STATE OF FLORIDA DIVISION OF ADMINISTRATIVE HEARING
INTERNATIONAL TEST CORPORATION, )
)
Petitioner, )
)
vs. ) CASE NO. 86-3647B1D
) STATE OF FLORIDA, DEPARTMENT OF ) HIGHWAY SAFETY AND MOTOR VEHICLES, )
)
Respondent, )
and )
)
JUNO SYSTEMS, INC., )
)
Intervenor. )
)
RECOMMENDED ORDER
This matter came on for hearing in Tallahassee, Florida, before Robert T. Benton, II, Hearing Officer of the Division of Administrative Hearings, on October 3, 1986. At hearing, the parties were represented by counsel:
APPEARANCES
For Petitioner: Martha Harrell Hall, and
Mary E. Haskins
Carlton, Fields, Ward, Emmanuel, Smith & Cutler, P.A.
410 First Florida Bank Building Tallahassee, Florida 32302
For Respondent: Michael James Alderman
Room A-432, Neil Kirkman Building 2900 Apalachee Parkway
Tallahassee, Florida 32399-0504
For Intervenor: Douglas P. Manson
Oertel & Hoffman, P.A. Post Office Box 6507
Tallahassee, Florida 32314-6507
By formal written protest and petition for formal administrative hearing, filed with the Department of Highway Safety and Motor Vehicles (DHSMV) on August 28, 1986, International Test Corporation (TestCorp) contends that DHSMV should award a contract for driver testing equipment to TestCorp rather than to Juno Systems, Inc. (Juno). By order entered September 19, 1986, Juno's petition for leave to intervene was granted and Juno's amended petition for leave to intervene was granted at hearing.
Procedural Background
The parties to the present dispute have had dealings before. The first time DHSMV set out to let a contract for automated driver testing equipment Juno and Test Corp. also submitted bids but "the Department then cancelled
On April 16, 1986, DHSMV mailed a second invitation to bid, No. 2887-85 (Rebid) and, on May 16, 1986, DHSMV opened the bids received in response. On June 23, 1986, DHSMV posted a bid tabulation and notice of its intention to award the contract to TestCorp. On the day of the posting, Juno filed notice of protest, and, on July 3, 1986, Juno filed its formal written protest.
On July 14, 1986, Juno's representatives net with DHSMV staff. Later that day and the next TestCorp's Ken Muir and DHSMV's Merelyn Grubbs spoke on the telephone, after which Ms. Grubbs wrote TestCorp that its bid was not responsive because TestCorp's "bid for equipment was predicated upon the Department agreeing to enter into the four-year maintenance contract." On August 14, 1986, DHSMV posted a second bid tabulation for No. 2887-85 (Rebid) indicating its intention to award the contract to Juno. TestCorp's notice of protest and formal written protest followed.
DHSMV transmitted the bidders' pleadings to the Division of Administrative Hearings along with its own motion to expedite on September 18, 1986. By order entered September 19, 1986, the motion to expedite was granted, and final hearing was set for October 3, 1986. At the close of the hearing counsel asked for and were granted until October 27, 1986, in which to file proposed recommended orders. Thereafter counsel advised of an agreement to file post- hearing submissions on Monday, October 20, 1986. As soon as the hearing officer learned of the agreement, counsel were asked to file on Friday instead of Monday because the hearing officer was to be out of the office the week of October 20- 24, but this proved impractical for counsel, and, in the end, proposed recommended orders were filed October 24, 1986.
Motion to Dismiss Denied
In an amended motion to dismiss, Juno argued that TestCorp's formal written protest and petition for formal administrative hearing should be dismissed because TestCorp failed to "file with the agency a notice of protest in writing within 72 hours after the posting of the Bid Tabulation," Section 120. 53(5)(b), Florida Statutes (1985), which is a statutory condition precedent to the filing of a formal written protest. Juno does not contend that TestCorp's formal written protest was itself untimely, only that the notice of protest was out of time.
