STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

PROCACCI REAL ESTATE MANAGEMENT ) COMPANY, LTD., )

)

Petitioner, ) CASE NO. 87-1849BID

)

vs. )

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent. )

) CAUSEWAY PROPERTIES, INC., )

)

Petitioner, ) CASE NO. 87-1850BID

)

vs. )

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, W. Matthew Stevenson, held a formal hearing in this cause on May 13, 1987 in Miami, Florida. The following appearances were entered.

FOR PETITIONER: Thomas Hinners

Procacci Real Estate 3200 North Federal Highway, Suite 221A Management Company, Boca Raton, Florida 33431

Ltd.

FOR PETITIONER: Robert Rich

Causeway Properties, 160 Sunny Isles Boulevard Inc. North Miami, Florida 33160

FOR RESPONDENT: M. Carmen Dominguez, Esquire

401 North West Second Avenue, Suite 790 Miami, Florida 33128

FOR INTERVENOR: Pedro Munilla, Esquire

1401 South West First Street, Suite 210 Miami, Florida 33135

PROCEDURAL BACKGROUND

On March 9, 1987, both Procacci Real Estate Management Company, Ltd. ("Procacci") and Causeway Properties, Inc. ("Causeway") filed a Notice of Protest of Department of Health and Rehabilitative Services' (DHRS) award of Lease No. 590:1802 to Alton Road Six Corporation (Alton Road). On March 19, 1987 both Petitioners filed formal written bid protests. On May 8, 1987 Alton Road filed a Petition to Intervene. Alton Road's Petition to Intervene was granted at the commencement of the hearing on May 13, 1987. Upon a sua sponte order of the undersigned, both cases were consolidated for purposes of the formal hearing.

At the final hearing, Procacci, Causeway, and DHRS presented the testimony of Pablo Lopez. Intervenor, Alton Road, presented the testimony of David Yusko, Manuel Carvajal, and Philip J. Procacci. Petitioner's Exhibit 1, Respondent's A Exhibits 1 thru 12 and Intervenor's Exhibits 1 thru 3 were duly offered and admitted into evidence. The parties have submitted post-hearing Proposed Findings of Fact. On July 7, 1987, the Intervenor filed a Petition to Strike the Proposed Recommended Orders of Procacci and Causeway because they were untimely filed. At the conclusion of the formal hearing, all parties were advised that Proposed Recommended Orders would be due no later than 10 days after the original transcript was filed with the Division of Administrative Hearings. The original transcript was filed on June 16, 1987 and Proposed Recommended Orders were due in hand on June 29, 1987. Procacci's Proposed Recommended Order was filed on June 30, 1987 and Causeway's was filed on July 2, 1987. The Intervenor has shown no prejudice which would result from consideration of the Petitioners' Proposed Recommended Orders, and the Petition to Strike will be denied. A ruling has been made on each proposed finding of fact in the Appendix to the Recommended Order.

FINDINGS OF FACT

Based upon my observation of the witnesses and their demeanor while testifying, the documentary evidence submitted and the entire record compiled herein, I hereby make the following findings of fact.

1. In 1986 DHRS determined the need for a facility in Miami Beach in which to administer various programs, including but not limited to, economic services, food stamps, aged and elderly services and medicaid. In December of 1986 DHRS extended an invitation to bid (Lease No. 590:1802) to individuals or companies interested in providing the type of facility needed in Miami Beach.

   
   

2. The Invitation to Bid and Bid Submittal Form for DHRS Lease No. 590:1802 stated that DHRS was seeking approximately 19,198 net rentable square feet of office space to lease within the City of Miami Beach. DHRS desired a ten year lease with a three year option, occupancy by November 1, 1987. January 20, 1987 was established as the bid closing date.

   
   

3. The Invitation to Bid and Bid Submittal Form provided in relevant part as follows:

   
   

   Requirements for Bidders to Submit Bids.

