Florida 33906

For Intervenor: Paul J. Ullom, Esquire

Carlton, Fields, et al. Post Office Box 3239 Tampa, Florida 33601-3239

STATEMENT OF THE ISSUE

The issue is whether to sustain Respondent's tentative award to Intervenor of a contract to serve families in Lee County.

PRELIMINARY STATEMENT

By letter dated May 31, 1996, Petitioner sent Respondent a Notice of Protest of its decision to award Intervenor a contract to provide family preservation services in Lee County. By letter dated June 10, 1996, Petitioner sent Respondent a Formal Written Protest of the award.

On June 25, 1996, Intervenor filed a Petition for Leave to Intervene, which was granted by order entered June 28, 1996.

Over objection of Respondent and Intervenor, the hearing officer granted Petitioner leave to challenge the scoring of additional criteria besides those identified in the notice of protest. These criteria are Sections B.1.a, B.1.b, B.3.i, and B.4.d.

At the hearing, Petitioner called 11 witnesses and offered into evidence five exhibits. Respondent called four witnesses and offered into evidence seven exhibits. Intervenor called no witnesses and offered into evidence no exhibits. The parties jointly introduced 25 exhibits. All exhibits were admitted.

The parties did not order a transcript. Rulings on timely filed proposed findings are in the appendix.

FINDINGS OF FACT

1. Respondent issued a Request for Proposals on April 12, 1996, to solicit proposals to provide services in a program known as Family Preservation Services (RFP). Family Preservation Services comprises four programs: the Intensive Crisis Counseling Program (ICCP), Family Builders Program, Reunification/Permanency Program, and Housekeeper and Homemaker Services, which are occasionally treated as separate programs.

   
   

2. Family Preservation Services provides "a continuum of services from the point of crisis or child abuse or neglect referral through the eventual permanent placement of the child with its biological or adoptive family." RFP,

   p. 3.

   
   

3. The ICCP provides up to six weeks of in-home counseling to provide immediate, short-term stabilization of families in crisis. The Family Builders Program provides up to three months of in-home counseling to keep families permanently intact when children are under imminent consideration for out-of- home placement.

   
   

4. The Reunification/Permanency Program provides up to six months of in- home counseling to help families being reunited with their children currently in foster care. The Housekeeper and Homemaker Services program supplements the Family Builders and Reunification/Permanency programs by performing basic housekeeping chores and child-rearing responsibilities.

   
   

5. Respondent prepared the RFP to elicit separate proposals for each of the seven counties that form Respondent's District 8. (Glades and Hendry counties were treated as though they were a single county.) An offeror seeking contracts for more than one county thus had to submit a separate proposal for each county.

   
   

6. Petitioner's protest is directed solely to Respondent's decision to award the Lee County contract. The other awards are not contested in this case.

7. For Lee County, Respondent received proposals from Petitioner, Intervenor, the David Lawrence Center, and the Family Continuity Program. The latter two offerors did not participate in this proceeding.

   
   

8. The RFP discloses the funding limits for the Family Preservation Services program and states: "Proposals . . . will be rated on the cost- effectiveness, as well as the quality, of their proposed service delivery plan." RFP, p. 7.

   
   

9. The RFP reports that, for Lee County, the limits are $553,479 for the Family Builders and Reunification/Permanency programs, $135,174 for the ICCP, and $8347 for the Housekeeper and Homemaker Services program. RFP, p. 7. The RFP notes that the Family Builders and Reunification/Permanency programs in Lee County will have additional funds of $85,950, of which the provider must supply

   $28,650 in order to obtain the matching federal funds of $57,300.

   
   

10. The section of the RFP entitled "RFP Specifications" provides detailed descriptions of the services required under each of the four Family Preservation Services programs. This section is broken down into criteria for each of the four programs.

    
    

11. The "unit of service" for the Housekeeper and Homemaker Services programs is "one hour of [relevant] service provided to one family." RFP, pp. 8 and 16, respectively. The "unit of service" for the ICCP, Family Builders Program, and Reunification/Permanency Program is "one 24-hour day of on-call and/or face-to-face counseling per target child, per family." RFP, pp. 24, 35, and 51, respectively.

    
    

12. For the ICCP, the maximum caseload per counselor is four families. RFP, p. 28. For the Family Builders and Family Reunification/Permanency programs, the maximum caseloads per team are six families and five families, respectively. RFP, pp. 41 and 57.

    
    

13. For the ICCP, Families Builders Program, and Reunification/Permanency Program, the RFP requires "each provider responding to this proposal to determine the minimum number of families it expects to provide [the relevant] services to." RFP, pp. 24, 35, and 51, respectively.

    
    

14. The RFP states the service provider will be paid on a unit-price basis for all services. The RFP also provides for some flex-funds, which are available for the Family Builders Service and Family Reunification/Permanency Service programs, but these funds are of no relevance to this case. (Petitioner's argument that Intervenor improperly included flex-funds in its line-item budget ignores a revision to pages 39 and 55 of the RFP by Respondent's letter dated April 25, 1996, in response to a written question from a prospective offeror.)

    
    

15. For the fiscal year ending June 30, 1997, and two contract renewal periods, the RFP states that Respondent will "reimburse. . ." the provider

    
    

    for the number of service units provided. The costs per unit will be negotiated based upon the calculated unit costs found in the

    line-item budget submitted with your proposal.

    RFP, pp. 67 and 78.

    
    

16. The RFP requires that each offeror submit a budget attachment with its proposal. The RFP states:

    
    

    Costs must be represented in line-item budget form (see Attachment V). A review of costs in the line item budget will be made to ensure that costs are allowable and meet the criteria of "Reasonable and Necessary". . . . A unit-cost presentation must be made providing for an estimated number of units of service, the unit price and total cost.

    
    

    RFP, p. 69.

    
    

17. Attachment V contains a number of blank forms. The form entitled "Family Preservation Total Project Summary" contains columns for all four Family Preservation Services programs (combining the Family Builders and Reunification/Permanency programs in one column), plus another column for money from Respondent and a final column for money from "other funding source." RFP, p. 149.

    
    

18. The "Family Preservation Total Project Summary" form contains rows describing classes of expenditures. The final three rows are "total program planned expenditures," "estimated number of clients served," and "unit cost." RFP, p. 149. It is obvious from the form that each offeror must divide the total program planned expenditures by the estimated number of clients served to calculate unit costs for each of the three programs.

    
    

19. Regarding the bidding process, the RFP notes various deadlines, including the deadline for receipt of written questions. The RFP advises prospective offerors that Respondent will award the contract to the "bidder who was ranked highest using the evaluation methodology in the proposals and who represents the best offer for the contractual services sought." RFP, p.71-1.

    
    

20. Respondent had not previously procured Family Preservation Services by competitive bidding. As discussed in the conclusions of law, Respondent is not required to obtain such services by competitive bidding. However, in deciding as a matter of policy to procure these services by competitive bidding on this occasion, Respondent agreed to follow the provisions of law governing public procurement, as reflected by the RFP provision giving adversely affected persons a point of entry to challenge the award by filing a notice of protest followed by a formal written protest and advising that a failure to do so is a waiver of "proceedings under Chapter 120." RFP, p. 71-2.