The second bid tabulation for Invitation to Bid (ITB) No. 2887-85 (Rebid) was posted at eight o'clock on Thursday morning, August 14, 1986. TestCorp filed its notice of protest on the following Tuesday morning, August 19, 1986, at 7:31. The filing was within 72 hours of the posting only if the weekend is excluded. Although weekends are excluded in calculating three-day deadlines under rules of court, see Fla. R.Civ. P. 1.090(a), Fla. R. Crim. P. 3.040, and Fla. R. App. P. 9. 420(e), the general rule is otherwise in calculating time periods under administrative rules that do not address the issue. Federal Property Management, Inc. v. Department of Health and Rehabilitative Services,
462 So 2d. 493 (Fla. 1st DCA 1984) (reh. den. 1985). Here, however, DHSMV has adopted a rule governing the filing of notice of protest which specifies that the "72-hour period excludes Saturdays, Sundays and holidays." Rule 15-2.03(3), Florida Administrative Code. Juno's amended motion to dismiss was denied at
hearing since, in substantial interest proceedings, rules never invalidated nor made the subject of a challenge pursuant to Sections 120.54(4) or 120.56, Florida Statutes (1985) are to be disregarded rarely, if ever.
Motion in Limine
Juno sought to limit the scope of the present proceeding in two respects.
First, Juno sought the exclusion of all evidence on the issue of the responsiveness of its own bid in response to ITB No. 2887-85 (Rebid). In this respect, Juno's motion in limine was denied. Second, Juno sought the exclusion of all evidence relating not to the question of the responsiveness of TestCorp's bid, but only to the history of the agency's treatment of the question. In this respect, Juno's motion in limine was granted.
Counsel are to be commended for the considerable effort the joint pre- hearing stipulation reflects, and for the further narrowing of the dispute they were able to accomplish at hearing because of their thorough preparation.
Remaining for decision are the following
ISSUES
Whether TestCorp's bid was contingent on DHSMV's entering into a maintenance and service contract with TestCorp? Whether TestCorp's offer of a 12-month cost-free warranty was contingent on DHSMV's entering into a maintenance and service contract with TestCorp? Whether TestCorp failed to offer a 12-month warranty at no charge? Whether DHSMV impermissibly proposes to consider the cost of maintenance in awarding the bid? Whether TestCorp's failure to register to do business in Florida until June 20, 1986 precludes an award to TestCorp? Whether TestCorp's failure to offer all right, title and interest in and to its system renders its bid unresponsive? Whether TestCorp failed to provide sufficient technical information to show that its system would meet specifications? Whether TestCorp failed to furnish the names of three customers with like or similar equipment? Whether TestCorp failed clearly and concisely to describe variances between its bid and the specifications set out in the ITB? Whether Juno's proposal has bilingual capability consistent with clearly visible images even on handicap display units?
FINDINGS OF FACT
ITB No. 2887-85 (Rebid) is in evidence as Joint Exhibit No. 1. The parties stipulated that pages 26 through 34 of Joint Exhibit No. 3, which replace two of the original ITB pages and consist otherwise of bidders' questions about the ITB and DHSMV's answers, also constitute part of the invitation to bid, whose purpose "is to secure Automated Driver Testing Equipment for the Florida Division of Driver Licenses." Joint Exhibit No. 1, p. 2.
ITB No. 2887-85 (Rebid) calls for ten testing machines to be tied to an examiner's console in each of five systems, and specifies that the testing systems have both "English and foreign language capability," Joint Exhibit No. 1, p. 13, 3.3.02, that they "function in such a manner that controls and operations for both examiner and examinee are minimal," Joint Exhibit No. 1, p. 14, 3.4, and that they be "capable of presenting a visual question test" to all examinees, including handicapped (seated) examinees.
With each system, ITB No. 2887-85 (Rebid) as modified in response to questions from TTSS, Inc., calls for 80 questions, consisting of "30 operator
questions, 30 chauffeur questions, and 20 road signs." Joint Exhibit No. 3, p.
DHSMV would administer 40-question tests to applicants for operator's licenses and to applicants for chauffeur's licenses, each consisting of "20 written questions and 20 road signs." Joint Exhibit No. 3, p. 34.
The specifications also call for "the highest quality professional duplicating film" and specify that "[n]o visible deterioration . . . be noticeable in the quality of the projected image during the warranty period." Joint Exhibit No. 1, p. 23, 4.6.2(c). ITB No. 2887-85 (Rebid) calls for "[c]omplete product information, including technical and descriptive literature sufficiently detailed to substantiate [that] the system offered meet[s] or exceed[s] the specifications." Joint Exhibit No 1, p. 3.
