vs. ) CASE NO. 85-3294BID
Respondent. )
This case arises as a bid protest upon a contract for Medicaid transportation services. Prior to formal hearing all parties waived all provisions for expedited bid proceedings.
Pursuant to notice, a formal hearing was held before the Division of Administrative Hearings by its undersigned duly designated Hearing Officers Ella Jane P. Davis on January 27, 1986 in Ft. Lauderdale, Florida.
John M. Camillo Esquire 4367 N. Federal Highway
Ft. Lauderdale, Florida 33305
Rehabilitative Services: Harold L. Braynon Esquire
Ft. Lauderdale, Florida 33301
Robert J. Siedlecki 2223 Pembroke Road
At formal hearing, Petitioner presented oral testimony of Barbara Sullivan, William Clarke, Maurice Swift, Vera Scharitt, Nancy Porter, Robert J. Siedlecki, and William K. Martin.
Petitioner also had admitted seven exhibits. Respondent presented no oral testimony and had admitted no exhibits. Robert J. Siedlecki testified for Intervenor and had admitted one exhibit.
One document was admitted as a Hearing Officer Exhibit. Respondent (DHRS) provided a transcript of the formal hearing and timely filed its post-hearing proposals within the stipulated period therefor. Respondent's (DHRS's) proposed findings of fact have been specifically ruled upon in the appendix hereto.
Petitioner (B & L Services) moved untimely for an extension of time in which to file post-hearing proposals which motion was denied and its late-filed proposals have not been considered nor ruled upon in the appendix hereto. Intervenor (Friendly) filed no proposals.
Respondent (DHRS) published a Request for Proposals (RFP) for Medicaid transportation services on May 24, 1985.
The RFP identified five transportation categories which would be the subject of the contract awarded the successful bidder.
In response to the RFP, Petitioner (B & L Services) and Intervenor Friendly Checker Cab. Co. (Friendly) were the only entities to submit bid proposals.
Friendly's response to the instant RFP was rated superior to the B & L proposal by the DHRS bid evaluation committee. The committee further recommended to the DHRS District Administrator that Friendly be awarded the contract.
As noted, there were five categories of transportation involved in the current RFP. Friendly's bid was roughly equivalent to that of B & L Services' bid for both intracounty and intercounty non-emergency ambulance/stretcher service (one category) based on anticipated mileage. Because the RFP called for a "fixed price per unit of transportation" and because a "unit is defined as a one-way trip," (See RFP I.E.) it is questionable whether this portion of Friendly's bid was in compliance with the RFP. Friendly's bid was lowest for demand- responsive ambulatory transportation (more than 24 hour notice category) and demand- responsive ambulatory transportation (less than 24 hour notice category) whether or not the transportation to be provided was
intercounty or intracounty. Friendly was lowest bidder for demand-responsive wheelchair transportation (more than 24 hour notice category) and for demand-responsive wheelchair transportation (less than 24 hour notice category) if the transportation was intracounty but B & L Services was low bidder for intercounty transportation in these last two categories.
The RFP required that potential bidders possess a Medicaid Provider Number. B & L Services possessed such a number. Friendly also was an approved Medicaid provider and possessed a Medicaid Provider Number prior to submitting its proposal in response to the RFP, although Robert J. Siedlecki individually, did not.
Robert J. Siedlecki purchased the entity known as Friendly Checker Cab and its trade name in 1978. At the time of the submission of the current bid proposals Siedlecki was operating Friendly as a sort-of one man show which he characterized as a "sole proprietorship" . There is only uncorroborated hearsay testimony that during the course of the preliminary informal bid resolution process, the Office of the Secretary of State verified to Vera Scharitt contract manager for DHRS; that Friendly Checker Cab Co. was "re-established" as a corporation on July 16, 1985. (After contract inception date). Accordingly there was established no limitation on Mr. Siedlecki's personal liability.
Most of the bid evaluation committee members who testified erroneously believed they were rating a corporation when they rated the Friendly bid proposal because of the word/symbol "Co."