   1. Control of Property - To submit a responsive bid a prospective lessor must meet one of the following qualifications:

      1. Be the owner of record of the

         facility.

      2. Be the lessee of the space to be proposed and present with bid, a copy of lease with documentation of

      authorization to sublease the facility.

      * * *

      (d) Submit documentation of an option to lease the facility with an authori- zation to inturn, sublease.

      * * * Existing Tenants

      If the offered space or any portion there- of will be covered by an active lease(s) at the stated availability date, written documentation by the tenant indicating acknowledgment of the bid and ability

      to vacate premises by the proposed date must be included with the proposal.

      * * *

      14. Parking

      For this facility the department has determined that a minimum of 120 parking spaces are required to meet its needs. This parking is to be under the control of the bidder, off street, suitably paved and lined.

      * * *

      A minimum of 6 spaces of the 120 re- quired must meet the requirements

      of the Standards for Special Facilities for Physically Disabled, Chapter 13D-1, Florida Administrative Code.

      28. Miscellaneous Requirements

      * * *

      (8) Bidders must have appropriate and pertinent zoning approval by bid opening date and this must be documented by the City of Miami Beach and such proof must be included as part of the bid submittal form.

      * * *

      Attachments Required to be Submitted with Bid Submittal for Existing Building

      * * *

      1. Floor Plan

      2. Site Layout

      * * *

      1. Documentation showing bidder as controller of property, if not owner of record.

         * * *

      2. Documented zoning approval from City of Miami Beach.

      * * * Definition of Terms

      * * *

      Existing Building - To be considered as

      existing, the entire space being bid must be dry and capable of being physically measured to determine net rentable square footage...

      * * * Evaluation of Bids

      1. Bids received are first evaluated to determine technical responsiveness. This includes submittal on bid submittal form, inclusion of required information and date, bid signed and notarized. Non-responsive bids will be withdrawn from further con- sideration.

      * * *

      
      

4. In response to the invitation to bid, four bidders, Procacci, Causeway, Alton Road and Rae Lin Realty (Rae Lin) timely submitted bids to DHRS.

   
   

5. After bid openings, DHRS reviewed each bid and prepared an initial comparative synopsis. Upon initial review DHRS determined that Alton Road submitted the only responsive bid. Thereafter, DHRS allowed the three other bidders the opportunity to clarify certain "questionable" parts of their bids in an effort to determine if the bids were in fact non-responsive. After an evaluation of the bid proposals plus the information gathered in the "clarification process," DHRS concluded that the bids of Procacci, Causeway and Rae Lin were non-responsive and that the only responsive bid was that of Alton Road.

   
   

6. Procacci's bid was found non-responsive due to an insufficient amount of net square footage and lack of control of parking spaces. Thirteen of the parking spaces offered by Procacci were municipal parking spaces with annual reservations. DHRS allowed Procacci the opportunity to re-measure and possibly re-adjust the square footage submitted in its bid. DHRS also allowed Procacci the opportunity to clarify its control over the municipal parking spaces. Procacci was unable to demonstrate that it could provide the minimum square footage required and could not provide any assurance or documentation that the City of Miami Beach would guarantee the municipal spaces for the full 10 year term of the lease. Procacci's proposal was non-responsive to the invitation to bid.

   
   

7. Causeway's bid was found non-responsive because of lack of sufficient net square footage. Causeway was allowed the opportunity to submit floor plans adjusting and clarifying the net square footage contained in its proposal but failed to demonstrate that its proposal would provide the square footage required. Causeway's proposal was non-responsive to the invitation to bid.

   
   

8. Rae Lin's bid was found non-responsive because of failure to submit the required zoning approval documentation for the existing building with its bid. Rae Lin was not allowed to clarify this aspect of its bid because zoning approval documentation for the existing building was required to be submitted by the bid opening date. Rae Lin's proposal was non- responsive to the invitation to bid.