ITB No. 2887-85 (Rebid) requires that each bidder use the "bid forms furnished by this Department," Joint Exhibit No. 1, p. 5, 2.21A, see Joint Exhibit No. 1, p. 1, which both TestCorp and Juno did. While warning that "[b]ids containing terms and conditions conflicting with those contained in this Invitation to Bid shall be rejected," Joint Exhibit No. 1, p. 6, 2.24, the ITB also reserves to DHSMV the right to waive "minor deviations or exceptions . . . defined as those that have no adverse effect upon the State's interest and would not affect the amount of the bid by giving a bidder an advantage or benefit not enjoyed by other bidders." Joint Exhibit No. 1, p. 5, 2.18.
In a related provision, the ITB requires that any nonconformity "be clearly and concisely described with a request for variance . . . accompanied by a full explanation as to the advantages and/or disadvantages." Joint Exhibit No. 1, p. 5, 2.19.
Bids Submitted
DHSMV received four bids in response to ITB No. 2887-85 (Rebid). Low at $94,470.00 was Computer Specialties, Inc., but DHSMV deemed this bid unresponsive and Computer Specialties, Inc., filed no notice of protest. Second low was Juno's alternate bid of $237,795.00, which tracked the bid DHSMV now proposes to accept, except that the alternate bid did not provide for a performance bond. DHSMV rejected Juno's alternate bid as unresponsive, and Juno has not questioned this determination. Third low was TestCorp's bid at
$242,000, and Juno's bid was high at $246,795.00.
Juno's Bid
The parties stipulated that the lack of bilingual capability would be material, but did not agree that Juno's system was deficient in that respect (T.73). Juno's bid states that each display unit "shall utilize an unnotified Kodak Ektagraphic Slide Projector Model E-2 . . . [and] shall be capable of displaying up to eighty (80) separate question slides." Joint Exhibit No. 3, p.
The sample slide representations Juno furnished with its bid depicted traffic scenes and accompanying questions in English only. Joint Exhibit No. 3, pp. 111, 111a.
Foreign language capability would require either separate slides with foreign language questions or the same slides with questions in English as well as in foreign language(s). In the event of separate slides, one machine of the ten called for (in each of the five systems specified) could be dedicated to each foreign language in which the tests were to be administered, or foreign language slide trays could be substituted as needed.
TestCorp's Bid
Set out as a general condition in ITB No. 2887-85 (Rebid) was the following:
SERVICE AND WARRANTY: Unless otherwise specified, the bidder shall define any warranty service and replacements that will be provided during and subsequent to this contract. Bidders must explain on an attached sheet to what extent warranty and service facilities are provided. Joint Exhibit No. 1.
In the event of a conflict between a general condition and a specification, the ITB states that the specification is to take precedence. Among the specifications included in ITB No. 2887-85 (Rebid) were these:
2.1 Bidder must submit copy of maintenance and service contract and costs with bid. (Informa- tion on maintenance during warranty and after warranty expires). Joint Exhibit No. 1, p. 4
2.27.2 If maintenance of the equipment is to be the responsibility of the State,
training necessary to properly maintain the equipment must also be provided. Joint Exhibit No. 3, p.27
2.30 Warranty - Service - Mai[n]tenance Parts Replacement: Parts determined to be defective must be repaired or replaced at no charge to this Department for a period of twelve (12) months. Labor must be furnished (normal working hours) at no charge to this Department for a period of twelve (12) months. EXCEPTION: It is understood that warranty does not include consumable parts/ supplies. Joint Exhibit No. 3, p.27.
2.31. If a defect in the equipment occurs because of obvious misuse or after expiration of the warranty, vendor or his authorized service representative will make repairs promptly for a period of five years from date of acceptance at a reasonable cost to the purchaser. Joint Exhibit No. 3, p. 28.
Maintenance
Bidder shall submit a maintenance plan with his bid response. Maintenance should be outlined in a schedule or table showing how and when it is to be performed. If the State must perform its own maintenance, this must be specified. Any replacement parts required to be installed under normal main-
tenance procedures must be listed, along with cost, method of delivery, and how installation is to be performed.