Petitioner contended that this status of Friendly and interrelationship of Friendly to other business entities of which Robert J. Siedlecki is a principal constituted sufficient camouflaging of interests to render Friendly an unresponsive bidder. Prior to the RFP in question, both B & L Services and Friendly had provided transportation services to DHRS pursuant to contract. The preceding year; Friendly had submitted a proposal in response to an RFP similar to the RFP in question. Robert J. Siedlecki submitted that former bid as Friendly for the category of ambulatory transportation in the same manner in which he submitted his proposal for Friendly for the five category contract under consideration herein, except that the present Friendly bid title page utilizes the trade name "Friendly Checker Taxis Company", another trade name owned by Mr. Siedlecki and the document agreeing to contract specifications and requirements
lists "Friendly Checker Taxicabs Co." The record is silent as to what "Friendly Checker Taxicabs Co." may bed but Mr. Siedlecki also owns it and the trade name of "Friendly Checker Cab. Co., Inc." which he stated is a corporation. The use of a different entity's name on the title page of the current Friendly bid proposal is characterized by Mr. Siedlecki as a "typographical error," because at his office they use these names interchangeably. In fact, although inadvertent and for no ulterior purpose; the interchangeable use of several different entity names throughout Friendly's bid proposal constitutes a material error which may have contributed to confusion of the bid evaluation committee over the identity and capability of the true bidder.
The prior year; Friendly was awarded and provided the ambulatory transportation category of a similar contract. That award and the award of other categories to B & L Services in response to the prior year's RFP were apparently made category by category within the same five categories as were covered by the present RFP. B & L Services contends that the bid evaluation committee members were misled with regard to the present proposals by use of only one rating sheet per each bidder as opposed to one rating sheet per bidder per category bid on. The current RFP provided that:
"III.D. . . .Proposers may submit a proposal for one or more types of services stated in this RFP" (RFP pp.2-3)
and
"V.C.4. . . .Proposers may submit a proposal for one or more types of service stated and must specify whether the cost is for countywide services, only, intercounty services only, or both." (RFP p.8)
However, the current bid evaluation committee members who testified all erroneously believed a single contract for all five categories was intended. Only the non-voting contract manager testified otherwise. The rating sheet misled the committee in its established award procedure.
Allegations of interrelationships between Intervenor Friendly and other business entities controlled by Mr. Siedlecki, such as "S & M," "Kinko Elevator," and "B & L Operating Co." (not to be confused with Petitioner B & L Services Inc.) were not
established as camouflaging or confusing the identity of the true bidder.
Paragraph L. of the RFP required that the original of all bid proposal responses be signed by an "official of the organization submitting the proposal who is authorized to bind the service operator to their proposal" (RFP page 6). Friendly's bid proposal title page indicates "Friendly Checker Taxi Company" with "Inquiries Coordinator Robert J. Siedlecki President," and "Project Director Karen Caputo."
Robert J. Siedlecki testified that within Friendly's bid proposal response documents, he signed the page requiring acceptance of contract terms and conditions as Robert J. Siedlecki, individually. This document bears his signature with no title. He also testified that he signed the affidavit of non- involvement in any feasibility study of the implementation of the subject contract as Robert J. Siedlecki, individually. This document bears his signature with no title. He also testified that he signed the certificate of self-insurance as Taxi, Inc.'s self insurance fund administrator. This document refers to "Friendly Checker Taxi" with his signature as "administrator." The administrative assessment documents refer to "Friendly Checker Cab Co." with Robert J. Siedlecki as "director." He testified that he signed the financial statement as Robert J. Siedlecki as President of Friendly Checker Cab, Co. and this testimony is confirmed on the document itself. He testified that he signed the document agreeing to all specifications and requirements of the contract as Robert J. Siedlecki, individually. That document refers to "Friendly Checker Taxicab, Co." and is signed by Mr. Siedlecki with no title. All these documents were required by the RFP and their completion resulted in the higher rating for Friendly's proposal. However, rationalizations within the internal workings of Mr. Siedlecki's mind of when he is an official of different entities and when he is an individual is not easily discernible from the actual bid documents. These rationalizations affected full disclosure required by the RFP and contributed to confusion of the bid evaluation committee members as to the identity, nature, and capability of the true bidder.
