STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

SECURUS TECHNOLOGIES, INC.,

vs.

Petitioner,

Case No. 19-0126BID

DEPARTMENT OF CORRECTIONS,

Respondent,

and

GLOBAL TEL*LINK CORPORATION,

Intervenor.

/

RECOMMENDED ORDER

On January 31 and February 1, 2019, pursuant to sections 120.569, and 120.57(1) and (3), Florida Statutes (2018),1/ a duly- noticed hearing was held in Tallahassee, Florida, before Lynne A. Quimby-Pennock, an administrative law judge (ALJ) assigned by the Division of Administrative Hearings (DOAH).

APPEARANCES

For Petitioner: William Robert Vezina, III, Esquire

Andrew Rubin Fier, Esquire Megan Reynolds, Esquire

Vezina, Lawrence and Piscitelli, P.A.

413 East Park Avenue Tallahassee, Florida 32301

For Respondent: William D. Hall, Esquire

Dean Mead Suite 130

215 South Monroe Street Tallahassee, Florida 32301

Daniel Ryan Russell, Esquire Dean Mead

Post Office Box 351 Tallahassee, Florida 32302

Kristen Krueger Clemons, Esquire Department of Corrections

501 South Calhoun Street Tallahassee, Florida 32399

For Intervenor: John A. Tucker, Esquire

Foley & Lardner, LLP Suite 1300

One Independent Drive Jacksonville, Florida 32202

Benjamin J. Grossman, Esquire Robert H. Hosay, Esquire Mallory Neumann, Esquire Foley & Lardner LLP

Suite 900

106 East College Avenue Tallahassee, Florida 32301

STATEMENT OF THE ISSUE

Whether Respondent’s intended decision to award a contract to Intervenor, Global Tel*Link Corporation (GTL), for telecommunication services pursuant to an “INVITATION TO NEGOTIATE FOR INMATE TELECOMMUNICATIONS SERVICES FDC ITN-17-122”

(the ITN), is contrary to Respondent’s governing statutes, its rules, or the ITN specifications; and, if so, whether it was contrary to competition, clearly erroneous, arbitrary, or capricious.

PRELIMINARY STATEMENT

On November 2, 2016, the Florida Department of Corrections (DOC) released the ITN seeking replies from vendors to provide telecommunications services for inmates at all DOC institutions and its associated satellite facilities. Twenty-five months later, on December 11, 2018, DOC posted its intent to award the ITN contract to GTL.

On December 13, 2018, Securus Technologies, Inc. (Securus) timely filed its Notice of Intent to Protest, and a protest bond. On January 7, 2019, DOC referred the matter to DOAH to assign an ALJ to conduct “all proceedings required by law and to submit a recommended order to the Department.” On January 9, 2019, GTL, the designated winner of the ITN, filed its Notice of Intervention.

A telephonic conference was held on January 11, 2019, with all participants represented. At the conclusion of the telephonic conference, the parties were advised that the hearing would start on January 31, 2019, and continue on February 1, 4 and 5, 2019.

Later that same day, Securus filed correspondence2/ requesting “the final hearing be scheduled for February 4 and 5, with the option of scheduling one or two additional hearing days.” On January 14, 2019, the Notice of Hearing was issued confirming the final hearing would begin on January 31, 2019, and a separate

Order was issued denying Securus’ request for the hearing to start on February 4, 2019.

On January 24, 2019, a Protective Order was issued based upon a stipulated motion seeking protection for certain confidential information.

Securus filed a motion seeking to amend its Petition on January 25, 2019. Both DOC and GTL filed responses in opposition to this motion on January 28, 2019. On January 28, 2019, GTL also filed a Motion seeking to compel Securus to respond to GTL’s second set of production requests. Later, on January 29, 2019, Securus filed a revised motion regarding its earlier motion seeking to amend its Petition. After notice, a telephonic conference was held on January 29, 2019, and an Order was issued addressing all these motions.

On January 30, 2019, the parties filed a Joint Prehearing Stipulation, and several additional motions were filed: Securus filed a motion seeking to exclude its current contract with DOC; GTL filed a motion requesting the dismissal of parts of Securus’ Petition on the basis of a failure to state a legally cognizable claim, and included an alternative motion to exclude certain evidence and argument about specifications of the ITN; DOC filed a motion pursuing the partial dismissal of Securus’ Petition; and GTL filed a response opposing Securus’ motion. Prior to the start of the hearing, Securus filed a notice that it did not stipulate

to certain joint exhibits identified in the Joint Prehearing Stipulation. All the motions were argued and denied prior to the start of the hearing, which commenced on January 31, 2019. The hearing continued to and was concluded on February 1, 2019. To the extent that any of the stipulated facts found in the Joint Prehearing Stipulation are relevant to this action, they may be found below.

The parties presented the following joint exhibits3/ which were admitted in evidence: 1, 5 through 21, and 23 through 59. Securus presented the testimony of Kasey Faulk and

Steve Viefhaus.4/ Securus’ Exhibits 1 through 4, 6, 8 through 11, and 15 through 25 were offered and received in evidence. DOC called Carl Wesley Kirkland and Michael Harrell.5/ DOC’s Exhibits

1 through 9 were offered and received in evidence. GTL did not call any witnesses, but fully participated in examining the witnesses called to testify. GTL’s Exhibits 1, and 3 through 26,

32 and 33 were offered and received in evidence. GTL’s Exhibit 34 was marked for identification, but was not admitted into the record.

The three-volume Transcript6/ of the proceedings was filed with DOAH on February 15, 2019.

On February 20, 2019, Securus filed an amended motion to determine that certain joint exhibits were not confidential, proprietary, or a trade secret.7/ Securus presented that DOC

objected to the amended motion, but Securus had not received GTL’s response. GTL filed its response to this amended motion on February 27, 2019, and also filed a motion to determine the confidentiality of certain portions of its response. Securus then filed an unopposed motion to determine the confidentiality of portions of its proposed recommended order. Orders were issued separately to address all these motions.

