STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
CITY OF GAINESVILLE, ) GAINESVILLE REGIONAL UTILITIES, )
)
Petitioner, )
)
UNIVERSITY OF FLORIDA, ) CASE NO. 88-2034BID
)
Respondent, )
and )
)
GATOR POWER, )
)
Intervenor. )
)
RECOMMENDED ORDER
Pursuant to written notice, a formal hearing was held in this case before William R. Cave, a duly designated Hearing Officer of the Division of Administrative Hearings, on May 11, 1988, in Tallahassee, Florida and on June 20-24, 28, 1988, in Gainesville, Florida. The issue for determination is whether the University of Florida acted arbitrarily and capriciously or abused
its discretion in its selection of Gator Power as the entity with which to begin negotiations for a contract to build a demonstration cogeneration facility.
APPEARANCES
For Petitioner: Ann Carlin, Esquire
Post Office Box 490, Station 52
Gainesville, Florida 32601
and
Kenneth G. Oertel, Esquire
R. L. Caleen, Esquire Oertel & Hoffman
2700 Blair Stone Road, Suite C Tallahassee, Florida
For Respondent: Barbara C. Wingo, Esquire
University of Florida
207 Tigert Hall Gainesville, Florida 32301
and
John W. McWhirter, Esquire John W. Bakas, Jr., Esquire 821 First Southern Plaza
201 East Kennedy Boulevard Tampa, Florida 33602
For Intervenor: Robert Pass, Esquire
Donald E. Hemke, Esquire Post Office Box 3239 Tampa, Florida 33601
and
James F. Stanfield, Esquire Senior Counsel
Office of General Counsel Florida Power Corporation 3201 34th Street South
St. Petersburg, Florida 33711 BACKGROUND
In the early 1980's, in response to the Florida Energy Efficiency and Conservation Act, Sections 366.80 - 366.85, Florida Statutes, the Governor's Energy Office (GEO) became interested in the possibility of cogeneration demonstration projects which would enable the state of Florida to conserve energy and to pay less than it presently pays for electric power. Also in the early 1980's, the work going on in the GEO to pave the way for cogeneration in the state of Florida was discussed with the University of Florida (University). Then in 1985, legislation proposed by the GEO was enacted which amended Chapter 255, Florida Statutes and created an opportunity for state agencies to participate in developing a "demonstration project" and a "model contract" for "shared energy savings." The statute allowed state agencies to take advantage of energy producing technology to reduce their energy costs, and expressly recognized "cogeneration" as one form of possible energy saving technologies.
It was also contemplated that only a limited number of state agencies would participate in a demonstration project from which a model contract would be developed.
In response to the legislation, the GEO solicited interest from various state agencies, including the state universities, for participation in a cogeneration demonstration project and the creation of a model contract. The University submitted an application and was selected to participate. Upon being selected, the University entered into a letter agreement with the GEO agreeing to participate in the demonstration cogeneration project.
The University determined that obtaining such a demonstration cogeneration facility through the bidding process was not practical and therefore decided to use a "Request For Proposal" in two phases; Request For Proposal - Phase I (RFP-
I) and Request For Proposal - Phase II (RFP-II). On April 1, 1988, after receiving and evaluating all the responses to the Request For Proposal - Phase I and Phase II, the University issued "Findings" dated April 1, 1988, stating the University intent to enter into contract discussions with Gator Power (GP), one of the proposers, for a demonstration cogeneration facility to be constructed on the University's Gainesville campus.
Gainesville Regional Utility (GRU), another proposer, protested the University's intended decision on April 1, 1988, and timely filed its Petition For Formal Proceeding on April 11, 1988. On April 25, 1988, the University forwarded the petition to the Division of Administrative Hearings, requesting assignment of a hearing officer to conduct a formal hearing.
GRU contends that: (1) the University acted improperly in retaining William Elmore, Vice President of Administrative Affairs, in "overall charge" of the cogeneration project until November 9, 1987, because he had a material
interest in Florida Progress Corporation, the parent company of Florida Power Corporation; (2) GP's cogeneration proposal was non-responsive to the University's RFP-II, and therefore should be rejected; (3) GP made material modifications to its proposal after the proposals were opened and the University considered such modifications in its evaluation; (4) the University's evaluation of competing proposals submitted by GP and GRU was unfair, unreasonable, erroneous, or arbitrary; (5) the University's evaluation reflected an effective bias in favor of GP's proposal and against GRU's proposal; and (6) the University should reject all proposals and issue a new Request For Proposals, or should select GRU's proposal as in the best interest of the University, considering all criteria, and finalize a contractual relationship with GRU for the construction and operation of a cogeneration facility.
