STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FOREVER LAWN AND LANDSCAPING, INC.,

Petitioner,

vs.

DEPARTMENT OF MANAGEMENT SERVICES, DIVISION OF FACILITIES MANAGEMENT AND BUILDING CONSTRUCTION,

Respondent.

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) Case No. 05-3555

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RECOMMENDED ORDER

A duly-noticed final hearing was held in this case by Administrative Law Judge T. Kent Wetherell, II, on July 12, 2006, in Lakeland, Florida, and on August 17, 2006, in

Tallahassee, Florida.

APPEARANCES

For Petitioner: James Domineck, Jr., Esquire

100 South Kentucky Avenue, Suite 295 Lakeland, Florida 33801-5096

For Respondent: Clifford A. Taylor, Esquire

Michael J. Barry, Esquire Department of Management Services 4050 Esplanade Way, Suite 160D Tallahassee, Florida 32399-0950

STATEMENT OF THE ISSUE

The issue is whether Petitioner’s performance under its lawn care service contract with the Department of Management

Services was deficient, and, if so, whether the amounts deducted by the Department from the monthly payments made to Petitioner under the contract were reasonable and appropriate.

PRELIMINARY STATEMENT

By letters dated June 1, July 15, August 17, and August 24, 2005, the Department of Management Services (Department) advised Petitioner that it was reducing the payments made to Petitioner under the lawn care service contract between the parties for April, May, June, and July 2005 because of alleged deficiencies in Petitioner’s performance in those months. The letters advised Petitioner that it “may have a right to an administrative hearing in this matter, pursuant to Sections

120.569 and 120.57(1), Florida Statutes.” Petitioner timely requested a hearing on the reductions for the months of April, June, and July 2005. Petitioner did not request a hearing on the reduction for the month of May 2005.

On September 22, 2005, a hearing was held before the Department pursuant to Section 120.57(2), Florida Statutes (2005).1 It was determined at the hearing that “certain disputed material facts exist between the parties” and, therefore, the case was transferred to the Division of Administrative Hearings (DOAH) for a hearing pursuant to Section 120.57(1), Florida Statutes. See Fla. Admin. Code R. 28-106.305(2). The case was received by DOAH on September 23, 2005.

The final hearing was originally scheduled for January 9, 2006, but it was twice continued at the parties’ request. The hearing commenced in Lakeland on July 12, 2006, but it was not completed on that date. The final hearing reconvened and was completed in Tallahassee on August 17, 2006.

At the final hearing, the Department presented the testimony of Andre Smith, John Gornto, Joe Pierce, Bob Morales, Charles Beall, Jack Smith, Dan Eberhart, and Kris Parks. The Department’s Exhibits DMS-1 through DMS-11 were received into evidence. Petitioner presented the testimony of Andre Smith and did not offer any exhibits.

The two-volume Transcript of the first day of the final hearing was filed on July 31, 2006. The one-volume Transcript of the second day of the final hearing was filed on

September 21, 2006. Petitioner requested and, without objection, the parties were given 30 days from that date to file proposed recommended orders (PROs).

The Department timely filed a PRO on October 20, 2006, and Petitioner filed a PRO on October 26, 2006. On October 27, 2006, the Department filed a motion to strike Petitioner's untimely PRO. The motion is denied. Both of the PROs have been given due consideration in the preparation of this Recommended Order.

FINDINGS OF FACT

1. Petitioner provides lawn care services to residential and commercial properties in the central Florida area. Andre Smith is Petitioner’s owner and president.

2. In November 2004, the Department entered into a contract with Petitioner for lawn care services at nine Department buildings. The contract was awarded to Petitioner through a competitive procurement process in which Petitioner was the low bidder. The contract number was ITN No. 26-991- 490-Z.

3. Petitioner was to be paid a total of $7,384.92 per month under the contract. Each of the nine buildings was apportioned a specific amount of the total price in the contract.

4. The scope of work under the contract generally included lawn care services, open field mowing, and irrigation system maintenance. The lawn care services required under the contract included mowing, edging, weed control, fertilizing, watering, shrub and tree pruning, mulching, and clean-up.

