STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MAGIC FOODS DISTRIBUTORS, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 96-3040BID

)

DEPARTMENT OF CORRECTIONS, )

)

Respondent, )

and )

)

WISE DISTRIBUTORS OF )

JACKSONVILLE, INC., )

)

Intervenor. )

)

RECOMMENDED ORDER

Pursuant to notice, an administrative hearing was held before William A. Buzzett, Hearing Officer with the Division of Administrative Hearings, on July 24, 1996, in Tallahassee, Florida.

APPEARANCES

For Petitioner: Darryl W. Johnston, Esquire

JOHNSTON AND SASSER, P.A.

Post Office Box 997

Brooksville, Florida 34605-0997

For Respondent: Steven S. Ferst, Esquire

Department of Corrections 2601 Blair Stone Road

Tallahassee, Florida 32399-2500

For Intervenor: Kenneth A. Hoffman, Esquire

William B. Willingham, Esquire Post Office Box 551

Tallahassee, Florida 32303-0551

Allen S. Wach, Esquire CRABTREE, BARTLETT, ET AL.

8375 Dix Ellis Trail, Suite 401

Jacksonville, Florida 32256 STATEMENT OF THE ISSUE

Whether the DEPARTMENT's rejection of MAGIC's bid for ITB No. 9596-RDC-011 as unresponsive was arbitrary, illegal, fraudulent, or dishonest and that therefore the DEPARTMENT of Corrections erred in its intent to award the contract to WISE.

PRELIMINARY STATEMENT

On May 3, 1996, the Department of Corrections (DEPARTMENT) issued an Invitation to Bid (ITB), Bid Number 9596-RDC-011 titled "Bagged Snacks and Snack Crackers." The DEPARTMENT received no protest challenging the terms and conditions of the ITB. Four proposals were submitted: (1) Wise Distributors of Jacksonville, Inc. (WISE); (2) Joe Walker (WALKER); (3) Magic Foods Distributors, Inc. (MAGIC); and (4) Stewart Distribution (STEWART). Late in the afternoon of May 29, 1996, the bids were opened and tabulated and it was determined that MAGIC provided the lowest bid. Subsequently, the DEPARTMENT disqualified MAGIC and issued an intent to award the bid to WISE. On June 6, 1996, MAGIC filed a Notice of Protest of the DEPARTMENT's Intent to Award Bid to WISE. On June 14, 1996, MAGIC filed a petition for formal hearing. This cause was later assigned to the undersigned Administrative Law Judge for adjudication.

In response to MAGIC's protest, WISE filed a Petition to Intervene. On July 15, 1996, the undersigned Administrative Law Judge granted the Petition to Intervene subject to the Intervenor demonstrating at hearing that it was entitled to participate as required by Rule 60Q-2.010, Florida Administrative Code. This matter proceeded to hearing on July 24, 1996, by video teleconferencing. 1/

Prior to the commencement of the hearing, WISE's Petition to Intervene was granted without objection. The undersigned also considered a motion filed by WISE which was styled as a "Motion in Opposition to, or in the Alternative, Answer to Magic Foods Distributors, Inc. Petition for Formal Hearing." After receiving argument of counsel, the undersigned Administrative Law Judge determined that because MAGIC failed to timely challenge the bid specifications, no testimony or argument challenging the bid specifications would be allowed at the hearing. 2/ At the conclusion of the motion hearing and prior to the commencement of the formal hearing, 13 joint-exhibits were introduced. 3/

At the hearing, MAGIC called Carla Harris, DOC Purchasing Agent; Jesse Mosley, DOC Purchasing Agent; and Charles Howland, General Manager of Magic Foods Distributors, Inc. The DEPARTMENT called Jesse Mosley and Carla Harris. WISE called Mr. James Silverberg, President of Wise Distributors, Inc.

The parties elected to transcribe the proceedings. At the hearing, the parties requested the right to file proposed findings of fact and conclusions of law in the form of Proposed Recommended Orders. The undersigned Administrative Law Judge agreed to render a Recommended Order within twenty days after receiving the proposed recommended orders. The proposed recommended orders were read and addressed in the appendix to this Recommended Order.