Bid Award - Special Conditions
Cost of maintenance, if applicable, will not considered in award of bid . . . Joint Exhibit No. 3, p. 28.
Finally, the specifications provided that the "complete system cost" included a year's spare parts and required each bidder to attach "a list of all equipment, service and spare parts included in his bid for each location." Joint Exhibit No. 1, p. 25.
Maintenance and Warranty Tied
11. With reference to specification 2.27.2, TestCorp's bid states, "Maintenance will be the responsibility of TestCorp." Joint Exhibit No. 2, p.
Otherwise TestCorp's bid responds to maintenance and service specifications by reference to and inclusion of a form "TestCorp Warranty and PerTest Maintenance Agreement." Joint Exhibit No. 2, pp. 34 through 38. On TestCorp's bid sheet is written, "PLEASE SEE REQUIRED MAINTENANCE AGREEMENT ATTACHED." Joint Exhibit No. 2, p. 25. With reference to specification 2.12, TestCorp's bid states, "Warranty and PerTest Maintenance contract is enclosed." Joint Exhibit No. 2, p. 31. Among the provisions of the form contract are the following:
This agreement shall be in effect for 5 years from the date of purchase of the system.
Service as described below will be provided at no charge during the "Warranty Period,"
which is the first year following installation. Joint Exhibit No. 2, p. 34.
There is no charge for service under this agreement during the 12 month Warranty Period. During the 48-month pre-test maintenance period . . . you will be charged at the rate
of $0.48 per test. Joint Exhibit No. 2, p. 35.
Variance from the terms and conditions of this agreement in any order or other written notification from you will be of no effect. Joint Exhibit No. 2, p. 38.
DHSMV originally determined TestCorp's bid to be responsive to ITB No. 2887-85 (Rebid) and proposed to award to TestCorp on June 23, 1986.
Another Look
During the pendency of Juno's ensuing protest, DHSMV staff changed their minds. In their prehearing stipulation, the parties set out the following sequence:
On July 14, 1986, Merelyn Grubbs, Chief of the Bureau of General Services of the Department, placed a phone call to Ken Muir,
Vice President of Sales and Marketing for TestCorp, in order to clarify questions that had arisen with regard to TestCorp's bid.
As a result of the July 14 telephone conversation and reexamination of TestCrop's bid, the Department concluded that in order
to get TestCorp's 12-month cost-free warranty, the Department would be required to sign
the maintenance and service agreement with TestCorp.
As a result of tube July 14 telephone conversation and reexamination of TestCrop's bid, the Department concluded that in order to get the TestCorp equipment at the bid price, the Department would be required to sign the maintenance and service agreement with TestCorp.
On July 15, 1986, Ken Muir called Merelyn Grubbs to discuss TestCorp's position with regard to the maintenance and service contract.
On July 15, 1986, Merelyn Grubbs sent a letter informing TestCorp that its bid had been rejected as nonresponsive because the "bid for equipment was predicated upon the Department agreeing to enter into the four- year maintenance contract."
On July 15, 1986, C. W. Keith, Director of the Division of Driver Licenses, sent a memorandum to Fred O. Dickinson, III, Deputy Executive Director of the Department, which said, in relevant part:
In view of the recent discovery of the main- tenance contract on TestCorp's bid which would in effect cost our Department approximately $300,000 for a four year period, which we obviously cannot afford
and was not listed in the bid, we recommend that TestCorp be notified that they are nonresponsive to the bid and that they be disqualified. Ms. Grubbs verified on July
14 with TestCorp [sic] that their bid was invalid unless we also accepted their maintenance contract at a price of 49 cents per examination administered. ([sic] and 49 in original)
In short, DHSMV reconsidered, decided that TestCorp's bid was unresponsive, and proposed to award to Juno, on that account. This is DHSMV's current position.
The form contract TestCorp attached to its bid, entitled "TestCorp Warranty and Per-Test Maintenance Agreement," covers five years. After the
initial year in which there were to be no maintenance charges, the contract specifies maintenance charges "at a rate of $0.48 per test . . . based on the estimated number of tests given in Addenda #1 to this bid, ITB-DHSMV-2887-85 (Rebid)." Joint Exhibit No. 2, p. 35. The estimated number of tests to which the form contract refers amounted to 950 daily in January of 1986. Joint Exhibit No. 3, p. 33. For years two through five, TestCorp's annual revenues from DHSMV under the maintenance contract can be calculated at $114,000, by multiplying 950 times $0.48 times 250 working days (approximate). If January is an unusually busy month or if the testing centers are not open fully 250 days a year, the figure would be less.