    
    

21. The section of the RFP entitled "Instructions to Bidders for Responding to Request for Proposals" states:

    
    

    It is the bidder's responsibility to respond to the RFP Specifications by proposing to provide the services in the manner, quality and quantity desired by [Respondent].

    Sufficient information should be included

    in the statement of work that reflects know- ledge of the Family Preservation Philosophy,

    as well as the ability to meet the specified service requirements for each program component.

    The bidder should follow the format found in Attachment VIII and meet all requirements as stipulated in the [RFP].

    
    

    RFP, p. 76.

    
    

22. The "Instructions" repeat the earlier provision that the costs per unit will be negotiated based on the calculated unit costs found in the line- item budget submitted with the proposal. The offeror must include a statement that it accepts the terms and conditions "of provision of services as stated in the [RFP] and Core Contract." Lastly, the "Instructions" require: "THE BIDDER MUST INCLUDE A UNIT COST FOR EACH YEAR OF CONTEMPLATED SERVICE AFTER THE ORIGINAL CONTRACTING YEAR." RFP, pp. 78-79.

    
    

23. The section of the RFP entitled "Proposal Evaluation Criteria & Request for Proposals Rating Sheet" advises: "The evaluation criteria that will be used to evaluate all proposals are identified on the Proposal Rating Sheet." The RFP adds that the Evaluation Committee will recommend to the District Administrator that he award the contract "based on the proposal receiving the highest number of points" in excess of one-half of the total number of available points. This evidently means that the highest point total wins, as long as it has received at least one-half of the available points. RFP, p. 80.

    
    

24. The "Proposal Rating Sheet" discloses that the number of available points, per evaluator, is 210. There were eight evaluators, so the total number of available points is 1680. RFP, p. 81.

    
    

25. There are four ratings: "exceptional," "adequate," "poor," and "omitted."

    
    

26. "Exceptional" means

    
    

    Above minimum requirements; demonstrates superior understanding of project; clarity in presentation and organizational and programmatic capability.

    
    

27. "Adequate" means

    
    

    Meets minimum requirements; demonstrates understanding of the project; organizational and programmatic capability is clearly presented.

    
    

28. "Poor" means

    
    

    Below minimum requirements; demonstrates insufficient understanding of the project; organizational and programmatic capability is not clearly presented.

29. "Omitted" means

    
    

    Not included in the proposal where required and adequate [sic] justification for omission.

    
    

    RFP, p. 81.

    
    

30. Part A of the "Proposal Rating Sheet" identifies six "fatal criteria," which each proposal must satisfy in order to be responsive. The parties do not dispute that Petitioner and Intervenor satisfied these criteria.

    
    

31. Part B of the "Proposal Rating Sheet" identifies 36 detailed criteria. Petitioner challenges the scoring of nine of these criteria: Sections B.1.a, B.1.b, B.2.a, B.2.e, B.3.a, B.3.i, B.4.c, B.4.d, and B.4.e of the "Proposal Rating Sheet."

    
    

32. Section B.1 states, in material part:

    
    

    Meeting the defined program goals of the Family Preservation Project (9 points) The evaluation committee reviews each proposal to determine how well it meets basic project objectives defined in the RFP.

    1. Does the proposal clearly demonstrate the bidder's understanding of the services? [3/2/1/-3]

    2. Does the proposal clearly demonstrate an understanding of the specific service needs of the county? [3/2/1/-3]

       
       

       [The numbers in brackets identify the number of available points for each question, in order from "excellent" through "omitted."]

       
       

33. Section B.2 states, in material part:

    
    

    Plan of operation. Refer to Clients to be Served, Service Task and Provider Responsi- bility sections within proposal. (33 points). The evaluation committee will review each proposal to determine:

    1. Is the time table for implementation such that service will begin within one month of the completed contract procedure? [3/2/1/-3]

       * * *

       e. Assessment of letters of recommen- dation specific to this project. [8/4/1/-8]

       
       

34. Section B.3 states, in material part:

    
    

    Quality of Staffing. (60 points) The evaluation committee reviews each proposal to determine the quality of personnel the bidder plans to use on the project.

    1. Does the proposal describe the qualifications of its current or proposed

       staff for this project in accordance with those put forth in RFP? (Do staff have necessary experience and training in fields related to project objectives?) [5/3/1/-5]

       * * *

       i. Planning for regular case staffings with staff, volunteers and/or paid facilitators. [3/2/1/-3]

       
       

35. Section B.4 states, in material part:

    
    

    Fiscal and budgetary effectiveness. Refer to Deliverables, Administrative Assessment and Line Item Budgets sections within the proposal (88 points). The evaluation committee reviews each proposal to determine the extent to which the budget is adequate to support the project and costs are reasonable in relation to the objectives of the project.

    * * *

    1. Does the budget demonstrate a relation- ship to the proposed delivery of service? [5/3/1/-5]

    2. Do the unit-prices appear to be necessary and reasonable? [10/5/0/-10]

    3. Assessment of previous administrative or programmatic evaluations or monitoring reports included in the proposal.

    [10/5/-10[sic]/-10]

    * * *

    
    

36. Respondent's Evaluation Committee awarded Intervenor 1101 points, Petitioner 1096 points, the David Lawrence Center 962 points, and the Family Continuity Program 876 points. The Evaluation Committee recommended to the District Administrator that he award the contract to Intervenor. On May 30, 1996, the District Administrator announced the tentative award of the Family Preservation Services contract to Intervenor.

    
    

37. Petitioner timely filed a notice of protest and formal written protest of the intended award to Intervenor.

    
    

38. There is no evidence whatsoever of fraud or dishonesty by Respondent or the evaluators in scoring the proposals of Petitioner, Intervenor, and the other offerors. The sole factual issue in this case is whether the scoring was arbitrary or illegal.

    
    

39. For Section B.1.a, Petitioner received 23 points and Intervenor received 22 points. For Section B.1.b, Petitioner received 21 points, and Intervenor received 18 points. For Section B.2.a, Petitioner received 21 points, and Intervenor received 20 points. For Section B.2.e, Petitioner received 8 points, and Intervenor received 29 points. For Section B.3.a, Petitioner and Intervenor each received 34 points. For Section B.3.i, Petitioner received 21 points, and Intervenor received 14 points. For Section B.4.c, Petitioner received 24 points (32 points prior to the discussion set forth below), and Intervenor received 30 points. For Section B.4.d, Petitioner

    and Intervenor each received 45 points. For Section B.4.e, Petitioner received

    -80 points, and Intervenor received 45 points.

    
    

40. Four of the items challenged by Petitioner do not present close factual issues.

    
    

41. The Evaluation Committee clearly scored Section B.2.a correctly. Petitioner received one more point than did Intervenor for this criterion. Petitioner complains that this is incorrect because it is the existing provider and could better ensure Respondent timely implementation than could Intervenor, a new provider.