Concerning financial statements; the RFP required providers to:
"V.D.4. Submit a copy of the most recent financial statement. A Certified Public Audit is preferred." (RFP p.8).
B & L Services' financial statement in its current bid proposal was dated December 31, 1983. Its coversheet is dated March 12, 1984 and purports to be signed by a firm of certified public accountants. This coversheet is actually a statement that the March 12, 1984 compilation relies on representations of B & L Services' management. (Petitioner B & L Services). It may be B & L Services' "most recent" financial statement, but this "compilation" does not constitute a certified public accountant's unqualified opinion let alone a "certified statement" or "certified public audit" within certified public accounting standards.
Friendly's financial statement submitted with its current bid proposal likewise was not a certified public audit but was dated May 15, 1985 and was verified by Robert J. Siedlecki as President of Friendly on June 19, 1985, and thus was more current than the financial statement of B & L Services. The Friendly financial statement seemingly contains all information associated with Friendly's operations, but does not contain all details of Robert
J. Siedlecki's personal and individual assets and liabilities. As a result, the Friendly financial statement is substantially defective and misleading for a sole proprietorship. This defect is particularly significant in misstating Friendly's financial status in the instant case because Mr. Siedlecki individually is involved in other business dealings and litigation which could affect his personal liquidity and thus the capability of Friendly to perform the DHRS contract.
B & L Services' response to the current RFP did not include an acceptance of responsibility statement nor a completed administrative assessment checklist, both of which were required by the RFP and failure of B & L Services to include each constituted a material and substantial noncompliance with the RFP.
Friendly's response to the current RFP did include a completed administrative assessment. It also included an acceptance of responsibility statement which materially complied with the RFP in all other respects except concerning identity and capability of the true bidder as reflected in Finding of Fact 12, above.
The current RFP called for five categories of transportation services. Intercounty transportation requirements (involving transportation portal to portal through three counties) and intracounty transportation requirements (involving transportation between any two points within Broward County) cross category lines. (See Findings of Fact 2 and 5 above). At least
two categories of services to be performed under the current contract did not require a Broward County Non-Emergency Medical Transportation (NEMT) license.
The RFP permitted the successful bidder to sub-contract for the provisions of services under the contract in question upon the following terms:
"III.F. The proposer shall execute with the District X Medicaid Program Office a
General Revenue Federal Funds Contract with appropriate attachments which complies with monitoring standards. Said provider may subcontract for provision of transportation services. The provider is responsible for assuring that the subcontractor meets all requirements for participation in the Medicaid Programs abides by the provisions of the contract and meets all state and local licensing
requirements." (Emphasis supplied) (RFP pp. 3-4)
Friendly, through Robert J. Siedlecki, made its decision to sub-contract the non-emergency transportation categories of the current contract some time around the time the bid was opened by DHRS. No information about subcontracting or subcontractors is apparent from Friendly's bid proposal documents.
AAA Wheelchair Wagon Service had been issued a Broward County NEMT license on June 20, 1985, which was one day prior to the submission and opening of bid proposals and prior to the date set for inception of the contract.
Prior to the start of the contract Friendly requested and received permission from DHRS to subcontract the wheelchair/stretcher portions of the contract to AAA Wheelchair Wagon Service.
Petitioner's Exhibit 7, a 6/14/85 letter from Dr. Martin, Assistant Director Broward County Emergency Services Division, to Mrs. Nancy Porter, a bid evaluation committee member was submitted to the committee for informational purposes so the committee would know what entities were NEMT licensed by Broward County to do non-emergency medical transportation in Broward County. The letter, although vague; represents by elimination, that Friendly and AAA Wheelchair Wagon Service were not licensed on June 14, 1985 by Broward County but B & L Services, Inc. was so-licensed on that date.