Registration
At the time TestCorp submitted its bid in response to ITB No. 2887-85 (Rebid), on May 16, 1986, it had not registered with Florida's Department of State as a foreign corporation doing business in Florida. Among the special conditions set out in ITB No. 2887-85 (Rebid) was the following.
2.1 All corporations seeking to do business with the State shall, at the time of submitting a bid in response hereto, be on file with
the Department of State in accordance with
the Provisions of Chapter 607, Florida Statutes; Chapter 607, Florida Statutes;
TestCorp registered with the Department of State in accordance with the provisions of Chapter 607, Florida Statutes (1985) on June 20, 1986, three days before the original tabulation on the rebid was posted. When TestCorp originally applied for registration is not clear from the record.
Purchase Contemplated
The ITB No 2887-85 (Rebid) announces DHSMV's intention to purchase five complete systems, and defined purchase as "acquisition of all rights, titles and interest in the systems in exchange for payment . . . ." Joint Exhibit No. 1, p. 2, 1.3. With reference to the bidder's use of any patented or copyrighted "design, device or materials" the specifications provide that "bid prices shall include all royalties . . . . " Joint Exhibit No. 1, p. 12. TestCorp conditioned its bid by stating
The Department will acquire all rights, titles and interest in the systems purchased save
and except the department shall not sell, lease, transfer, duplicate or copy the TestCorp hardware configuration, software, or video disc for any purpose whatsoever.
In using this language, the drafter of TestCorp's bid referred by section number, 1.3, to that part of the ITB calling far sale outright.
Product Information
TestCorp's bid represents that all components of the systems it offers "are of standard manufacture." Joint Exhibit No. 2, p. 31. It proposes touch screens in lieu of keyboards. Included in its bid are technical specifications for the touch screens, as well as for the Hitachi video disc player, the multi- user host adapter and the monitor components. Technical specifications for the
cable, the Roland printer, the TestCorp housing and the IBM-compatible microcomputer components are not included in the bid, which describes the software and video disc components only as "proprietary." A narrative description of how the system works is also included with TestCorp's bid, however, and the bid recites that the software for the examiner's station "controls all Testing/Information stations and saves all the answers given during each test." Joint Exhibit No. 2, p 29. TestCorp's substitution of touch screens for keyboards, while not framed as a request for variance, was clearly and concisely described. An explanation of the perceived advantages of touch screens accompanied the description.
Right and Wrong
ITB No. 2887-85 (Rebid) calls for "correct answer feedback," Joint Exhibit No. 1, p. 13, 3.3.05, which the specifications describe in some detail, after first making clear that "wording and procedures . . . serve only as a guideline [and that d]ifferent procedures, wording or indications will be acceptable." Joint Exhibit No. 1, p. 16.
"WHEN SURE PUSH SCORE" should be an indicator and shall come on after an answer choice has been made to advise the applicant to depress the "SCORE" selection device.
"RIGHT" [or] "WRONG" will appear after the "SCORE" selection device has been depressed and will indicate the correctness of the applicant's answer choice.
Joint Exhibit No. 1, pp. 16 and 17, 3.9.5
3. 9.5
3.9.7 The final answer selection device, when activated by the applicant, shall cause the selected answer to be recorded and the correct or incorrect indicator to be activated. It shall not be possible to activate the final answer selection device until an answer selection has been made. Joint Exhibit No. 1. p.
TestCorp's bid, which states, "The test can be presented as specified in this proposal," Joint Exhibit No. 2, p. 29, indicates that the "TestCorp method uses an answer until correct procedure for administering tests." Joint Exhibit No. 2, p. 30. "The computer does the scoring . . . . Examinees know the correct answer to each question at the end of the test." Joint Exhibit No. 2, p. 30.
TestCorp's bid also includes the following description:
When the test begins, the software chooses a question at random and presents it to the examinee. The examinee touches a key to register the answer of his choice. If it is wrong, the computer tells him to try again until he gets the right answer . . .