5. The contract specified the frequency that the services were to be performed. Mowing was to be done weekly between April and November, and every two weeks between December and March; hedges and shrubs were to be trimmed at least monthly

   unless more frequent trimming was required for aesthetic reasons; and mulching was to be done in March and September.

6. The contract required Petitioner to take soil samples at the beginning of the contract and annually thereafter. The results of the soil samples were to be used to determine whether Petitioner needed to apply iron, lime, or other minerals to the lawns.

7. The contract required Petitioner to inspect each building’s irrigation system at the beginning of the contract, and required Petitioner to provide a report to the building manager regarding any repair work needed on the system. Petitioner was also required to check the irrigation system on every visit to ensure that it was operating properly.

8. The contract required Petitioner to apply pre-emergent weed control and fertilizer. The weed control was to be applied in the spring and the fall, and the fertilizer was to be applied three times during the year on an agreed upon schedule.

9. The mulching required by the contract was to be done in March and September. The mulch was to be maintained at a depth of four inches throughout the year. The contract required Petitioner to use cypress mulch.

10. The day-to-day operation of the buildings subject to the contract was the responsibility of on-site building managers, not the Department staff in Tallahassee. The building

    managers were responsible for the direct oversight of Petitioner’s work under the contract, and they were also responsible for reviewing and evaluating Petitioner’s performance.

11. Petitioner began providing services under the contract in December 2004.

12. Petitioner received full payment from the Department for the services that it provided from December 2004 through March 2005, even though several of the building managers were not satisfied with Petitioner’s performance under the contract during that period.

13. Several of the building managers spoke with Mr. Smith regarding their concerns with Petitioner’s performance under the contract. They also documented Petitioner’s performance deficiencies on the monthly summary report forms that the contract required Petitioner to submit in order to obtain payment.

14. Starting in April 2005, the building managers were required to fill out evaluation forms in addition to the monthly summary report forms. The impetus for the creation and use of the evaluation forms was Petitioner’s continuing unsatisfactory performance under the contract.

15. The building managers used the evaluation forms to rate Petitioner’s performance as “good,” “fair,” or “poor” on

    the 20 categories of service that Petitioner was required to perform under the contract. Each service was assigned an equal weight -- e.g., one twentieth or five percent of the contract -- and if all 20 services were not applicable to a particular building, the weight assigned to each service was adjusted accordingly.

16. The evaluation form was developed by Kris Parks, who was the contract administrator for Petitioner’s contract. Ms. Parks developed the form on her own. She did not get the input of the building managers in developing the form, and Mr. Smith was not consulted regarding the development of the form.

17. The evaluation forms were used by Ms. Parks in conjunction with the monthly summary report forms in order to reduce the payments made to Petitioner under the contract.

18. Each service for which Petitioner was given a “poor” rating by a building manager resulted in a five percent deduction in the amount paid to Petitioner. Typically, a “poor” rating reflected work that was not performed at all by Petitioner, rather than work that was performed unsatisfactorily.

19. In some situations, a smaller deduction was made if the comments on the evaluation form or the monthly summary report form reflected partial performance despite the “poor” rating. For example, if Petitioner received a “poor” rating for

    mowing, but the comments reflected that Petitioner provided services twice during the month rather than the required four times, the deduction was 2.5 percent rather than five percent.

20. The reduction of payments under the contract for unsatisfactory performance or unperformed work is specifically authorized by Section 3.13 of the contract.

21. Section 3.13 of the contract states that the monthly summary report form “will be used by [the building managers] to track performance of services, in order to determine a proportional deduction in payment for services that are not performed as agreed” in the contract. It does not mention any other form.

22. The contract does not define “proportional deduction” and it does not include the methodology to be used in calculating the deduction. The contract is silent on those issues.

23. Petitioner’s contract with the Department was amended in May 2005 to reduce the number of buildings that Petitioner served from nine to three. The three remaining buildings were the ones closest to Petitioner’s business location in Lakeland, i.e., the Hargrett and Trammel Buildings in Tampa and the Peterson Building in Lakeland.

24. The reduction in the scope of the contract was the result of Petitioner’s continuing unsatisfactory performance

    under the contract, and it reflected the Department’s well- founded view that Petitioner was not able to handle all nine buildings. The Department staff was trying to help Mr. Smith by allowing Petitioner to retain a portion of the contract rather than canceling the contract altogether based upon Petitioner’s poor performance.