    
    

42. However, Respondent's bid coordinator directed each evaluator not to give an advantage to the existing provider. The idea was to give each offeror an equal chance to win this contract. She also directed the evaluators to limit their review to the contents of the proposals and not rely on external information that they might have as to the providers. Also, Intervenor has experience with the services sought in the RFP.

    
    

43. Four or possibly five evaluators construed Section B.2.a to require that they assess only whether the proposal offered a timely initiation date, and not the likelihood of success in meeting this initiation date. This "either/or" approach is a reasonable interpretation given the language of Section B.2.a. Although the RFP provides more than two scores for Section B.2.a, which is somewhat inconsistent with the "either/or" interpretation, the narrow range of scores for this criterion effectively achieves the same result.

    
    

44. The Evaluation Committee clearly scored Section B.3.a correctly. Unlike Section B.2.a, Section B.3.a is a general criterion, requiring consideration of staff qualifications. There is much more room for a reasonable difference of opinion among evaluators trying to assess the qualifications of staff described in a proposal than there is in trying to determine if a proposal provides for timely implementation.

    
    

45. Each offeror received 34 points for Section B.3.a. There was variability in the weight assigned by individual evaluators to education versus experience or, within education, to various levels of education. But nothing in the record supports Petitioner's assertion even of an inaccuracy in the scoring of this criterion.

    
    

46. The Evaluation Committee clearly scored Section B.4.e accurately in assigning Petitioner -80 points. Each evaluator agreed on a score of -10 points. This is a specific criterion, like Section B.2.a, rather than a general criterion, like Section B.3.a, and Petitioner simply did not supply the required information.

    
    

47. Evidently due to a typographical error, Section B.4.e assigns the same value of -10 points for scores of "poor" and "omitted." However, this mistake is unimportant because the error was in assigning a value for a score of "poor." Section B.4.d had the same range of scores, but assigned 0 points to "poor."

    The -10 for "poor" under Section B.4.e should also have been 0.

    
    

48. In any event, Petitioner deserved an "omitted" for Section B.4.e. Petitioner submitted no program evaluations or monitoring reports. Petitioner claimed that an audited financial statement that it submitted responded to this criterion, but the evaluators presumably credited Petitioner for this submittal

    under Section B.4.a, which is the criterion to which an audited financial statement responds.

    
    

49. Petitioner claims that it could not submit the monitoring reports covering its current Family Preservation Services program because Respondent failed to supply Petitioner with a copy of the monitoring report, as required by law to do. The RFP does not require submission of monitoring reports of a Family Preservations Services program. Petitioner has copies of other monitoring reports for other types of programs sufficiently similar in nature to satisfy this criterion, but Petitioner did not submit these reports.

    
    

50. Petitioner has provided Family Preservation Services for Respondent in the past and has done a satisfactory job doing so. Respondent has prepared monitoring reports for these services, but has failed to provide copies to Petitioner, and Petitioner did not request copies in time to include them with its proposal.

    
    

51. The situation regarding monitoring reports is unfortunate because it was easily avoidable. Petitioner's attempt to gain points by blaming this omission on Respondent might have been more successful if Petitioner had submitted any monitoring report and then lost points for its failure to submit the monitoring report that Respondent failed to transmit to Petitioner. However, Petitioner failed to preserve this factual issue when it submitted nothing in response to this criterion, and Petitioner deserved the score of -80 points for this omission.

    
    

52. Likewise, Petitioner has failed to prove any inaccuracy in the score of 45 points assigned Intervenor. Intervenor attached an assessment from a Human Services Program Specialist employed by Respondent. The assessment is more of a letter of recommendation than a formal assessment or monitoring report, but, coming from an employee of Respondent, is probably sufficient to earn Intervenor the "adequate" score that it received on this criterion.

    
    

53. The Evaluation Committee also correctly scored Section B.1.a. This is a most general criterion, calling for a clear demonstration of the offeror's understanding of the services. Petitioner earned 23 points, and Intervenor earned 22 points.

    
    

54. The Evaluation Committee probably scored Section B.1.b correctly. This is also a general criterion, requiring a clear demonstration of the specific needs of Lee County. Here, Petitioner earned 21 points, and Intervenor earned

    18 points.

    
    

55. For each of these two general criteria, the range of possible scores between "excellent" and "poor" is only two points with a range of six points between "excellent" and "omitted." Although, in hindsight, a margin of one point multiplied by eight evaluators changes the outcome of this tentative award, Petitioner seeks here an exceedingly close scrutiny of scores covering this narrow range for these two criteria.

    
    

56. Intervenor's proposal reflects an understanding of the services called for in the RFP. There is no meaningful difference in the extent to which the proposals of Intervenor and Petitioner address this general criterion.

    
    

57. Intervenor's proposal could have done better reflecting its understanding of the service needs of Lee County. However, Intervenor's average score on Section B.1.b is a 2.3, which is close to an "adequate." Petitioner's

    average score on Section B.1.b is a 2.6, which is closer to an "excellent." There is a 0.4-point difference in average scores, which is about as much spread as Petitioner can reasonably expect on these facts when the range of assigned possible scores is so narrow.

    
    

58. The Evaluation Committee probably scored Section B.4.c correctly. This fairly general criterion asks whether the proposal's budget demonstrates a relationship to the proposed delivery of service. This criterion carries a range of four points between scores of "excellent" and "poor" and ten points between scores of "excellent" and "omitted."

    
    

59. The Evaluation Committee met only twice-on May 24 and 28, 1996. As instructed by the bid coordinator, the evaluators did not discuss any of the proposals except during these meetings, which were generally devoted to reporting the scores of each evaluator for each of the 20 proposals that he or she evaluated for the District-wide procurement of Family Preservation Services.

    
    

60. The evaluators had only a couple of weeks to evaluate all 20 proposals. The meetings allowed them to discover if items that they thought had been omitted might actually be present in a proposal. There was discussion only if scores displayed a large discrepancy or if an evaluator reported finding something than another evaluator had not found. However, the score-reporting procedure did not facilitate comparisons of responses to the same criterion by two or more offerors.

    
    

61. Except for the comment regarding Section 8.2.e, which is described below, the only discussion that resulted in changes in scores involved Section

    B.4.c. Petitioner's scores dropped as a result of this discussion.

    
    

62. Initially, the evaluators did not differentiate significantly in the scores that they assigned the two proposals with respect to Section B.4.c. Petitioner received 32 points, and Intervenor received 30 points. However, the discussion resulted in three evaluators reducing Petitioner's scores by a total of eight points, which is three points greater than the margin by which Petitioner lost the award. Even though the spread between the two sets of scores for Section B.4.c remains fairly small and the revised scores are fair, the reduction of the three scores is noteworthy because the evaluators relied on incorrect reasons in reducing these scores.

    
    

63. The criterion of Section B.4.c directs the evaluators to determine whether the proposal's budget demonstrates a relationship to the proposed delivery of service. This is a fairly general criterion. (Shortcomings in the treatment of unit costs in Intervenor's proposal are addressed in the findings concerning Section B.4.d.)