All parties timely filed proposed recommended orders, which were carefully considered in the preparation of this Recommended Order.

FINDINGS OF FACT

Based upon the oral and documentary evidence presented at hearing, the following facts are found:

1. DOC is the state agency responsible for the supervisory and protective care, custody and control of all inmates incarcerated by DOC, its buildings, grounds, and property in the state. See § 945.025, Fla. Stat. In carrying out this statutory responsibility, DOC provides access to inmate telephone services.

2. DOC believes that inmate contact with their family and friends reduces recidivism by encouraging family connections and prepares inmates for their eventual release back into society. DOC records all non-privileged calls in order to prevent and detect the coordination of violent and/or illegal activity over

   
   

   the telephone. Inmates may contact their family and friends by using a prepaid card or calling collect.

3. The current rates for prepaid inmate calls are $0.04 per minute for local calls and $0.14 per minute for intra-Local Access Transport Area (LATA), inter-LATA and long distance calls. Under the current system, there is no deposit or funding fee for each call. The majority of inmates are not incarcerated in their home community, thus approximately 75 percent of current inmate calls fall into the $0.14 per minute categories. Inmate calls are limited to 15 minutes per call, however if there is no one waiting to use the telephone, the inmate may call again. A 15-minute local call currently costs $0.60 cents. A 15-minute intra-LATA, inter-LATA or long distance call currently costs $2.10.

4. Securus, through its wholly owned subsidiary T-Netix Telecommunications Services, Inc., currently holds the contract to provide DOC inmate telephone service. DOC does not provide or pay for inmate telephone services, but is authorized pursuant to section 945.215(1)(b), Florida Statutes, to contract with telephone-service providers who install and maintain all the necessary telephone equipment for this service.

5. On July 25, 2016, Ms. Faulk8/ (DOC’s bureau chief of procurement and lead negotiator) proposed a “justification memo” (memo) to DOC’s chief of staff for the use of an ITN “for the

   
   

   purpose of competitively procuring Statewide Inmate Telecommunication Services.” The stated purpose of the ITN was:

   to solicit replies from fully capable and qualified respondents, and to ultimately establish a Contract, based on the “Best Value”, for quality tele-communication services for inmates under” DOC’s care and custody.

   
   

   The memo suggested that the ITN process provided flexibility that would help DOC in “determining the service and programming options available and the opportunity to understand the implications of those services and proposed rates.” Further, the use of an ITN would allow DOC:

   to discuss in detail, each respondent’s technical capabilities, professional experience, and capability to provide quality services in relation to the rates charged to inmate friends and family members. The negotiation phase . . . will provide a venue for discussion of value-added services, and will ensure the most qualified vendor is selected.

   
   

6. Section 287.012(17), Florida Statutes, defines “Invitation to negotiate” as:

   1. written or electronically posted solicitation for competitive sealed replies to select one or more vendors with which to commence negotiations for the procurement of commodities or contractual services.

      
      

7. Section 287.057(1)(c) further explains an ITN as a type of procurement method which allows an agency to “determine the best method for achieving a specific goal or solving a particular

   
   

   problem” and to identify “one or more responsive vendors with which the agency may negotiate in order to receive the best value.”

8. On November 2, 2016, DOC released the ITN, seeking competitive replies from qualified vendors to provide telecommunications services for inmates at all DOC institutions, and its associated satellite facilities. The ITN specifically sought a no-cost contract, meaning DOC would not expend any State funds for the services procured. Instead, the winning vendor would charge an inmates’ family or friends on a per-minute basis for an inmate to place each telephone call.

9. The original ITN timeline provided that the anticipated posting of the intent to award the contract was in April 2017. However, that original timeline was changed on December 22, 2016, and revised another 16 times before the intent to award was actually published. Revisions or changes (excluding solely timeline revisions) to the actual requirements of the ITN were found in the following addenda9/: 1, 3, 5, 6, and 8.

10. The ITN’s “Statement of Purpose” found in section 2.2 provides:

    The Department is seeking responses, from interested and qualified Vendors, for the provision of telecommunication services for inmates at all its institutions, and associated satellite facilities, listed in Attachment II. Vendors must have at least three years, out of the last five years, of

    
    

    business/corporate experience, specifically providing telecommunication services through multiple sites in a correctional or other security/law enforcement setting, as described in this ITN.

    
    

    Specifically, the Department is seeking replies for telecommunication services for all its facilities. The Department intends to award the resultant Contract to a single Vendor, Statewide.

    
    

11. The ITN’s “Procurement Overview” found in section 2.3 provides:

    The Department is requesting competitive, sealed replies, from responsible Vendors, in order to establish a multi-year Contract for the provision of telecommunication services to inmates in the Department’s care. The Department is interested in considering value- added services that would be beneficial to, or will otherwise complement, the services required by this ITN.

    
    

    The process for evaluating and selecting a Vendor will consist of two phases. The first phase involves evaluation of the replies to the ITN, which will result in the selection of Vendors to proceed to the negotiation phase.

    In the second phase, Vendors will be asked to provide a presentation of their Reply. This phase also includes negotiation of a final statement of work, pricing, and terms and conditions of the final Contract. The negotiation phase culminates in one or more of the Vendors receiving a request, from the Department, to submit a best and final offer (BAFO), which must include: (1) a revised statement of work; (2) a final Contract draft; and (3) a final cost and compensation model. (Emphasis added).

    
    

12. The ITN’s goals and specific goals are found in sections

    
    

    1. and 2.4.1, which provide:

       
       

       1. FDC Goals

          
          

          The Department is looking to not only continue providing quality telephone services for inmates in our care, at the minimum, levels of service required by law and rule, but also to achieve strategic improvements in the area of tele-communication services. Overall goals for the Department include:

          
          

          • Reduce recidivism through increased family re-unification and re-entry efforts.