25. The invoices submitted by Petitioner for April 2005 through July 2005 were as follows: $7,384.92 (April); $7,384.92 (May); $1,938.64 (June); and $1,938.64 (July). The April and May invoices were based upon the nine buildings served by Petitioner in those months. The June and July invoices were based upon the three buildings served by Petitioner in those months.

26. The Department did not pay the invoices for April 2005 through July 2005 in full. It paid Petitioner $2,451.782 for April (33.2 percent of the invoice), $835.82 for May (11.6 percent), $453.393 for June (23.4 percent), and $904.66 for July (46.7 percent).

27. The amounts deducted -- $4,933.14 for April; $6,531.10 for May; $1,485.25 for June; and $1,033.98 for July -- were based upon the Department’s determination that Petitioner failed to perform certain work under the contract. The amounts deducted were calculated by Ms. Parks using the information

    provided to her by the building managers on the evaluation forms, as described above.

28. The letters by which the Department informed Petitioner of the payment reductions advised Petitioner that it “may have the right to an administrative hearing regarding this matter, pursuant to Sections 120.569 and 120.57(1), Florida Statutes.” The letters explained what Petitioner was required to do to request a hearing and advised Petitioner that the "[f]ailure to timely request a hearing will be deemed a waiver of [the] right to a hearing."

29. Petitioner timely filed letters challenging the deductions for April, June, and July 2005. The total deductions for those months were $7,452.37.

30. Petitioner did not file anything challenging the deduction for May 2005. Therefore, the $6,531.10 deduction for that month is not at issue in this proceeding.

31. Petitioner is not entitled to the full amount billed to the Department for April, June, and July 2005 because all of the services required under the contract were not performed during those months. Mr. Smith conceded this point in his testimony at the final hearing.4

32. Mr. Smith contended at the hearing that the amounts deducted by the Department were not reasonable in light of the services that Petitioner did provide. However, Mr. Smith did

    not identify what he would consider to be a reasonable deduction for the work that Petitioner admittedly did not perform.

33. Petitioner routinely failed to provide mowing services at each of the buildings at the intervals required under the contract. For example, Petitioner only mowed one time during the month of June 2005 at the Hargrett and Trammel Buildings, rather than the four times required under the contract.

34. Petitioner did not put down mulch at any of the buildings in March 2005, as required by the contract. When the building managers asked Mr. Smith about the mulch, he told them that he would get to it.

35. Mr. Smith testified that he was told by the Department staff in Tallahassee that the mulch could be put down in any month so long as it was done twice a year. That uncorroborated, self-serving testimony was not persuasive.

36. Petitioner put down mulch at some, but not all of the buildings in April and May 2005. The mulch that Petitioner put down did not cover all of the areas requiring mulch and it was not put down at the required four-inch depth. At the Trammel Building, for example, the mulch put down by Petitioner was less than half of that required by the contract. No mulch was ever put down at the Hurston Building in Orlando or the Grizzle Building in Largo.

37. Petitioner’s performance was often deficient in regards to trimming and clean-up of debris. For example, on one occasion at the Trammel Building, Petitioner left more than 60 bags of leaves in and around the building’s dumpster; at the Hargrett building, there were overhanging tree limbs that went untrimmed for an extended period; and Petitioner routinely failed to do trimming at the Grizzle Building, although he did a good job picking up debris at that building.

38. The services provided by Petitioner at the Trammel Building got so bad that the building manager had to hire another company at a cost of approximately $1,800 to clean up the site so that it would be presentable for an event in the vicinity of the building that was attended by a U.S. Senator and other dignitaries.

39. The building managers were never given the results of the soil samples that Petitioner was required to take at the beginning of the contract even though they repeatedly requested that information. When Mr. Smith was asked about the soil samples by the building managers, he told them that he would get them done.

40. Mr. Smith claimed at the hearing that he sent the results of the soil samples to the Department staff in Tallahassee, although he could not recall whom specifically he sent the results to, and he offered no documentation to

    corroborate his testimony on this issue. Petitioner’s testimony regarding the soil samples was not persuasive. The Department’s witnesses credibly testified that they never received the results of the soil samples from Petitioner.

