STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
UNISYS CORPORATION, )
)
Petitioner, )
)
vs. ) DOAH CASE NO. 87-4105BID
)
STATE OF FLORIDA, ) DEPARTMENT OF GENERAL SERVICES; ) INFORMATION TECHNOLOGY RESOURCE ) PROCUREMENT ADVISORY COUNCIL; ) and STATE OF FLORIDA, ) DEPARTMENT OF GENERAL SERVICES, ) DIVISION OF PURCHASING, )
)
Respondents, )
and )
)
AMERICAN SOFTWARE, INC., )
Intervenor. )
)
RECOMMENDED ORDER
On October 14, 15, 16, 19 and 20, 1987, in Tallahassee, Florida, a formal hearing was held in this cause in accordance with Section 120.57(1), Florida Statutes. Charles C. Adams was the Hearing Officer. This recommended order is being entered following the receipt and review of the transcript of the hearing, in consideration of the evidential items admitted into evidence and having analyzed the proposed recommended orders submitted by the parties and the associated memorandum of law submitted by the Petitioner. The suggested fact- finding set forth in the proposed recommended orders has been utilized in some instances in the preparation of the recommended order. Otherwise, those facts offered by the parties are not included in the recommended order for reasons described in an appendix to the recommended order.
APPEARANCES
For Petitioner: Alan C. Sundberg, Esquire
W. Douglas Hall, Esquire Martha Harrell Hall, Esquire CARLTON, FIELDS, WARD, EMMANUEL, SMITH, CUTLER,
& KENT, P.A.
410 First Florida Bank
215 South Monroe Street Post Office Drawer 190 Tallahassee, Florida 32302
For Respondents: Susan B. Kirkland, Esquire
Stephen S. Mathues, Esquire Department of General Services Office of General Counsel
452 Larson Building
200 East Gaines Street Tallahassee, Florida 32399-0955
For Intervenor: Thomas M. Beason, Esquire
MOYLE, FLANIGAN, KATZ, FITZGERALD & SHEEHAN, P.A.
The Perkins House, Suite 100
118 North Gadsden Street Tallahassee, Florida 32302
PRELIMINARY MATTERS
Petitioner called as witnesses Deborah Miller, Derrell Parham, Dr. Ralph Martin Stair, Jr., George William Zimmerman, William Thomas Walsh and Jeffrey Thomas Bartholomew, and by portions of his deposition, Daniel McLinden.
Respondents called as witnesses Jeffrey Thomas Bartholomew, William Thomas Walsh, Russ Rothman, Robert Glover, Zayda Cooper, Judy Smith, William Michael Hale, William H. Brundydge, William Monroe, and Dozier Johnson, and offered by deposition the testimony of Jeffrey Thomas Bartholomew, Derrell Parham, George William Zimmerman and James Scvhrader. The Intervenor called as witnesses Frank Smith and William T. Blitch, and by portions of his deposition, Daniel McLinden, and offered the same deposition testimony as the Respondents.
Joint Exhibits 1 through 9 were offered into evidence by all three parties and received. Petitioner offered into evidence the following exhibits: Petitioner's 1, 6, 8, 9 and ASI 3, 7. They were received. The Respondent
offered into evidence the following exhibits: DGS 1-14, 19-26, 28, 29. All save DGS Exhibit 27 were received. It was rejected by the Hearing Officer and proffered by DGS. DGS Exhibits 15-19 constitute the above- mentioned depositions offered by DGS and the Intervenor. A ruling was reserved on their admissibility. Having reviewed the depositions and considered the argument of counsel, the exhibits are admitted. The Intervenor had admitted into evidence the following exhibit: ASI 1.
ISSUES
There is presented for consideration the question of whether the State of Florida, Department of General Services (Department), should be entitled to purchase certain software from the Intervenor, American Software, Inc. (ASI), as contemplated in Section 287.062(1)(c), Florida Statutes, known as the sole source exception to the general requirements of competitive bidding. The software under consideration is part of the "FFAMIS" Purchasing Subsystem related to the Florida Fiscal Accounting Management Information System. See Sections 215.93(1)(e) and 215.94(5), Florida Statutes. This case also examines the choice by the State of Florida, Department of General Services, Division of Purchasing (Division) to authorize the sole source purchase. Petitioner, Unisys Corporation (Unisys) has challenged the actions by the Department and Division which would preclude any opportunity on the part of Unisys to provide the subject software. Unisys claims that the sole source exception for purchase should not be allowed on this occasion in that Unisys provides a viable alternative in selecting a vendor.
FINDINGS OF FACT
Stipulated Facts
Unisys is a foreign corporation authorized to do business in Florida pursuant to Section 604.304, Florida Statutes.
Intervenor is American Software, Inc., 470 East Paces Ferry Road, Atlanta, Georgia.
During 1985, the Division developed a conceptual statements describing the desired functionality of the Florida Fiscal Accounting Management Information System ("FFAMIS") Purchasing Subsystem. Draft functional specifications which describe the desired functionality of the sub system somewhat more definitely were issued on April 22, 1986. The Division performed these activities through a Design Team which consisted of members from the Division and the Division of Information Services.
The members of the Design Team were: William Walsh; Robert Glover; William Brundydge; Christine Logan; Judith Smith; aid Zayda Cooper.
The draft functional specifications, entitled ("FFAMIS") Purchasing Subsystem Functional Specifications," have been admitted as Joint Exhibit 1. That document was supplemented in May 1986 by a document entitled "FFAMIS Purchasing Subsystem Functional Specification Comments/Questions and Development Team Responses," which has been admitted as Joint Exhibit 2.
During the fall of 1986, the Design Team performed an evaluation of the Purchasing and Material Management System (PMM) produced by American Software and the Purchasing 1100 System produced by Unisys.
After the evaluation, the Design Team recommended that DGS purchase the American Software system.
On June 29, 1987, the Division issued another document entitled "State of Florida FFAMIS Purchasing Subsystem Functions and Features Document," which has been admitted as Joint Exhibit 7.
On August 20, 1987, ITRPAC recommended that DGS purchase the American Software System as a sole source.
By memorandum dated August 20, 1987, (admitted as Joint Exhibit 9), the Executive Director of DGS requested that the Division authorize the purchase of American Software's system as a single source.
The purchase price for the American Software system is $346,000.
Unisys' notice of intent to protest was filed within 72 hours of DGS' August 20, 1987 posting.
Unisys filed its formal written protest within ten days of filing its notice of intent to protest.
DGS plans to make modifications to the American Software system after its purchase.
Hearing Facts
The FFAMIS Purchasing Subsystem is a legislatively mandated portion of the Florida Fiscal Accounting Management Information System. See Section 215.93(1)(e), Florida Statutes. The Department of General Services is the functional owner of the purchasing Subsystem and is charged with its design, implementation and operation. See Section 215.94(5), Florida Statutes. This Subsystem must include components for commodity procurement, inventory control and warehousing. See Section 215.94(5)(a), Florida Statutes. The FFAMIS Council, consisting of the State Comptroller, Treasurer, and the directors of five other agencies, coordinates and reviews activities of the various functional owners. See Section 215.96, Florida Statutes.
The purpose of the Purchasing Subsystem is the computerization of all state purchasing under a single purchasing system. The Division was given the responsibility, within the Department, to develop and implement the Purchasing Subsystem.
Moreover, it is expected that the FFAMIS Purchasing Subsystem will eliminate paper work and redundant data entry, bring about automation of purchasing, bidding, document tracking, status reporting, statistics gathering, reporting, and inventory control.
In February 1985, the FFAMIS Council directed the Department to prepare a legislative budget request for the Subsystem. In conjunction with this request, the Department developed a Conceptual Statement, DGS Exhibit 10. The Conceptual Statement was written to highlight the major elements within a purchasing system as gleaned from the Department's contact in 1985 with various state, federal and military applications and surveys of other Florida state agencies. In early 1986, the conceptual statement was reviewed by representatives of agencies which will eventually use the Subsystem.
Section 215.92(6), Florida Statutes, requires the functional owner to describe what the "subsystem is required to do" along with its "features, characteristics, controls and internal control measures . . . ." In turn, the FFAMIS Purchasing Subsystem Functional Specifications, Joint Exhibit 1, were written to serve this purpose, as well as to show the ultimate users the important elements of the Subsystem.