    
    

64. However, one evaluator questioned during the meeting whether Petitioner's proposal included the provider's match required for Lee County. In fact, Petitioner's proposal contains the match as a $28,650 line item in the proposed budget. However, the budget narrative in Petitioner's proposal does not mention the match. On the other hand, Intervenor's proposal mentions the match in the budget narrative, but not in the line-item budget.

    
    

65. The three evaluators who changed their scores relied on erroneous information in doing so. Two of the witness candidly testified that they made the change due to the "missing" match and did not realize that Petitioner's proposal included the match. The third witness was less responsive in her entire testimony, but she clearly labored under the same misconception.

66. Some of the evaluators placed great emphasis on the match. As one evaluator explained, the federal government required the match, and Respondent reasonably stresses items required by the federal government.

    
    

67. But Section B.4.c asks for a more general determination than simply whether a match is present. One evaluator testified that he did not think the match issue was especially relevant to this criterion.

    
    

68. On balance, the final score assigned Petitioner's proposal, relative to the score assigned Intervenor's proposal, is not unreasonable, even though three evaluators lowered Petitioner's scores based on a misunderstanding.

    
    

69. An inquiry into the minds of evaluators might expose serious misunderstandings underpinning numerous scores. For instance, one evaluator giving Petitioner five points and Intervenor three points for Section B.4.c admitted that she relied in part on information not contained in the proposals. But the important fact is that Petitioner, though proving that evaluators relied on erroneous information in reducing its score by a total of eight points, failed to prove that the final scores for this general criterion were incorrect.

    
    

70. The evaluators probably scored Section B.3.i correctly. This criterion requires an assessment of each proposal "for regular case staffings with staff, volunteers and/or paid facilitators." This is a fairly specific criterion with a narrow range of two points between scores of "excellent" and "poor."

    
    

71. Petitioner outscored Intervenor by 21 to 14 points on Section B.3.i. An evaluator who assigned Intervenor -3 points for omitting this criterion briefly stated his reasons to the other evaluators, but they were unpersuaded.

    
    

72. Petitioner's proposal was superior to Intervenor's proposal as to regular case staffings. One evaluator relied on outside information in giving Intervenor points for this item. However, the evaluator who admitted relying on outside information is the same one who relied on outside information in giving Petitioner more points than Intervenor for Section B.4.c.

    
    

73. Intervenor's proposal is silent as to the staffings required by Section B.3.i. During the brief discussion of this item, the evaluators felt this was a minor point and believed that Intervenor would necessarily conduct regular staffings.

    
    

74. Petitioner earned a one-category advantage for its superior proposal. This is about as much as Petitioner can reasonably expect for an item with this modest point value and limited point range.

    
    

75. In contrast to the scoring of the already-discussed sections, the scoring of Sections B.4.d and B.2.e was so materially flawed as to affect the fairness of the scoring process, rendering it both arbitrary and illegal.

    
    

76. The evaluators had little to say at the hearing about their scoring of Section B.4.d, which requires a determination whether the unit prices appear to be necessary and reasonable. There is a 20-point spread for this criterion, and each evaluator assigned identical scores for each of the two proposals.

    
    

77. The unit prices proposed by Petitioner and Intervenor were wildly divergent. Petitioner's proposal projected $639,429 in Family Builders and

    Reunification/Permanency expenditures, $135,175 in ICCP expenditures, and $8347 in Housekeeper and Homemaker Services expenditures. Estimating that Petitioner would serve 9742 clients, 2184 clients, and 618 clients, respectively, in the three programs, Petitioner's proposal calculated unit costs of $61.63, $61.89, and $13.50, respectively. These unit costs are the result of dividing total project expenditures by clients (though the unit cost of the Family Builders and Reunification/Permanency programs is actually $65.64 per client).

    
    

78. Intervenor projected $634,172.83 in Family Builders and Reunification/Permanency expenditures, $140,106.28 in ICCP expenditures, and

    $8670.89 in Housekeeper and Homemaker Services expenditures. Estimating that Intervenor would serve 216 clients, 224 clients, and 1176 clients, respectively, in the three programs, Intervenor's proposal calculated unit costs of $38.85,

    $35.87, and $7.37, respectively. Except for the Housekeeper and Homemaker Services, Intervenor's stated unit costs are not based on total expenditures divided by clients. Had Intervenor made the same calculation for the Family Builders and Reunification/Permanency programs and ICCP, the respective unit costs would have been a staggering $2935.99 and $625.47.

    
    

79. For comparison purposes, the David Lawrence Center projected in its proposal unit costs for these three programs of $64.82, $54.86, and $9.68, respectively.

    
    

80. Obviously, Intervenor failed to express the "estimated number of clients served" in the units of service specified in the RFP.

    
    

81. The RFP should have maintained the same nomenclature between the main body and the line-item budget form, but it is clear on page 69 of the RFP that each proposal must present the unit costs for the estimated number of units of service. And Intervenor's proposal fails to do so, precluding informed comparisons with the unit costs of other proposals.

    
    

82. The serious shortcomings of Intervenor's proposal as to units of service and unit costs reflects Intervenor's imperfect understanding of maximum caseloads for the Family Preservation Services programs. As noted above, the ICCP caseload limit is four families per counselor. The line-item budget narrative in Intervenor's proposal states that the limit is eight counselors. (Joint Exhibit 3, p. 112). In the main text of the proposal, Intervenor fails to state accurately the ICCP caseload maximum, noting only that the ICCP requires "small caseloads" and that a "team is available to the family," even though the ICCP maximum is expressed in terms of a counselor, not a team. (Id. at p. 13).

    
    

83. Intervenor's proposal is little better in its description of the caseload limits under the Family Builders and Reunification/Permanency programs. For the latter, neither the budget narrative nor the main body describes any maximum caseload. For the former, the budget narrative states that the maximum is six families per counselor, which is incorrect-it is six families per team, as reflected accurately in the main body of the proposal. (Joint Exhibit 3, pp.

    112 and 30, respectively.)

    
    

84. In contrast to Intervenor's confused and flawed treatment of unit costs, Petitioner did a competent job presenting its unit costs.

    
    

85. Section B.4.d is a fairly specific criterion. Its point value and point spread is high. Although Respondent would use unit costs merely as a negotiating reference point, the fact that Respondent assigned a high point

    value to this criterion evidences its importance. In programs for which total expenditures are capped, added cost-effectiveness means that more families will be served. The criterion of reasonable and necessary unit costs is thus a crucial requirement of this RFP.

    
    

86. There is no possible way that the evaluators could have scored the two proposals identically, given the substantial differences in the two sets of unit costs and Intervenor's evident failure to grasp caseload maximums. The absence of explanatory discussion at the meeting or the hearing leaves little doubt, on these facts, that the scoring of Section B.4.d was arbitrary and illegal.

    
    

87. There is a minimum scoring discrepancy on Section B.4.d of 40 points because, according Respondent the full extent of its discretion, the evaluators nevertheless had to assign Intervenor a score at least one category less than Petitioner's score (e.g., 40 points for Petitioner's "adequate" response to the requirement that its unit costs be necessary and reasonable and 0 points for Intervenor's "poor" response to this criterion).