41. Indeed, the evidence was not persuasive that Petitioner ever took the soil samples required by the contract. The print-outs presented at the final hearing, Exhibit DMS-11, do not have any identifying information that would corroborate Mr. Smith’s testimony that the samples described in the print- outs were from the buildings that were the subject of the contract.5 Moreover, the print-outs are dated March 8, 2005, which is more than four months after the samples were supposed to have been taken by Petitioner, and several of the soil samples had pH levels outside of the range set forth in the contract.

42. Mr. Smith testified that Petitioner applied fertilizer and pre-emergent weed control at each of the buildings, as required by the contract. That uncorroborated, self-serving testimony was not persuasive.

43. The more persuasive evidence establishes that Petitioner did not apply fertilizer or pre-emergent weed control. On this issue, the building managers credibly testified that they were never advised by Mr. Smith that the fertilizer or pre-emergent weed control was being applied, even

    though those services were to supposed be performed pursuant to a schedule agreed upon with the building managers; the building managers credibly testified that they did not observe any signs that fertilizer had been applied, such as the greening of the grass; and fertilizer could not have been applied at the Hurston Building without killing all of the grass because the fertilizer needs to be watered into the lawn, and the sprinkler system at the building was not working at the time.

44. Petitioner failed to perform the required inspection of the irrigation system at several of the buildings, including the Hurston Building, at the beginning of the contract in order to determine whether any repairs needed to be done. The system at the Hurston Building did not work for an extended period of time, which caused large sections of grass around the building to die from a lack of water.

45. The performance deficiencies described above were cited on the monthly summary report forms and the evaluation forms completed by the building managers, which in turn were used by Ms. Parks to calculate the amount deducted from the monthly payments made to Petitioner under the contract.

46. Petitioner was responsible for the costs of the mulch, fertilizer, and pre-emergent weed control required under the contract. The money that Petitioner “saved” by not providing those services likely exceeds the amounts deducted by the

    Department pursuant to Section 3.13 of the contract. For example, the mulch purchased by Petitioner for the Trammell Building cost approximately $2,250, and that was only half of the mulch needed for that building alone.

47. Petitioner is no longer providing lawn care services to the Department under the contract. The contract was revoked based upon Petitioner’s unsatisfactory performance.

48. The revocation of the contract, which occurred at some point prior to August 2005, is not at issue in this proceeding.

    CONCLUSIONS OF LAW

    
    

49. DOAH has jurisdiction over the parties to and subject matter of this proceeding pursuant to Sections 120.569 and 120.57(1), Florida Statutes. See also Exhibit DMS-1, at § 5.37 (dispute resolution section of the contract, which affords Petitioner a “right to review pursuant to Chapter 120 of the Florida Statutes” for “[a]ny dispute concerning performance of the Contract”).

50. This is a de novo proceeding to formulate final agency action even though the agency action at issue -- i.e., the payment reductions -- has already been effectuated by the Department. See generally Gopman v. Dept. of Education, 908 So. 2d 1118, 1121-22 (Fla. 1st DCA 2005). The purpose of this proceeding is to give Petitioner “an opportunity to change the

    [Department]’s mind.” Capeletti Bros., Inc. v. Dept. of General Services, 432 So. 2d 1359, 1363 (Fla. 1st DCA 1983).

51. Petitioner did not request a hearing on the deduction for May 2005, despite the clear point-of-entry and notice of rights contained in the letter from the Department related to that month’s payment. Therefore, Petitioner waived its right to contest the payment reduction for that month. See, e.g., Jancyn Manufacturing Corp. v. Dept. of Health, 742 So. 2d 473 (Fla. 1st DCA 1999); Lamar Advertising Co. v. Dept. of Transportation, 523 So. 2d 712 (Fla. 1st DCA 1988); § 120.569(2)(c), Fla. Stat.; Fla. Admin. Code R. 28-106.111(4).

52. The deductions for the other months -- April 2005, June 2005, and July 2005 -- are technically still preliminary agency action. Therefore, the Department has the burden to prove by a preponderance of the evidence that the proposed payment reductions for those months are justified, reasonable, and appropriate under the contract. See Dept. of Transportation v. J.W.C. Co., Inc., 396 So. 2d 778, 788 (Fla. 1st DCA 1981) (burden of proof is on the party asserting the affirmative in an administrative proceeding); Department's PRO, at 2 (acknowledging that the Department “had the initial burden of proving a breach of contract, entitlement to make deductions for failure to perform and the reasonableness of such deductions”) and 11 (same); § 120.57(1)(j), Fla. Stat.

