STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

WALES INDUSTRIES INC., )

)

Petitioner )

)

vs. ) CASE NO. 87-3317BID

) DEPARTMENT OF HEALTH AND ) REHABILITATIVE SERVICES, )

)

Respondent, ) and )

)

MID-FLORIDA FREEZER )

WAREHOUSES, LTD., )

)

Intervenor. )

)

RECOMMENDED ORDER

Pursuant to notice, this cause was heard by Linda M. Rigot, the assigned Hearing Officer of the Division of Administrative Hearings, on August 31, 1987 in Tallahassee, Florida.

Petitioner Wales Industries, Inc., was represented by Martin R. Dix, Esquire Tallahassee, Florida; Respondent Department of Health and Rehabilitative Services was represented by Robert Powell, Esquire Tallahassee; Florida; and Intervenor Mid-Florida Freezer Warehouses Ltd., was represented by Harold T. Bistline Esquire, Cocoa, Florida.

Respondent Department of Health and Rehabilitative Services invited bids for the award of a contract for the receipt, handling, storage, and delivery of surplus foods from the United States Department of Agriculture to emergency feeding organizations pursuant to the temporary emergency food assistance program. After Respondent announced its intent to award the contract for Region I to Gulf Cargo Services; Inc., and for Regions II-VI to Mid-Florida Freezer Warehouses Ltd., Petitioner initiated this bid protest proceeding.

Petitioner Wales Industries Inc., presented the testimony of John Butler, Valarie L. Daniels, Paul J. Charters, Robert Toadvine, Kevin Horn, and Daniel R. Quinn. Intervenor Mid-Florida Freezer Warehouses Ltd.; presented the testimony of Daniel R. Quinn, Patrick T. Lee, and James Miller. Respondent Department of Health and Rehabilitative Services adopted the Intervenor's evidence in this proceeding. Additionally, Petitioner's Exhibits numbered 1-5, 7-10; and 12-17 were admitted in evidence.

All parties submitted posthearing proposed findings of fact in the form of proposed recommended orders. Rulings on each proposed finding of fact can be found in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. Since 1984 Respondent Department of Health and Rehabilitative Services (hereinafter "the Department") has served as the distributing agency for United States Department of Agriculture surplus foods to be distributed to needy people in the State of Florida. These foods are butter, processed cheese, non-fat dry milk, cornmeal, rice, flour, and honey. The Department contracts with companies in the food storage and distribution business-to store the surplus food and distribute it to emergency feeding organizations. The emergency feeding organizations then distribute the food to needy persons.

   
   

2. Each year the Department enters into contracts for various regions within the State. Petitioner Wales Industries, Inc. (hereinafter "Wales"), Intervenor Mid-Florida Freezer Warehouses, Ltd. (hereinafter "Mid-Florida"); and Gulf Cargo Services, Inc. (hereinafter "Gulf Cargo"); have all been awarded contracts with the Department over the years for storage and distribution of the surplus foods in the various regions of the State.

   
   

3. On or about June 12, 1987, the Department issued an Invitation for Bid (hereinafter "IFB 87-1") which advised prospective bidders that sealed bids would be opened on July 10, 1987 for a contract for the storage and distribution of the surplus foods for the period of October 1, 1987 to September 30, 1988.

   
   

4. A bidder under IFB 87-1 would be required to store the above-described commodities in dry, chilled, and frozen storage. The provider must also be able to ship the commodities under dry, chilled, and frozen conditions to emergency feeding organizations throughout the state.

   
   

5. The bid evaluation criteria set forth in Paragraph E of IFB 87-1 provide, in part, as follows:

   
   

   c. The bid will be awarded to the Bidder submitting the lowest delivered price per CWT for dry, cold, and frozen donated foods inclusive for each Region, combination of regions, or statewide as bid. The bid price for pick-up at the Provider's warehouse is informational, but is not a consideration in award of the bid.