    
    

88. The evaluators also did a poor job evaluating the letters of recommendation under Section B.2.e. Petitioner received 8 points with each evaluator rating its letters of recommendation "poor." Intervenor received 29 points with each evaluator but one rating its letters of recommendation "adequate." The lone exception rated Intervenor's letters of recommendation as "poor."

    
    

89. Intervenor attached five letters of recommendation. Three of the letters of recommendation are dated May 2, 1996. The other two are dated May 4 and May 6, 1996. They are all on the letterhead of the author, except for a letter from a member of the Marco Lutheran Church. In addition to this letter, the letters are from a Lee County Commissioner, a member of the Lutheran Ministries Advisory Board (written on the author's corporate stationary entitled "Batteries Plus"), the executive director of the Lee County Chapter of the American Red Cross, and the president of a public relations and fund-raising company.

    
    

90. Each of the five letters bears a striking resemblance to the other four. The resemblances are such as to rule out coincidence and demonstrate instead that one person, probably employed by Intervenor, prepared a form letter for either four (if the prototype were prepared by an author of one of the letters) or five (if the prototype were prepared by Intervenor) of the letter- writers to copy.

91. Each of Intervenor's letters of recommendation states: Please accept this letter as support of

    Lutheran Ministries of Florida, Inc. in their proposal response to the Family Preservation Project.

    We understand the Family Preservation Project is funded by the Department of Health and Rehabilitative Services and provides intense prevention services to families at risk.

    Lutheran Ministries of Florida, Inc., as the sole provider of the CINS/FINS/Oasis Youth and Family Center program in District 8B, would be able to expand its services to include Sarasota and DeSoto counties. A

    broad continuum of prevention services would be offered to families and children, 0-18.

    We fully support the approach of Lutheran Ministries of Florida, Inc., as they continue to empower families, youth and children in our region.

    
    

92. This is the same form letter that Intervenor used in its proposals for other counties in District 8. Obviously, it does not even nominally apply to the Lee County project, given the assurance of the author that Intervenor could "expand its services to include Sarasota and DeSoto counties." Of course, the ability of Intervenor to expand service into Sarasota and DeSoto counties has no direct bearing on its ability to serve Lee County. The failure of these letters even to mention Lee County means that they are not, in the underlined language of Section B.2.e, "specific to this project."

    
    

93. Petitioner's letters of recommendation fall into two categories. Five of the letters are on the letterhead of the author. These letters all bear different dates. One letter is from the executive director of the Southwest Florida Addiction Services in Ft. Myers and states that the entity is "excited to be a collaborating agency providing clinical services as part of the Ruth Cooper Center's Family Preservation proposal." The letter adds that Petitioner's "family-based services in this area have been a valued community service."

    
    

94. A letter from the director of Redi-Care Home Health Services, Inc. states that they are looking forward to providing services with Petitioner in Lee and Charlotte counties.

    
    

95. A letter from the special projects director of the Circuit Court Clerk in Lee County states that the author has reviewed juvenile dependency cases and that Petitioner "has consistently demonstrated a high standard of competency in treating multiproblem families with very effective time limits."

    
    

96. A letter from the executive director of Habitat for Humanity of Lee County, Inc. states that they have collaborated with Petitioner for the delivery of services and will continue to do so. The letter states that Habitat for Humanity of Lee County, Inc. supports Petitioner in continuing to offer Family Preservation Services.

    
    

97. A letter from Stephanie Baker-Thomas, a licensed psychologist in Ft. Myers, expresses the author's high regard for Petitioner's psychotherapeutic treatment program in its Family Preservation Services program based on personal experience working with Petitioner. The author strongly supports Petitioner's bid to continue providing these services "to our community."

    
    

98. The second category of Petitioner's letters of recommendation are 19 form letters on Petitioner's letterhead. Most of the forms state: "We have collaborated this year with the Family Preservation unit in the delivery of services to mutual clients. We will continue to collaborate with these services in the further. We support the Ruth Cooper Center in continuing to offer Family Preservation Services." The forms contain blanks for the date and signature line. There is also a letter from Petitioner's recently retired senior manager for the Family Preservations Services program in support of his successor as program manager.

99. The evaluators reasonably disregarded the form letters written on Petitioner's stationary. These letters were written for the most part by persons with a financial interest in Petitioner's ongoing provision of Family Preservation Services. The forms were short, uninformative, and uninspired.

    
    

100. The writers of three of the five nonform letters, though detailed and specific to the Lee County project, suffer from a financial interest in Petitioner's continued involvement in the program, and the same objection may apply to the letter from Habitat for Humanity. The only clearly disinterested letter is from the Clerk's Office.

     
     

101. Arrayed against the lone effective letter in support of Petitioner are five form letters endorsing Intervenor's ability to provide services to an irrelevant area. The letter from Intervenor's board member is also of doubtful value due to financial interest. Either financial interest or a lack of knowledge into Intervenor's programs would also discredit-based on the same standards applied to Petitioner-the letters from the public relations/fundraising company and the Lutheran church member. The letter from the County Commissioner reveals no special insight into Intervenor's programs and thus would be entitled to little, if any weight, even if not flawed by its focus on counties other than Lee. This leaves a disinterested letter from the American Red Cross, whose author states that he is a member of the Oasis Youth and Family Services Advisory Board, but this letter again is directed toward the needs of counties other than Lee.

     
     

102. Thus, the letters of recommendation submitted by Petitioner and Intervenor are reduced to one effective letter in favor of Petitioner.

     
     

103. The Evaluation Committee did not discuss the letters of recommendation in any formal manner, as it discussed the matching issue in the budgets. Instead, when one evaluator noted the form letters used by Petitioner- perhaps when announcing his or her score--at least four other evaluators reduced their scores, even before preliminarily stating them to the bid coordinator. Unfortunately, the evaluators ran through an entire proposal before considering another proposal, so they did not compare specific features of competing proposals side-by-side.

     
     

104. It is arbitrary and illegal for the Evaluation Committee to have awarded more points to Intervenor for effectively no letters than to Petitioner for effectively a single letter. If the evaluation committee had employed even approximately equivalent standards to the letters of recommendation of each party, the resulting scores would have been the same for each party. Instead, the evaluators gave Intervenor a total of 29 points and Petitioner a total of eight points, for a minimum scoring discrepancy of 21 points against Petitioner on Section B.2.e.

     
     

     CONCLUSIONS OF LAW

     
     

105. The Division of Administrative Hearings has jurisdiction over the subject matter. Section 120.57(1), Florida Statutes. (All references to Sections are to Florida Statutes.)

     
     

106. Section 287.057(3)(f)9 and 10 appear to withdraw the subject procurement from the competitive bidding provisions of Section 120.53(5). However, Respondent voluntarily undertook in the RFP to submit bid protests to the provisions of Section 120.53(5), and various offerors, including Petitioner and Intervenor, accepted this offer while it was still outstanding.

