STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FOOD MANAGEMENT GROUP, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 87-3131BID

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent. )

) FOOD SERVICE MANAGEMENT SYSTEMS ) OF FLORIDA, )

)

Petitioner, )

)

vs. ) CASE NO. 87-3132BID

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent. )

) SERVICEMASTER SOUTHEAST MANAGEMENT ) SERVICES, )

)

Petitioner, )

)

vs. ) CASE NO. 87-3133BID

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent )

and )

) CANTEEN COMPANY, A DIVISION OF TW ) SERVICES, INC. )

)

Intervenor. )

)

RECOMMENDED ORDER

Pursuant to notice, a final hearing in the above-styled matter was held on August 13, 1987, at Tallahassee, Florida, before Joyous Parrish, a duly designated Hearing Officer of the Division of Administrative Hearings. The parties were represented at the hearing as follows:

APPEARANCES

For Food Management William E. Williams, Esquire Group, Inc.: Fuller and Johnson, P.A.

111 North Calhoun Street Tallahassee, Florida 32302

For Food Service Management

Systems of Florida: (No appearance)

For Servicemaster Phillip Dresch

Southeast Management 2304 Parkland Drive, North East Services: Building 9, Suite 290

Atlanta, Georgia 30345

For Canteen Company, Roy C. Young, Esquire Division of TW Young, VanAssenderp, Vernadoe Services, Inc.: & Benton, P.A.

225 South Adams Street, Suite 200 Tallahassee, Florida 32302-1833

For Department of Lawrence F. Kranert, Jr., Esquire Health and District 10 Legal Counsel Rehabilitative 201 East Broward Boulevard

Services: Fort Lauderdale, Florida 33801-1885 BACKGROUND AND PROCEDURAL MATTERS

This case began on June 24, 1987, when Food Management Group, Inc., by its president David Witten, filed an intent to protest the decision to award bid number 595-530 to Canteen Company. Bid number 595-530 was for the food service management program at South Florida State Hospital. Thereafter, on July 1, 1987, Food Management Group, Inc. requested that the matter be set for formal hearing. The case involving Food Management Systems of Florida began on June 26, 1987, when Celeste Rossi gave notice of that company's intent to protest the bid to be awarded to Canteen Company. Thereafter, on July 2, 1987, Mr. Rossi, as president of Food Service Management Systems of Florida, requested that the matter be set for hearing. The third case, ServiceMaster Southeast Management Services, was begun June 30, 1987, when the notice of protest and formal written notice of protest was filed by Kevin L. Creasman, vice president for the company. The three cases were then referred to the Division of Administrative Hearings for all necessary proceedings on July 29, 1987.

In accordance with Section 120.53(5)(e), Florida Statutes, the cases were expedited and set for final hearing for August 10, 1987. The Notice of Hearing, the Order consolidating the three cases, and a Prehearing Order were executed and furnished to the parties on July 30, 1987. As a result of a telephone conference held on August 10, 1987, the matter was rescheduled to commence on August 13, 1987.

At the time of the final hearing, the successful bidder, Canteen Company, a Division of TW Services, Inc., filed a Motion to Intervene; such motion was granted. Also at the time of the final hearing, the Department of Health and Rehabilitative Services filed a Motion to Invalidate/Motion to Quash and Objection to Notice to Produce; such motion was denied. A Motion to Dismiss filed by the Department of Health and Rehabilitative Services alleged that there were no issues of material fact to be heard which would entitle Petitioner, Food

Management Group, Inc., to a formal administrative hearing. Inasmuch as Petitioner filed an amended formal written protest and petition for formal administrative hearing which did set forth issues of fact, the Motion to Dismiss is hereby denied.

For purposes of this Recommended Order, Food Management Group, Inc. is hereby designated "FMG"; Food Service Management Systems of Florida is designated "Food Service"; ServiceMaster Southeast Management Services is designated "ServiceMaster"; Canteen Company, a Division of TW Services, Inc., is designated "Canteen"; and the Department of Health and Rehabilitative Services is designated "HRS".