Within the Division, responsibility for developing the Subsystem was delegated to the Department's Bureau of Purchasing Systems and Services, initially headed by Robert Glover.
A User Group was also involved in the development of the Subsystem. It was comprised of some fifty individuals representing many agencies who would ultimately employ the Subsystem in their agencies. It was divided into subcommittees with a Steering Committee chosen to lead the group. One of the functions of the User Group was to help produce the Functional Specifications.
Another entity involved in the development of the Functional Specifications was the Information Resources Commission (IRC) consisting of the Governor and Cabinet. The IRC is responsible for the basic oversight, planning and policy for data processing for the state. Toward this end, its Executive Administrator, Mike Hale, and his staff had a great deal of interaction with the User Group and Department, giving advice and assistance in developing functional specifications for the Subsystem.
The Functional Specifications, Joint Exhibit 1, were widely reviewed by the User Group representing purchasing, financing and accounting staff of all state agencies and the State University System, and by the Department's upper management and the FFAMIS Council.
William Walsh is the DGS employee primarily responsible for design, development and implementation of the Subsystem. Mr. Walsh was heavily involved in preparing the Functional Specifications. User Group comments/questions about the Subsystem, along with Mr. Walsh's responses, were appended to the Functional Specifications, Joint Exhibit 1. Again, these questions, comments, and responses may be found as Joint Exhibit 2. Together these two exhibits came to reflect the purchasing subsystem contemplated for development.
The functional specifications were intended to conform to the User Group's and the Design Team's conclusions as to what should be included as major elements in the Purchasing Subsystem as well as describing in greater detail the more comprehensive expectations those entities held for the Subsystem.
The Department considered three methods of providing the software for the Purchasing Subsystem. First buying an off-the-shelf package and using it without modifications. This was rejected because there was no package which could be used without modifications. In-house development of a system from "scratch" was a second option. The third option was buying a canned system which closely met the needs and modifying it in-house.
As the Department contemplated its choices, it had already done general research of existing applications of software referred to above. This past research was done by the Design Team consisting of three members. Visits were made to Texas, Virginia, Michigan and Minnesota to look at possible applications. Applications in Florida were also examined.
At the point of more serious reflection on alternatives, the Design Team investigated some fourteen systems in the public and private domains. These included the State of Michigan, several Big Eight accounting firms, the University of Florida's CUFFS system, SADCOM, and other private software packages. The Design Team also researched current literature to find an adequate system. In addition, the team attended vendor presentations by ASI, Unisys and Structured Computer.
Eventually, though serious consideration had been given to the alternative of in-house development of necessary software, this choice was also rejected because it was felt to be too time-consuming and risky a proposition. From that point forward, the decision was to buy existing software and modify it to meet the specific needs that the State had in mind. Toward this end, the Structured Computer offering was discarded because of limitations in hardware. That left for consideration the possibility of using ASI or Unisys software, which would be modified in this connection, though the State did not expect to be presented an exact match with its functional specifications, referred to as a "wish list," it was expected that the software which was purchased must respond to requirements of basic functionality. The software would be required to undergo scrutiny by an Evaluation Team within the Department to ascertain its functionality. This Evaluation Team was constituted of the Design Team which had six members, including the project manager, Walsh.
The evaluations were to be more extensive than the preliminary demonstrations of the ASI and Unisys equipment which have been mentioned, pertaining to ASI's Purchasing and Materials Management system or PMM equipment
and the Unisys system that was demonstrated, known as Purchasing 1100. The demonstrations took place in October 1986. The evaluations would allow hands-on usage of the software by the state evaluators processing examples of routine purchasing functions.
In preparation for the hands-on evaluation which the six members of the evaluation team would perform, the vendors ASI and Unisys were provided copies of Joint Exhibit 1, the functional percent specifications. Unisys received this information in the person of one of its local employees, James Schraeder, an account executive. This was received from Mr. Walsh sometime in late September or early October 1986. The ASI functional specifications were sent by cover letter from Mr. Walsh on September 29, 1986. Within Joint Exhibit 1, there are described general functions which the vendors' equipment would be expected to respond to. Among those at 2.4.3 would be a bid processing module and at 2.4.5 a supply management module also known as an inventory module. The State evaluators expected the vendors to provide the essence of those functions found within those subsections to the functional specifications, together with requisition, purchasing and receiving modules.
Related to the functional specifications and their general requirements for a bid module and an inventory module, on October 9, 1986, when a technical specialist within Unisys demonstrated its Purchasing 1100 system, it was apparent that the Purchasing 1100 did not include the function for bid processing that the State expected in this project, nor did it include an inventory module of any kind. The piece of equipment had a request for quote "capacity" which is unlike the state's competitive bid system and the bid module spoken to in the Functional Specifications. The competitive bid system was what the state wished to acquire through a bid module in the Purchasing Subsystem. The choice to demonstrate the Purchasing 1100 and to later offer it for evaluation was that of Unisys, not the State.
In addition to the provision of a set of functional specifications for the benefit of the vendors prior to the evaluation session, the evaluation team prepared a questionnaire which was given to each vendor at the commencement of the hands-on evaluation performed on the vendors' equipment. A copy of this questionnaire may be found as Joint Exhibit 3. In its substance, it inquires of the vendors concerning the nature of the product which the vendor would offer in furtherance of the state's needs for the Purchasing Subsystem, and also discusses the topic of vendor support of the equipment if it were purchased by the state. The evaluation team also prepared a checklist to be used in the course of the hands-on evaluation of the vendor's equipment. A copy of this checklist may be found as Petitioner's Exhibit 6 admitted into evidence.
During the course of the hands-on evaluation sessions; the Design Team or Evaluation Team did place data into the systems being demonstrated to simulate the uses to which the software would be put in meeting the State needs for the Purchasing Subsystem.
The ASI evaluation was conducted partially in Atlanta, Georgia, on ASI-owned equipment. The ASI equipment evaluated was the PMM system which incorporated modules for the dive functions contemplated within the Purchasing Subsystem. ASI elected to perform this evaluation session at their facilities to allow for a controlled environment and to guard against program bugs. Program bugs are anomalies in the performance of the software. The Atlanta session took place in the lasts week of October 1986. A further session was held in the first week of November 1986, in Tallahassee, Florida, through a
telephone hook-up to the ASI computers in Atlanta, Georgia. All told, approximately five days were spent in the evaluation.
In the hands-on evaluations of the ASI equipment, the team members from the Department had specific responsibilities in accordance with their experience and background. The same format would be followed, with the same division of responsibility among the Evaluation Team when it examined the Unisys equipment on later dates.
In both the ASI and Unisys hands-on evaluation period, an initial orientation was conducted by the two vendors in describing the features and the functions of the software and familiarization with the use of their equipment which was employed in demonstrating the software packages.
The evaluation team input, in particular, typical state requisitions, purchase orders, bids, commodity descriptions and vendor descriptions, having in mind examining whether the equipment would perform the desired functions.
During the course of the ASI evaluation, Robert Glover, the Chief of the Bureau of Purchasing Systems and Resources within the Department, found that the system performed adequately from a functionality standpoint and would meet all the required basic functions contemplated, and had the necessary modules. Zayda Cooper, systems project administrator within the Department, found the system to be easy to utilize. Judy Smith, a purchasing specialist within the Department, examined the system from the point of view of user documentation in all the five required modules and is not reported to have been concerned about the performance of the system. Bill Brundydge, a consultant manager from the Division of Information Services, was involved in the evaluation in looking at the design of the programs in the data base in addition to systems documentation to see if these materials were written in a manner which the State could support and maintain. He expressed no concerns about the adequacy of the ASI equipment.