Joint Exhibit No. 2, p. 71.
Apparently TestCorp's system would cause a "Try Again" panel rather than a "Wrong" panel to light up, but this difference is not material, as Section 3.9.5 explicitly states.
Cabinetry
ITB No. 2887-85 (Rebid) requires that the cabinet for the "handicapped display unit . . . be so constructed as to permit an applicant for a driver's license test to remain seated while taking the test," Joint Exhibit No. 1, p. 15, 3.8.1; and requires that the examiner's console cabinet "be a small desk top unit with a sloping panel for ease of operation and readout viewing." Joint Exhibit No. 1, p. 19, 8.14.
TestCorp's bid does not explicitly address the cabinetry either for the handicapped display unit or for the examiner's station. TestCorp's bid does say, "Any testing station can be used as an alternate Examiner's Station."
Joint Exhibit No. 2, p. 27. TestCorp's bid also states, however that the "Examiner's Station consist[s] of the same components [as make up an examinee's station, viz., housing, cables, a microcomputer, a monitor, a touchscreen and a video disc player] with the exception of the video player, which is replaced by a printer," Joint Exhibit No. 2, p. 29, and that the "Examiner's Console also includes the local area network hardware that controls the Testing/Information Stations." Joint Exhibit No. 2, p. 29. The latter statements raise some question about the asserted interchangeability. In context, the claims that the different types of stations are similar or interchangeable must relate to their technical construction, and not to the cabinets in which the working components would be housed.
References
ITB No. 2887-85 (Rebid) calls for a "list of three (3) customers having equipment like or similar to that being bid." Joint Exhibit No. 1, p 4,
2.17. TestCorp supplied the names of four customers, for only two of whom, however, TestCorp had installed automated driver testing systems.
TestCorp furnished the other two customers hardware identical to that called for by ITB No. 2887-85 (Rebid), albeit "not all tied together to a command console or master console as" (T.63) called for by ITB No. 2887-85 (Rebid). As for the software TestCorp furnished these other two customers, "[t]here are some differences in terms of commands, but the program, software program, is not a dissimilar program" (T. 64) even though these customers use the systems for purposes other than testing drivers, purposes requiring the input of different data.
CONCLUSIONS OF LAW
An invitation to bid sets out specifications which bids filed in response must meet in substance, in order for the bidder to qualify as a competitor for the contract to be let. It is not the invitation to bid, but the bid itself which, if accepted, forms the contract. The invitation to bid is the standard against which bids are measured to determine whether they are eligible for consideration. Specifications in invitations to bid, like "[w]ords in [almost] an[y] instrument should be given their natural or most commonly understood meaning." Tropabest Foods, Inc. v. State Department of General Services, 493 So.2d 50, 51-2 (Fla. 1st DCA 1986).
"Although a bid containing a material variance is unacceptable . . . not every deviation from the invitation is material." Robinson Electric Co. v. Dade County, 417 So.2d 1032, 1034 (Fla. 3d DCA 1982); Tropabest Foods, Inc. v. State Department of General Services, 493 So.2d 50, 52 (Fla. 1st DCA 1986); Glatstein v. Miami, 399 So.2d 1005 (Fla. 3rd DCA) rev. den. 407 So.2d 1102 (Fla. 1981). "It is only material if it gives the bidder a substantial advantage over the other bidders and thereby restricts or stifles competition." Tropabest Foods, Inc. v. State Department of General Services, 493 So 2d 50, 52 (Fla. 1st DCA 1986); Harry Pepper & Associates, Inc. v. City of Cape Coral, 352 So.2d 1190 (Fla. 2d DCA 1977). TestCorp's bid varies from the specifications in the ways described in the findings of fact. At least two of the variances are material.
TestCorp Warranty and Per-Test Maintenance Agreement
ITB No. 2887-85 (Rebid) requires that each bidder "define any warranty service and replacements" and "explain on an attached sheet to what extent warranty and service facilities are provided." The TestCorp Warranty and Per Test Maintenance Agreement (Warranty/Maintenance Agreement) comprises the only definition of "warranty service and replacements" or attachment on the subject that TestCorp included with its bid The Warranty/Maintenance Agreement makes no provision for warranty service or replacements, unless DHSMV also contracts with TestCorp for maintenance for four years thereafter. But if, as it is perhaps legally obligated to do, DHSMV waits for another day on which to invite bids for maintenance contracts, and so foregoes signing the Warranty/Maintenance Agreement TestCorp has furnished, TestCorp's bid is devoid of any assurance that it would supply any warranty services or replacements whatsoever, under contract No. 2887-85 (Rebid).