            
            

          • Ensure the safety and security of staff, inmates, and the public through the use of modern technology.

            
            

          • Control inmate telephone usage and limiting the use of the telephone service for fraudulent activity.

            
            

          • Ensure a quality telephone service with reasonable and justifiable telephone call rate charges for inmate’s families and friends similar to those available to the public at large.

    
    

    The intent of this procurement is to contract with a Vendor who will assist the Department in meeting these goals.

    
    

    1. Specific Goals of this ITN:

    
    

    • Establish a flexible contract, with transparency of service costs and better alignment of costs with services.

      
      

    • Establish a contract that allows the Vendor to bring market expertise and an ability to shape strategy, to lower the cost of telecommunication services for inmates friends and family, and maximize the benefits to the Department.

      
      

    • Ensure a smooth transition/continuation of services from the current Contract to a new Contract without disruption.

      
      

    • Award to a Vendor that applies technical and operational expertise to ensure a smooth continuation of services with minimal risk.

      
      

    • Ensure pricing that is cost effective through entire term of the Contract.

      
      

    • Establish a collaborative relationship, with the prospective Vendor, which will maximize the extent to which the Department can achieve the objectives of this ITN. (Emphasis added).

    
    

13. DOC mandated an initial five-year contract, with an option for DOC to renew the contract up to five more years or any portion thereof. The additional five-year renewal period was “contingent, at a minimum, upon satisfactory performance by the Vendor, as determined by the Department, and will be subject to the availability of funds.”10/

14. The ITN’s pricing methodology found at 2.7 provided:

    
    

    The Department is seeking pricing that will provide the most favorable terms the Vendor can offer in terms of lowest phone rates to the State[11]; therefor, interested Vendors must submit a Cost Reply, utilizing the Price Information Sheet, Attachment III. Best and Final Offers from Vendors will be solicited to establish the lowest possible telephone rates and most beneficial value added services.

    Vendors are encouraged to submit a Cost Reply in such a manner as to offer the most cost effective, and innovative solution for services and resources, as cost efficiency for the State will be a consideration in determining best value. Vendors must provide

    
    

    the Cost Reply in accordance with the instructions in Section 4.8. (Emphasis added).

    
    

15. The definition for value added service (VAS) is found in the ITN at section 1.29 as:

    Advanced and/or additional services provided to the Department that include new and innovative technologies relating to the telecommunication services sought, and at no additional cost to the Department.

    
    

16. There is no definition for telecommunication services found in the ITN.

17. DOC included a list of VASs in section 3.2 of the ITN. That list included in pertinent part:

    As part of this revenue generating Contract, the Department is interested in obtaining value-added services in lieu of commissions. The Department requests that Vendors provide with their Reply, a detailed description of all value-added services the Vendor is offering to the Department. These services would be in addition to those services that meet the minimum service requirements and specifications of this ITN.

    
    

    At no cost to the Department, for the duration of the Contract term and any subsequent renewals, the Department is especially interested in the following value-added services; however, Vendors are encouraged to provide additional or alternate value-added services.

    
    

    1. Handheld Cell Phone Detection Units (CEIA or equivalent).

       
       

    2. A fully functioning Cell Phone Forensic Laboratory with the following:

       
       

       * * *

       
       

    3. Access to ICER (Inmate Inter- Communications Evaluation and Reporting) national database for identifying and reporting inmate-to-inmate communications.

       
       

    4. Word spotting services through the Vendors proposed inmate telephone system.

       
       

    5. Voice Biometric Analysis through the Vendors proposed inmate telephone system.

       
       

    6. Vendor-provided call monitoring.

       
       

    7. A Managed Access System (MAS), in an effort to control and eliminate wireless communications within our institutions. Vendors are encouraged to include a single facility, multi-facility or statewide solution that will prevent unwanted or unauthorized access to commercial wireless networks while simultaneously enabling legitimate, mission- critical, or emergency connections. Any Managed Access Solution being proposed by the Vendor shall be inclusive of all equipment, installation, infrastructure and network, training, operation, and ongoing repairs and maintenance.

       
       

18. Change number 3 found in the ITN’s Addendum 5, posted on February 23, 2017, provided revisions to section 3.2, the VASs section. The changes are shown via strike-through for the deleted language, and underscored for the new language:

    As part of this revenue generating Contract, the Department is interested in obtaining value-added services in lieu of commissions. The Department requests that Vendors provide with their Reply, a detailed description of all value-added services the Vendor is offering to the Department. These services would be in addition to those services that meet the minimum service requirements and specifications of this ITN; at no cost to the Department, for the duration of the Contract

    
    

    term and any subsequent renewals, The Department is especially interested in the following value-added services; however, reviewing Vendor proposed value-added services or technology to aid in the prevention and detection of cellular devices, peripheral hardware and hazardous contraband at entry points and within the secure perimeter of our correctional institutions. Vendors are encouraged to provide additional or alternate value-added services, beyond what is included in this Section. While value-added services are considered in the evaluation (see Section 4.9 of this ITN), Vendors are not required to propose a particular value-added service or group of services to be considered.