Sometime before Thanksgiving, in 1986, the Unisys evaluation was conducted. It was conducted in the Administrative Management Information Center or AMIC in Tallahassee, Florida. This is the data center associated with the Department. The choice of this location was that of Unisys. Unisys elected to demonstrate the Purchasing 1100 system. This system, as Unisys knew before the point of the hands-on evaluation, did not include an inventory module and its request for quote module did not correspond to what the functional specifications contemplated as a bid module. Some testimony was offered by Mr. Bartholomew, the technical specialist for the October 9, 1986, demonstration and for the evaluation, to the effect that had he been given adequate notice, he could have brought with him an inventory module which could have been interfaced with the Purchasing 1100 equipment and provided the necessary inventory module. Mr. Bartholomew does not have a recollection of his October 9, 1986, demonstration of the Purchasing 1100's equipment, at which point that equipment had been devoid of the necessary bid module and any inventory module. Bartholomew had not been informed of the Functional Specification by the Tallahassee staff of Unisys who had received those functional specifications in late September or early October 1986. Specifically, Bartholomew says that another week would have been enough to install an interfaced inventory module added to the two weeks prior to evaluation for installing the Purchasing 110. More than an extra week had been given to Unisys in providing its Tallahassee staff with a copy of the Functional Specifications. On the other hand, in his testimony at hearing, Bartholomew states that it is difficult to determine what type inventory module should be presented, having read the Functional Specifications. To follow this line of reasoning, there are no assurances that
he would have prescribed an inventory module had he personally been given adequate notice to install one. In any event, contrary to Mr. Bartholomew's remonstrations, the inventory module requirements were sufficiently clear for a vendor to present that component for evaluation if it had been available. In the last analysis, whether Mr. Bartholomew knew or others knew about the need to provide a system which would include an inventory module and a bid module as opposed to a quote module, Unisys as a corporation knew and it failed to provide two of the five basic modules that needed to be examined in the evaluation period. Those modules were the bid module and inventory module. Unisys has not offered an adequate excuse for failure to provide the inventory module for evaluation or an acceptable bid module, given that Unisys had been told through the Functional Specifications document that the inventory and bid module would need to be examined, a process vital to the interest which the Department had in making certain that the essential building blocks were available to it in creating the Purchasing Subsystem.
From the evaluations period forward, Unisys seems to take the point of view that had the State really wanted to see an inventory module demonstrated, it had but to ask. The State had asked through its provision of the Functional Specifications. The State had asked at the most important juncture in this process that it wished to see the basic capabilities of the software before making a decision to purchase the software. The State cannot be seen as responsible for continuing to request from Unisys what should have been provided in the evaluation session, that is to say an adequate bid module and provision of an inventory module. The Department simply was not obligated beyond the evaluation session to continue to request Unisys to provide an inventory module and an adequate bid module. The project needed to move forward. It is the inadequacy of Unisys' performance at evaluation in two important particulars which is their fault, not the Department. Unisys' comments by its employees in the course of the evaluation session that it manufactured inventory systems was simply too late to accomplish its needs and those of the State. The time for promoting this response had arrived and Unisys was unsuccessful in its attempt at compliance. For reasons that will be subsequently described, even had Unisys brought with it some form of inventory module to be interfaced with the Purchasing 1100, there are grave reservations about whether that arrangement would sufficiently satisfy the basic needs that the Department had in obtaining a software foundation for its Purchasing Subsystem.
As Cooper used the Unisys equipment, she began by familiarization with the Unisys terminal. She found it more difficult to use than the ASI equipment. It was not as clear to understand, the help messages were not as beneficial and the screens did not flow in a logical manner. She found that her knowledge of the evaluation information did not correspond with the Unisys documentation of that information and that errors within the system were not caught as they should have been. In one instance where quantities were not described, a
$43,000,000 purchase order was developed. Ms. Cooper discovered inconsistencies between requested requisition numbers and those that were actually displayed by the software.
Ms. Smith encountered similar difficulties and found that the documentation did not always match what was shown on the screens and errors were allowed to move forward beyond the place where they should have been caught.
She found that the ASI documentation was easier to utilize than Unisys. She and others as well noted the nonexistence of an inventory module. She also noted that the documentation for the quote system within the Unisys equipment was not a bid system.
Mr. Glover found errors in the Unisys documentation and had not found any in the ASI equipment.
In the course of the evaluation, related to the bid module, the ASI system was found to provide the basic functionality, whereas the Unisys system in its request for quote module merely provided an automated entry of vendor information, but was not a module pertaining to the creation of a bid document.
The documentation errors that were discovered with the Unisys system were significant matters in that documentation is critical in developing training manuals for the agency personnel- who will utilize the Purchasing Subsystem.
Given that Unisys did not provide an inventory module for review, it did not provide literature related to an inventory module or the manner in which that module might work with the Purchasing 1100 which was provided for the evaluation.
The ease of operation when comparing ASI to Unisys in the software evaluation and the superior performance which Unisys equipment displayed in some instances are not the crucial items. The crux of the problems with Unisys is the lack of functionality in the bid module, a lack of any inventory module and the errors.
Responses to the questionnaire, Joint Exhibit 3, were offered by both vendors following the evaluation sessions. The ASI responses found as Joint Exhibit 5 were provided with a cover letter on November 7, 1986. The Unisys response came through Joint Exhibit 4 with a cover letter dated December 2, 1986. Mr. Walsh describes that the weight afforded these responses was somewhere in the neighborhood of five percent in the decision-making process.
He gave these items a complete review but found the product explanation to be a less convincing statement of capabilities than the actual performance as seen in the course of the evaluation sessions. In effect, approximately 95 percent of the attitude about the adequacy of the two systems demonstrated by the vendors comes from the experience in hands-on evaluation.
In its response to the questionnaire through Joint Exhibit 4, Unisys indicates at 2.4.5 related to the supply management module or inventory module and whether it has the ability to provide that function, "No, but with more detailed specifications Unisys believes that the UNISYS 1100 or MAPPER FACS inventory modules could satisfy the needs of the State of Florida. Together we could determine which system is applicable. Possibly it would better serve the user community by expanding Purchasing 1100 to include the required functionality." This seems to correspond to Mr. Bartholomew, in his testimony, continuing to promote the idea that Unisys had somehow been less than certain about what the state meant in its requirement for an inventory module. Again, even if one were to assume that the exact details of the inventory module identified by the Functional Specifications had not been developed, it is certain that an inventory module was contemplated and that Unisys had been put on notice that that inventory module needed to be presented for evaluation. By the remarks set forth in the answer to the questionnaire, Unisys did not seem to know which inventory module it wished to offer. Nonetheless, if it intended to respond to this opportunity to sell the product to the state, it was incumbent upon it to make that decision prior to the evaluation session and offer some form of inventory module for assessment. It was not incumbent upon the State beyond the point of evaluation to solicit Unisys for further documentation about an inventory module, or to ask for further demonstration of the capabilities of
an inventory module. The reason why the State did not evaluate a Unisys inventory module is because no inventory module was offered for evaluation at the time when the State went forward with its hands-on analysis of the capabilities of the software. Unisys, in its responses to the questionnaire, also acknowledged that its bid module could only partially meet the requirements by the State and commented that the quote module of Unisys within the Purchasing 1100 does have "processing."
After concluding both hands-on evaluations, the Team members produced a written report and recommendation, the Software Evaluation Report, Joint Exhibit 6. Individual members first write down their findings, which they circulated among themselves. Next, evaluation paragraphs expressing preferences and giving reasons were added. After a unanimous agreement by the Design Team, Mr. Walsh added a final section reflecting the Team's recommendation to purchase the American Software PRIM System. The final document was finished during the last week of December 1986.
Mr. Glover testified that he wrote Section 2 of the Report. His recommendation to purchase the ASI package was based on the fact that it "provided the closest fit to the Functional Specifications, [and] provided the functionality" required. In addition, it was easier to use, the instructions were clear, screen movement was easier and movement from screen to screen was easier.
Ms. Cooper participated in writing Section 2 with Mr. Glover. Her reasons for recommending acquisition of the ASI Package included the fact that it included all the necessary modules and documentation, and the ease with which she could teach others to use the system. She found it to be "much more user friendly." Screens flowed more logically and help messages were clear. These were important factors to her because the level of expertise of users is usually very limited.
Ms. Smith wrote Section 5 of the Report. She joined in the recommendation to acquire the ASI package because it had better documentation and user training manuals, it performed all of the functions required, the flow of information, screens and functions was much easier, it caught errors promptly, and did not produce errors unlike Unisys.