   
   

9. Alton Road's bid was responsive on its face at the time of bid opening. However, during the initial evaluation process, it was brought to the attention of DHRS that Alton Road might not have actual control over some of its proposed parking spaces. Alton Road was allowed the opportunity to clarify its ability

   to provide the parking spaces proposed in its bid package. Alton Road was able to demonstrate that it had control over at least 120 parking spaces as called for in the invitation to bid. DHRS found Alton Road's bid responsive in all other respects and gave notice to all bidders of its intent to award the lease to Alton Road, the lowest responsive bidder.

   
   

10. Procacci and Causeway submitted timely formal written protests contending that Alton Road's bid is non-responsive.

    
    

    PARKING

    
    

11. Alton Road's proposed facility was acquired pursuant to a lease with Potamkin Chevrolet, owner of the property. The lease between Alton Road and Potamkin guaranteed to Alton Road a minimum of one hundred and twenty parking spaces and, if necessary, exclusive right to other parking spaces on property in the proximate vicinity.

    
    

12. After bid opening, DHRS was informed by Causeway that two of the parking spaces which Alton Road included in its bid proposal were leased by Potamkin to Causeway and not to Alton Road. During the clarification/evaluation process, Alton Road disputed Causeway's claim and also demonstrated that it's proposal could provide at least 120 parking spaces even if the two parking spaces in question were excluded. In addition, Potamkin owned much of the adjacent property and was bound by its lease with Alton Road to provide 120 exclusive parking spaces. The lease specifically provided that exclusive right to additional parking spaces on property located in the proximate vicinity would be provided if necessary.

    
    

13. A portion of Alton Road's proposed parking spaces were being leased by Potamkin to an existing tenant, Miami Beach Wrecker and Towing Services, Inc., at the time of the bid submission. However, there was no evidence that any portion of the property offered by Alton Road would be covered by an active lease of Miami Beach Wrecker or any other tenant on the required availability date of November 1, 1987.

    
    

14. The bid submittal form requires that at least six (6) of the one hundred and twenty parking spaces comply with the requirements of the Standards for Special Facilities for the Physically Disabled, Chapter 13D-I, Florida Administrative Code. A complete reading of the bid submittal form in light of Chapter 13D-I, Florida Administrative Code indicates that the invitation to bid contemplated that renovations would be necessary to comply with the handicapped parking specifications and that there was no requirement that the renovations or modifications be completed at the time of bid submission. Alton Road's bid proposal provided for the required six (6) physically handicapped parking spaces.

    
    

15. A complete reading of the bid submittal form indicates that bidders were required to include zoning approval for the existing building with their packages but were not required to submit documentation regarding parking space zoning. This interpretation of the bid submittal form's requirements is further supported by the fact that none of the four bidders included documentation as to parking space zoning with their bid proposals and there was no evidence that such a requirement was ever applied to other DHRS bid projects.

    
    

16. In its bid proposal, Alton Road submitted one hundred and twenty parking spaces under its control, off-street, suitably paved and lined as required in the invitation to bid.

    CONTROL OF THE PROPERTY

    
    

17. Alton Road's proposed facility was acquired pursuant to a lease between Alton Road and Potamkin Chevrolet. The lease contains a 19 page addendum. Both the lease and addendum are signed by the vice-president of finance of Potamkin Chevrolet.

    
    

18. The lease and addendum were executed on January 17, 1987. All signatures on the final page of the addendum are witnessed. The lease specifically states that the addendum is "attached hereto" and "made a part hereof."

    
    

19. The bid submitted by Alton Road was responsive to the Invitation to Bid for DHRS Lease Number 590:1802.

    
    

    CONCLUSIONS OF LAW

    
    

    The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, these proceedings. Section 120.53(5) and 120.57(1), Florida Statutes.