    
    

19. Change number 4 found in the ITN’s Addendum 5, posted on February 23, 2017, provided revisions to section 3.2.7. The changes are shown via strike-through for the deleted language, and underscored for the new language:

    A Managed Access System (MAS), in an effort to control and eliminate wireless communications within our institutions. Vendors are encouraged to include a single facility,

    multi-facility or statewide solution that will prevent unwanted or unauthorized access to commercial wireless networks while simultaneously enabling legitimate, mission- critical, or emergency connections. Any Managed Access Solution being proposed by the Vendor shall be inclusive of all equipment, installation, infrastructure and network, training, operation, and ongoing repairs and maintenance. Vendors are not required to provide a MAS as part of their solution; however, if a Vendor chooses to include a MAS in their Reply, the Department is interested in the MAS meeting the below minimum requirements:

    
    

    1. Locations

    
    

    * * * 3.2.7.2. Implementation

    * * * 3.2.7.3 System Requirements

    * * * 3.2.7.4 Vendor Responsibilities

    * * * 3.2.7.5 Department Responsibilities

    * * * 3.2.7.6 System Maintenance

    * * * 3.2.7.7 Reporting

    * * *

    
    

    3.2.7.8 Support

    
    

20. The ITN process to select qualified vendors consisted of two distinct parts: Part 1 and Part 2.

21. Part 1 required vendors to submit a “straightforward, concise delineation of the Vendor’s capabilities to satisfy the requirements” of the ITN. Eight specific components were described, and the evaluation criteria were provided. However, the actual components need not be reviewed here, as section 4.9.C provided the “score from the Evaluation Phase will not carry over

    
    

    into negotiations and the Negotiation Team will not be bound by those scores.”

22. CenturyLink, GTL, and Securus are providers of telecommunications services for inmates, and each timely submitted the “Technical Reply and Cost Replies” for Part 1 of the ITN. It is well settled and uncontested that Securus scored the highest in Part 1, followed by GTL and CenturyLink.

23. Part 2 allowed DOC to select one or more qualified vendors for the negotiation phase. DOC invited all three vendors to negotiate. The negotiation team (Team) included three DOC employees: Ms. Faulk, Mr. Kirkland12/ (DOC’s deputy director of Institutional Operations), and Mr. Harrell13/ (DOC’s bureau chief of Security Operations).

24. Section 4.9 B. in the ITN set forth the following “Negotiation Phase Methodology”:

    The Department reserves the right to negotiate with any or all responsive and responsible Vendors, serially or concurrently, to determine the best solution.

    
    

    During the negotiation process the Department reserves the right to exercise the following rights. This list is not exhaustive.

    
    

    1. Schedule additional negotiating sessions with any or all responsive Vendors.

       
       

    2. Require any or all responsive Vendors to provide additional revised or final written Replies addressing specified topics.

       
       

    3. Require any or all responsive Vendors to provide a written Best and Final Offer (BAFO).

       
       

    4. Require any or all responsive Vendors to address services, prices, or conditions offered by any other Vendor.

       
       

    5. Pursue a contract with one or more responsive Vendors for the services encompassed by this solicitation, any addenda thereto, and any request for additional revised or final written Replies or request for best and final offers.

       
       

    6. Pursue the division of contracts between responsive Vendors by type of service or geographic area, or both.

       
       

    7. Arrive at an agreement with any responsive Vendor, finalize principal Contract terms with such Vendor and terminate negotiations with any or all other Vendors, regardless of the status of or scheduled negotiations with such other Vendors.

       
       

    8. Decline to conduct further negotiations with any Vendor.

       
       

    9. Reopen negotiations with any Vendor.

       
       

    10. Take any additional administrative steps deemed necessary in determining the final award, including additional fact-finding, evaluation, or negotiation where necessary and consistent with the terms of this solicitation.

        
        

    11. Review and rely on relevant information contained in the Replies received from Vendors.

        
        

    12. Review and rely on relevant portions of the evaluations conducted.

        
        

    13. Reject any and all Replies if the Department determines such action is in the best interest of the State.

        
        

    14. Negotiate concurrently or separately with competing Vendors.

        
        

    15. Accept portions of a competing Vendor’s Reply and merge such portions into one project, including contracting with the entities offering such portions.

        
        

    16. Waive minor irregularities in Replies.

        
        

    17. Utilize subject matter experts, subject matter advisors, and multi-agency advisors to assist the negotiation team.

    
    

    The ITN provided that DOC had “sole discretion in deciding whether and when to take any of” these actions. This methodology section included that the focus of the negotiations would be on “achieving the solution that” provided “the best value to the State based upon the ‘Selection Criteria’ and satisfies the Department’s primary goals as identified in the ITN.”

25. Section 4.9 B. also included the Selection Criteria as:

    
    

    1. The Respondent’s articulation of its approach to provide the services.

       
       

    2. The innovativeness of Respondent’s approach to provide the services.

       
       

    3. Respondent’s articulation of its solution and the ability of the solution to meet the requirements of this ITN and provide additional innovations.

       
       

    4. Respondent’s demonstrated ability to effectively provide the services.

       
       

    5. Respondent’s experience in providing the services being procured and the skills of proposed staff relative to the proposed approach and offering.

       
       

    6. Respondent’s technical Reply and Cost Replies as they relate to satisfying the primary goals of the telecommunication services identified herein.

    
    

26. Change number 2 found in the ITN’s Addendum 8 posted on June 13, 2017, provided revisions to section 4.8.A (2), the description of offering section. The changes provided the number of points allocated for each section in the Part 1 evaluation phase. However, paragraph “4.8.A.2.(c)” provided a further break- down of the overall points allocated to the “Vendor’s proposed value-added services” and provided important information for the negotiation phase. The pertinent changes are shown via underscore for the new language:

    c) To what extent do the Vendor’s proposed value-added services maximize the benefits to the Department? (Worth 21 weighted points, allocated below)

    
    

    1. Cell phone detection equipment and phone system surveillance services, including those listed in Sections 3.2.1, 3.2.4, and 3.2.5. (4 points)

       
       

    2. Cell phone forensics and intelligence, including those listed in Sections 3.2.2 and 3.2.3. (4 points)

       
       

    3. Managed Access Systems described in Section 3.2.7. (4 points)

    4. Vendor-provided phone call monitoring services referenced in Section 3.2.6. (4 points)

       
       

    5. Any other Vendor proposed value-added services or technology to aid in the prevention and detection of cellular devices, peripheral hardware and hazardous contraband at entry points and within the secure perimeter of our correctional institutions. (5 points)

    
    

    In the negotiation phase of this procurement, the Department reserves the right to negotiate for these or other value-added services identified through the negotiation process.