On May 3, 1988, GP petitioned to intervene as a party, and the petition was granted on May 10, 1988. By motion dated May 5, 1988, GRU moved for leave to amend its petition, which was granted on May 13, 1988. On May 16, 1988, in compliance with an order entered on May 13, 1988, GRU filed a more definite statement of paragraph 42 of its amended petition.
The formal hearing began on May 11, 1988, in Tallahassee, Florida (within
15 days of the receipt of the petition by the Division of Administrative Hearings), was then continued and rescheduled for June 6 - 10, 1988 - the first five continuous days available on the Hearing Officer's calendar. Due to the Hearing Officer's unexpected hospitalization on June 8, 1988, the hearing was cancelled and rescheduled for June 20 - 24, 1988 in Gainesville, Florida. The hearing was not completed on June 24, 1988 as anticipated and was rescheduled and completed on June 28, 1988.
At the hearing, GRU presented the testimony of Albert T. Clary, Gerald E. Warren, III, Craig Kiser, Richard Nicholls, Arthur Miller, Henry Fishkind and Robert Moye. GRU's exhibits 5-10, 12-33, 36, 37, 39-41, 44A-44G, 45-50, and 51A-51D were received into evidence. The University presented the testimony of Henry Erikson, Marlene Michaelson, Edwin Coxe, Marshall M. Criser, Jr., Sanford
V. Berg, Eugene F. Brigham, Daniel Livermore and Dale Kirmse. The University's exhibits 1-23, 25-47, 49-65 were received into evidence. GP presented the testimony of Donald Paton, Worth Blackwell, Peter Christman and Cyril V. Smith, Jr. GP's exhibits 1-4 were received into evidence. Joint Composite Exhibits 1-
4 were received into evidence.
At the conclusion of the hearing, the parties requested, and were granted, permission to exceed the 40-page limitation imposed under Rule 22I-6.031(3), Florida Administrative Code, for Proposed Recommended Orders, by an additional
40 pages, for a total of 80 pages. Just prior to the due date for the submission of the Proposed Recommended Orders, permission was again requested and granted to exceed the 80-page limitation imposed earlier by another 40 pages. The parties timely submitted their post-hearing Proposed Findings of Fact and Conclusions of Law. A ruling on each proposed finding of fact has been made as reflected in the Appendix to this Recommended Order.
After the hearing was concluded, there were two motions filed by GRU. The first motion was GRU's Motion For Leave To File Updated State Of Florida Private Activity Bond (PAR) Allocation Printout. A telephonic hearing was held and the motion was granted allowing the Updated State Of Florida Private Activity Bond (PAB) Printout to be filed as GRU's exhibit 52. The second motion was GRU's Motion To Reopen Hearing And Receive Additional Evidence. A telephonic hearing was held and, after hearing and considering argument of all the parties, the motion was denied even though the newly discovered evidence was not discoverable
at the time of the hearing because it was not probable that the newly discovered evidence would change the outcome of the hearing. Ragen v. Paramount Hudson, Inc., 434 So.2d 907 (3 DCA Fla. 1983), rev. denied, 444 So.2d 417 (Fla. 1984);
Department of Transportation v. Groves-Watkins Constructors, 13 FLW 462 (Fla., opinion filed August 18, 1988).
FINDINGS OF FACT
Upon consideration of the oral and documentary evidence adduced at the formal hearing, the following relevant facts are found:
At the present time, all purchased electric power for the main campus area of the University of Florida (University) is obtained from Florida Power Corporation (FPC). The power is routed through a single FPC substation and from there the university-owned system distributes power to eight campus substations.
The University consumes approximately 1 billion pounds of steam and in excess of 200 million kilowatt hours (kwh) of electricity, for which the University paid approximately 4 million dollars and 10 million dollars, respectively in 1986. The University projects that it will consume nearly 300 million kwh of electricity by 1995.
"Cogeneration" means the creation of two forms of energy from one energy source. Cogeneration at the University contemplates the creation of electrical and thermal (i.e., steam) power for the University from a single generation facility fueled by natural gas.