The RFP provides that:
"I.D.6. List vehicles to be used, identifying number and licenses with proof of insurance, listing type and amount of coverage, attaching copies of all current applicable state and local licenses and permits," (RFP page 8)
However, neither the DHRS contract manager nor any of the bid evaluation committee members who testified had any knowledge at all of what licenses were required to perform any of the contract's five categories, and none realized that certain licenses which were no longer necessary and/or which were issued to many other Siedlecki-owned entities or to Mr. Siedlecki personally had been attached to Friendly's proposal while B & L Services attached to its proposal its Broward County NEMT license but not its state NEMT license.
Some of the 90 employees listed on Friendly's bid proposal should have been indicated as independent contractors instead. Additionally, the insurance compliance documents mention "Friendly Checker Taxi" and, according to Mr. Siedlecki's oral testimony, some of the vehicles listed as Friendly's property were apparently owned by independent dispatch drivers and some by Taxi, Inc., which is yet another entity owned and controlled by Robert
J. Siedlecki. These errors result in a material noncompliance of Friendly's proposal with RFP requirement I.D. 6 (RFP page 8). However, the authority of Robert J. Siedlecki as administrator of the Taxi, Inc. Self- Insurance Fund in relation to the number of Taxi, Inc. vehicles listed in the Friendly bid proposal is less than clear from the record and since the burden of proof is upon Petitioner to demonstrate each element of non-compliance and the extent of this non-compliance by competent substantial evidence, no non- compliance arising from alleged criminal violations under Florida Statutes governing the requirements of self insurance funds and their administrators has been adequately demonstrated.
The RFP required bidders to:
"I.D.3. Submit evaluations of projects similar to the one proposed in the RFP (previous experience is desired but not required)" (RFP p.8).
Friendly's bid proposal outlined 20 years of service to the community including service to and from the local airport. B & L
Services contends this information is falsified due to Siedlecki's takeover of Friendly as sole proprietor of Friendly in 1978. The competent substantial evidence falls short of establishing deliberate falsification, but in light of the foregoing findings of fact and the sole proprietorship status of Friendly, this portion of the Friendly proposal is materially misleading of the overall experience of Friendly.
B & L Services did not present any evidence to show that it was an eligible transportation provider under 10C- 7.45(3)(a) F.A.C.
B & L Services presented no evidence to rehabilitate the deficiencies of its proposal and no evidence to show the superiority of its bid over that of Friendly.
Pleadings of record indicate Petitioner and Respondent have entered into agreements concerning damages, if any, as part of their stipulations for continuance of the formal hearing but B & L Services presented no evidence of damages incurred by B & L Services as a result of the bid award to Friendly.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction of the parties and subject matter of this cause.
Since this contract involves procurement by a state agency of personal services, it is governed by Chapter 287 Florida Statutes. Of that Chapters the following sub-sections are relevant to these proceedings.
Section 257.012
"(1) Agency means any of the various state officers, departments, boards, commissions, divisions, bureaus, and councils and any
other unit of organization, however designated of the executive branch of state government.
"(9) 'Qualified bidder' or 'qualified offeror' means a person who has the capability in all respects to perform fully the contract requirements and has the integrity and reliability which will insure good faith performance.
"(12) 'Responsive bidder' or 'responsive offeror' means a person who has submitted a bid which
conforms in all material respects to the invitation to bid or request for proposals."
Other statutes and rules applicable in this case are Section 401.255(1) F.S. which provides:
"(1) Every person, firms corporation, association, or governmental entity owning or acting as agent for the owner of any business or service which furnishes, operates, conducts, maintains, advertises,
engages in, proposes to engage in or professes to engage in the business or service of primarily transporting upon the streets, highways, waterways, or airways of this state persons who are confined to wheelchairs or stretchers and whose conditions are such that they do not need and are not likely to need immediate medical attention during transport shall be licensed by the department as a nonemergency medical transportation service, except when a county elects to regulate such services by enacting an ordinance which sets forth requirements meeting those specified herein. For purposes of this part, licensure as a nonemergency medical transportation service includes wheelchair and stretcher car service." (Emphasis supplied)
and Rules 10C-7.45(3) which provides: 10C-7.45 Transportation. Provides for
transportation of eligible individuals to
obtain compensable Medicaid services from a Medicaid provider
(3) Provider Eligibility
(a) Eligible transportation providers include: ambulance companies, non emergency medical vehicle companies, public (bus, taxi) companies, private and public agencies, operators of private vehicles, and specialized (air ambulance companies).