    Further, the Department is not bound to the point allocation or prioritization included in this section when determining the best value to the Department.

    
    

27. Securus did not file a protest when Addendum 8 was posted.

28. In the later part of November 2017, roughly a year after posting the ITN, DOC’s Team began conducting negotiation meetings with each vendor separately. Over the course of the next several months, the Team held a total of 20 negotiation sessions:

    6 sessions with CenturyLink; and 7 sessions each with GTL and Securus. In addition, the Team held 24 strategy sessions where they discussed potential negotiation strategies, the vendors’ offerings, and options for achieving the best value to the State.

29. DOC used a negotiating strategy that “flipped” Securus’ negotiating strategy. Instead of starting the negotiations with the low cost telephone rate charges and securing the VASs through the money collected in that manner, DOC elected to use a higher telephone rate charge to seek more VASs. Ms. Faulk explained this

    
    

    tactic as similar to how a car company operates. Instead of starting with a base price and adding specific features one at a time, a car company bundles added features, and a consumer has to take the bundle just to get the individual features they want.

30. In Securus’ first negotiation meeting with DOC, Ms. Faulk informed Securus that DOC was:

    fairly comfortable with the base phone system

    . . . they are fairly solid system platforms. So the main focus will be on the value added services, as I’m sure you all expected it to be.

    
    

    Ms. Faulk made clear that the negotiations “as a whole are intended to be a two-way street.” Although Ms. Faulk advised Securus that DOC would not be “dictating” what was in Securus’ best and final offer (BAFO) to DOC, DOC was providing Securus “an opportunity to understand what’s important to” DOC.

31. During the negotiation meetings, Ms. Faulk also stated that DOC was looking for:

    the solutions that we [DOC] can deploy and hit the biggest, the most number of institutions and kind of spread our buck or your [vendor’s] buck essentially the furthest that we can.

    Because, you know, we have funding struggles like any other public entity. And so, we want to utilize [the ITN process] in the best way we can.

    
    

    Ms. Faulk provided that DOC was trying to find a “sweet spot,” a call rate that was “reasonable” for inmates’ family and friends that also provided the VAS that DOC wanted.

    
    

32. The ITN was a “revenue-generating contract” for the vendor to provide DOC with VASs “in lieu of commissions.” See ITN, section 3.2 Value-Added Services. However that changed during the negotiation phase. During the third or fourth negotiating session, “a change to the terms laid out in the ITN” was provided. DOC coveted a $5 million commission paid on a yearly basis. Ms. Faulk testified that the reasons for this change dealt with the need to fill a revenue gap created when a different DOC contract expired. According to Ms. Faulk, DOC “wanted to ensure that we [DOC] did not reduce our [DOC] contribution to the general revenue.” All proceeds from telephone commissions are deposited into the State’s General Revenue Fund. See § 945.215(1)(b), Fla. Stat. Ms. Faulk further testified that

    the ITN was structured to allow for negotiation, and DOC was, at that point, “negotiating terms and conditions.”

33. DOC reviewed available telephone industry pricing for other state correctional departments (including Florida’s current provider) and found rates vary from a low of $0.04 (DOC) for local per minute calls to $0.13 (Georgia Department of Corrections, GDOC) for local per minute calls; and from a low of $0.06 (Texas Department of Corrections, TDOC) for an interstate per minute call to $0.25 (California Department of Corrections, CDOC) for an interstate per minute call. The other states also included a funding fee or account set up fee ranging from CDOC’s $3.00 (for a

    
    

    one-time set up fee) and $0.99 for each “Advanced Pay One Call,” up to TDOC’s $5.95 to fund prepaid accounts, plus $2.00 per collect call. No direct comparison can be made from these other states as there are too many variables in play.

34. The Federal Communications Commission (FCC) recently conducted a study that determined a “reasonable rate” to charge inmates for telephone usage was $0.21 per minute.

35. During the negotiation stage, Securus suggested to DOC that it provide a specific fixed per-minute rate, as well as include a deposit fee, in an effort to level the playing field for all competing vendors. Further, Securus explored the multiple VASs options that DOC discussed during the negotiation sessions.

36. On April 23, 2018, following completion of the multiple negotiation sessions with all the vendors, DOC issued a Request for Best and Final Offers (RBAFO) pursuant to section 4.9 of the ITN. The RBAFO directions had a specific reference to VASs. It

    provided:

    
    

    Value-added Services to include any additional ideas for improvement or cost reduction, additional commodities or additional services, which the Vendor will provide to the Department at no additional cost(s). These should be thoroughly detailed including an exact quantity, proposed implementation schedule, and maintenance, as applicable.

    
    

37. The RBAFO also provided specific directions on the format for the BAFO response and required that detailed

    
    

    information be provided on a revised price information sheet (RPIS). The RPIS included:

    The Vendor shall provide their proposed monthly commission rates per the stated per minute rate and deposit fee. Value-added services should be included on a separate sheet, along with any price assumptions.

    Please note, these rates are the only fees to be charged to inmate friends and family and shall include any surcharges and connection fees.

    
    

    The RPIS also required the initial term and renewal term be stated. The RPIS also supplied: the per minute telephone rate for all calls at $0.135; the deposit fee of $0.9914/; and a monthly commission rate of “$ .” The RPIS then again instructed that “The Vendor should include all Value-added Services on a separate sheet.” The form also contained the appropriate lines for the date, Federal Identification Number, the vendor’s name, the vendor’s printed authorized representative’s name and his/her signature.