Mr. Brundydge and Ms. Logan produced Sections 3 and 6. Mr. Brundydge agreed with the recommendation to purchase the ASI package because it had all the required functions, it could be maintained by the State and the programs were written in a logically laid-out manner.
Mr. Walsh concurred in the unanimous recommendation, based on the other Team members' findings, as well as his conclusion that ASI has a superior data base management system.
The evaluation report noted that the Unisys equipment did not have a bid module or supply management/inventory module, while both of these modules were set forth in the ASIPMM software.
While the Unisys equipment was perceived to be adequate in some of its features and superior to ASIA in others, on balance the Unisys Purchasing 1100 was not acceptable because it did not respond to the bid module and inventory module requirements.
The Evaluation Report was subjected to wide review. The recommendation to purchase the ASI package was accepted within DGS by William Monroe, Director, Division of Purchasing; his superior, Larry Strong; and the Executive Director, Mr. Ronald Thomas. The Steering Committee of the User Group unanimously accepted the recommendation. The FFIS Council also accepted the recommendation.
The Department amended its legislative budget request to reflect acquisition of the ASI package. The Governor's Office supported the recommendation. DGS Exhibit 22 is the agency's amended budget request for funding to purchase the ASI package at a cost of $346,000. The Legislature approved and appropriated this amount. See DGS Exhibit 23.
The proposed purchase of the ASI-PMM was also submitted to the IRC. The Department prepared and submitted to the IRC an amendment to its Information Technology Resource Plan for fiscal years 1987/88-1988/89.
The IRC carefully scrutinized the proposed acquisition. The Department's IRC Plan, DGS Exhibit 24, was submitted for approval by the IRC to insure proper planning for information technology resource use and procurement. Specifically, the Department's IRC plan called for acquisition of the ASI package. Ultimately, the Governor and Cabinet, sitting as the IRC, approved the choice of ASI.
In June 1987, FFAMIS Purchasing Subsystem Features and Functions, Joint Exhibit 7, was prepared to give the user community an overview of the ASI system. It also gave some detail of the anticipated modifications to be done to the package. As enumerated at page eight of Joint Exhibit 7, it was estimated that these modifications could be done in twelve to eighteen months using fourteen people to both operate and modify the system.
An ITRPAC package, DGS Exhibit 8, was developed by Mr. Walsh and his staff for submission to the Information Technology Resource Procurement Advisory Council (ITRPAC). Included in this package is a fiscal summary containing the Department's latest cost projections for implementation of the Subsystem. There is also a prototype implementation schedule with estimates based on the experience of Mr. Walsh, with input from Mr. Brundydge.
As Executive Administrator of the IRC, Mr. Hale also sits as a member of ITRPAC. Other members are the Director of the Office of Planning and Budgeting, Office of the Governor, and the DGS Purchasing Division Director, or their designees. See Section 287.073(2), Florida Statutes. Part of ITRPAC's responsibility includes making recommendations on sole source acquisitions. ITRPAC does not take final agency action. It has the power to make non-binding recommendations only.
Mr. Hale's staff performed a review of the Respondent's ITRPAC package. Concurrently, the Governor's Office raised questions concerning the sole source aspect of the acquisition.
Being satisfied about the sole source purchase, the Governor's Office approved this plan to purchase the ASI system.
The INTRPAC package, DGS Exhibit 8, also points out that the cost of the purchase of the ASI PMM software package is $346,900. It reflects that the overall costs within that budget estimate for two years, to include the purchase price, and would also include costs for modification of the ASI software.
Staffing requirements for the design, development, implementation, documentation, training and operation of that system are described as involving
14 additional data processing and purchasing FTE's. Within the $1.2 million budget for that two-year period are cost items unassociated with matters pertaining to the purchase and modification of the ASI PMM software package.
Mr. Walsh prepared the package that was submitted to ITRPAC and also responded to the request by the Governor's Office concerning sole source acquisition. He is a staff employee for ITRPAC and his response to the Governor's Office was as a member of the Design Team.
On August 20, 1987, ITRPAC met to consider the sole source request related to the purchase of ASI PMM. It voted to accept the purchase.
From the evidence admitted, it appears that the ITRPAC decision to go with a sole source acquisition relied heavily on the Design Team's evaluation of the ASI and Unisys equipment.
In the course of the ITRPAC meeting on August 20, 1987, Derrell Parham, branch sales manager for Unisys in Tallahassee, Florida, appeared and stated Unisys' opposition to a sole source purchase of the ASI software. Mr. Hale questioned Mr. Parham about deficiencies in the Unisys package, as Mr. Hale perceived them. Parham answered by stating that Unisys did not have an inventory component nor did it have a bid module that would meet the State's requirements. Hale pointed out errors that had been experienced when the evaluation was made concerning the Unisys equipment. (Those errors from the point of view of Mr. Bartholomew and his testimony at hearing could have been taken care of through a patch to remove the glitches within the program. That patch was not made available at the time of evaluation. Whether the program errors could have been accommodated through a patch maintenance tape or not does not avail Unisys because, at the most critical juncture, that patch maintenance tape was not installed. A sufficient time would appear to have been available for arranging for patch tapes in anticipation of the installation and evaluation session.
Following the recommendation of ITRPAC, a memorandum was prepared by Mr. Walsh dated August 20, 1987, addressed to William Monroe, the Division of Purchasing Director, from Ronald W. Thomas as Executive Director of the Department, requesting permission to acquire the ASI package as a sole source. This memorandum is the formal request for sole source purchase. A copy may be found as Joint Exhibit 9. Walsh had a further role to play in this in that he reviewed the Department's request for sole source purchase as a member of the Division of Purchasing staff.
Within the request for sole source are set forth what the Executive Director perceives as the minimum requirements for the FFAMIS Purchasing Subsystem. They are:
The system must address all the Purchasing functional modules defined in the functional specifications. This requires an integrated package which supports requisition, purchase order, bid, inventory, and receiving functions, as well as providing user defined interface points to the User's Accounting System.
The system must be a currently marketed product fully supported by the Vendor.
The system must be implemented and operational in at least ten customer sites.
The system must operate in the general hardware and software environment of either AMIC or the CDC, and utilize the Data Base Management System and Tele- communications Systems currently installed at each site.
The Vendor must permit user modifications to the product without discontinuing support.
The application package must be coded in ANSI COBOL or utilize the fourth generation programming language available
within the data center (i.e. NATURAL for the CDC and MAPPER for AMIC).
75 The request for sole source approval goes on to describe how only two possible alternatives had been discerned as being potential alternatives for the purchase. The request talks about the fact that the two systems had been scrutinized through an evaluation process and a conclusion reached that one of the systems did not meet the bid and inventory control requirements, leaving only the ASI equipment which if purchased would cost $346,000
Having considered the evidence in this case, the expression of the minimum criteria contemplates software which will respond to the basic elements or modules through an integrated package. It does not contemplate an exact match to the Functional Specifications. Therein lies the necessity for modification.
Concerning the approval of the request for sole source acquisition, typically an agency of State government would request authorization from the Division of Purchasing and the Division staff would research the industry to verify the circumstances for utilization of the sole source exception to purchase. This was not done on this occasion because extensive research and verification through an evaluation process had been done by personnel within the Division of Purchasing who would serve to advise the Division director on the question of approval
The way that the decision for approval was communicated by the Division of Purchasing was by the placement of a stamp on the third page of the memorandum requesting sole source permission which carried a line for the signature of the Director of the Division of Purchasing, a date line and a statement of authority line and a note that a carbon copy would be sent to the Auditor General. The Director did not sign this, date it, nor state the authority, in that within the time permitted for testing the decision for sole source purchase, as set out in another stamped portion of the third page--that being a deadline of 3:00 p.m., August 25, 1987--Unisys filed its statement of protest to sole source. According to the custom in the Division of Purchasing, the approval stamp would only have been filled out subsequent to the time allotted for a protest to be filed.
The approved request for sole source acquisition was then placed in Room 613 of the Larson Building, in Tallahassee, Florida, which is the headquarters of the Department. Its exact placement was on a ring binder, among other unrelated documents.
