STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MARTIN M. McALLISTER, )

)

Petitioner, )

)

vs. ) CASE NO. 82-1967BID

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent, )

and )

)

1. WHIDDEN, )

   )

   Intervenor. )

   )

   
   

   RECOMMENDED ORDER

   
   

   Pursuant to notice, a formal administrative hearing was conducted in this matter on September 20, 1982, in Fort Myers, Florida. The following appearances were entered: Truman J. Costello and L. David Sims, Fort Myers, Florida, appeared on behalf of the Petitioner, Martin M. McAllister; Anthony DeLuccia, Jr., Fort Myers, Florida, appeared on behalf of the Respondent, Department of Health and Rehabilitative Services; and Fletcher Brown, Arcadia, Florida, appeared on behalf of the Intervenor, C. W. Whidden.

   
   

   This is a proceeding through which the Department of Health and Rehabilitative Services is seeking to acquire a lease of office space and facilities in Arcadia, Florida. The Department issued a Request for proposal for the facilities. The Petitioner and the Intervenor submitted bids in response to the Request for Proposal. By letter dated June 16, 1982, the Department gave notice of its intent to award the bid to the Intervenor. The Petitioner filed a timely Protest and Petition for Formal Hearing. The final hearing was scheduled as set out above by notice dated August 11, 1982. C. W. Whidden had not previously moved to intervene in the proceeding, but appeared at the hearing with counsel and moved to intervene. The motion was granted on the record.

   
   

   At the final hearing, the Petitioner testified as a witness on his own behalf and called the following additional witnesses: Lester Missman, the Facilities Service Coordinator for District VIII of the Department of Health and Rehabilitative Services; Raymond Ward, the Administrator of Department of Health and Rehabilitative Services' activities in Sarasota and DeSoto Counties within the Department's District VIII; Frances Clendenin, the Department's Administrative Services Director; Frank Snell, a certified public accountant; Billy M. Newberry, an energy management specialist employed with Florida Power and Light Corporation; and Jeffrey R. Smith, the Vice President of Smith Quality Cleaning Service, Inc. Cindi Shaffer, the Facilities Services Coordinator of the Department of Health and Rehabilitative Services testified on behalf of the Department. The Intervenor testified on his own behalf; re-called the witness

   Clendenin; and called Thomas Hankins, the Department of Health and Rehabilitative Services' Direct Services Supervisor in Arcadia, Florida, as an additional witness. Petitioner's Exhibits 1 through 12 were offered into evidence and received. Intervenor's Exhibits 1 and 2 were marked for identification, but were neither offered nor received.

   
   

   The parties have submitted post-hearing memoranda which include proposed findings of fact and conclusions of law. The proposed findings and conclusions have been adopted only to the extent that they are expressly set out in the findings of fact and conclusions of law which follow. They have been otherwise rejected as not supported by the evidence, contrary to the evidence, irrelevant to the issues, or legally erroneous.

   
   

   ISSUES

   
   

   The ultimate issue to be determined in this proceeding is which of the bids submitted to the Department of Health and Rehabilitative Services in response to its Request for Proposal for office space and facilities in Arcadia, Florida, is the lowest and best response to the invitation. The Petitioner contends that the Intervenor's bid was not responsive to the Request for Proposal, and that even if the Intervenor's bid were considered responsive, that Petitioner's bid was the lowest and best response. The Intervenor contends that its bid was responsive and that it was the lowest and best response. The Department contends that it properly evaluated the responses and that the bid should be awarded to the Intervenor.

   
   

   FINDINGS OF FACT

   
   

   1. In order to provide services as required by various federal and state statutes, the Department of Health and Rehabilitative Services needs to maintain office space in or near to the city of Arcadia, Florida. The Department is presently leasing office space from C. W. Whidden, the Intervenor in this proceeding. The lease expires on November 30, 1982. The Department's space needs have expanded since the time that it entered into the lease for the existing facility. In order to meet the need for increased space and to continue with its present activities, the Department issued an "Invitation to Propose" inviting interested persons to submit bids for the required office space. Three persons responded to the invitation: Chuck Bundschu, Inc.; Martin

      M. McAllister, the Petitioner in this proceeding; and the Intervenor. The bid acquisition has been designated by the Department as Lease No. 590:1526.