All transportation service providers must comply with all applicable, local and state operating regulations required by the regulating authority; and
Be in full compliance with Section
504 of the Rehabilitation Act; and
Be in full compliance with Title VI of the Civil Rights Act; and
Be enrolled in the Florida Medicaid Program; and
Not be currently suspended from the Title XVIII (Medicare) Program; and
Not be currently under suspension
from Florida or any other state's Title XIX (Medicaid) Program; and
Not be currently under any suspension
from any local or state regulatory authority." (Emphasis supplied)
The standard of review of agency decisions for RFP acquisitions is set forth in System Development Corp. v. Department of Health and Rehabilitative services; 423 So.2d 433 (Fla. 1st DCA 1982) which stated:
"We are constrained to review the
agency's decision under these circumstances only so far as to determine
whether the decision was arbitrary, capricious or beyond the scope of its discretion, which discretion is very board"
'So long as a public agency acts in good faiths even though they may reach a conclusion on facts upon which reasonable men may differs the courts will not generally interfere with their
judgment even though the decision reached may appear to some persons to be erroneous. Volume Services Division v. Canteen Corp., 369 So.2d 391, 395 (Fla. 2d DCA 1979).
Although normally a bidder may not "cure" errors or meet qualifying standards set forth in the RFP after date of opening, in this case, the subcontracting of Friendly was permissible. The language of RFP provision III F, set out above in Finding of Fact 17, is clearly subject to the interpretation that a proposer shall execute the contract, become a provider, and then subcontract for provision of transportation services. This means that, contrary to B & L Services' oral argument at hearing that compliance cannot occur after bid award, the RFP here in question expressly authorized the successful bidder to subcontract for the provision of services under the Medicaid Transportation Contract after award. While this procedure clearly could result in abuses which would affect the competitive nature of bidding, no abuses were
demonstrated. Likewise, it was demonstrated that Friendly complied with all contract requirements for prior DHRS approval of the subcontractor (AAA Wheelchair) and took steps to ensure that the subcontractors which was primarily engaged in stretcher and wheelchair transportation; met all necessary licensing requirements. Because of this subcontracting factors it is not necessary to determine whether or not Friendly was "primarily engaged" in transportation of persons confined to wheelchairs or stretchers so as to require either its own state or its own county NEMT license.
The failure of a majority of the bid evaluation committee to understand that the RFP called for categorized bids and that the contract might be awarded category by by category, combined with the use of a single rating sheet for all five categories resulted in an arbitrary and capricious rating of both proposers as those terms are understood within System Development Corp. v. Department of Health and Rehabilitative Services; supra.; Liberty County v. Baxter's Asphalt & Concrete- 421 So.2d
505 (Fla. 1952) and Volume Services Division v. Canteen Corp. supra; but this assessment is secondary to the determination that neither proposer was responsive or qualified- regardless of which proposer might demonstrate the lowest bid in a given category.
There is no specific statutory, rule, nor RFP requirement that the bid evaluation committee investigate behind the proposals submitted, but it is axiomatic that the committee members should satisfy themselves that they are aware of the true identity of the competitive bidders. This is especially so where the nature of the entity bidding (corporations sole proprietorship, etc.) may affect insurance coverage, general liability, ownership of vehicles, capability of performance and financial capability as it does here.
The Friendly proposal/bid facially suggests involvement somewhere of Friendly Checker Cab Co., Friendly Checker Taxi Company, and Friendly Checker Taxicab Co. This, plus the attached licenses in many different entities' names, should have alerted the contract manager and committee that some inquiry was necessary to accurately determine what entity was actually doing the bidding, and that the entity bidding, whatever its nature might be, had the "capability in all respects to perform fully the contract requirements and has the integrity and reliability which will insure good faith performance." These are the terms upon which Section 287.012(9) F. S. defines "qualified bidder."