    
    

20. Section 287.057(2) Florida Statutes, provides in pertinent part that:

    
    

    ...all contracts for contractual services shall be awarded by competitive sealed bid- ding. An invitation to bid shall be issued which shall include a detailed description of the services sought; the date for sub- mittal of bids; and all contractual terms and conditions applicable to the procure- ment of contractual services,...The contract shall be awarded with reasonable promptness by written notice to the qualified and responsive bidder who submits the lowest

    and best bid.

    
    

21. Rule 13M-1.015(1), Florida Administrative Code provides in part that:

    
    

    (1) No agency shall enter into a lease for 2,000 square feet or more of space in a privately owned building except upon advertisement for and receipt of competitive bids and award to the lowest and best bidder.

    * * *

    (5) Evaluation

    1. The user agency shall reserve the right to accept or reject any or all bids submitted and if necessary reinitiate procedures for soliciting competitive bids.

       * * *

       1. The evaluation shall be made by the user agency

       2. Selection (deemed to be the lowest and best bid) shall be made by the user agency.

       
       

22. The DHRS has wide discretion in evaluating bid proposals and awarding contracts to responsible bidders. Nonetheless, a state agency still cannot act arbitrarily and capriciously when awarding a contract. Liberty County v. Baxter's Asphalt & Concrete, Inc., 421 So.2d 505 (Fla. 1982); Baxter's Asphalt & Concrete, Inc. v. Department of Transportation, 475 So.2d 1284 (Fla. DCA 1985); Wood-Hopkins Contracting Co. v. Roger J. Au & Son 354 So.2d 446 (Fla. 1st DCA 1978).

    
    

23. The burden of proof is on the party asserting the affirmative of an issue before an administrative tribunal. Florida Department of Transportation

    v. T.W.C. Company, Inc., 396 So.2d 778 (Fla. 1st DCA 1981). Therefore, Procacci and Causeway must show that Alton Road's bid is non-responsive by a preponderance of the evidence. Florida Department of Health and Rehabilitative Services v. Career Services Commission, 289 So.2d 412 (Fla. 4th DCA 1974). Both Procacci and Causeway have either failed to prove the factual allegations made in their bid protests or failed to demonstrate that the allegations proven require the relief sought, i.e. the rejection of Alton Road's bid as non- responsive.

    
    

24. Procacci alleges that Alton Road did not submit documentation from the City of Miami Beach with respect to zoning approval of its parking spaces and failed to demonstrate control over a portion of the property which was in the possession of a third-party tenant.

    
    

25. Causeway alleges that the facilities proposed by Alton Road fail to meet applicable handicapped access requirements, that Alton Road failed to show control over two parking spaces which were allegedly included in an option lease by Potamkin Chevrolet to Causeway and that the lease between Alton Road and Potamkin Chevrolet is improperly executed and invalid. Both Petitioners allege that Alton Road was given preferential treatment by DHRS.

    
    

    PARKING

    
    

26. The invitation to bid did not require the bidders to submit documentation from the City of Miami Beach demonstrating that their proposed parking areas were properly zoned. The requirement for the inclusion of documentation for zoning approval in the bid proposals applied only to the proposed structure or "existing building." This requirement should have been clearly understood by all parties from a reading of the bid submittal form and indeed, no bidder supplied such documentation with its bid proposals.

    
    

27. Alton Road was not required to provide documentation by bid opening date that the existing tenant, Miami Beach Wrecker, would vacate the premises by the availability date of November 1, 1987. Such documentation was required by the bid submittal form only where the existing tenant had an active lease extending beyond the availability date. The Petitioners failed to show that the existing tenant, Miami Beach Wrecker, had an active lease which would have extended past the availability date of November 1, 1987.

    
    

28. There was no evidence offered to show that six of Alton Road's proposed parking spaces would not be able to conform to the requirements for the physically handicapped by the availability date of November 1, 1987. The

    renovations and modifications necessary to facilitate access for the physically handicapped were not required to be completed upon submission of the bid proposals.

    
    

29. Alton Road's bid proposal was conforming and responsive to all parking space requirements contained in the invitation to bid.

