RICHARD S. WEINSTEIN, )
vs. ) CASE NO. 79-1826BID
) FLORIDA DEPARTMENT OF LABOR AND ) EMPLOYMENT SECURITY, DIVISION OF ) ADMINISTRATIVE SERVICES, )
Respondent. )
A hearing was held in the above captioned matter, after due notice, at West Palm Beach, Florida on October 15, 1979, and concluded at Tallahassee, Florida, on October 23, 1979, before Thomas C. Oldham, Hearing Officer.
For Petitioner: John C. Moyle, Esquire
For Respondent: Kenneth H. Hart, Jr., and
Chad J. Motes, Esquires Department of Labor and Employment Security
Whether Petitioner's bid for lease of office space to Respondent in West Palm Beach, Florida, should be accepted.
In May 1979, Respondent issued invitation for bids for office space in West Palm Beach, Florida, for the purpose of establishing a combined claims, tax, and appeals unemployment compensation office in the West Palm Beach area. The lease on the present office in West Palm Beach expires in December, 1979. Two prior invitations for bids on the required office space had failed to result in the receipt of any bids. The invitation for bids provided that Respondent reserved the right to reject any and all bids and to make the award deemed to be in the best interests of the State of Florida. (Testimony of Bradner, Exhibit 15)
On May 30, 1979, Petitioner Richard S. Weinstein submitted the sole bid in response to the May 1979 invitation. He proposed to lease his building located at 1814 North Dixie Highway, West Palm Beach, and to meet all bid specifications and requirements. At the time of bid submission, Petitioner was leasing the building in question to a tenant who operated a used furniture store on the premises. In order to meet the specifications of the bid, the property required considerable renovation and improvement which Petitioner agreed to accomplish. (Testimony of Petitioner, Exhibit 2)
A bid selection committee composed of four departmental employees in Respondent's Tallahassee headquarters was appointed to consider Petitioner's bid and arrive at appropriate recommendations. On June 7, 1979, one of the committee members, accompanied by several officials of the West Palm Beach Office, inspected Petitioner's building and the surrounding area to determine its suitability for the proposed unemployment compensation office. Based upon statements made by those officials and the building's tenant that the area was unsafe and subject to frequent vandalism and theft, the committee member thereafter recommended to the selection committee that the bid be rejected and that the Department should readvertise for new bids. The committee unanimously accepted the recommendation and, on June 13, 1979, Petitioner was advised in a letter from the Respondent's support services director that his bid had been rejected based on the "inability of the building to meet our programmatic needs." Petition thereafter protested the decision and, as a result, the Secretary of the Department, Wallace E. Orr, directed the entire committee to make an on-site evaluation of the property and surrounding area. Thereafter, on July 18, 1979, the committee visited the site. At this time, each committee member, together with one of the officials of the local office, inquired of various businessmen in the surrounding area as to local criminal activity and solicited their opinion as to safety and security problems. One of the committee members also telephoned a city police desk sergeant concerning crime statistics in the area. (Testimony of Petitioner, Lowhorn, Orr, Bradner, Exhibits 3-4, 12)
Petitioner gave the committee members a petition from a number of local businessmen supporting his bid, and a letter from the nearby Good Samaritan Hospital advising that it may construct a medical office building adjacent to the hospital in the future. Letters were also sent to the Department by the manager of an apartment building adjacent to Petitioner's premises stating that the area was safe and that there had been no break-ins in more than four years, and from the Mayor of West Palm Beach to the Secretary of the Department describing the area and asserting that it was making a resurgence in character as a result of city improvements and that it was no more unsafe than most of the areas of the city. Another letter, dated July 20, 1979, was sent to the Department from the West Palm Beach Downtown Development Authority Executive Director stating that the area was growing, new buildings were being developed, and that the downtown area generally was becoming a "hub" for governmental facilities. Upon return to Tallahassee, each member of the bid committee rendered a report and recommendations concerning Petitioner's bid. They applied weighted criteria in its consideration, and concluded that the bid was unacceptable because it failed to meet the two criteria of "condition of immediate vicinity of location" and "security of the facility." In these respects, they basically found that (a) the various businesses in the area were essentially "fortified" against burglary and vandalism, (b) the proposed office would be subjected to break-ins and possible loss of valuable office equipment and unemployment compensation checks, (c) the local departmental employees would be fearful of working in an unsafe area and (d) an office located at Petitioner's premises would be "depressing" to members of the public who
utilized the departmental services. No mention was made in the various reports of the petition or letters sent to the Department by civic officials. The committee again recommended rejection of the bid and, by letter of August 1, 1979, Petitioner was advised of this fact and that new calls for bids would be made in the near future.