FINDINGS OF FACT

1. On May 3, 1996, the DEPARTMENT issued an Invitation to Bid, Bid Number 9596-RDC-011, titled "Bagged Snacks and Snack Crackers." The snacks were to be resold in the inmate canteens located throughout the DEPARTMENT's Region 2 facilities. The effective date of the awarded contract was from July 1, 1996 through June 30, 1997.

   
   

2. Inmate canteens are small grocery stores located in prison facilities that are operated for the convenience of the general prison population.

3. The Invitation to Bid (ITB) contained eighteen different bagged snacks and snack crackers including, BBQ corn chips, pork rinds, potato chips, pretzels, tortilla chips, beef jerky products, peanuts, popcorn, and crackers. While the ITB was not brand name specific, it did contain specific size and flavor requirements. In addition, the ITB required price quotations and samples for each of the eighteen products.

   
   

4. Except for Item 7, the ITB stated a weight that each product bid must meet or exceed. The product bid may weigh more than the amount stated in the ITB, but a product that weighs less is deemed non-responsive.

   
   

5. Bid packages were sent to 28 vendors, and the DEPARTMENT received four bids. Bids were submitted by WISE, JOE WALKER, MAGIC, AND STEWART DISTRIBUTION. The remaining 24 vendors did not respond to the ITB.

   
   

6. No protest challenging the terms and conditions of the ITB were filed.

   
   

7. On May 29, 1996, the bids were opened, and MAGIC submitted the lowest bid at $673,564.97. WISE submitted the second lowest bid at $757,608.98. WALKER submitted a bid of $1,146,196.81 and STEWART submitted a bid of

   $1,417,208.42.

   
   

8. Subsequently, on June 3, 1996, the DEPARTMENT disqualified MAGIC as unresponsive because it did not bid items as specified and because it did not provide samples for all the items that were bid.

   
   

9. As a result of MAGIC's non-responsive bid, the DEPARTMENT issued an intent to award the bid to WISE.

   
   

10. On June 14, 1996, MAGIC timely filed a protest to the award of the contract, asserting (1) that it submitted the lowest bid, (2) that it complied with the material requirements of the bid, (3) that any deviation was minor, and

    (4) that the award of the bid to WISE was arbitrary, capricious or illegal.

    
    

11. The DEPARTMENT and WISE raised a series of arguments countering the allegations raised by MAGIC. Specifically, the DEPARTMENT and WISE asserted that MAGIC violated the terms of the ITB by not providing and marking samples, by failing to bid on certain products contained in the ITB, and by failing to meet the weight and size specifications of the ITB. In short, the DEPARTMENT and WISE asserted that MAGIC's bid was nonresponsive.

    
    

12. The first issue raised by the DEPARTMENT and WISE related to samples of snacks provided by MAGIC. The DEPARTMENT and WISE asserted that the MAGIC proposal was unresponsive to the ITB because it did not provide a sample of every snack included within the ITB and that it failed to label the samples provided to the DEPARTMENT.

    
    

13. On this issue, section 12 of the Special Conditions of the ITB provides that:

    
    

    On or before the scheduled bid opening date, the bidder shall forward, and/or otherwise cause to be delivered one (1) sample of each item to be considered to Regional Distribution Center, Region....

    The section further provides:

    All samples must be marked with bidder's

    name, group number, item number, and bid number. Items not so marked may be disqualified. [Failure to submit all required samples shall be grounds for disqualification.] [emphasis provided].

    
    

14. MAGIC failed to meet the first requirement of section 12 of the Special Conditions of the ITB by failing to provide samples of each item bid. The testimony of DEPARTMENT personnel indicated that WISE presented its samples in an unsealed box. The testimony further indicated that the box was placed in a secure facility prior the opening and evaluation of the contents of the box. 4/ While MAGIC offered testimony that it did provide samples for all the snack products, the testimony was inconsistent and did not have the same reliability as the testimony of the DEPARTMENT'S personnel. Specifically, DEPARTMENT personnel Jesse Mosley and Carla Harris offered credible testimony that supports the finding that they properly reviewed samples from MAGIC, that they inventoried the samples, and that they discovered that some of the samples were missing. Failure to provide samples, alone, was grounds for the DEPARTMENT's disqualification of MAGIC.