    
    

    CONTROL OF THE PROPERTY

    
    

30. Alton Road's lease with Potamkin is an enforceable conveyance of real property in Florida. The lease expressly incorporates the addendum which was properly executed in the presence of two witnesses. See Section 689.01, Florida Statutes. The proper execution of an addendum to a lease effectuates the original lease between the parties. See Bilic v. Aladdin Real Estate, Inc., 489 So.2d 170 (Fla. 5th DCA 1986).

    
    

    ALLEGED PREFERENTIAL TREATMENT

    
    

31. The Petitioners failed to prove that Alton Road was given preferential treatment by DHRS in the evaluation of bid proposals in this case. All of the bidders were given an opportunity to clarify their bid proposals and to present information which would show that their bids were in fact responsive to the invitation. However, no bidder was allowed to include substitutions changing the property originally offered and contemplated in its bid proposal.

    
    

32. In its evaluation of the bid proposals, DHRS was allowed to look beyond the paperwork submitted in order to determine whether an apparently responsive bid was in fact responsive and vice-versa. DHRS was not required to accept the bald assertions and calculations of the bidders concerning square footage, parking space sites and/or control of the property.

    
    

33. The decision of an agency to award a contract, when based on an honest exercise of discretion, should not be overturned even if reasonable people may disagree with the award. H. Banco Contracting Company v. Department of Transportation, 483 So.2d 796 (Fla. 1st DCA 1986). In the absence of illegality, fraud, oppression or misconduct of either the agency or the lowest bidder, the agency's discretion in awarding the bid should not be disturbed.

See Liberty County v. Baxter's Asphalt & Concrete Inc. 421 So.2d 505 (Fla. 1982). Neither Procacci nor Causeway proved that DHRS acted arbitrarily or capriously in its evaluation of the bid proposals and selection of the successful bidder in this case, and therefore, the award of the lease to Alton Road should not be disturbed.

RECOMMENDATIONS

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

RECOMMENDED that Department of Health and Rehabilitative Services project lease number 590:1802 be awarded to Alton Road Six Corporation.

DONE and ORDERED this 15th day of July, 1987 in Tallahassee, Leon County, Florida.

W. MATTHEW STEVENSON 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 15th day of July, 1987.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-1849BID & 87-1850BID

The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case.

Rulings on Proposed Findings of Fact Submitted by the Petitioner (Procacci)

1. Adopted in Finding of Fact 4.

2. Adopted in substance in Finding of Fact 5.

3. Adopted in substance in Finding of Fact 5.

4. Adopted in Findings of Fact 6, 7 and 8.

5. Adopted in substance in Finding of Fact 6.

6. Adopted in substance in Finding of Fact 7.

7. Adopted in substance in Finding of Fact 8.

8. Adopted in substance in Finding of Fact 9.

9. Adopted in substance in Finding of Fact 10.

10. Rejected as subordinate and/or unnecessary.

11. Adopted in Finding of Fact 10.

12. Adopted in substance in Finding of Fact 2.

13. Rejected as misleading and not supported by the weight of the evidence.

14. Rejected as a recitation of testimony and/or misleading. 15. Rejected as a recitation of testimony/evidence and/or misleading.

1. Rejected as a recitation of testimony and/or misleading.

2. Rejected as a recitation of testimony and/or subordinate.

3. Rejected as subordinate and/or unnecessary.

4. Rejected as misleading and/or subordinate.

5. Rejected as not supported by the weight of the evidence.

6. Rejected as misleading, subordinate and/or not supported by the weight of the evidence.

7. Rejected as contrary to the weight of the evidence and/or misleading. Although Procacci was not afforded the opportunity to substitute other parking for the thirteen (13) municipal parking spaces included in its proposal, Procacci was provided the opportunity to demonstrate to DHRS that the municipal parking spaces would be guaranteed by the City of Miami Beach for the entire term of the lease. This, Procacci failed to do.