Friendly's financial statement, although more current than B & L Services' financial statement, is flawed by failure to include the personal finances of its sole proprietor, Robert J. Siedlecki. Mr. Siedlecki may not take advantage of limited corporate liability without incorporating his respective business entities. An incomplete financial statement in the case of a sole proprietorship significantly affected the committee's opportunity to evaluate a bidder's capability to perform the contract and use of "Co." and "Inc." suggested limited liability and a complete financial statement where these did not exist. It is immaterial that certain members of the committee expressed no concern with corporate status vel non of bidders.
There are materially incorrect or incomplete statements in the Friendly proposal as regards the number of vehicles and which specific vehicles are owned and insured, number of Friendly employees, status of independent contractors and their vehicles, and past similar successful community service by Friendly. Friendly has also failed for one category to comply with the unit price concept enunciated in the RFP.
Friendly's noncompliances were not "minor technicalities" which the RFP and contract permitted DHRS to waive, but rather, were substantial defects and noncompliances, the waiver of which was not within the committee's knowing discretion.
Upon the foregoing, it is determined that Friendly was neither a "responsive bidder" nor a "qualified bidder" as those terms are defined by statute.
However, B & L Services also did not comply with the RFP in that it did not submit a statement that indicated its acceptance of the terms and conditions of service nor a completed administrative assessment checklist as required by the RFP. These are also material, non-waiveable non-compliances which render B & L Services a non-responsive bidder. Further, although B & L Services established it had a Medicaid Provider Number, it did not present any evidence to show that B & L Services was otherwise an eligible transportation provider under 10C- 7.45(3)(a), and it therefore cannot be pronounced a "qualified bidder."
The RFP and contract specifically authorize rejecting all bids and readvertising. Faced with both proposers' substantially non-conforming bids, there are but two proper alternatives: to award the contract to the next lowest bidder who meets the qualifications or to reject all bids and readvertise.
Since there were no responsive bidders once Friendly and B & L Services are eliminated, based upon the evidence adduced in these Section 120.57(1)F.S. proceedings, the only option is to reject both bids and readvertise. Harry Pepper & Associates, Inc. v.
City of Cape Coral, 352 So.2d 1190 (Fla. 2nd DCA 1977); 64 Am. Jur. 2d, PUBLIC WORKS AND CONTRACTS, Section 75.
Notwithstanding the broad discretion that public agencies are vested with in the bidding process, it is essential to the integrity of the process and to public confidence in the process that such discretion be exercised in a manner which excludes any reasonable doubt as to the fairness of the process. Requiring DHRS to select which of these materially non-conforming bids is most in conformance would defeat that goal.
The court in Couch Construction Company, Inc. v. Department of Transportation, 361 So.2d 172 (Fla. 1st DCA 1978), citing Willis v. Hathaway, 95 Fla. 608, 117 So. 89 (Fla. 1928), Berry v. Okaloosa County, 334 So.2d 349 (Fla. 1st DCA 1976); Wood- Hopkins Contracting Co. v. Roger J. Au & Son, Inc., 354 So.2d 446 (Fla. 1st DCA 1978), affirmed an agency's wide discretion to reject all bids and to call for new bids for public contracts, provided that such a determination considers all circumstances in the course of the Section 120.57(1) proceeding, and is not done arbitrarily.
That DHRS enter a final order rejecting all bids and providing procedures for a new RFP.
DONE and ORDERED this 4th day of June, 1986, in Tallahassee, Florida.
ELLA JANE P. DAVIS
Division of Administrative Hearings this 4th day of June, 1986.
APPENDIX TO RECOMMENDED ORDER, CASE NO. 85-3294BID
Petitioner B & L submitted no timely Proposed Findings of Fact Respondent DHRS' Proposed Findings of Fact
Intervenor Friendly submitted no Proposed Findings of Fact.
John M. Camillo, Esquire B & L Services, Inc.
4367 N. Federal Highway
Ft. Lauderdale, Florida 33308 Harold L. Braynon, Esquire
Ft. Lauderdale, Florida 33301
Robert J. Siedlecki, Friendly Checker Cab Co. 2223 Pembroke Road