    
    

15. In addition to failing to provide adequate samples, MAGIC violated the second requirement of section 12 of the ITB by failing to properly mark its samples. A review of the samples submitted by MAGIC indicates that MAGIC failed to label any of its samples. 5/ Because MAGIC did not label its products, the DEPARTMENT was forced to guess as to which products corresponded with the list of products contained in the ITB. 6/ The absence of labels on the MAGIC samples also serves as grounds to disqualify each unmarked product.

    
    

16. The other responsive bidders (WISE, WALKER, and STEWART) all complied with the requirements of Section 12 by providing and marking samples of each product bid.

    
    

17. The second and third issues raised by the DEPARTMENT and WISE were that MAGIC's bid was nonresponsive because it failed to bid all the items contained in the ITB and the samples provided did not adequately comply with the size requirements of the ITB. As stated above, because MAGIC failed to mark its samples, it was difficult for the DEPARTMENT to match the samples provided with the item list. In some instances the DEPARTMENT, by a process of elimination, was forced to guess which MAGIC sample corresponded with an item on the item list.

    
    

18. For example, the first item on the ITB list was "cheese flavored crackers" with a net weight of not less than 1-1/4 ounces. (Identified as Item 1-1). 7/ MAGIC specified in its bid that the product offered for the "cheese

    flavored crackers" weighed 1.5 ounces. Unfortunately, because the MAGIC samples were not marked, it was difficult to determine if MAGIC had complied with the bid size requirements relating to "cheese flavored crackers." It appears that MAGIC's bid was non-responsive as it relates to "cheese flavored crackers" because the product bid and found in the sample box, "Cheetos Cheesey Checkers," weighed only 1.0 ounce, less than the required 1-1/4 ounces provided by the ITB.

    
    

19. In contrast to the MAGIC bid, WISE, STEWART, and WALKER all supplied samples that met or exceeded the requirements for "Cheese Flavored Crackers."

    
    

20. A second example of non-compliance relates to Item 1-10, Pretzels. MAGIC failed to provide any samples for review by the DEPARTMENT in violation of section 12 of the Special Conditions of the ITB.

21. A third example of non-compliance with the ITB relates to Item 2, "Beef Jerky." The ITB requires beef jerky with a specified weight of 1/4 ounce. A review of the sample submitted by MAGIC indicates that MAGIC was non- responsive to this item. Specifically, MAGIC provided samples for "Double Salami" (Exhibit 9-k). "Double Salami" is not beef jerky and it does not comply with the requirements of the ITB.

    
    

22. A fourth example of non-compliance relates to Item 3, beef jerky in a single-serving size not less that .52 ounces in weight. MAGIC submitted "Beef and Cheese Sticks" (Exhibit 9-l). While the product exceeds the weight requirement of the ITB, "Beef and Cheese Sticks" are not beef jerky and do not comply with the requirements of the ITB.

    
    

23. A fifth example of non-compliance related to Item 7, "saltine crackers." MAGIC is in non-compliance because it failed to provide a sample of the cracker. In addition, MAGIC failed to inform the DEPARTMENT of the size of the saltines being bid and therefore it was impossible for the DEPARTMENT to determine if MAGIC could comply with the minimum weight requirements contained in the bid.

    
    

24. WISE bid on each of the eighteen items. Each product bid by WISE, and the corresponding sample that WISE submitted, equalled or exceeded the minimum requirements set forth in the ITB for that item. 8/

    
    

    CONCLUSIONS OF LAW

    
    

25. The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of this proceeding. Sections 120.53(5) and 120.57(1), Florida Statutes.

    
    

26. MAGIC has the burden of proving, by a preponderance of the evidence, that it is entitled to relief. Florida Department of Transportation v. J.W.C. Co., Inc., 396 So.2d 778 (Fla. 1st DCA 1981).