      
      

   2. The Department formed a bid evaluation committee composed of five employees of the Department's District VIII office. The facility being acquired would be located within and serve people within the Department's District VIII. Members of the bid evaluation committee individually reviewed the three bids, and met together to form a consensus. On May 14, 1982, the committee generated a memorandum in which the three bids were given points in 12 separate evaluation areas. The Petitioner's bid was given 87 points, the Intervenor's bid was given

      83 points, and the bid submitted by Chuck Bundschu, Inc., was given 75 points. The committee recommended that the lease be awarded to the Petitioner. The Department's District VIII Administrative Services Director, Frances Clendenin, was among the members of the committee. She was not satisfied with the committee's evaluation, and she communicated about it with Cindi Shaffer, the Department's Facilities Services Coordinator in Tallahassee. Shaffer agreed that the committee's evaluation had not been sufficiently objective, or at least that the evaluation did not adequately reveal that objective criteria were applied. She recommended to Clendenin that tangible factors be applied. She

      suggested that the most tangible factor was cost to the Department; and if cost was not a factor, that the committee should set out a detailed narrative statement in support of its conclusions that one bidder or another should receive more or less points in any given area of the evaluation. Clendenin interpreted these suggestions as meaning that all bidders should be awarded the same points in any area unless a specific cost to the Department could be identified so as to justify less points being given to any bidder. The committee conducted a second evaluation and concluded, based upon criteria directed by Clendenin, that the Intervenor's bid should be given 98 points, that Petitioner's bid should receive 90 points, and that the Bundschu bid should receive 81 points. Accordingly, the committee recommended that the lease be awarded to the Intervenor. This recommendation was accepted by the Department. Petitioner filed a timely bid protest, and this proceeding ensued. Chuck Bundschu, Inc., neither protested the bid award nor appeared in this proceeding.

      
      

   3. The Petitioner has contended that the bid submitted by Intervenor is not responsive to the specifications set out in the Invitation to Propose. The Invitation sets out the following evaluation criteria:

      
      

      The successful bid will be the one determined to be the lowest and best. All bids will be evaluated based on the award factors enumerated below:

   4. Provision of the adequate square footage in a single building. Proposals will be considered, but fewer points given, which offer the aggregate square footage in not more than two locations provided the facilities are immediately adjacent to or within 100 yards of each other.

Intervenor has proposed to provide the required aggregate square footage in three buildings. Two of the buildings are presently occupied by the Department under the lease which will soon expire. They are separated only by a five- or six-foot-wide concrete walkway which is covered. To get from one building to the other, one must merely open one door, cross the sidewalk, and open another door. While these are more than one building, they effectively serve as a single location in the same sense that two floors in a single building serve as a single location. The third building in Intervenor's proposal is located across a parking lot from the other two buildings, within 100 yards of them.

Intervenor proposes to meet the aggregate square footage required by the Department through three buildings. The three buildings constitute two locations, however, which are within 100 yards of each other. The proposal thus meets the bid evaluation criteria and is not unresponsive to the Invitation to Propose.

1. The evaluation criteria set out in the Invitation to Propose delineates

   12 separate areas to be evaluated and designates a weighted point value to be assigned each area. The highest number of points that could be given was 100. The first area for evaluation is "rental rate including projected operating expenses." Twenty-five points are assigned to this area. The Intervenor's bid offered the lowest rental rate. Over the 10-year period of the proposed leases, Intervenor's bid is between $84,000 and $85,000 lower than Petitioner's bid. In its first report, the evaluation committee gave Intervenor 25 points and the Petitioner 21 points. In its second evaluation, Intervenor was given 25 points and Petitioner 17 points. The second evaluation more objectively sets out the difference in rental rate between the proposals and constitutes an accurate

   appraisal of the difference between the rental rates proposed by Intervenor and Petitioner.