38. On May 30, 2018, Securus, GTL, and CenturyLink submitted their BAFOs. GTL and CenturyLink each submitted one BAFO, while Securus initially submitted four BAFOs. The Team requested clarification from the vendors, and additional responses were submitted on June 25, 2018. GTL and CenturyLink each revised or submitted one BAFO, while Securus submitted an additional three BAFOs. Securus provided multiple scenarios as to how it could best accomplish DOC’s goals, using different telephone rates.

    
    

39. GTL’s BAFO provided the required call rate, deposit fee, monthly commission, and VAS within the five-year initial contract period.

40. Option 5 of Securus’ BAFOs, which was closest to the GTL BAFO, provided the required call rate, deposit fee, monthly commission, and VAS, but delivery was over a 10-year period as opposed to the five-year initial contract.

41. The Team held a final meeting on November 21, 2018, to discuss the various BAFO proposals. Ultimately, the Team recommended GTL for the contract award. The Team’s recommendation memorandum provided the Team “felt that both Securus and GTL offered similar core inmate telecommunication services to inmates and the Department with a robust management system.”

42. The difference, and the basis for the Team’s recommendation to award the contract to GTL, was grounded on GTL’s “offered commission rates and value-added services that would be implemented throughout the course of a five (5)-year initial contract term” as opposed to Securus’ proposal “over a 10-year initial contract term.” The remaining six options by Securus, offered the “five (5)-year contract term, [but] provided lower commission rates and less value-added services” to DOC.

43. On December 11, 2018, DOC posted its Notice of Intent to Award the contract to GTL. Securus timely protested DOC’s selection of GTL.

    
    

44. Securus’ protest focused on what it perceived to be VASs that were not related to inmate telecommunications services, specifically: hand-held walkie-talkies; a biometric entry/exit system for inmates, staff and visitors; and a radio frequency identification system (RFID). Securus failed to appreciate DOC’s stated goal: “Ensure the safety and security of staff, inmates and the public through the use of modern technology.” Each of these VASs falls within that goal.

45. DOC maintained its goal of “reasonable and justifiable telephone call rates.” DOC failed to maintain its specific goal for establishing a contract that lowered, not raised, the cost of telecommunication services for inmates’ friends and family, but held fast to maximizing the benefits to DOC. Although contrary to the goal, DOC placed all vendors on notice of its intention to seek the desired VASs in relation to the telecommunication services.

    CONCLUSIONS OF LAW

    
    

46. DOAH has jurisdiction over the subject matter and the parties to this competitive procurement protest pursuant to sections 120.569, 120.57(1), and 120.57(3).

47. Following negotiations, GTL was the announced recipient of the contract for the inmate telecommunications services contract, with Securus coming in second. Under the traditional standing test in Agrico Chemical Co. v. Department of

    
    

    Environmental Regulations, 406 So. 2d 478, 479 (Fla. 2d DCA 1981),

    
    

    Securus was “adversely affected” by DOC’s allegedly wrongful award of this contract to GTL.

48. Securus challenges DOC’s intent to award the contract to GTL. Pursuant to section 120.57(3)(f), the burden of proof in this matter rests with Securus as the party protesting the proposed agency action. Section 120.57(3)(f) further provides that in a competitive procurement protest:

    [T]he administrative law judge shall conduct a de novo proceeding to determine whether the agency’s proposed action is contrary to the agency’s governing statutes, the agency’s rules or policies, or the solicitation specifications. The standard of proof for such proceedings shall be whether the proposed agency action was clearly erroneous, contrary to competition, arbitrary, or capricious.

    
    

49. The phrase “de novo proceeding” describes a form of intra-agency review. The purpose of the ALJ’s review is to “evaluate the action taken by the agency.” J.D. v. Fla. Dep’t of

    Child. & Fams., 114 So. 3d 1127, 1132 (Fla. 1st DCA 2013); and State Contr. v. Dep’t of Transp., 709 So. 2d 607, 609 (Fla. 1st

    DCA 1998). A de novo proceeding “simply means that there was an evidentiary hearing . . . for administrative review purposes” and does not mean that the ALJ “sits as a substitute for the [agency] and makes a determination whether to award the bid de novo.” J.D. v Fla. Dep’t of Child. & Fams., 114 So. 3d at 1133;

    
    

    Intercontinental Props., Inc. v. Dep’t of HRS, 606 So. 2d 380, 386

    
    

    (Fla. 3d DCA 1992).

    
    

50. The “governing statute” for DOC’s use of an invitation to negotiate process to procure contractual services is found in section 287.057(1)(c), which provides:

    [T]he agency shall evaluate replies against all evaluation criteria set forth in the invitation to negotiate in order to establish a competitive range of replies reasonably susceptible of award. The agency may select one or more vendors within the competitive range with which to commence negotiations.

    After negotiations are conducted, the agency shall award the contract to the responsible and responsive vendor that the agency determines will provide the best value to the state, based on the selection criteria.

    
    

51. Securus must prove, as the party protesting DOC’s intended award, by a preponderance of the evidence, that DOC’s proposed action is either: (a) contrary to its governing statutes; (b) contrary to its rules or policies; or (c) contrary to the specifications of the ITN.

52. The standard of proof Securus must meet to establish that the award to GTL violates this statutory standard of conduct is whether DOC’s decision was: (a) clearly erroneous;

    (b) contrary to competition; or (c) arbitrary or capricious.

    
    

    §§ 120.57(3)(f) and 120.57(1)(j) Fla. Stat.; and AT&T Corp. v.

    
    

    State, Dep't of Mgmt. Servs., 201 So. 3d 852, 854 (Fla. 1st DCA

    
    

    2016).