    
    

27. Competitive bidding requirements, such as those imposed on the DEPARTMENT, have as their purpose an objective of the following:

    
    

    [T]o protect the public against collusive contracts; to secure fair competition upon equal terms to all bidders; to remove not only collusion but temptation for collusion or opportunity for gain at public expense; to close all avenues to favoritism and fraud in various forms; to secure the best values for the [public] at the lowest possible

    expense; and to afford equal advantage to all desiring to do business with the [government], by affording an opportunity for an exact comparison of bids. Harry Pepper & Associates, Inc. v. City of Cape Coral,

    352 So. 2d 1190, 1192 (Fla. 2d DCA 1977).

    
    

28. In soliciting and accepting competitive bids, an agency has wide discretion, and its decision, if based on an honest exercise of this discretion, will not be overturned even if reasonable persons may differ with the outcome.

    D.O.T. v. Groves-Watkins Constructors, 530 So.2d 912 (Fla. 1988); Liberty County

    v. Baxter's Asphalt & Concrete, Inc., 421 So.2d 505 (Fla. 1982).

    
    

29. In exercising its discretion, an agency may not accept a proposal that is materially at variance with the invitation for bid. Not every deviation from the invitation for bid, however, is material. It is only material if it affects the price of the proposal, gives the offeror an advantage or benefit not enjoyed by other offerors, or adversely impacts the interest of the agency. See Tropabest Foods, Inc. v. Department of General Services, 493 So.2d 50 (Fla. 1st DCA 1986); Robinson Electrical Co., Inc. v. Dade County, 417 So.2d 1032 (Fla. 3d DCA 1982).

    
    

30. This case involves an invitation to bid not a request for proposal. The differences in a request for proposal and an invitation to bid were explained in System Development Corporation v. Department of Health and Rehabilitative Services, 423 So.2d 433, 434 (Fla. 1st DCA 1982):

    
    

    Implicit in the definition of an RFP is the underlying rationale that, in some types of competitive procurement, the agency may desire an ultimate goal but cannot specifi- cally tell the offerors how to perform toward

    achieving that goal; thus, a ready distinction arises between the RFP and an ITB. Typically, an ITB is rigid and identifies the solution

    to a problem. By definition, the invitation specifically defines scope of work by soliciting bids responsive to detail plans and specifications set forth.

    
    

31. The principal inquiry in this proceeding is whether MAGIC's bid for ITB No. 9596-RDC-011 was responsive. As discussed in the findings of fact, the evidence in this case established that the proposal submitted by MAGIC was not responsive to the ITB and that the DEPARTMENT correctly awarded the bid to WISE.

    
    

32. By a preponderance of the evidence, MAGIC has not established that WISE's proposal was materially non-responsive and should have been rejected. Specifically, WISE met the requirements of the ITB. Conversely, as discussed earlier, MAGIC failed on many fronts to comply with the ITB and as a result must be found to be non-responsive.

    
    

33. The evidence in this case demonstrates that the DEPARTMENT did not subvert the competitive bid process or act arbitrarily, illegally, fraudulently, or dishonestly. In summary, the DEPARTMENT awarded the bid to the vendor (WISE) that submitted the lowest responsive bid.

    
    

34. In addition to numerous substantive reasons for finding MAGIC's bid non-responsive, MAGIC was non-responsive for the most elementary reason - it

failed to read and follow directions. By not following the requirement to label its samples, MAGIC's created confusion and lead to considerable extra effort by the DEPARTMENT. The DEPARTMENT should be commended for its display of patience and for even attempting to make some semblance of sense and order out of the MAGIC bid. The end decision to reject the MAGIC bid as non-responsive was sound and just.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered accepting the proposal filed by

WISE, in response to ITB No. 9596-RDC-011.

DONE and ENTERED this 30th day of September, 1996, at Tallahassee, Florida.

WILLIAM A. BUZZETT, 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 30th day of September, 1996.

ENDNOTES

1/ Mr. Kenneth A. Hoffman, Esquire and the undersigned Administrative Law Judge attended the hearing at the Division of Administrative Hearings, Desoto Building, Tallahassee, Florida. The remaining attorneys of record, the corporate representatives, and all witnesses were located in a teleconferencing studio in Gainesville, Florida.

2/ Section 120.53(5)(b), Florida Statutes, provides that "[w]ith respect to a protest of the specifications contained in an invitation to bid or a request for proposals, the notice of protest shall be filed in writing within 72 hours after receipt of the notice of the proposed plans and specifications in an invitation." No notice was filed by MAGIC and the undersigned ordered that he would not allow testimony or argument challenging the bid specifications during the hearing.