Secretary Orr had viewed the premises himself and agreed with the committee recommendations that the site was unsuitable for the establishment of a local office. He felt that placement of the office in the area where Petitioner's building was located would be inconsistent with departmental goals to upgrade their state offices and improve their "image." He had not been made aware of most of the various letters and the petition provided to the committee, but had considered the letter of the West Palm Beach Mayor prior to arriving at his decision. (Testimony of Butler, Frisch, Radner, Baker, Orr, Lowhorn, Renfroe, Quigg, Petitioner, Exhibits 6-10, 11-12, 16)
The street on which Petitioner's building is located is commercial in nature, although it is on the fringe of a residential community. It is an older part of the city and, until about five years ago, was in a rundown and depressed condition. In recent years, however, there has been an upgrading of the character of the downtown area of West Palm Beach which extends northerly to encompass the businesses in Petitioner's vicinity. The establishment of governmental facilities in the downtown and adjacent areas have been encouraged and a state office building is located in the area. A Department of Health and Rehabilitative Services "halfway house" has been erected approximately two blocks from Petitioner's building. Additionally, a branch banking facility, professional offices, several quality restaurants, and other modern business establishments are in the near vicinity. A laundry plant is across the street from Petitioner's building and at the present time presents an unsatisfactory appearance. It is intended, however, by the owners to expand and remodel the building in the near future.
The City of West Palm Beach has the second highest crime incident rate in the state based on population. The city is divided into ten zones for police purposes, and during 1978, the zone in which Petitioner's building is located was average from the standpoint of crime statistics. In the opinion of the City Chief Police Inspector, it is typical of the various commercial areas located along U.S. Federal Highway No. 1, and as safe an area in the daytime as any in the city. He is of the further opinion that a burglar alarm would be a sufficient security precaution for nighttime safety, and that with such protection, a building would have adequate security. The highest crime rate in the city is located in the zone where the city hall, police station and other governmental buildings are located. Although business and professional individuals in the area near Petitioner's building have experienced minor vandalism and occasional illegal entries in the past, they uniformly are of the opinion that the area is safe with normal security precautions, such as a burglar alarm. A local boat sales establishment has a fence around the premises and a watch dog, but no burglar alarm. These precautions are designed to protect the expensive boats which are located out- side the building. The apartment building next to Petitioner's premises has not experienced break-ins in recent years although some of its elderly patrons have been exposed to occasional purse snatching on the street. The laundry plant across the street from Petitioner's building experiences various window breakage by youths on the weekends, and had a break-in recently in the nighttime through a poorly secured door in the rear of the premises. (Testimony of Lowhorn, Stackhouse, Hauser, Hodges, Lee, Lunney, Eddy, Ring, Eaton, DeSanti, Witt (Deposition - Exhibit 1), Exhibits 12-14).
CONCLUSIONS OF LAW
In this proceeding, Petitioner seeks to have Respondent accept his bid for lease of the premises in question to the state. The pertinent statutory provision in this respect is Section 255.25(3)(a) , Florida Statutes, which provides pertinently as follows:
255.25 Approval of the Division of Building Construction and Property Management prior to construction or lease of buildings.--
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(3)(a) No state agency shall enter into a lease as leasee for the use of 2,000 square feet or more of space in a privately owned building except upon advertisement and receipt of competitive bids and award to the lowest and best bidder . . . .
Rules of the Division of Building Construction and Maintenance, Department of General Services, which are applicable in this proceeding, are set forth in Chapter 13D-7, Florida Administrative Code. Rule 13D-7.03 requires subordinate units of state government to obtain approval and certification of need from the respective agency head prior to requesting approval of the Department of General Services for lease of space. Rule 13D-7.14 prohibits a state agency from entering into negotiations for privately owned space without first soliciting competitive proposals and provides that solicitation for such proposals will be widely publicized in the city in which space is desired. Rule 13D-7.14(5) establishes requirements for evaluation of bids and reads in pertinent part as follows:
13D-7.14 Competitive Proposals
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Evaluation.
The user agency alone shall reserve the right to accept or reject any or all bids submitted and if necessary reinitiate pro- cedures for soliciting competitive proposals.
The user agency, in conjunction with preparing specifications, shall develop weighted evaluation criteria. The criteria items most significant to the user agency's needs should hear the highest weight. The cost of relocation, if any; consolidation of activities, if desirable; and any other
factors deemed necessary should be weighted.
The evaluation will be made by a committee consisting of the user agency staff whose proceedings will be duly recorded.