107. This case is governed by Department of Transportation v. Groves- Watkins Constructors, 530 So. 2d 912 (Fla. 1988). In this case, the Court stated:

     
     

     [A]lthough the APA provides the procedural mechanism for challenging an agency's decision to award or reject all bids, the scope of the inquiry is limited to whether the purpose of competitive bidding has been subverted. In short, the hearing officer's sole responsibility is to ascertain whether the agency acted fraudulently, arbitrarily, illegally, or dishonestly.

     
     

     Id. at p. 914.

     
     

108. In Groves-Watkins, an honest mistake in the prebid estimate, standing alone, was not sufficient to require the agency to award a contract to the winning bidder, rather than reject all bids due to the agency's miscalculation of expected project costs.

     
     

109. The mistakes in this case involve the scoring of the proposals of Petitioner and Intervenor and the ensuing award of a contract to Intervenor. In contrast to minor errors in scoring other sections of the two proposals, the errors in scoring Sections B.4.d and B.2.e were egregious and changed the outcome of the tentative award.

     
     

110. If allowed to stand, these errors would render the subject procurement manifestly unfair, subvert the purpose of competitive bidding, and undermine public confidence in public procurements. The scores assigned the two proposals for Sections B.4.d and B.2.e were therefore arbitrary and illegal. Public procurement is no better served by condoning such clear abuses of agency discretion as in the scoring of the unit-cost criterion of Section B.4.d and letter-of-recommendation criterion of Section B.2.e than it is by subjecting agency procurement decisions to such close scrutiny as to prevent public agencies from conducting business.

     
     

111. Respondent should proceed as provided by law. See, e.g., Procacci v. Department of Health and Rehabilitative Services, 603 So. 2d 1299 (Fla. 1st DCA 1992); Moore v. Department of Health and Rehabilitative Services, 596 So. 2d 759 (Fla. 1st DCA 1992); RFP, page 71-2; and Section 287.057(3)(f)9 and 10.

RECOMMENDATION

It is

RECOMMENDED that the Department of Health and Rehabilitative Services enter a final order withdrawing the award of the Family Preservation Services contract to Intervenor.

ENTERED on September 27, 1996, in Tallahassee, Florida.

ROBERT E. MEALE, 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 September 27, 1996.

APPENDIX

Rulings on Petitioner's Proposed Findings

1-10 (third sentence): adopted or adopted in substance.

10 (remainder): rejected as subordinate. 11-17: adopted or adopted in substance.

18: rejected as unsupported by the appropriate weight of the evidence except as to Sections B.4.d and B.2.e. There was no evidence of bad faith, although the scoring of these two sections was irrational.

19: adopted in substance, although subordinate except to the extent noted in the recommended order.

20: adopted in substance as to Sections B.4.d and B.2.e. 21-25: rejected as not findings of fact.

26: rejected as unsupported by the appropriate weight of the evidence.

27-28: rejected as subordinate and irrelevant to this Section, though not Section B.4.d.

29-32, 36-38, and 45-48: rejected as subordinate and unsupported by the appropriate weight of the evidence except as to the statement of the Sections.

33-35: adopted in substance. The recommended order resolves the apparent contradiction in testimony as to whether the evaluators discussed Section B.2.e by finding that they did not formally discuss this item, as they did the match, but several evaluators changed their scores after hearing a brief comment from one of the first evaluators to report his or her score on this item for Petitioner's proposal.

39-40: adopted in substance as to the erroneous reasoning but rejected as unsupported by the appropriate weight of the evidence as to the ultimate proposed findings of bad faith and implied incorrectness of the final score assigned Petitioner for this Section.

41: rejected as subordinate and unsupported by the appropriate weight of the evidence.

42 (first sentence): adopted.

42 (remainder)-44: rejected as recitation of testimony and subordinate. The findings in the recommended order as to Section B.4.d obviously rely on different evidence.

Rulings on Respondent's Proposed Findings

1-15: adopted or adopted in substance.

16: rejected as unsupported by the appropriate weight of the evidence except as to the second, third, and fourth sentences, which are adopted or adopted in substance. The scoring of Section B.2.e was honest, but not fair.

17-20: adopted or adopted in substance.

21: adopted in substance except as to the consideration of outside factors, illegality, unfair advantage (at least as it follows arbitrary and illegal scoring in the favor of one offeror), arbitrariness, and final outcome.

22-23: adopted.

24: adopted except as to illegality and arbitrariness in the scoring of Sections B.4.d and B.2.e, which tainted the fairness of the process and the outcome of the tentative award.

25 and 26 (first sentence): rejected as recitation of testimony. 26: adopted.

COPIES FURNISHED:

Carl Joseph Coleman, Esquire Fowler White

Post Office Box 1567

Ft. Myers, Florida 33902

Susan Mastin Scott Senior Health Attorney Department of Health and

Rehabilitative Services Post Office Box 60085

Ft. Myers, Florida 33906

Paul J. Ullom, Esquire Carlton, Fields, et al. Post Office Box 3239 Tampa, Florida 33601-3239

Richard Doran, General Counsel Department of Health and

Rehabilitative Services Building 2, Room 204B 1323 Winewood Boulevard

Tallahassee, Florida 32399-0700

Gregory D. Venz, Agency Clerk Department of Health and

Rehabilitative Services Building 2, Room 204B 1323 Winewood Boulevard

Tallahassee, Florida 32399-0700

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 within which to submit written exceptions. Some agencies allow a longer period within which to submit written exceptions. You should contact the agency that will issue the final order 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.

================================================================= AGENCY FINAL ORDER

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

STATE OF FLORIDA DEPARTMENT OF CHILDREN AND FAMILIES

LEE MENTAL HEALTH CENTER, INC., d/b/a RUTH COOPER CENTER FOR BEHAVIORAL HEALTHCARE

Petitioner,

vs. CASE NO. 96-2999BID

RENDITION NO. DCF-97-D08-FOF-BID

DEPARTMENT OF CHILDREN AND FAMILIES

Respondent,

and

LUTHERAN MINISTRIES OF FLORIDA, INC.

Intervenor.

/

FINAL ORDER

THIS CAUSE is before me for entry of a Final Order.

Petitioner, Lee Mental Health Center, Inc. challenges this department's 1/ determination to accept the proposal of the intervenor Lutheran Ministries of Florida, Inc. submitted in response to Request for Proposals (RFP) No. 96- 030196. Petitioner, an unsuccessful proposer, timely protested the evaluation committee's interpretation of the RFP, and the interpretation and scoring of the proposals.

The hearing officer (now administrative law judge) entered a Recommended Order finding material errors in the scoring of two criteria, and concluding that the errors rendered the department's selection of intervenor's submission "arbitrary and illegal." The department filed detailed exceptions to certain o

the ALJ's findings of fact and conclusions of law. Petitioner filed a response to the exceptions which, over the department's objection, has been considered 2/ . After review of the extensive record in this cause, including the transcript of the hearing, I reject certain of the administrative law judge's findings of fact as unsupported by competent substantial evidence. I reject as

well the conclusion that the scoring of the proposals was arbitrary and illegal. Accordingly, I affirm the department's selection of intervenor's submission.