   
   

2. Petitioner sought to establish at the hearing that the Department would incur additional operating expenses under Intervenor's proposal which would not be incurred under Petitioner's proposal. Petitioner offered the testimony of an employee of the electrical utility that serves the area to the effect that electrical utility charges would be greater for Intervenor's facility than for Petitioner's. The evidence is not, however, credible. The witness estimated Intervenor's utility charges by tracing the past history of charges for the two buildings presently occupied by the Department and assuming that the third building would incur utility expenses at the same rate per square foot. The Petitioner has proposed to construct a new building. The witness estimated utility charges that would be incurred at Petitioner's facility by utilizing accepted formulas. The comparison is not appropriate in an evidentiary sense because of the different techniques used to estimate charges for the two facilities. Furthermore, the witness's assumption that utility charges in the Intervenor's third building would be consistent with those in the other two is not valid because the third building would not be utilized on a daily basis. Finally, the theoretical computations for Intervenor's building cannot be credited because such services as heating and required equipment were not included in the estimate.

   
   

3. Petitioner sought to establish that the Department would incur increased operating expenses under Intervenor's proposal because an additional employee would be required for Intervenor's facility. This contention is not supported by the evidence. The Department's activities are presently being undertaken in the Intervenor's two buildings that are separated only by a sidewalk, and no additional employees are required because of the configuration.

   
   

4. Petitioner sought to establish that the Department would incur higher janitorial charges under Intervenor's proposal than under Petitioner's. A janitorial service made an estimate of the amounts that it would charge for the Petitioner's proposed building and for the Intervenor's existing three buildings. The estimate assumed that the third building would be utilized on a daily basis by the Department. The evidence establishes, however, that the building would be used on less than a daily basis and only for a portion of those days on which it is used. The janitorial service estimates are therefore based upon an unsupported assumption.

   
   

5. The second area to be evaluated is "conformance of space offered to the specific requirements contained in the Invitation to Bid." Twenty-five points are assigned to this area. In its initial report, the evaluation committee gave the Intervenor 20 points in this area, and the Petitioner 25 points. In its second evaluation, both bidders were given 25 points. The first evaluation reflects a concern with the fact that Intervenor's proposal was to provide the required square footage in three buildings, while Petitioner proposed to construct a new facility and to offer the square footage in a single building. The second evaluation reflected the committee's inability to assign a specific dollar amount to the inconvenience that would be caused by utilizing three buildings instead of one. Clearly, there are inconveniences that would result from use of three buildings rather than a single building. The operation would be less compact and therefore less efficient. Petitioner's proposal met the specific requirements in the Invitation to Bid with precision as might be expected from a facility which is designed specifically with the Invitation in mind. As also might be expected, Intervenor's facility, which was not developed with this specific Invitation in mind, does not conform as specifically with the

   requirements of the Invitation. The initial evaluation giving the Intervenor 20 points and the Petitioner 25 points for this area appropriately reflects differences in the bids offered by Intervenor and Petitioner and accurately assesses the difference through the point system.

   
   

6. The fourth area to be evaluated is "provision of the aggregate square footage in a single building." Ten points are assigned to this area in the Invitation. In its initial report, the committee gave five points to the Intervenor and 10 points to Petitioner. In its second report, Intervenor was given eight points and Petitioner 10 points. The second evaluation reflects a more objective appraisal of the disadvantages of the three-building complex offered by Intervenor as compared to the one-building complex offered by Petitioner. The first evaluation represented too harsh a view of the inconveniences that would result from the three-building proposal. Some members of the evaluation committee felt that an additional employee would be required, which is not the case. Furthermore, the third building proposed by Intervenor, which is located across a parking lot, would be utilized only for storage of old files and as a conference room. It would not be used on a daily basis, and this minimizes the inconvenience that would result from its being located across the parking lot. It is appropriate that the Intervenor be given eight points and the Petitioner 10 points for this area of the evaluation.