Debbie Miller, an employee of Unisys, a legislative consultant, went to the Department on August 21, 1987, and after a number of attempts to ascertain the situation related to sole source acquisition of ASI software, found the memorandum with the approval stamp. She informed the Assistant Division Director on that date that Unisys would protest the single source decision, and was led to believe that one protest letter of the decision would be sufficient. This remark was made by Dozier Johnson, Assistant Division Director.
The protest letter is dated August 24, 1987, and was filed with the Office of Clerk of the Department of General Services on that same date. It is addressed to the Executive Director of the Department of General Services and states: "This letter is to notify you that Unisys intends to file formal protest of the sole source decision to purchase the American Software, Inc., Purchasing package as decided by the Information Technology Resource Procurement Advisory Council on August 20, 1987." It is signed by Derrell Parham, the branch manager. There ensued the formal written protest which was timely filed. It better describes the fact that Unisys is challenging the Department and Division decisions for sole source. From the facts presented, it can be inferred that the Department and Division knew that their choices to vie for a purchase of ASI software through sole source was under challenge from the inception, that is, when Parham sent his letter of August 24, 1987.
The process by which the Department undertook to acquire a FFAMIS Purchasing Subsystem, through the initial evaluation of available software, the selection to acquire an off-the-shelf system and modify as opposed to purchasing an off-the-shelf system without modification or designing a system in-house, the development of functional specifications and the evaluation process pertaining to ASI and Unisys were reasonable responses to the legislative mandate. The failure by Unisys to offer a system for evaluation which incorporated essential modules for bid and inventory jeopardizes its ability to criticize the choice to purchase sole source from ASI. This factual impression is held because the most critical juncture in assessing the needs for this project came at the point where the vendors were called upon to make available their equipment to allow the Department to test adequacy. The attempt by Unisys at the hearing de novo to rehabilitate its position and to describe how the Department is presented an alternative to the sole source purchase has not been successful.
Unisys has attacked the cost factor and estimate for the preparation of modifications to the existing ASI PMM software. In doing so, it questions the estimates given by Mr. Walsh as to the time needed to accomplish the task of modifications. It also poses what it considers to be a less costly alternative which is the purchase of Unisys software and having that group modify the off- the-shelf purchase. It is acknowledged that the estimates which have been placed for achieving the ends which the State has in mind, that is, the modification of the ASI software to meet the functional specifications, has not been completely thought out. Nonetheless, the reasoning which the Department had in mind to maintain control over this modification process and to anticipate any future modifications which might come about through the use of this software and the estimate related to cost to accomplish those tasks is acceptable for purposes of resolving this dispute. This is especially true given that the Department is afforded deference in deciding that it would make a purchase of off-the-shelf software and modify that software in-house. It is not bound to accept the idea that a vendor will make the modifications even if the vendor can do them more cheaply. The real issue presented is whether there is an alternative to the purchase of ASI software which would meet the core
requirements which form the basis for the construction of the necessary software for the FFAMIS Purchasing Subsystem.
It may turn out that the choice to do the modifications in-house would be more costly than having a successful vendor do that task. Even should that occur, the control of the process of modification and the ability to have an on- going staff which can make further modifications and maintain the software without having to resort to the vagaries inherent in dealing with an outside entity which carries forward modifications is sufficient reason to allow the modifications to be accomplished in-house. To do the modifications in-house is seen by the Department as a means to maintain day-to-day control over the specifics of those modifications as opposed to placing that control with a vendor. It allows the staff analysts to become familiar with the software. The projected cost estimate of $1.2 million involves implementation of a prototype FFAMIS Purchasing Subsystem which is more than the modification of the ASI system. Beyond modifications, maintenance of this system is contemplated and the development of any enhancements that might come along beyond the point of the initial modifications. All of these tasks promote important familiarity by in-house staff pertaining to the Purchasing Subsystem. On the topic of modifications, the type required for the ASI software are considerably less involved than those for the Unisys software. The ASI programs are sufficiently close to the basic functionality to avoid major modifications. The Purchasing 1100 that was evaluated would require substantial adjustments to the bid module, known in the Unisys system as a request for quote module and a considerable amount of modification even should the 2R1 enhanced software be used when it becomes generally available on the market. It is unclear what modifications might have to be done with the inventory module to the UNIS 1100 software package, but it would always carry with it the risk associated with the fact that the UNIS 1100 inventory module had been interfaced with the Purchasing 1100 as opposed to being part of an integrated system.
On the subject of equipment costs, Unisys in December 1986 offered-to sell the Purchasing 1100 system to the Department for $48,000, the price that included 25 percent discount. It has also offered to sell the Unisys 1100, which has an inventory module for $29,900 to which a 25 percent discount would be applied. Unisys offered testimony to the effect that it could satisfy functional specifications and modifications for a cost of $900,000. In any event, even if Unisys commits itself to a $900,000 figure for the sale of its basic software and modifications to that software, the State does not have to look to Unisys for modifications and sufficient questions remain about the adequacy of the Unisys software to meet the requirements for five modules and the essential functions within those modules contemplated by the Functional Specifications, such that the Unisys proposal is not a viable alternative to the sole source purchase of ASI PMM.
Further, the Unisys software does not meet the six criteria or core functions in the sole source request memorandum which reasonably describe the essential functions which the foundation software must perform. It is not in any iteration an integrated package that would support the requisition, purchase order, bid, inventory and receiving functions. It lacks an adequate bid module, in the generation of the Purchasing 1100 that was evaluated by the design team. As briefly alluded to before, there has been some upgrade to the bid module which arguably comes closer to responding to the basic needs which the State has, but is still somewhat lacking. This describes an enhancement or update known as 2R1 which has been tested at beta sites at the point of final hearing, but had not been released as a generally marketed item. While both ASI and Unisys refer to quote or request for quote in describing their modules, ASI
performs the basic bid function contemplated by the State and Unisys in its software package which was evaluated by the State does not. The inventory module from the UNIS 1100 system which would be interfaced with Purchasing 1100 does not form an integrated package. The system which Unisys offers is not a currently marketed product fully supported by the vendor or implemented in operation in at least ten customer sites. It is a conglomeration of the Purchasing 1100 with an interface of the inventory module from the UNIS 1100.
Unisys presented an exhibit which demonstrated more than ten users who have the Purchasing 1100 system and the UNIS 1100 system; however, no indication has been given that the Purchasing 1100 and UNIS 1100 has been interfaced at those sites, especially as it would relate to an interface wherein the UNIS 1100 inventory module operates independently of other modules in that system in conjunction with the Purchasing 1100. By contrast, ASI is an integrated package that has all of the five modules contemplated and it has the interface points necessary to operate with the Users Accounting System. Unisys, too, can interface with the Users Accounting System. ASI PMM is a currently marketed product fully supported by the vendor and is implemented and operational in at least ten customer sites. This system which Unisys would build to meet the needs of the State by combining the Purchasing 1100 software package with the inventory module, would appear to be a case of the first application of that combination. This inference is gained based upon the remarks of the employees of Unisys in the course of their testimony at hearing and at deposition in which they were unfamiliar with such application.
The fourth, fifth and sixth criteria listed in the memorandum seeking sole source approval can be accomplished by both vendors. While the questionnaire answers within Joint Exhibit 5 may have indicated that ASI would not continue to support its software with the advent of modifications by the State, the testimony at hearing identified the fact that ASI would support the software package following modifications by the State. Their intentions are evidenced in their relationship with the State of Minnesota which has a similar PMM package that has been modified by that state and is still being supported by ASI. In particular, the ASI commitment to support the software package would continue if the sequence of the ASI code was not changed. The ASI spokesperson, Frank Smith, a corporate vice president, did not seem to think that the code sequence would be changed, but acknowledged that he had not gone into the details of the modifications contemplated by the State. This lack of absolute certainty is not regarded as non-compliance by ASI with the requirement for the vendor to permit user modifications to the product without discontinuing support.