FINDINGS OF FACT

The department's "exception one," which encompasses related objections to findings of fact in paragraphs 62, 64, 65, 68, and 69 of the Recommended Order, is adopted in part. These paragraphs revolve around the allegation that petitioner's proposal was improperly scored with respect to RFP section B.4.c. 3/ , "whether the budget demonstrate[s] a relationship to the proposed delivery of service."

The record reflects that petitioner's proposal lost a total of eight points spread among three evaluators who were of the opinion that the proposal did not identify the provider's contribution of federal matching funds. Although the ALJ found as fact that the match was included as a line-item in the budget, it is undisputed that the funds were identified only as "other funding source" in the line-item budget and did not otherwise appear in the proposal. The three evaluators who downgraded petitioner provided undisputed testimony that they could not identify the federal matching funds as stated in the proposal.

I approve and adopt the ALJ's finding that the matching funds were included in the proposal and that the three evaluators who lowered petitioner's score for lack of the funds "relied on erroneous information in doing so." I also adopt the finding in paragraph 69 that petitioner "failed to prove that the final scores for this general criterion (B.4.c) were incorrect." I reject the ALJ's conclusion in paragraph 69, however, that the failure to prove an incorrect score is the "important fact" in upholding the department's action with respect to this section of the RFP. The salient consideration here is that the evaluators' determinations were based upon a standard reasonably drawn from the RFP and applied uniformly to all proposals. The record clearly demonstrates that petitioner's proposal was downgraded because three 4/ evaluators reasonably believed that the proposal omitted an important element 5/ . Any scoring errors that may have occurred on this RFP section were attributable to petitioner's lack of specificity, not to arbitrary action by the evaluators.

See Department of Trans. v. Groves-Watkins Constructors, 530 So.2d 912 (Fla. 1988), and progeny, explained infra.

The department's "exception two" challenges as unsupported by competent substantial evidence the ALJ's finding in paragraph 3 that "[i]ntervenor's proposal is silent as to the staffings required by Section B.3.i." 6/ The transcript of the hearing includes testimony from some of the evaluators as to information in intervenor's proposal that they considered responsive to the issue of staffings. I adopt the department's exception two, although given that the ALJ concluded that section B.3.i. was properly scored, the impact on the Recommended Order is minimal.

I also approve and adopt the department's "exception three" to the implication in paragraph 52 of the Recommended Order that intervenor's proposal did not include a formal program assessment or monitoring report from similar projects. The record reflects that intervenor did attach such a document to its proposal. As with the prior exception, this exception is almost wholly irrelevant since the ALJ found no impropriety with respect to the evaluation of the corresponding RFP criterion.

The department's "exception four" and "exception five" are approved and adopted because it is apparent in paragraph of the Recommended Order that the ALJ erroneously equated "clients" with "units of service" in evaluating petitioner's proposal. There is no competent substantial evidence in the record to support the finding that petitioner would serve the number of "clients" found in paragraph .

The department's "exception six," encompassing objections to the findings of fact in paragraphs 8, 80 through 84, 86, and 87, relating to section B.4.d. 7/ of the RFP, is approved and adopted as set forth on pages six and seven of the exceptions. There is no evidence, other than the opinion of petitioner's agent, to support the ALJ's finding that intervenor did not correctly represent unit cost in its proposal. Nothing in the record supports the conclusion in paragraph 86 that the scoring of section B.4.d. was "arbitrary and illegal." Indeed, review of the RFP, the intervenor's proposal, and the testimony on this issue demonstrates that the intervenor's proposal presents unit cost as the department intended. 8/

The ALJ's findings with respect to the scoring of section B.4.d. are also rejected on the basis that the Groves-Watkins scope of review has been exceeded. The thrust of petitioner's challenge was that intervenor's proposal relied upon a unit cost formula that was less representative of actual services to be provided to actual clients than was petitioner's, with the result that intervenor's unit costs were artificially low. Petitioner does not contend, nor does the ALJ conclude that intervenor's proposal was non-responsive. The ALJ concludes that the department acted arbitrarily and illegally by assigning an identical score to both proposals for this section because, in his opinion, petitioner's proposal was superior. In view of the differing methodologies employed by petitioner and intervenor in projecting service levels and unit costs, the department reasonably could conclude that the proposals were essentially equivalent on this criterion. See Department of Trans. v. Groves- Watkins Constructors, 530 So.2d 912 (Fla. 1988), and progeny, explained infra.

See also s 120.5(3)(f), Fla. Stat. (1996). 9/

I approve and adopt the department's "exception seven" relating to paragraphs 88, 92, 101, 102, and 104. It is eminently clear that ALJ was unimpressed with the letters of recommendation submitted by both petitioner and intervenor under section B.2.e. of the RFP. The ALJ found that petitioner submitted just one letter that was "effective," and that intervenor submitted no letters that were "effective." The scoring of the letters of recommendation required the evaluators to weigh any number of subjective factors on which reasonable persons could disagree. The ALJ's conclusion, which is rejected, that the department's scoring was arbitrary depended entirely upon his own assessment of some of these factors. The department's evaluation of the letters was well within the realm of reasonableness; therefore, the scores assigned to the proposals for this criterion are not reviewable. See Groves-Watkins and progeny, infra. See also s 120.5(3)(f), Fla. Stat. (1996)

CONCLUSIONS OF LAW

The administrative law judge's conclusions of law in paragraphs 109 and 110 of the Recommended Order that the department "egregiously" erred in scoring sections B.4.d. and B.2.e. of the proposals such that the scoring was arbitrary and illegal are rejected. These conclusions, and the ALJ's findings of fact, to the extent that they rescore sections of the proposals, inappropriately expand the review provided by Department of Trans. v. Groves-Watkins Constructors, 530 So.2d 912 (Fla. 1988), to label "arbitrary and illegal" a determination that is not in accord with the ALJ's assessment of the proposals. The department has very broad discretion in evaluating proposals received through the competitive bidding process. See Groves-Watkins Constructors, 530 So.2d 912 (Fla. 1988); Fairbanks, Inc. v. Dept. of Trans., 635 So.2d 58 (Fla. 1st DCA 1994). A bid protest proceeding pursuant section 120.5, Florida Statutes (1995), is limited in scope "to whether the purpose of competitive bidding has been subverted." Id. The sole responsibility of the hearing officer "is to ascertain whether the [department] acted fraudulently, arbitrarily, illegally, or dishonestly." Id. A decision which, though erroneous 10/ , is made in good faith according to a legitimate interpretation of the RFP and the proposals submitted in response thereto, is not, as a matter of law, fraudulent, arbitrary, illegal, or dishonest. See e.g., Fairbanks, 635 So.2d 58 (Fla. 1st DCA 1994)(allegation that department considered only bids which included a product exclusive to a particular bidder, despite the availability to other bidders of an equivalent product, implied that department's decision was "without any rational justification and was intended by the department to preclude competition," and sufficiently alleged a violation of Groves-Watkins so as to entitle appellant to a hearing); Brasfield & Gorrie General Contractor, Inc. v. Ajax Constr. Co., 627 So.2d 1200 (Fla. 1st DCA 1993)(City's honest exercise of the wide discretion afforded public entities in the solicitation and acceptance of bids would not be overturned even if erroneous and even if reasonable persons may disagree); Youth Crime Watch of America v. Dept. of Health and Rehab. Serv., 619 So.2d 405 (Fla. 3d DCA 1993)(Arbitrary decision is one not governed by a fixed rule or standard); Asphalt Pavers, Inc. v. Dept. of Trans., 602 So.2d 558 (Fla. 1st DCA 1992) (Department's rejection of bid as non-responsive was arbitrary where predicated upon the absence of a required, non- material document which was misplaced by department); Moore v. Dept. of Health and Rehab. Serv., 596 So.2d

59 (Fla. 1st DCA 1992) (Department's failure to individually evaluate bids as required by department's policy manual rendered evaluation process arbitrary; however, hearing officer exceeded authority by conducting his own evaluation of the bids).