   
   

7. The fifth area to be evaluated is "susceptibility of the design of the space offered to efficient layout and good utilization." In its initial report, the committee gave Intervenor three points and the Petitioner five points. In its second report, both Intervenor and Petitioner were given five points. The first evaluation too harshly downgrades the effect of three buildings, and the second evaluation gives too little weight to it. It is appropriate that Intervenor be given four points and Petitioner five points for this area of the evaluation.

   
   

8. The twelfth area of the evaluation is "moving costs." Two points are assigned to this area in the Invitation. In both of its reports, the evaluation committee gave Intervenor two points and Petitioner no points for this area. Given the fact that no moving costs would be incurred under Intervenor's proposal, and costs would be incurred under Petitioner's, this appears to be an appropriate evaluation.

   
   

9. The third and sixth through eleventh areas to be evaluated under the Invitation for Bid are "proximity to clients," "environmental factors," parking," "street-level space," "transportation," "dining facilities," and "proximity to other Department activities." The evaluation committee's reports varied in insignificant respects, but the evidence demonstrates that, objectively, the Intervenor's and Petitioner's proposals are equal in each of these areas. A total of 33 points is assigned to these areas under the Invitation. Both Petitioner's and Intervenor's bids meet the requirements in these areas set out in the Invitation, and both should be given 33 points.

   
   

10. In its initial report, the evaluation committee gave Intervenor 83 points and Petitioner 87 points. In its second report, the committee gave Intervenor 98 points and Petitioner 90 points. The first report did not reflect an appropriate scoring because too much penalty was assigned to Intervenor's three-building configuration. The second evaluation did not adequately downgrade Intervenor's bid because of the three-building configuration. When the points set out in the above findings are added, Intervenor's bid is given 92 points and Petitioner's bid 90 points. This numerical assignment accurately reflects the differences between the bids and the advantages that would accrue

    to the Department for accepting one bid or the other. The reduced price of Intervenor's proposal and increased efficiency of Petitioner's render the proposals very nearly equal in value to the Department. By a very narrow margin, the Intervenor's proposal is the lowest and best bid in response to the Invitation to Propose for Lease No. 590:1526.

    
    

    CONCLUSIONS OF LAW

    
    

11. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of this proceeding. Section 120.57(1), Florida Statutes.

    
    

12. The specifications set out in the Department's Invitation to Propose are in compliance with the rules of the Department of General Services relating to leasing facilities set out in Chapter 13D-7, Florida Administrative Code. The regulations and the Invitation to Propose provide a vehicle for the Department to weigh the advantages of different proposals in terms of suitability of the proposed space and in terms of cost.

    
    

13. The lowest and best bid submitted in response to the Department's Invitation to Propose for Lease No. 590:1526 is the bid submitted by the Intervenor, C. W. Whidden.

RECOMMENDED ORDER

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

RECOMMENDED:

That a final order be entered by the Department of Health and Rehabilitative Services awarding a lease contract to the Intervenor, C. W. Whidden, for Lease No. 590:1526.

RECOMMENDED this 2nd day of November, 1982, in Tallahassee, Florida.

G. STEVEN PFEIFFER Assistant Director

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 2nd day of November, 1982.

COPIES FURNISHED:

Truman J. Costello, Esquire

L. David Sims, Esquire 1873 College Parkway Post Office Drawer 06205

Fort Myers, Florida 33906

Anthony N. DeLuccia, Jr., Esquire District VIII Legal Counsel Department of Health and

Rehabilitative Services 8800 Cleveland Avenue, South Fort Myers, Florida 33907

Fletcher Brown, Esquire

124 North Brevard Avenue Post Office Box 349 Arcadia, Florida 33821

Mr. Chuck Bundschu

5900 Enterprise Parkway Fort Myers, Florida 33905

Mr. David H. Pingree Secretary

Department of Health and Rehabilitative Services

1323 Winewood Boulevard

Tallahassee, Florida 32301

Docket for Case No: 82-001967

Orders for Case No: 82-001967