The Department has also stated that what it needs is a system which provides a reasonable fit to the functional specifications. Its primary concern is that the system provide purchasing functionality. This purchasing functionality was described at hearing by Robert Glover, Chief of the Department's Bureau of Purchasing Systems, as follows: The system must have modules for requisition, bids, purchase orders, receiving, and inventory. The system's central files, which contain commodity, vendor, and agency information, feed data into the modules. A requisition can be generated either manually, by inputting information into a terminal, or automatically, when inventory falls below the designated re-order point. Once a requisition is generated, the terminal operator can order that requisition information be transmitted to the bid file: Vendor information is then pulled from the central file and a commodity description and bid invitation is generated. The bid invitation is then sent to vendors. When the bid responses are received, these responses are keyed into the bid file which tabulates the responses. The purchasing agent selects the lowest responsive bidder and keys that award into the system. The
system generates a purchase order which is sent to the vendor. Information is transmitted to the receiving file indicating that the commodity is on order, and identifying the vendor and commodity price.
When the commodity is received, the receiving file is updated and the updated information is transmitted to the inventory and accounting files.
In examining the functionality just referenced, the Department has a legitimate reason to be concerned about the performance of an unproven system such as the combination of Purchasing 1100 with an inventory module from UNIS 1100. This lack of utilization in the market place within the ten customer sites alone could cause the Unisys software package alternative to be rejected.
The beta site testing that the 2R1 enhancement to the Purchasing 1100 was undergoing at the selected customer sites is not comparable to a market release in ten customer sites. The available information concerning this release was constituted of a functional overview which is set forth in the ASI Exhibit 1. The formal product documentation for the 2R1 release had not been finalized at the point of hearing. Among the references within the ASI Exhibit
1 pertaining to the request for quote is an indication of:
.STATUS ON QUOTE RECORD-"ON-HOLD"
.CANNOT BE LINKED TO REQUISITIONS OR PO'
."NEW ON-LINE PRINT PROGRAM.
The ASI Exhibit 1 or functional overview of the 2R1 enhancement was derived from overhead transparencies or bullets intended to lead into discussion of the project.
There is another document related to the system that Unisys would build to meet the demands that the State has that has to do with the interface. This is described as Sperry CIM/UNIS-1100, CIM/Purchasing 1100 Interface Installation memo, Petitioner's Exhibit 6. Each portion of this interfaced system of Purchasing 1100 and UNIS 1100 has a separate data base. Not all information that is used by this system is stored in both data bases. There are some items that are not transferred by the interface between the two pieces of software. On the other hand, there are occasions in which information is transferred and this leads to duplicate files within the Purchasing 1100 and the UNIS 1100. Under the circumstances the risk is presented of data mismatch, a condition in which file information within a duplicate data base is inconsistent or different or unsynchronized. The installation memorandum for the interface between the two Unisys products warns users about the problem of data mismatch. These warnings within Petitioner's Exhibit 6 may be found at 2.2, 2.3 and the note to 2.8.
A system which allows for data mismatch could cause incorrect information to be employed in the activities contemplated by the FFAMIS Purchasing Subsystem. That is the reason why the Functional Specifications contemplate a system which has an integrated data base arrangement allowing the sharing of all file materials by each module. ASI provides that with its PMM product, and the Unisys system of combination of Purchasing 1100 and UNIS 1100 inventory module does not. It employs duplicate files which could effect the performance of the system through data mismatch. The idea of duplicate or redundant data files in addition to possible data mismatch, also promotes duplication or redundancy in hardware storage space.
The Department contemplates an integrated system without duplicate files, thus avoiding the need for synchronization of data bases. The ASI PMM system consists of a series of modules using common data bases with no duplicate or redundant files.
Modifications necessary for the ASI PMM software are described in Joint Exhibit 7 as: (a) provides security similar to SAMAS; (b) reformat and redefine screens to use FFAMIS naming convention; (c) refine SAMAS interface requirements; (d) modify report programs; and (e) rewrite user documentation. Similar functions would have to be performed related to Unisys software in addition to more basic modifications to the Unisys software. Even should this arrangement be made with the Unisys equipment, again it would not meet all the basic criteria contemplated in the request for sole source.
An integrated system operates in "real time." ASI Exhibit 1, the 2R1 functional overview document for the Purchasing 1100, has reference to the interface with the UNIS 1100 and speaks in time of a "virtual real time of data" in describing the "user defined interval of information transfer. Through his testimony, Mr. Bartholomew tried to indicate that nothing special was intended by the use of the term virtual "real time." What he said was that he was interested in describing a circumstance in which the user determines the transfer interval. According to Bartholomew, the user can arrange for the interval to be a millisecond to a much greater length of time. The problem that is inherent in the Unisys arrangement is to the extent that information is placed in the data base for the UNIS 1100 inventory module which has a counterpart in the data base for Purchasing 1100, an interval will have to be arrived at to allow for the transfer of information in assuring that the duplicate files within the two interfaced systems will remain synchronized. The integrated system sought contemplates the entry of data into the data base without regard for the maintenance of duplicate files and the transfer of information from one duplicate fife to another. Although the interface arrangement between Purchasing 1100 and UNIS 1100 contemplates automatic maintenance of synchronization between duplicate files within the data bases for those two combined systems, there is still the risk recognized by Unisys of data mismatch in the duplicate file environment.
Reference is made by Unisys to the belief that the Joint Exhibit 1 through Appendix C, Figure C-22 in its conceptual design of the system contemplates a number of data bases which share some common information or data. It may depict common data available to more than one data base or it may describe two types of data which correspond by type characterization to the data base with the same name designation. It does not describe duplicate files. Unisys also urges that, through its witness Bartholomew, that there is always some data mismatch whether you have activity with an interfaced system or an integrated system. Regardless of this opinion held by Mr. Bartholomew, and the description set forth in Figure C-22 to the Functional Specifications depicting common sources of information for various data bases, the system which the State wishes to purchase is an integrated system that does not contemplate two parts of a system connected by an interface in which duplicate data files may be held in each of those parts and upon the changing of data in the first duplicate file, transport or notification of that change must be brought to the second duplicate data file through the interface apparatus. The ASI system is integrated with common data bases for the various modules within the system and in which no duplicate or redundant files are involved, Unisys does not offer such a system.
Finally, as observed by Mr. Hale, the intention of the Department to install the software in an existing State site, the Comptroller's data center, is advantageous in that it puts this prototype in the position where another system exists allowing the benefit of the guidance and expertise of the Comptroller's data center in interaction with the analysts involved with the FFAMIS Purchasing Subsystem. This location also houses the SAMAS accounting System with which the Purchasing Subsystem is required to interface.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter and the parties to this action in accordance with Sections 120.53(5) and 120.57, Florida Statutes.
The Department and Division have given adequate notice of their intent to proceed to and grant permission for sole source acquisition of the ASI PMM software. Although Section 120.53(5)(a), Florida Statutes, contemplates that the notification should have been given through certified United States mail, return receipt requested, and the actual notice given by the Department and Division was through the posting of the August 20, 1987, memorandum requesting sole source acquisition with approval stamp at the Larson Building, Room 613, Tallahassee, Florida, on a ring binder or clip board, Unisys acquired this notice in sufficient time to challenge the intended agency action. Therefore, the notice was adequate to notify Unisys that the Department had in mind the purchase of the ASI software through sole source acquisition and that under the circumstances that the Division approved the request.
Rule 13A-1.010(1), Florida Administrative Code, states that the notice by the Division of its decision on a request for authorization for sole source purchase shall be through posting in accordance with the provisions of Section 120.53(5), Florida Statutes. The process undertaken here is one in which sole source request without resort to bid solicitation or request for purchase has been utilized in effecting the purchase. Consequently, Section 120.53(5)(a), Florida Statutes, requires that notification of intent to award a contract through the sole source acquisition shall be by certified United States mail, return receipt requested. In this instance, the Division seems to discount the need to comply with Section 120.53(5)(a), Florida Statutes, pertaining to notification by certified United States mail, return receipt requested, and to defer to its Rule 13A-1.010(1), Florida Administrative Code, which describes the notice of statement of intent by posting. Without deciding whether the rule is an invalid exercise of delegated legislative authority, which is not the thrust of the present case, or alternatively the rule in some fashion supplements or gives additional notice of intended agency action, it suffices to say that, in this instance posting served as the only notice given. Nonetheless, actual notice was obtained by Unisys sufficient to allow consideration of the dispute on its merits, assuming that Unisys has complied with requirements set forth in Section 120.53(5), Florida Statutes, pertaining to the filing of a timely notice of protest within 72 hours after receipt of the notice of agency's intended sole source acquisition, followed by a timely formal written protest within ten days after the date the notice of protest had been filed. Unisys has met the time requirements for notice of protest and formal written protest. Moreover, the initial notice of protest, while it describes an attack on the Information Technology Resource Procurement Advisory Council decision to acquire ASI's software through sole source purchase, is deemed ample to alert the Department and Division that it was the choice of those entities to acquire the ASI software through sole source purchase that was under challenge.