In order for the bids to conform to the specifications, the bidders must be in the business of servicing what they sell. A provision of ITS No. 2887-85 (Rebid) requires that the successful bidder must stand ready to "make repairs for a period of five years from date of acceptance at a reasonable cost to the purchaser." Joint Exhibit No. 3, p. 28 2.31.2. Elsewhere ITB No. 2887-
85 (Rebid) specifies that only the cost of the machines and their installation is to be considered. With respect to the purchase contract, the cost of maintenance is to play no part in the award; and it is clear from ITB No. 2887-
85 (Rebid) as a whole that the specifications require only that bidders give DHSMV the option of contracting with them for maintenance, after the warranty period expires.
The Warranty/Maintenance Agreement calls for annual payments in excess of $100,000, after the first year. The failure of a bid to offer warranty services or replacements during the first year would be a material omission, and TestCorp has not contended otherwise. By making warranty services and replacements contingent on a maintenance contract DHSMV has not subjected to competitive bidding (and may therefore be legally precluded from entering into at this time), TestCorp's bid is no less unresponsive than it would be if it had omitted to mention warranty services and replacements altogether.
DHSMV and Juno contend that TestCorp's entire bid is contingent on DHSMV's willingness to enter into the Warranty/Maintenance Agreement included with the bid. But TestCorp's bid does not explicitly condition its offer to sell DHSMV five systems on execution of the Warranty/Maintenance Agreement. Such a condition cannot fairly be inferred simply from TestCorp's including the Warranty/Maintenance Agreement with its bid, in compliance with those specifications that call for information on maintenance after the warranty expires, and require each bidder "to submit copy of maintenance and service
contract and costs . . . ." Joint Exhibit No. 1, p. 4. 2.12. TestCorp's bid cannot be faulted for giving DHSMV the option to contract with it for maintenance, only for conditioning its warranty on execution of the maintenance contract.
Sale Outright
28, ITB No. 2887-85 (Rebid) calls for bids offering to sell "all rights, titles and interest in the systems." The systems consist of hardware manufactured by Hitachi, Roland and others which is to be assembled within TestCorp housing, and to be operated using TestCorp software and video discs on which TestCorp is to have recorded images. The images would depict traffic scenes accompanied by multiple choice questions. TestCorp's bid offered to sell the systems subject to the condition that DHSMV "not sell, lease, transfer, duplicate or copy the TestCorp hardware configuration, software, or video disc for any purpose whatsoever." This offer does not conform to the specifications.
As written, TestCorp's reservation would preclude DHSMV's resale of the software and video discs themselves. Such restrictions are incompatible with an outright sale, even though they may be of less practical importance than the other contractual restrictions with which DHSMV would encumber itself if it accepted TestCorp's bid.
TestCorp argues its reservation is intended only to protect unspecified intellectual property it allegedly owns, and invokes that part of ITB No. 2887-85 (Rebid) entitled "PATENTS AND ROYALTIES." The specifications include provisions in case of infringement of patents and copyrights held by others, but otherwise provide only that "bid prices shall include all royalties or cost arising from the use of . . . [any patented or copyrighted] design, device, or materials in any way involved in the work."
As far as the evidence shows, TestCorp's "hardware configuration," its software, and the contents of its video discs are all in the public domain. Nothing in the evidence establishes and nothing in TestCorp's bid claims that TestCorp's "hardware configuration" has been or could be patented. DHSMV might be subject to restrictions on the use of the "hardware configuration," if it accepted TestCorp's bid, while others were free to duplicate it. Similarly, and more importantly, DHSMV might subject itself to restrictions on the use of test questions which happened to be recorded on the TestCorp video discs.
Juno's Bid Responsive
Since TestCorp's bid is not responsive, DHSMV should accept Juno's bid, unless Juno's bid is also unresponsive. TestCorp contends that Juno's bid is unresponsive for failure to purpose a system with bilingual capability. It is clear from the evidence, however, that Juno's proposal has bilingual capability and that its bid is responsive.