53. Section 3.13 of the contract authorizes the Department to make “proportional deductions” in the monthly payments made to Petitioner for services not performed as required under the contract. The contract does not specify how the “proportional deductions” are to be calculated.

54. The preponderance of the evidence establishes that Petitioner failed to perform a number of the services required by the contract and that his performance of the services that he did provide was deficient much of the time. Thus, the Department was justified in reducing the monthly payments made to Petitioner pursuant to Section 3.13 of the contract.

55. The preponderance of the evidence further establishes that the methodology utilized by the Department to determine the amount of the “proportional deductions” in the payments made to Petitioner is reasonable and that the amounts deducted are appropriate in light of the extent of the deficiencies in Petitioner’s performance under the contract.

56. The methodology utilized by the Department gives effect to the plain meaning of the phrase “proportional deduction.” See Merriam Webster Online Dictionary, at www.m- w.com (defining “proportional” to mean “corresponding in size, degree, or intensity” and “having the same or a constant ratio”). Moreover, contrary to Petitioner's argument, the methodology utilized by the Department is not inconsistent with

    the statement in the contract that the monthly summary report forms “will be used . . . in order to determine a proportional deduction in payment for services that are not performed as agreed.” Indeed, the evaluation forms used by Ms. Parks to convert the building managers’ performance ratings into percentage deductions were based upon the information contained on the monthly summary report forms.

57. The methodology utilized by the Department was not “impulsive” or “haphazard,” as argued by Petitioner in its PRO; it was a reasonable approach that relies upon the building managers’ evaluations of Petitioner’s performance and gives Petitioner credit for the work that it satisfactorily performed. On this point, it is noteworthy that Petitioner did not present any evidence regarding an alternate methodology that, in its opinion, would be more reasonable than the methodology utilized by the Department.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is

RECOMMENDED that the Department of Management Services issue a final order rejecting Petitioner’s challenge to the payment reductions made by the Department for the months of April, June, and July 2005.

DONE AND ENTERED this 3rd day of November, 2006, in Tallahassee, Leon County, Florida.

S

T. KENT WETHERELL, II Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6847 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 3rd of November, 2006.

ENDNOTES

1/ All statutory references are to the 2005 version of the Florida Statutes.

2/ The April payment was originally $2,096.91, see Exhibit DMS-2 (check numbers 4-04 964 460 and 4-04 971 895), but Petitioner was subsequently paid an additional $354.87 for the month. See Exhibit DMS-3 (letter dated July 15, 2005).

3/ The June payment was originally $436.36, see Exhibit DMS-4 (letter dated August 17, 2005, and check numbers 4-05 329 941 and 4-05 329 942), but Petitioner was subsequently paid an additional $17.03 for the month. See Exhibit DMS-5 (letter dated August 24, 2005).

4/ See, e.g., Transcript, at 213-14. See also Petitioner’s PRO, at 4, 7.

5/ Mr. Smith testified that he was confident that the print-outs were for samples taken at the buildings subject to the contract because, at the time, Petitioner did not have any other contracts that required soil samples and that the Department contract “is one of the first times that we sent [the testing company, Lesco] soil samples for a contract.” See Transcript, at 319. Earlier in his testimony, however, Mr. Smith indicated

that Petitioner did a lot of business with Lesco, see Transcript, at 30, which calls into question his later testimony.

COPIES FURNISHED:

Tom Lewis, Jr., Secretary Department of Management Services 4050 Esplanade Way

Tallahassee, Florida 32399-0950

Steven Ferst, General Counsel Department of Management Services 4050 Esplanade Way

Tallahassee, Florida 32399-0950

James Domineck, Jr., Esquire

Law Offices of James Domineck, Jr., P.A.

100 South Kentucky Avenue, Suite 295 Lakeland, Florida 33801-5096

Clifford A. Taylor, Esquire Department of Management Services 4050 Esplanade Way, Suite 160D Tallahassee, Florida 32399-0950

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of 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: 05-003555

Orders for Case No: 05-003555