   
   

6. Paragraph numbered eight of the General Conditions of IFB 87-1 notifies actual or prospective bidders who dispute the reasonableness, necessity, or competitiveness of the terms and conditions therein or of the bid selection or contract award recommendation that they must file a protest within the time prescribed in section 120.53(5), Florida Statutes, or be deemed to have waived their right to do so.

   
   

7. IFB 87-1 included an estimate of the number of cases and weights of commodities to be handled by a provider per region. This information was characterized as "History of 1986-1987 Cases and Pounds" but this characterization was amended to "Estimates of 1986-1987 Cases and Pounds" by letter of amendment dated June 18, 1987. IFB 87-1 provides elsewhere that these distribution rates are subject to change.

   
   

8. By further letter of amendment dated June 23, 1987, the Department notified prospective bidders that bids based upon combinations of regions were

   acceptable, and revised bid sheets with blanks for the dollar bid for each of the three types of commodities were provided to prospective bidders with the letter of amendment.

   
   

9. On June 26; 1987; the Department conducted a bidder's conference for IFB 87-1. Representatives from Wales and Mid-Florida attended the bidder's conference and asked questions of the Department's representatives concerning IFB 87-1.

   
   

10. Wales, Mid-Florida, and Gulf Cargo (among others) submitted sealed bids by the deadline at 2:00 p.m., July 10, 1987. Gulf Cargo submitted a bid for Region I only. Wales submitted individual bids for each of Regions I through VI. Mid- Florida submitted individual bids for Regions II through VI and two bids combining various regions except for Region I.

    
    

11. Gulf Cargo was awarded a contract for Region I, and Mid-Florida was awarded a contract based on its combined bid for Regions II through VI.

    
    

12. The bid awards were announced on July 17, 1987. Wales' notice of intent to file formal written protest is dated July 23, 1987. Wales filed its formal written protest on July 31, 1987.

    
    

13. The volume and type of surplus foods distributed through the program is solely dependent upon the commodities made available to the Department by the federal government. There is no guarantee that the State of Florida will receive any particular amount or mix of the commodities distributed through the program. Therefore, the data supplied by the Department to prospective bidders regarding the volume and type of surplus foods to be stored and distributed is based upon actual historical data and is the most accurate data available.

    
    

14. Neither IFB 87-1 nor the contracts for previous years under this program guarantee the successful bidder any amount of revenue or any volume of goods to be handled.

    
    

15. The method of bid evaluation that was set forth in IFB 87-1, which was emphasized at the bidder's conference, and which was memorialized in the Department's June 29, 1987 listing of questions and answers from the bidder's conference and sent to all prospective bidders was the same the Department would average the bid prices for each type of commodity, i.e., frozen, dry and chilled. The averaging method utilized results in the lowest cost accruing to Use State and actually resulted in a lower bid price for the 1987-88 contracts than the 1986-87 contracts.

    
    

16. The actual cost to a provider of storing and transporting frozen, chilled, and dried commodities varies according to the facilities and equipment owned by each prospective bidder.

    
    

17. The averaging method utilized by the Department for IFB 87-1 permits bidders to develop competitive bids based upon the bidder's individual costs, storage facilities and equipment; and the bidder's anticipation of the volumes and types of commodities likely to be received from the federal government.

    
    

18. The information provided in IFB 87-1 as to drop sites for delivery by the providers was sufficient for prospective bidders to develop competitive bids.

19. The requirement contained in IFB 87-1 that the provider would be responsible for providing off-loading facilities in Dade, Broward, and Duval counties did not prevent the formulation of competitive bids.

    
    

    CONCLUSIONS OF LAW

    
    

20. The Division of Administrative Hearings has jurisdiction over the subject matter hereof and the parties hereto. Section 120.57(1), Florida Statutes.