At the final hearing FMG presented the testimony of two witnesses: its president, Thomas David Witten, and Nancy L. Dion, the Administrator at South Florida State Hospital. Petitioner's twelve exhibits which were marked FMG 1-12 were admitted into evidence. Food Service did not appear at the final hearing but submitted a letter requesting that the bid be readvertised. Canteen submitted an exhibit which was identified as Canteen's Composite #1 and which was admitted into evidence. Canteen's exhibit constitutes the file of the South Florida State Hospital relating to bid number 595-530. HRS submitted one exhibit which was marked HRS #1 and which was admitted into evidence. This exhibit contained the minutes of the pre-bid conference conducted on May 14, 1987, for bid number 595-530. All documentary evidence has been carefully considered in the preparation of this Recommended Order.

After the hearing, the parties were granted leave to file proposals outlining their findings of fact and conclusions of law. FMG, HRS, and Canteen filed proposals which have been carefully considered in the preparation of this Recommended Order. Specific rulings on their proposed findings of fact are included in the attached Appendix. ServiceMaster submitted a letter adopting the proposal submitted by HRS. Accordingly, no reference is made in the Appendix as to ServiceMaster's letter.

ISSUE

The central issue in this case is whether FMG met the qualifications to bid as set forth in the Invitation to Bid. Specifically involved is whether or not FMG met the requirement of having been engaged successfully in the business of food service management for at least a ten (10) year period prior to the date of the bid. As a secondary issue, FMG argued that the requirement is a minor irregularity which, by rule, should be waived.

FINDINGS OF FACT

Based upon the testimony of the witnesses and the documentary evidence received at the hearing, I make the following findings of fact:

1. Petitioner, FMG organized and filed its Articles of Incorporation on November 8, 1985. The Florida corporation has remained active with all fees due the Secretary of State having been paid through December 31, 1987.

   
   

2. On July 14, 1986, Thomas David Witten, became the majority shareholder and president of FMG. Mr. Witten's prior work experience included seventeen years of food service management with the Marriott Corporation followed by six years with Canteen. Mr. Witten left Canteen in 1985. While with Canteen, Mr.

   Witten had Successfully negotiated the contract at South Florida State Hospital for the food service management program. Canteen had obtained this contract after the bid process in 1981.

   
   

3. On May 4, 1987, HRS mailed an Invitation to Bid (ITB) to obtain competitive prices for the food service management program contract to commence July 1, 1987. The ITB required the bidders to have engaged Successfully in the business of food service management for at least ten years prior to the date of the bid. The bidder was also required to furnish, as a part of its bid, a written statement evidencing its ability to accomplish the Specified work. As part of the written statement, the bidder was required to include information as to the immediate availability or ownership of the necessary equipment to perform the work, and the financial worth or reputability of the bidder together with the experience which the bidder has had in Successfully completing projects of a similar size, scope and responsibility

   
   

4. The ITB also set forth specification; one of which was a performance and payment surety bond in the amount $250,000 to be furnished by the bidder to the hospital upon award of the contract.

   
   

5. On May 14, 1987, HRS conducted a pre-bid conference. In attendance were representatives from Canteen, FMG, ServiceMaster, Food Service, and Service America Corporation (not a party to these proceedings). At this pre-bid conference no question was raised by FMG as to the qualification requiring ten

   (10) years experience in the business of food service management.

   
   

6. The bid proposal submitted by FMG responded to the bidder's qualification by enclosing the curriculum vitae for members of FMG's professional staff. Documents regarding the experience of T. David Witten, Jimmy Blicharz, Williams Cox and Robert J. Trinley were included. Mr. Blicharz's career summary described thirteen years of operational and marketing management in the food service industry. Mr. Witten's curriculum vitae described twenty-three years of food service management experience as previously described. Mr. Cox's experience dated to 1966 and detailed food service activity as both food service director and dietician for various health care providers. Mr. Trinley's experience included over twenty-five years of administrative work with various health care providers.

   
   

7. FMG described its bidder experience by listing work which had been performed by its individual employees at various institutions. In each of the instances, the experience noted was as a member of the staff of another company- not FMG.

   
   

8. FMG, the company, was the bidder for bid number 595-530.

   
   

9. HRS opened the proposals for bid number 595-530 on June 10, 1987. Additional information was requested from all bidders.

   
   

10. On June 11, 1987, HRS requested the following information from FMG:

    
    

    1. Demonstration of ten (10) years of corporate history and corporate management of food services for institutions of Similar size and complexity.