Unisys, in its formal written protest, attacked the ITRPAC decision to recommend the purchase of the software system offered by ASI. This was a claim separate and apart from the attack on the Department in its choice to seek sole source approval for purchase and the Division's approval of that request. The Department and Division offered an affirmative defense to that attack on the ITRPAC recommendation, asserting that the recommendation is not agency action subject to attack through Chapter 120, Florida Statutes. It is the decision of the Department and Division which those entities believe must undergo the scrutiny. To the extent that Unisys continues to urge any claims directed to the recommendation by ITRPAC to allow the sole source purchase of ASI software, that challenge is not accepted, for reasons articulated by the Department and Division in argument.
Section 287.073(2), Florida Statutes, creates the obligation on the part of ITRPAC to review and make recommendations pertaining to agency single source certification requests involving information technology resources that have a two year cost that exceeds $500,000. Information technology resources are under consideration in this sole source purchase and the $500,000 amount has been exceeded; however, the action of ITRPAC in making its review and recommendation in this project or in any project is not agency action for which review pursuant to Chapter 120, Florida Statutes, may be had ITRPAC is not an agency within the definition of Section 120.52(1), Florida Statutes. Thus, its advisory activity does not create a point of entry for a substantially affected party to challenge the product of review and recommendation.
Section 215.94(5), Florida Statutes, established that the Department should be the functional owner of the General Services and Purchases Subsystem within the Florida Fiscal Accounting Management Information System. As such, the Department was responsible for design, implementation and operation of the Subsystem. Those components which the Department would be expected to include in its Purchasing Subsystem were also identified. In furtherance of this mandate, the Department set about organizing a staff to evaluate compliance with its charge, seeking the input of prospective users of the Purchasing Subsystem, seeking technical advice from persons within State government who might assist the Department in this development task, considering available componentry within the private and public sector, and making choices about whether software should be purchased off the shelf, developed in-house or purchased off the shelf with modifications being made to effectuate its purposes. Through extensive research and preparation, it was determined that the purchase of a software package to be modified by the State was the best alternative. In arriving at this conclusion, the Department acted in a reasonable fashion. It was not arbitrary or capricious in its determination to seek a software package which could be modified to meet its particular needs in the Purchasing Subsystem or in choosing to complete is own modifications. Having arrived at the decision to seek a software package and offer modifications, it ascertained that three possible vendors might be able to provide the foundation capability needed in the Purchasing Subsystem. Among those vendors were Unisys and ASI.
To satisfy itself that the vendors could provide the foundation software for the Purchasing Subsystem, the Department determined to evaluate the software in an environment which would allow Design Team members to gain their own insights into the
vendor software capability. In the interest of fairness and a meaningful evaluation process, the vendors were not brought into the process without first being instructed concerning the Department's desires. The Department provided the vendors with functional specifications which clearly indicated that the Department wished to evaluate software which provided requisition, bid, purchase
order, receiving and property management/inventory functions. Those functional specifications were given to the vendors in ample time to allow the vendors to present for evaluation a software package which would speak to each essential function described. ASI presented for evaluation software which met the fundamental needs that the Department had for its Purchasing Subsystem. Unisys did not. Unisys did not offer for evaluation a true bid module as the State envisioned that activity. Unisys did not present any inventory module. Its failure to do so was not based upon the Department's failure to provide adequate information concerning its expectations for software in a Purchasing Subsystem. The fault lies with Unisys in that it did not offer an inventory module for evaluation and presented an inadequate bid module. Unisys's protestations that discussions were held during the course of the evaluation of its product concerning the availability of an inventory module, that although it answered the questionnaire in the negative when requested to explain whether it had software related to inventory and went on to describe that with further explanations it could offer existing software on inventory or fabricate such software and although it attempted through this case to describe how it had upgraded its bid module response and could offer an inventory module, the true nature of what Unisys might be able to provide in response to the functional specifications is an unknown commodity. It is unknown in the sense that a vital piece of intelligence concerning the Unisys product could not be gathered by the Department, because Unisys did not provide it that information at an appropriate juncture. This speaks to the need to have offered this system that Unisys now feels is available at the time the Department was prepared to undertake an impartial evaluation in comparison to the Functional Specifications, especially the essence of the five basic functions which have been alluded to.
Unisys argues that these proceedings are de novo and that the evaluation phase and the outcome at that place in time should not control this dispute. Generally speaking, that observation is correct. Nonetheless, given its mandate, the Department was entitled to the orderly pursuit of its design and implementation of the Purchasing Subsystem. The Department was not unreasonable in its choice to have the vendors confirm software capability through the evaluation process. The de novo hearing process does not contemplate that the Department in this setting must reconvene an evaluation session directed to the Unisys software packages which have been described in this hearing. That refers to a Purchasing 1100 with an inventory module from UNIS 1100. That leaves Unisys in the position of having to demonstrate in the course of the hearing that product that it now describes can meet the fundamental needs which the Department has for its Purchasing Subsystem. The description given concerning the bid module, even with enhancements, leaves in question whether indeed it meets the fundamental requirements from which modifications may be made. The inventory module from UNIS 1100 interfaced with the Purchasing 1100 which was evaluated or with the enhancements to the Purchasing 1100 which have been described is less than a certain fit compared to the fundamental requirements.
In effect, on paper the offering which Unisys describes to meet the Purchasing Subsystem fundamental needs does not thoroughly demonstrate basic compliance with those needs. Consequently, having foregone the opportunity that was offered for evaluation, Unisys has failed in its need to prove the acceptability of its product. Given the expectation that the Department should move forward with this project, the comprehensive nature of its assessment process in canvassing the industry for suitable software, the amount of work still remaining to accomplish the modification, the even-handed treatment which has been afforded both vendors in assessing their respective software packages, and the remaining question about whether the Unisys combination systems could meet fundamental needs when the issue is examined de novo, Unisys does not prevail in its claims.
Reference is also made to the letter requesting sole source acquisition in which six minimum criteria are identified from the point of view of the purchasing agents. Those minimum criteria carry forward the fundamental functions, or basic functions theme extracted from the Functional Specifications that had been provided to the vendors prior to the evaluation sessions.: Examining the Unisys product in the context of those criteria, it is not an integrated package. It is not one which is sufficiently in compliance with the bid needs that the State has and while an inventory module has been added, in theory, it is not clear that this combination of inventory function from UNIS 1100 with the Purchasing 1100 is one which is a currently marketed product, nor is it clear whether it is one implemented and operational in ten customer sites.
Section 287.062(1)(c), Florida Statutes, identifies the idea of a sole source acquisition as an exception to the bid requirements. It requires a certification of the conditions and circumstances under which the agency head. In this instance, the Department wishes the Division to examine its request.
Being an exception to the general concept that competitive bidding shall form the basis for a purchase in an amount as great as this case describes, the request must be carefully examined. Upon that examination, the request for sole source acquisition should be granted. Taking into account the comprehensive analysis of the market place, the acceptability of the decision to buy a software package and effect modifications, the fair treatment which the only two vendors who might possibly comply with the needs which the Department had in mind, and in the initial impression which was gained from that evaluation process and which continues through the hearing de novo that ASI is the only vendor which clearly meets the fundamental needs which the Department has, a sole source acquisition is acceptable. See also Rule 13A-1.001(15), Florida Administrative Code.
Some discussion is entered into by Unisys in its suggested legal conclusions to the effect that given the many masters served by Department staff, in particular Mr. Walsh, and the close relationship between various government agencies involved in this process, due diligence should be brought to bear in examining these matters. Notwithstanding the myriad functions performed by a number of staff members, including Mr. Walsh, and the close relationship between the various agencies, the requirements of law concerning comment, review, request and approval have been met.