Scientific Games, Inc. v. Dittler Bros., Inc., 586 So.2d 1128 (Fla. 1st DCA 1991), is very similar to the current proceeding in its material facts. There, the court was asked to quash a hearing officer's discovery order directing disclosure of information determined to constitute trade secrets. As in the case at bar, Dittler Bros., an unsuccessful RFP bidder, alleged that the Department of the Lottery's proposal evaluators failed to comply with and misinterpreted the RFP, misinterpreted the proposals, and made factual errors in their evaluations. To prove these allegations, Dittler Bros. sought discovery of "all of the proposals and the agency's entire file on the matter, including an audio tape of the evaluation committee's consideration of the proposals." Id. The agency declined to produce the technical portions of the proposals, certain portions of the evaluation committee audio tape, a forensics report, and the notes of the forensics examiner. Id. The court, in assessing the discovery issue, stated

While these allegations are sweeping, the scope of discovery to be permitted must be viewed in light of the proper standard of review to employed in the administrative proceeding. The Hearing Officer need not, in effect, second guess the members of the evaluation committee to determine whether he and/or other reasonable and well-informed persons might have reached a contrary result. Rather, a "public body has wide discretion" in the bidding process and "its decision, when based on an honest exercise" of the discretion, should not be overturned "even if it may appear erroneous and even if reasonable persons may disagree.

Id. (citations omitted). The court then quashed the discovery order to the extent that it exceeded what the agency was willing to produce, holding that "the parties may litigate, and the Hearing Officer may properly resolve the bid protest with the issues framed by the Groves-Watkins standard without resort to the full disclosure ordered." Id.; see also Intercontinental Prop. v. Dept. of Health and Rehab. Serv., 606 So.2d 380 (Fla. 3d DCA 1992) (Although a bid protest proceeding before a hearing officer is de novo, that is simply an indication that there is to be a full and fair evidentiary hearing. "It does not mean . . that the hearing officer sits as a substitute for the department and makes a determination whether to award the bid de novo"); Moore v. Dept. of Health and Rehab. Serv., 596 So.2d ?59 (Fla. 1st DCA 1992) (same).

In the instant case, the administrative law judge employed the same level of review consistently rejected by the appellate courts. The ALJ determined that the selection of intervenor's proposal was arbitrary and illegal, not by examining whether the department evaluated the proposals according to appropriate criteria and standards contained within the RFP, but rather by inquiring into whether the challenged scores for separate and distinct criteria by each individual evaluator were correct. Utilizing this impermissible heightened standard of review, the ALJ concluded that the scoring of two criteria was "egregiously" incorrect, and that the entire process was thereby rendered arbitrary and illegal. As Groves-Watkins and progeny teach, the ALJ's role is not to reevaluate proposals. The ALJ, like a reviewing court, need only inquire if the department has reasonably interpreted the RFP and fairly applied the same standards to each bidder.

I conclude that the evaluation of the proposals submitted to the RFP in this case was fair, reasonable, and well within the department's broad discretion in the competitive bidding arena.

Accordingly, it is ORDERED that petitioner's formal protest of the award of the contract advertised in RFP NO. 96-030196 be DENIED.

DONE and ORDERED this 31st day of 1997, in Tallahassee, Leon County, Florida.

EDWARD A. FEAVER, Secretary Department of Children

and Families

By: SAMARA H. NAVARRO, D.B.A.

Deputy Secretary

ENDNOTES

1/ The Department of Health and Rehabilitative Services was renamed the Department of children and Families effective January 1, 1997. ch. 96-403,Laws of Fla.

2/ Unlike exceptions, there is no requirement in chapter 120, Florida Statutes, that the department specifically rule on responses to exceptions.

3/ The "RFP sections" set forth in this Final order reference, unless otherwise noted, the "Proposal Evaluation criteria" beginning on page 82 of the RFP.

4/ More than one evaluator did not reduce petitioner's score for this reason.

5/ The ALJ agreed that the federal match was reasonably emphasized by some evaluators.

6/ Section B.3.i. criterion is whether the proposal provides "planning for regular case staffings with staff, volunteers and/or paid facilitators."

7/ The section B.4.d. criterion asks the evaluators to determine if "the unit- prices appear to be necessary and reasonable."

8/ It does appear that intervenor included an incorrect figure for the "caseload per counselor" variable in calculating the unit cost for the ICCP segment of section B.4.d, correction of which would have brought intervenor's unit cost on this segment much closer to that of petitioner. Petitioner and intervenor, however, received identical scores on this segment from the evaluator's, which indicates that the evaluators considered the actual unit costs of each proposal comparable.

9/ This proceeding is governed by section 120.57, Florida Statutes (1995). Even section 120.57(3)(f), Florida Statutes (Supp. 1996), however, does not authorize the administrative law judge to rescore the proposals where the department's scoring is based upon a reasonable interpretation of the RFP and the proposals.

10/ The department, as previously noted, does not concede that the evaluations of the disputed criteria were erroneous.

A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO A JUDICIAL REVIEW WHICH SHALL BE INSTITUTED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF HRS, AND A SECOND COPY ALONG WITH FILING FEE AS PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE AGENCY MAINTAINS ITS HEADQUARTERS OR WHERE A PARTY RESIDES. REVIEW PROCEEDINGS SHALL BE CONDUCTED IN ACCORDANCE WITH THE FLORIDA APPELLATE RULES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED.

COPIES FURNISHED:

Robert E. Meale, Hearing Officer Division of Administrative Hearings 1230 Apalachee Parkway

Tallahassee Florida 32399-1550

Eugenie Rehak, Esquire District 8 Legal Office Department of Children and Families

Post Office Box 60085

Fort Myers, Florida 33906

Carl Joseph Coleman, Esquire Fowler White

Post Office Box 1567

Fort Myers, Florida 33902

Paul J. Ullom, Esquire Carlton, Fields,

Post Office Box 3239 Tampa, Florida 33601-3239

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true copy of the foregoing FINAL ORDER has been sent by U.S. Mail or hand delivery to each of the above-named persons this 31st, day of January, 1997.

Gregory D. Venz Agency Clerk

Department of Children and Families

1323 Winewood Blvd.

Tallahassee, Florida 32399-0700

(904) 488-2381

Docket for Case No: 96-002999BID

Orders for Case No: 96-002999BID