It is accordingly, RECOMMENDED:
That DHSMV award Juno the contract contemplated by ITB No. 2887-85 (Rebid).
DONE AND ENTERED this 31st day of October 1986, in Tallahassee, Florida.
ROBERT T. BENTON, II
Hearing Officer
Division of Administrative Hearings The Oakland Building
2009 Apalachee Parkway
Tallahassee, Florida 32399-1550
(904) 488-9675
FILED with the Clerk of the Division of Administrative Hearings this 31st day of October 1986.
APPENDIX
Petitioner's proposed findings of fact Nos. 1 through 8, 10, 12, 13, 14, 19
through 28, 30, 31, 32, the first sentence of No. 34, 35, 39, 40, 42, 43 and 44 have been adopted, in substance, insofar as relevant.
Petitioner's proposed finding of fact No. 9 accurately states DHSMV's position, which is no misperception as to the tie between warranty and maintenance agreement.
Petitioner's proposed finding of fact No. 10 has been adopted, in substance, except that the ITB does not require that a single contract include the maintenance information for both the warranty and post-warranty periods.
With respect to Petitioner's proposed findings of fact 15 through 18, the only offer in TestCorp's bid to perform under a warranty during year one was an integrated, nonseverable part of its offer to perform maintenance for years two through four.
The first sentence of Petitioner's proposed finding of fact No. 29 has been adopted except that even with respect to these two customers the stipulation was that there were different hardware configurations, specifically, no ties to a master console. The second sentence of Petitioner's proposed finding of fact No. 29 has been adopted as to the other two customers.
With respect to Petitioner's proposed finding of fact No. 33, TestCorp's response makes no mention of any copyright. The ITB did not seek bids offering to sell any right, title or interest vested in a third party.
With respect to Petitioner's proposed finding of fact No. 36, the ITB calls for bids for the sale and installation, not for the maintenance, of the machines.
Petitioner's proposed findings of fact Nos. 37 and 38 are immaterial because the parties eliminated this issue by stipulation. (T. 66)
Petitioner's proposed finding of fact No. 41 has been rejected as unsupported by the evidence.
Respondent's proposed findings of fact Nos. 1 through 4, 6 through 11, 14 through 20, 23 and 25 have been adopted, in substance, insofar as material.
With respect to respondent's proposed findings of fact Nos. 5 and 13, TestCorp's only response was the "TestCorp Warranty and Per-Test Maintenance Agreement."
Respondent's proposed finding of fact No. 21 has been adopted, in substance, except that the per test charge is $0.48, not $0.58.
Respondent's proposed findings of fact Nos. 22 and 24 have been rejected as unsupported by the weight of the evidence.
Respondent's proposed finding of fact No. 26 has been adopted, in substance, insofar as it relates to the contingent nature of the warranty only.
Intervenor's proposed findings of fact Nos. 1 (as corrected), 2, 3, 4, 6
through 14, 17, 19 through 23, and 28 have been adopted, in substance.
Intervenor's proposed finding of fact No. 5 has been adopted, in substance, except that the firm's name has been stated as it appears in the prehearing stipulation.
With respect to intervenor's proposed findings of fact Nos. 15, 16 and 18, the evidence showed that TestCorp's bid as to purchase and installation was not contingent on TestCorp's receiving the maintenance contract, but that TestCorp's bid as to purchase and installation was materially unresponsive for failure to include am unconditional offer of a one year warranty.
COPIES FURNISHED:
Martha Harrell Hall, Esquire Mary E. Haskins, Esquire
410 First Florida Bank Building Tallahassee, Florida 32302
Michael James Alderman, Esquire Room A-432, Neil Kirkman Building 2900 Apalachee Parkway
Tallahassee, Florida 32301
Douglas P. Manson Esquire Post Office Box 6507 Tallahassee, Florida 32314
| Issue Date | Proceedings |
|---|---|
| Oct. 31, 1986 | Recommended Order (hearing held , 2013). CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Dec. 22, 1986 | Agency Final Order | |
| Oct. 31, 1986 | Recommended Order | Agency's rule defined ""72 hours"" to exclude weekends. Protest timely under rule although result would differ without rule. Low bid non-responsive. |