       
       

    2. A written statement evidencing FMG's ability to accomplish the Specified work.

11. FMG's reply to the HRS request maintained that the experience of its principal employees qualified FMG under the bid requirement Clearly, FMG had not successfully engaged in the business of food Service management for at least ten years prior to its bid proposal.

    
    

12. HRS did not waive the ten year requirement.

    
    

13. HRS, Food Service, ServiceMaster, and Canteen have agreed to readvertise bid number 595-530.

    
    

14. The results of the bid tabulation for bid number 595- 530 were as follows:

    
    

    A. Food Service	$103,979
    B. ServiceMaster	$110,000
    C. FMG	$ 96,900
    D. Canteen	$106,000

    
    

15. Four other potential bidders did not submit a proposal.

    
    

    CONCLUSIONS OF LAW

    
    

16. The Division of Administrative Hearings has jurisdiction over the parties and the Subject matter of these proceedings.

    
    

17. Rule 10-13.007 Florida Administrative Code provides, in part:

    
    

    1. Any person or firm affected adversely by a notice of contract award

       or by a bid solicitation shall first, within 72 hours after receipt of that notice or solicitation advise in writing the appropriate departmental purchasing office...of its intent to file a

       formal written protest. Secondly, they shall, within 10 days after the notice of intent to protest is filed, file a formal written notice of protest with

       the appropriate Department's staff person.

       
       

18. Generally, an ITB defines the scope of the work required by soliciting bids responsive to the detailed plan and specifications required by the agency. In the case at issue, the ITB required ten years of successful business experience and a performance bond. The proper procedure for contesting the qualifications or specifications of the bid solicitation would have required a protest within seventy-two hours of receipt of the ITB. See: Capeletti Bros., Inc. v. Department of Transportation, 499 So.2d 855 (Fla. 1st DCA 1986). The failure to file a timely protest constitutes a waiver of chapter 120 proceedings. The parties herein waived any challenge to the ten year requirement by their failure to timely contest that bidder qualification.

    
    

19. In Liberty County v. Baxter's Asphalt & Concrete, Inc., 421 So.2d 505 (Fla. 1982) the Florida Supreme Court reiterated that public bids statutes:

    
    

    serve the object of protecting the public against collusive contracts and prevent favoritism toward

    contractors by public officials and tend to secure fair competition upon equal terms to all bidders, [and] they remove temptation on the part of public officers to seek private gain at the taxpayers' expense, are of highly remedial character, and should receive a construction always which will fully effectuate and advance their true intent and purpose and which will avoid the likelihood of same

    being circumvented, evaded, or defeated.

    
    

    Citing Webster v. Belote, 138 So. 721,724 (Fla. 1931).

    
    

20. Rule 10-13.012 Florida Administrative Code provides:

    
    

    The Department shall reserve

    the right to reject any or all bids and proposals. The Department shall reserve the right to waive minor irregularities in an otherwise valid bid or proposal. A minor irregularity is a variation from the bid invitation or proposal terms and conditions which does not affect the price of the bid, or give the bidder an advantage or benefit not enjoyed by other bidders, or does not adversely impact the interests of the Department. Variations which are not minor cannot be waived. A bidder may not modify its bid or proposal after bid opening.

    Mistakes clearly evident on the face of the bid documents, such as an error in an arithmetic extension of pricing may be corrected by the Department.

    
    

21. There is no evidence to suggest HRS considered waiving either the ten year qualification. Moreover, since variations which are not minor cannot be waived, it would be inappropriate to waive either the ten year qualification or the performance bond. First, such a waiver would give FMG an advantage or benefit not enjoyed by other bidders. Send, the performance bond, alone, does not provide an evidence of a past experience level which would establish the bidder will perform. The bond is always a course of last resort. There may be companies with ten years of experience which, because of past financial or performance difficulties, cannot provide the bond. There may be substantial companies with less than ten years experience which can post the bond but which lack the business track record to establish they will successfully perform the required services.

22. The proof established that FMG had not successfully engaged in the food service management business for ten years. Consequently, HRS properly disqualified FMG's bid. Such action was not arbitrary and was within the bounds of HRS' discretion.

    
    

23. HRS' disqualification of FMG secured fair competition on equal terms to all bidders involved. Moreover, it assured that FMG did not have an advantage not enjoyed by others.

RECOMMENDATION

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

That HRS enter a Final Order denying the protest filed by FMG.