    
    

53. The “clearly erroneous” standard has been defined to mean “the interpretation will be upheld if the agency’s construction falls within the permissible range of interpretations.” Colbert v. Dep’t of Health, 890 So. 2d 1165, 1166 (Fla. 1st DCA 2004); see also Holland v. Gross, 89 So. 2d

    255, 258 (Fla. 1956)(when a finding of fact by the trial court “is without support of any substantial evidence, is clearly against the weight of the evidence or . . . the trial court has misapplied the law to the established facts, then the decision is ‘clearly erroneous.’”).

54. An agency action is “contrary to competition” if it unreasonably interferes with the purpose of competitive procurement. As described in Wester v. Belote, 138 So. 721, 722

    (Fla. 1931):

    
    

    The object and purpose [of the bidding process] . . . is to 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 and opportunity for gain at public expense; to close all avenues to favoritism and fraud in its various

    forms; to secure the best values . . . at the lowest possible expense; and to afford an equal advantage to all desiring to do business

    . . . , by affording an opportunity for an exact comparison of bids.

    
    

    In other words, the “contrary to competition” test forbids agency actions that: (a) create the appearance and opportunity for favoritism; (b) reduce public confidence that contracts are

    
    

    awarded equitably and economically; (c) cause the procurement process to be genuinely unfair or unreasonably exclusive; or

    (d) are abuses, i.e., dishonest, fraudulent, illegal, or unethical. See § 287.001, Fla. Stat.; and Harry Pepper & Assoc., Inc. v. City of Cape Coral, 352 So. 2d 1190, 1192 (Fla. 2d DCA

    1977).

    
    

55. An “arbitrary” decision is one that is “not supported by facts or logic, or is despotic.” Agrico Chemical Co. v. Dep’t of

    Envtl. Reg., 365 So. 2d 759, 763 (Fla. 1st DCA 1978), cert. denied, 376 So. 2d 74 (Fla. 1979). A “capricious” action is one

    which is “taken without thought or reason or irrationally.” Id.

    
    

56. To determine whether an agency acted in an “arbitrary, or capricious” manner involves consideration of “whether the agency: (1) has considered all relevant factors; (2) given actual, good faith consideration to the factors; and (3) has used reason rather than whim to progress from consideration of these factors to its final decision.” Adam Smith Enter. v. Dep’t of Envtl. Reg., 553 So. 2d 1260, 1273 (Fla. 1st DCA 1989). The

    standard has also been formulated by the court in Dravo Basic Materials Co. v. Dep’t of Transp., 602 So. 2d 632, 632 n.3 (Fla.

    2d DCA 1992), as follows: “If an administrative decision is justifiable under any analysis that a reasonable person would use to reach a decision of similar importance, it would seem that the decision is neither arbitrary nor capricious.”

    
    

57. Section 287.012(4) defines “best value” as:

    
    

    The highest overall value to the state based on factors that include, but are not limited to, price, quality, design, and workmanship.

    
    

58. Turning to the merits of Securus’ protest, the evidence at the final hearing conclusively establishes the following facts:

    • The ITN put Securus on notice of DOC’s goals, specific goals and the requirements for submission of a BAFO.

    • The multiple addenda addressed questions, concerns, timelines, and changes for the conclusion of the process.

    • Securus participated in multiple negotiation sessions, and made suggestions to DOC for a standardized telephone rate charge, plus a deposit fee.

    • Securus participated in multiple negotiation sessions where DOC explained and discussed VASs that it wanted as part of the ITN.

    • Securus was aware of the initial contract term, with the option for an additional five year renewal term.

    • Securus responded to DOC’s ITN, not once, but utilizing seven different approaches.

59. In light of these factual findings, the central issue in this matter turns on whether DOC’s decision to award the contract to GTL was based on a process that was clearly erroneous, contrary to competition, arbitrary, or capricious. If Securus demonstrates

    
    

    that DOC should not have awarded the contract to GTL, then DOC’s failure to contract with Securus (the next eligible vendor) would be contrary to its governing statutes (§ 287.057, Fla. Stat.) and the ITN specifications.

60. To procure contractual services through an invitation to negotiation, section 287.057(16)(a) required the Department to

    appoint:

    
    

    At least three persons to conduct negotiations during a competitive sealed reply procurement who collectively have experience and knowledge in negotiating contracts, contract procurement, and the program areas and service requirements for which commodities or contractual services are sought.

    
    

61. The evidence in the record establishes that the persons DOC assigned to the Team “collectively” had the requisite experience and knowledge to conduct negotiations for the inmate telecommunications services. Based on the testimony, Ms. Faulk Mr. Kirkland, and Mr. Harrell each demonstrated their proficiency in contract procurement through their previous and current work responsibilities. Ms. Faulk is qualified to be the lead negotiator. DOC established that the Team “collectively” had the required experience and knowledge to negotiate and make the recommendation.

62. The undersigned concludes that DOC’s decision to award the contract to GTL is not clearly erroneous, contrary to competition, or arbitrary or capricious. DOC did not act in an

arbitrary or capricious manner. All vendors were provided a fair and equal opportunity to compete for the contract award. DOC concluded that except for the difference in the vendors’ base contract terms, both Securus and GTL seemingly presented very comparable and competitive offers to DOC. That Securus was out- negotiated is not a basis upon which a legal challenge may be sustained. The ITN process inherently relies upon and necessitates vendor competition, in terms of both pricing and negotiation strategy. Securus failed to show any credible or reliable evidence that DOC’s violated its governing statutes, rules, or policies in awarding GTL the contract.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Corrections enter a final order dismissing the protest by Securus. It is further recommended that the Department of Corrections award the contract under Invitation to Negotiate, ITN-17-122, to GTL.

DONE AND ENTERED this 25th day of March, 2019, in Tallahassee, Leon County, Florida.