3/ Exhibits 1 through 5, and 8 through 12 were received into evidence without objection. Exhibit 6 and 7 were received into evidence subject to the objection of WISE. Exhibit 13 and 14 were received into evidence subject to the objection of MAGIC. Exhibit 6 is the written bid STEWART without samples. Exhibit 7 is the written bid of WALKER without the samples. Exhibits 13 and 14 are packages of Cads Crunch Cheese Flavored snacks, weighing 2-1/8 and 1-1/8 ounces respectively. Two exhibits were inadvertently numbered twice. As a result, Exhibits 8 and 12 represent the same thing - Petitioner's Verified Petition. To avoid confusion and to keep the transcript consistent, however, the exhibits were not renumbered.

4/ Adequate testimony was received to indicate that the chain of custody was not broken while the DEPARTMENT was in possession of MAGIC's samples. While, MAGIC asserted that it provided samples for each item on the ITB, such assertion is rejected.

5/ Any labels found on the MAGIC samples were placed on the samples by DEPARTMENT employees. The DEPARTMENT made every effort to label the samples and then match the samples to the list of items bid.

6/ The DEPARTMENT placed labels on each of the samples submitted by MAGIC identifying "MAGIC" as the bidder. The labels contained no other information.

7/ The Item list contained in the ITB contained a total of eight categories and eighteen individual products. Because item 1 contains eleven chip type items, the undersigned labeled each product with the prefix 1-1, 1-2 etc. The labeling of these items assists in the discussion and analysis of this bid protest.

8/ MAGIC asserted that it was treated in an arbitrary manner because both STEWART and WALKER also submitted nonconforming bids with regard to item 1-3 (Cheese Flavored Snacks (fried/crispy)) or and item 1-4 ("Plain Corn Chips") and yet they were found to be in conformance. The MAGIC assertion is rejected for two reasons. First, because the STEWART and WALKER samples were not offered into evidence in the hearing, it is impossible to determine if those bidders actually submitted nonconforming bids. (The sample controls with regard to the issue of compliance with the bid specification). Second, assuming the STEWART and WALKER bids were nonconforming, the DEPARTMENT testified that the bid requirements for items 1-3 and 1-4 were waived for all bidders thereby making this issue moot.

APPENDIX Case No. 96-3040BID

All of the parties filed proposed findings which were read and considered.

The following rulings are made on the proposed findings of fact. Petitioner's Proposed Findings of Fact.

1. Paragraph 1: Accepted.

2. Paragraph 2: Accepted.

3. Paragraph 3: Accepted.

4. Paragraph 4: Accepted.

5. Paragraph 5: Accepted to the extent consistent with Finding of Fact 18.

6. Paragraph 6: Rejected, see Finding of Fact 21.

7. Paragraph 7: Rejected to the extend inconsistent with Findings of Fact 12-16.

8. Paragraph 8: Rejected, see Finding of Fact 25.

9. Paragraph 9: Rejected as irrelevant.

10. Paragraph 10: Rejected.

11. Paragraph 11: Rejected.

Respondent's and Intervenor's Proposed Findings of Fact are accepted in their entirety.

COPIES FURNISHED:

Kenneth A. Hoffman, Esquire William B. Willingham, Esquire RUTLEDGE, ECENIA, ET AL.

P.O. Box 551

Tallahassee, FL 32302-0551

Alan S. Wachs, Esquire CRABTREE, BARTLETT, ET AL.

8375 Dix Ellis Trail, Ste. 401

Jacksonville, FL 32256

Steven S. Ferst, Esquire Department of Corrections 2601 Blairstone Road

Tallahassee, FL 32399-2500

Darryl W. Johnston, Esquire JOHNSTON AND SASSER, P.A.

P.O. Box 997

Brooksville, FL 34605-0997

Harry K. Singletary, Jr., Secretary Department of Corrections

2601 Blairstone Road

Tallahassee, FL 32399-2500

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: 96-003040BID

Orders for Case No: 96-003040BID