DONE and RECOMMENDED this 22nd day of October, 1987, in Tallahassee, Florida.

JOYOUS D. PARRISH

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 22nd day of October, 1987.

APPENDIX TO RECOMMENDED ORDER 87-3131BID, 87-3132BID, 87-3133BID

Rulings on Petitioner, FMG's Proposed Findings of fact:

1. Accepted, finding of fact paragraph 1

2. Accepted, finding of fact paragraph 2

3. Paragraphs 3 and 4 are accepted but deemed unnecessary since, at best, the described activities have only occurred within the last two years.

4. Paragraph 5 is accepted, finding of fact paragraph 2.

5. Paragraphs 6 and 7 accepted but are unnecessary to the resolution of the issues in this cause.

6. Paragraph 8 is accepted in material part in finding of fact, paragraph

   6.

7. Paragraph 9 is accepted and addressed in material part in findings of

   fact paragraphs 2 and 6.

8. Paragraph 10 is accepted as provided in findings of fact, paragraphs 2 and 6 the balance of paragraph 10 is deemed unnecessary.

9. Paragraph 11 is accepted as addressed in finding of fact, paragraph 6.

10. Paragraph 12 is rejected as unnecessary.

11. Paragraph 13 is accepted only to the extent addressed in findings of fact, paragraphs 10 and 11. The balance is rejected as contrary to the weight of the evidence.

12. Paragraph 14 is rejected as an argumentative conclusion outside the scope the issues to be resolved.

13. Paragraph 15 is accepted in finding of fact, paragraph 14.

14. Paragraph 16 is rejected . Mr. Witten's individual experience is not at issue. Mr. Witten, individually, was not the bidder. FMG chose to submit the proposal and waived its right to challenge the bid qualification requiring ten years experience. The conclusion reached in Paragraph 16 is contrary to the weight of the evidence and the law.

15. Paragraph 17 is rejected. The conclusion reached is argumentative and contray to the weight of evidence and the law.

Rulings on HRS' Proposed Findings of Fact:

1. Accepted.

2. Accepted.

3. Accepted but deemed unnecessary to the resolution of the issues of this case.

4. Accepted as addressed in finding of fact, paragraph 3.

5. Accepted as addressed in finding of fact paragraph 3.

6. Accepted as to date for incorporation otherwise rejected as unnecessary.

7. Accepted.

8. Accepted.

9. Accepted.

10. Paragraph 10 and 11 are addressed in material part in finding of fact, paragraphs 6, 7, 10, and 11.

11. Paragraph 12 is accepted.

12. Paragraph 13 is accepted to the extent that its alleges the requirement was considered indispensable, otherwise rejected as unnecessary or not supported by evidence.

13. Paragraphs 14 and 15 are accepted.

Rulings on Canteen's Proposed Findings of Fact:

1. Accepted.

2. Accepted.

3. Accepted.

4. Accepted but unnecessary to the resolution issues in this cause.

5. Accepted.

6. Accepted.

7. Accepted but unnecessary.

8. Accepted.

9. Accepted.

10. Accepted but unnecessary as the parties agreed the sole issue was whether or not FMG met the bid qualification requiring ten years of experience.

11. Rejected. All parties had waived any right to challenge the ten years requirement.

12. Rejected as argumentative Allegation that bid was done as corporation not individually is accepted.

13. Accepted.

14. Rejected. FMG's position is that qualification should be waived.

15. Accepted.

COPIES FURNISHED:

William E. Williams, Esquire Fuller & Johnson, P.A.

111 North Calhoun Street Tallahassee, Florida 32302

Phil Dresch

2304 Parklake Drive, North East Building 9, Suite 290

Atlanta, Georgia 30345

Roy C. Young, Esquire

Young, VanAssenderp, Varnadoe & Benton, P.A.

225 South Adams Street, Suite 200 Tallahassee, Florida 32301

Lawrence F. Kranert, Jr., Esquire District 10 Legal Counsel

1. East Broward Boulevard

   Fort Lauderdale, Florida 33301-1885

   
   

   Celeste Rossi, President

2. Duval Street West, Florida 33040

Gregory L. Coler, Secretary Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32399-0700

Robert S. Power, Agency Clerk Assistant General Counsel Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32399-700

Docket for Case No: 87-003131BID

Orders for Case No: 87-003131BID