S

LYNNE A. QUIMBY-PENNOCK

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675

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

Filed with the Clerk of the Division of Administrative Hearings this 25th day of March, 2019.

ENDNOTES

1/ All references to the Florida Statutes are to the 2018 codification unless otherwise indicated.

2/ Securus failed to comply with Florida Administrative Code Rule 28-106.204(3).

3/ The failure of all parties to utilize each other’s exhibits wasted resources and caused the undersigned to review, or begin to review, the same documents, only in different exhibit books.

4/ Ms. Faulk was listed as a witness for all three participants. Mr. Viefhaus was listed as a witness for Securus and GTL. Counsel for all parties were given wide latitude to extensively examine each witness.

5/ Mr. Kirkland and Mr. Harrell were each listed as a witness for all three participants.

6/ The third volume included a sealed envelope for the confidential portion (inclusive of pages 349 – 365) of the hearing.

7/ Prior to filing the amended motion, a Motion for Order Determining Certain Joint Exhibits Not to Be Confidential, Proprietary, or Trade Secret was filed.

8/ Ms. Faulk has worked in procurement for 14 years. She is a Florida Certified Contract Manager, a Florida Certified Contract Negotiator, and a Project Management Professional. Ms. Faulk has also overseen approximately 18 ITNs while working with DOC, and has participated in over 150 state procurements during her career.

9/ Addendum 001, posted on December 22, 2017, revised the time line, and deleted a specific paragraph in section 4.9.

Addendum 002, posted on January 9, 2017, purports to contain DOC’s “written responses to written inquiries, a revised timeline, and other revisions to requirements in the ITN document.” The undersigned only found a revision to the timeline.

Addendum 003, posted on January 17, 2017, provided DOC’s “written responses to Vendor’s written inquiries, as well as, revisions made to requirements of ITN.” Specific changes were made to sections 3.6.4, 3.6.4.1, 3.6.5, 4.9(A), and “the call data, by month for the last 12 months.” Forty questions were also addressed.

Revisions found in addendum 005, posted on February 23, 2017, will be provided in detail and found at paragraphs 18 and 19 of this Order.

Addendum 006, dated May 18, 2017, provided DOC’s “answers to the second round of written questions received” and added “new language to the ITN.” Specific changes were made to section

4.8.A (2) (which was changed again in addendum 008); a new attachment XI, regarding the non-disclosure agreement for restricted information; and answers to 33 questions.

Revisions found in addendum 008, posted on June 13, 2017, will be provided in detail and found at paragraph 26 of this Order.

Addenda 4, 7, 9, 10, 11, 12, 13, 14, 15, 16, and 17

specifically revise the ITN timeline.

10/ The phrase “subject to the availability of funds” is somewhat misleading as it appears that a contract renewal is subject to some form of remuneration from the state, which is not the case.

11/ The phrase “in terms of lowest phone rates to the State”; is misleading, at best, because this is a “revenue generating Contract” for the vendors to supply value added services. The ITN specifically states “At no cost to the Department.”

12/ Mr. Kirkland began his 28-year career with DOC as a correctional officer and has been promoted through various security-related positions. As the deputy director of Institution Operations,

Mr. Kirkland oversees the Bureau of Security Operations, the Prison Rape Elimination Act Compliance Office, the Emergency Management Special Teams, and the Radio Communications Office. Mr. Kirkland was on the Team and participated in all the negotiations and DOC strategy sessions.

13/ Mr. Harrell started his 26-year career as a correctional officer, and worked his way through the ranks to colonel. He also served as an assistant bureau chief of security Operations, and is its current bureau chief. Mr. Harrell was on the Team and participated in the negotiations and the DOC strategy sessions

14/ At these rates, all family and friends will pay $3.015 ($0.135 x 15, plus $0.99) for a 15-minute call. While that may seem to be a trivial amount to some, inmate calls to family and friends may be less frequent.

COPIES FURNISHED:

Kristen Krueger Clemons, Esquire Department of Corrections

501 South Calhoun Street Tallahassee, Florida 32399 (eServed)

William Robert Vezina, III, Esquire Vezina, Lawrence and Piscitelli, P.A.

413 East Park Avenue Tallahassee, Florida 32301 (eServed)

Andrew Rubin Fier, Esquire Vezina, Lawrence, & Piscitelli

413 East Park Avenue Tallahassee, Florida 32301 (eServed)

Megan S. Reynolds, Esquire

Vezina Lawrence & Piscitelli, P.A.

413 East Park Avenue Tallahassee, Florida 32301 (eServed)

William D. Hall, Esquire Dean Mead

Suite 130

215 South Monroe Street Tallahassee, Florida 32301 (eServed)

Daniel Ryan Russell, Esquire Dean Mead

Post Office Box 351 Tallahassee, Florida 32302 (eServed)

John A. Tucker, Esquire Foley & Lardner, LLP Suite 1300

One Independent Drive Jacksonville, Florida 32202 (eServed)

Robert H. Hosay, Esquire Foley & Lardner LLP Suite 900

106 East College Avenue Tallahassee, Florida 32301 (eServed)

Mallory Neumann, Esquire Foley & Lardner LLP

106 East College Avenue Tallahassee, Florida 32301 (eServed)

Benjamin J. Grossman, Esquire Foley & Lardner LLP

Suite 900

106 East College Avenue Tallahassee, Florida 32301 (eServed)

Nicholas John Peter Meros, Esquire Foley & Lardner

Suite 900

106 East College Avenue Tallahassee, Florida 32301 (eServed)

Mark S. Inch, Secretary Department of Corrections

501 South Calhoun Street Tallahassee, Florida 32399-2500

Kenneth S. Steely, General Counsel Department of Corrections

501 South Calhoun Street Tallahassee, Florida 32399-2500 (eServed)

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

10 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: 19-000126BID

Orders for Case No: 19-000126BID