8. Rejected as contrary to the weight of the evidence.

Rulings on Proposed Findings of Fact Submitted by the Petitioner (Causeway)

1. (a) Rejected as contrary to the weight of the evidence.

   1. Rejected as contrary to the weight of the evidence.

   
   

   Rulings on Joint Proposed Findings of Fact Submitted by the Respondents and Intervenor

   
   

   1. Adopted in Finding of Fact 4.

   2. Adopted in substance in Finding of Fact 5.

   3. Adopted in substance in Finding of Fact 5.

   4. Adopted in Findings of Fact 6, 7 and 8.

   5. Adopted in Finding of Fact 6.

   6. Adopted in Finding of Fact 7.

   7. Adopted in Finding of Fact 8.

   8. Adopted in Findings of Fact 6, 7, 8 and 9.

   9. Adopted in Findings of Fact 6, 7 and 8.

   10. Rejected as subordinate and/or unnecessary.

   11. Rejected as subordinate and/or unnecessary.

   12. Adopted in Finding of Fact 9.

   13. Adopted in Finding of Fact 10.

   14. Rejected as subordinate and/or unnecessary.

   15. Adopted in substance in Finding of Fact 10.

   16. Adopted in substance in Finding of Fact 2.

   17. Adopted in Findings of Fact 3 and 15.

   18. Adopted in Findings of Fact 3 and 15.

   19. Partially adopted in Finding of Fact 15, matters not contained therein are rejected as subordinate.

   20. Adopted in substance in Finding of Fact 15.

   21. Adopted in Finding of Fact 3.

   22. Rejected as subordinate and/or unnecessary.

   23. Adopted in Finding of Fact 3.

   24. Adopted in Finding of Fact 16.

   25. Adopted in Finding of Fact 17.

   26. Adopted in Finding of Fact 12.

   27. Adopted in substance in Finding of Fact 12.

   28. Addressed in Conclusions of Law section.

   29. Adopted in Finding of Fact 13.

   30. Adopted in substance in Finding of Fact 13.

   31. Adopted in substance in Finding of Fact 17.

   32. Adopted in substance in Finding of Fact 18.

   33. Adopted in substance in Finding of Fact 18.

   34. Addressed in Conclusions of Law section.

   35. Adopted in substance in Finding of Fact 6.

   36. Adopted in Finding of Fact 3 and 36.

   37. Adopted in Finding of Fact 3 and 36.

   38. Adopted in substance in Finding of Fact 14.

   39. Adopted in Finding of Fact 9 and 19.

   40. Addressed in Conclusions of Law section.

COPIES FURNISHED:

M. Carmen Dominguez, Esquire Robert Rich

401 North West Second Avenue Causeway Properties, Inc. Suite 790 160 Sunny Isles Blvd.

Miami, Florida 33128 North Miami, Florida 33160

Louisa P. Maurer Pedro Munilla, Esquire

Acting Administrator 1401 South West First Street

HRS District XI Suite 210

401 North West Second Avenue Miami, Florida 33135 Room 939

Miami, Florida 33128 Gregory L. Coler Secretary

Thomas Hinners Department of Health

Procacci Real Estate and Rehabilitative Services Management Co. Ltd. 1323 Winewood Blvd.

3200 North Federal Highway Tallahassee, Florida 32399-0700 Suite 221-A

Boca Raton, Florida 33431 John Miller, Esquire

Acting General Counsel

Pablo I. Lopez Department of Health and Facilities Service Mgr. Rehabilitative Services Suite 950 1323 Winewood Blvd.

401 North West Second Avenue Tallahassee, Florida 32399-0700 Miami, Florida 33138

Sam Power

Department of Health and Rehabilitative Services

1323 Winewood Blvd.

Tallahassee, Florida 32399-0700

Docket for Case No: 87-001849BID

Orders for Case No: 87-001849BID