Based upon a consideration of the facts found and the conclusions of law reached, it is
That a final order be entered which approves the sole source acquisition of the ASI PMM software.
DONE and ENTERED this 5th day of January 1988 in Tallahassee, Florida.
CHARLES C. ADAMS
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 5th day of January, 1988.
APPENDIX TO RECOMMENDED ORDER CASE NO. 87-4105 BID
Use of the suggested facts offered by the parties to this dispute can be found within the paragraphs to the recommended order, except in the following instances which describe modification to suggested facts or rejection of those facts: Unisys Facts
Paragraphs 15 through 24 are subordinate to facts found.
Paragraph 25 with the exception of the last sentence is subordinate to facts found. The last sentence of paragraph 25 is not necessary to the resolution of the dispute.
Paragraphs 26 through 32 are subordinate to facts found.
Paragraph 33 is subordinate to the facts found with the exception of the last sentence which is not necessary to the resolution of the dispute.
Paragraphs 34 and 35 are subordinate to the facts found. Paragraph 36 is contrary to the facts found.
Paragraph 37, while true, the Department did not ask ASI to perform cost estimates for modifications and was not required to.
Paragraphs 38 and 39 are subordinate to facts found.
Paragraph 40 is acknowledged as to the first sentence, but it is not necessary for the Department to defer to an arrangement in which modifications are made by the vendors and not done in-house. Consequently, related to the second sentence within paragraph 40, whether the estimate of the relative cost of in-house modification as opposed to vendor modification is accurate or not is not controlling.
Sentence one to paragraph 42, is uncertain in that the MAPPER FACS Inventory System and the creation of an inventory system to work in conjunction with the Purchasing 1100 are unknown commodities. The second sentence to paragraph 42 is contrary to facts found. The remaining sentences within paragraph 42 are subordinate to facts found.
Paragraph 43 is not necessary to the resolution of the dispute.
The first sentence to paragraph 44 is contrary to facts found. The remaining sentences within paragraph 44 are subordinate to facts found.
Paragraph 45 is not necessary to the resolution of the dispute. Related to paragraph 45 the relative ease of modification of the security system offered in the Unisys equipment when compared to ASI equipment is not significant given the fundamental failings in the Unisys equipment and the basic acceptability of the ASI equipment. Paragraphs 46 and 47 are subordinate to facts found.
Paragraphs 49 through 53 are subordinate to facts found.
Paragraph 54 is not necessary to the resolution of the dispute. ITRPAC appeared to rely on the work done by the Design Team. The suggestion in the first sentence of paragraph 55 that Mr. Hale may have acted differently had he been convinced that Unisys had an inventory system, is a moot point in that the Unisys inventory system has not been shown to be adequate. The remaining sentences within paragraph 55 are subordinate to facts found as are paragraphs
56 through 66.
Paragraph 67 is contrary to facts found.
Paragraphs 67 through 69 are subordinate to facts found. The first two sentences within paragraph 70 are subordinate to facts found. The remaining sentences within that paragraph have been modified within the facts found.
Paragraph 71 is not necessary to the resolution of the dispute. The first sentence of paragraph 72 is subordinate to the facts found. The remaining sentences found In that paragraph are contrary! to facts found.
Paragraphs 73 and 74 are subordinate to the facts found. The first two sentences within paragraph 75 are contrary to facts found. The remaining sentences within paragraph 75 are correct in the sense of describing the interchangeability of terms in "request for quote" and "invitation to bid;" however, the function contemplated within this case is for a competitive bid module not a quotation module.
Paragraph 76 is not necessary to the resolution of the dispute. Paragraph 77 is contrary to the facts found.
Paragraph 78 with the exception of the last sentence is subordinate to the facts found. The last sentence within that paragraph is contrary to the facts found.
Paragraph 79 is contrary to the facts found. The first sentence of paragraph 80 is contrary to facts found. The remaining sentences within that paragraph are subordinate to facts found.
Paragraph 81 is contrary to facts found.
Paragraphs 82 and 83 are subordinate to facts found. The first two sentences of paragraph 84 are subordinate to facts found. The remaining sentences within that paragraph are contrary to facts found in that they suggest the adequacy of Unisys' system, which has not been accepted in the factual findings in the recommended order.
Paragraph 85 is contrary to the facts found.
Paragraph 86 is not necessary to the resolution of this dispute. Paragraphs 87 through 89 are contrary to facts found.
Paragraph 90 is subordinate to facts found. Paragraph 91 is contrary to facts found.
Paragraph 92 is subordinate to facts found, other than in the place where it suggests that the sixth requirement for installation of the system within ten locations was merely proof that the: system is currently marketed. That requirement was an important element of the assessment process, not a mere afterthought.
Paragraph 93 is not necessary to the resolution of the dispute. The first two sentences within paragraph 94 are subordinate to facts found. The last sentence within that paragraph was not necessary to the resolution of the dispute. The first sentence of paragraph 95 is subordinate to facts found.
The last sentence to paragraph 95 is contrary to facts found.
Paragraphs 96 and 97 are subordinate to facts found. The first two sentences of paragraph 98 are subordinate to facts found. The remaining sentences within that paragraph and paragraph 99 describe some of the instances in which the ASI equipment will not meet all functional specifications. This does not mean that the ASI equipment is not fundamentally adequate. Related to paragraph 100, the Department is not deemed to have intended that all functional specifications should be met, therein lies the necessity for modification.
Paragraph 101 is subordinate to facts found with the exception of the last two sentences which were contrary to facts found.
Paragraph 102 is subordinate to facts found.
Paragraph 103 suggests inconclusive facts in that the batch tape had not been installed such as to allow a test of the claims of its adequacy.
Paragraph 104 is subordinate to facts found. Paragraph 105 is contrary to facts found.
Paragraph 106 in the depiction of functional features not contemplated within the functional specifications is irrelevant.
Paragraphs 107 and 108 are contrary to facts found. Department-Envisioned Facts
Paragraph 3 through 7 are subordinate to facts found. Paragraph 8 is not necessary to the resolution of the dispute. Paragraph 10 is subordinate to facts found.
Paragraphs 13 through 19 are subordinate to facts found. Paragraphs 23 through 25 are subordinate to facts found. Paragraphs 28 through 30 are subordinate to facts found. Paragraphs 39 through 41 are subordinate to facts found. Paragraphs 43 through 45 are subordinate to facts found.
Paragraphs 47 through 49 are subordinate to facts found. The first sentence of paragraph 50 is not necessary to the resolution of the dispute. The remaining sentences within paragraph 50 are subordinate to facts found.
Paragraphs 51 through 59 are subordinate to facts found. Paragraph 60 is not necessary to the resolution of the dispute. Paragraphs 61 through 78 are subordinate to facts found.
Paragraph 79 in its first two sentences is subordinate to facts found. The remaining sentence within that paragraph is not necessary to the resolution of the dispute.
ASI Facts The proposed findings are subordinate to the factual findings in the recommended order.
COPIES FURNISHED
Alan C. Sndberg, Esquire
W. Douglas Hall, Esquire Martha Harrell Hall, Esquire CARLTON, FIELDS, WARD,
EMMANUEL, SMITH, CUTLER, & KENT, P.A.
410 First Florida Bank
215 South Monroe Street Post Office Drawer 190 Tallahassee, Florida 32302
Susan B. Kirkland, Esquire Stephen S. Mathues, Esquire Department of General Services Office of General Counsel
452 Larson Building
200 East Gaines Street Tallahassee, Florida 32399-0955
Thomas M. Beason, Esquire MOYLE, FLANIGAN, KATZ,
FITZGERALD & SHEEHAN, P.A.
The Perkins House, Suite 100
118 North Gadsden Street Tallahassee, Florida 32302
Ronald W. Thomas Executive Director
Department of General Services
133 Lars91n Building Tallahassee, Florida 32399-0955
| Issue Date | Proceedings |
|---|---|
| Jan. 05, 1988 | Recommended Order (hearing held , 2013). CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Jan. 27, 1988 | Agency Final Order | |
| Jan. 05, 1988 | Recommended Order | Petitioner failed to respond to material requirements in computer purchase concerning offer of software for evaluation. Competitor entitled to contract |