Selection (deemed to be the lowest and best bid) , will be based on the findings of each committee member subject to review by the Bureau of Property Management, Department of General Services, for technical adequacy.
Although the foregoing statutory and regulatory provisions appear to contemplate the necessity of receiving more than one bid or proposal prior to entering into a lease, the parties at the hearing expressly stipulated that the only issue to be determined in this proceeding was whether the bid met two of the eight evaluation criteria established by Respondent's bid review committee, i.e., "condition of immediate vicinity of location" and "security of facility." No issue was raised as to whether the bid should be rejected solely for the reason that it was the only bid received by Respondent. In fact, Respondent states in its posthearing memorandum of law that it is not contending that Petitioner's bid was rejected because it was the only bid received. The posture of the case therefore militates that the Hearing Officer restrict consideration to the stipulated issues. (See Gandy v. Department of Offender Rehabilitation, 351 So.2d 1133 (Fla. 1st DCA 1977).
It is uncontroverted that Petitioner's bid meets the bid specifications and, since it is the only bid, it necessarily is the "lowest and best" bid received by the Department. The only remaining question is whether it should be rejected for failure to satisfy the two evaluation criteria under the authority of Rule 13D-7.14(5)(a), F.A.C.
The various evaluation criteria used in evaluating Petitioner's bid are not specified in Departmental rules. However, they are straightforward in language and easily susceptible to interpretation. The criterion "condition of immediate vicinity of location" obviously concerns the appearance of the area near Petitioner's premises with respect to maintenance of structures, grounds, streets, and the like. Additionally, as expressed in various views of committee members, this criterion reasonably can also be applied in determining the suitability of the neighborhood for the establishment of Respondent's Unemployment Compensation Office. This factor properly may be viewed in the light of whether the area is of such a nature as to be an appropriate location for the conduct of Respondent's business, from the standpoint of both its employees and the public which it serves. In the foregoing respects, the evidence shows that the area in question is on Dixie Highway, a major through street which runs north and south through the downtown business area of West Palm Beach. A variety of types of businesses are located along Dixie Highway on either side of Petitioner's premises. It is a typical older commercial area that has been upgraded to some extent during the past several years and contains some buildings in need of maintenance and others that are modern and attractive. It is relatively near to the central downtown area in which most governmental facilities are located. The collective judgment of Respondent's bid selection committee was generally that the area was "cluttered," "depressing," and would not only downgrade the image of the Department in the eyes of the public, but also affect the morale and efficiency of agency employees. Although these subjective views merit consideration, they are considered to be insufficient for rejection of the bid. It may well be that more attractive surroundings are available in West Palm Beach, such as an office complex location in a newer area of the city. However, the fact remains that Petitioner's bid cannot be evaluated against another since it was the sole submission and Petitioner has established that the condition of the surrounding area is suitable for the location of Respondent's facility.
The other evaluative criterion of "security of facility" concerns the extent to which premises, office personnel and property, and the general public would be protected from incidence of theft, burglary, vandalism or other criminal activity. The weight of the evidence shows that the location in question is typical of other commercial areas in the city from the standpoint of criminal activity. Several incidents of vandalism and break-ins have been
experienced by some of the nearby business establishments, but not to any significant extent. Police and other city officials, together with the views of residents of the area make it clear that Respondent's apprehensions as to the probability of a high incidence of criminal activity is unfounded.
Respondent urges that its preliminary decision to reject the bid not be disturbed because such decision represented an exercise of discretion which should not be overturned unless arbitrary or capricious. Although this legal proposition is indisputable, the fact remains that this proceeding does not constitute a review of preliminary agency action, but is a de novo administrative process designed to formulate final agency action in cases where there is a dispute. McDonald v. Department of Banking and Finance, 346 So.2d 569 at 584 (Fla. 1st DCA 1977).
Respondent's contention that the opinion testimony of the West Palm Beach Chief Police Inspector concerning security aspects of various areas in the city be rejected is not deemed meritorious. A sufficient predicate was laid for receipt of opinion testimony in this respect.
Based on the foregoing, it is concluded that Petitioner has established eligibility for acceptance of his bid and that therefore Respondent should recommend approval of the same to the Department of General Services.
That Petitioner's bid be accepted by Respondent and recommended for approval to the Department of General Services.
DONE and ENTERED this 17th day of December, 1979, in Tallahassee, Florida.
THOMAS C. OLDHAM
John C. Moyle, Esquire 707 North Flagler Drive Post Office Box 3888
Kenneth H. Hart, Jr. and Chad J. Motes, Esquires Department of Labor and Employment Security
2561 Executive Center Circle E. Suite 131