    
    

21. Section 120.53(5)(b), Florida Statutes, provides as follows:

    
    

    Any person who is affected adversely by the agency decision or intended decision shall file with the agency a notice of protest in writing within 72 hours after the posting of the bid tabulation or after receipt of the notice of the agency decision or intended decision and shall file a formal written protest within 10 days after the date he filed the notice of protest. Failure to file a notice of protest or failure to file a formal written protest shall constitute a waiver of proceedings under chapter 120. The formal written protest shall state with particularity the facts and law upon which the protest is based.

    
    

22. Wales' protest is based upon alleged improprieties in the Invitation to Bid, the bid solicitation itself. Essentially, Wales argues that the bid solicitation was improper in that: (1) it did not adequately describe the services for which bids were being solicited, (2) the methodology for determining the low bid contained therein is improper, and (3) the methodology causes the bidding to inaccurately reflect the actual cost to the State. Although the record is unclear as to when Wales received its copy of IFB 87-1 which was mailed by the Department on June 12, 1987, it is certain that Wales had the bid solicitation prior to its attendance at the bidder's conference conducted on June 26, 1987. Yet; Wales failed to initiate its protest of the bid specifications until its letter dated July 23, 1987. Since Wales' protest is based on the bid specifications and not upon any allegations that its bid was lower than the bids of Mid- Florida or Gulf Cargo, and since Wales' notice of intent to file its protest was not filed within 72 hours of Wales' receipt of the bid solicitation, Wales has waived its right to initiate a bid protest proceeding pursuant to chapter 120, Florida Statutes.

    
    

23. Even if Wales had timely initiated this bid protest proceeding, it has not shown that it is the lowest responsible bidder or even argued that it is the lowest bidder. Rather, the thrust of Wales' argument is that the bidding process and the bid award process were invalid due to the methodology involved and the insufficiency of information provided to bidders in the Invitation to Bid. The weight of the evidence in this case, however, establishes that the bid specifications of IFB 87-1 are sufficiently clear and unambiguous to permit bidders to prepare and submit competitive bids and the bid evaluation criteria set forth in IFB 87-1 are reasonable under the circumstances and resulted in the submission of competitive bids.

RECOMMENDATION

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

RECOMMENDED that a Final Order be entered dismissing the bid protest filed by Wales Industries Inc.; awarding the 1987-88 contract for Region I to Gulf Cargo Services, Inc.; and awarding the 1987-88 contract for Regions II-VI to Mid-Florida Freezer Warehouses Ltd.

DONE and RECOMMENDED this 14th day of October, 1987, at Tallahassee, Florida.

LINDA M. RIGOT

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 14th day of October, 1987.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-3317BID

1. The Department's proposed findings of fact numbered 1-3 and 7 have been adopted either verbatim or in substance in this Recommended Order. However, the Department's proposed findings of fact numbered 4-6 have been rejected as not constituting findings of fact but rather as constituting argument of counsel or conclusions of law.

2. Mid-Florida's proposed findings of fact numbered 1-20 have been adopted either verbatim or in substance in this Recommended Order.

3. Wales' proposed findings of fact numbered 1-4 and 9 have been adopted either verbatim or in substance in this Recommended Order. However, Wales' proposed findings of fact numbered 12-15 have been rejected as being contrary to the evidence in this cause; Wales' proposed finding of fact numbered 16 has been rejected as not being supported by the evidence in this cause; and Wales' proposed findings of fact numbered 5-8, 10, and 11 have been rejected as being subordinate to the issues under consideration herein.

COPIES FURNISHED:

Sam Powers Clerk Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32399-0700

Martin R. Dix Esquire Barnett Bank Building Suite 800

315 South Calhoun Street Tallahassee, Florida 32301

Robert Powell, Esquire Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee Florida 32399-0700

Harold T. Bistline Esquire Building 1, Suite 10

1970 Michigan Avenue

Cocoa, Florida 32922

Gregory L. Coler, Secretary Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32399-0700

Docket for Case No: 87-003317BID

Orders for Case No: 87-003317BID