Having been selected to participate in the cogeneration demonstration project, the University in consult with the Governor's Energy Office (GEO), Lane & Edson, a law firm retained earlier by the GEO as a consultant in this area, and Reynolds, Smith & Hill (RSH), an engineering and consulting firm with experience in cogeneration, decided to: (a) employ a "request for proposal" solicitation process under Section 287.012(11), Florida Statutes, rather than an "invitation to bid" process under Section 287.012(7), Florida Statutes; aid (b) conduct the process in two phases. A Request for Proposals was used because it was not feasible to specify in detail the precise form of technology, financial arrangements, and other factors that would be most beneficial to the University.
Request For Proposal - Phase I (RFP-I) was designed to elicit qualifications from contractors and enable the University to select a limited number qualified to submit detailed proposals in response to Request For Proposal - Phase II (RFP-II). The purpose of RFP-II was to elicit detailed proposals from the pre-qualified contractors and select a contractor with whom the University would negotiate a final cogeneration contract.
The University project was placed under the primary supervision of the University Physical Plant Division, overseen by Mr. Robert Cremer, Director.
A Cogeneration Technical Advisory Committee was selected to assist Mr. Cremer and was composed of faculty members from the Department of Chemical Engineering, Department of Economics, Department of Finance, Insurance and Real Estate and the Department of Industrial and Systems Engineering.
On December 5, 1985, the University issued RFP-I, with a response date of February 5, 1986, "to select contractors who will then be asked to submit final proposals under Phase-II." The RFP-I requested a statement of
qualification from contractors who desired to develop a cogeneration facility and to enter into a "shared savings contract" with the University.
Because of the complexity and expense of preparing and evaluating the subsequent cogeneration proposals, the RFP-I "anticipated" the number of contractors "chosen to receive" the RFP-II not to exceed five.
The RFP-I advised those contractors receiving the RFP-I that any protest as to the reasonableness, necessity, or competitiveness of the RFP-I or any selection made under the terms of RFP-I should be filed in accordance with Rule 6C1-3.020(19), Florida Administrative Code.
The RFP-I advised the potential contractor that the contractor ultimately selected would provide comprehensive services for the cogeneration facility, including: (a) the design and installation of the equipment; (b) the operation and maintenance of the facility; and (c) the financing for the facility under either a third party ownership agreement or a tax-exempt lease purchase. The contractor would either: (a) operate the facility and sell thermal (steam) and electrical output to the University pursuant to a service contract; or (b) lease the facility to the University pursuant to a tax-exempt lease purchase and operate it under an operating agreement.
Seventeen responses to RFP-I were received by the University by the February 5, 1986, deadline. Among them were Babcock & Wilcox (B&W), Gainesville Regional Utility (GRU), Ebasco Services Inc. and Aptco Constructors (GRU/EBASCO/APTCO), a joint venture, and FPC.
The RFP-I proposals were reviewed by an "evaluation team" (team) appointed by the University consisting of representatives of GEO, RSH, Lane & Edson and the University. The team was composed of Henry Erikson, Senior Analyst, GEO; Edwin Coxe, RSH (University's consultant); Marlene Michaelson, Lane & Edson (GEO consultant); Barbara Wingo, University's General Counsel's Office (Advisor); Dale Kirmse, University's Faculty Technical Advisory Committee
; Edgar Callaway, Physical Plant Division; and Richard Boe, Assistant Director, Physical Plant Division, Chairman.
The team, using the criteria set out in the RFP-I, grouped the seventeen proposers into four categories: (1) Best Qualified; (2) Highly Qualified; (3) Qualified; and (4) Not Qualified. B&W and GRU/EBASCO/APTCO were found highly qualified and ranked three and four, respectively. Only the top seven proposers were ranked. Although FPC was found to be qualified, it was given no ranking. Three proposers were found not qualified. The team recommended that only four proposers be selected as finalists, i.e. eligible to submit responses to RFP-II: Foster-Wheeler Power Systems, Inc.; Impell Corp/FPL Energy Services; B&W; and GRU/EBASCO/APTCO.
By memo dated May 7, 1986, Mr. Boe conveyed the team's ranking and recommendation to Mr. Cremer. Mr. Cremer did not fully agree with the team's recommendation. Having attended the oral presentation, Mr. Cremer reviewed the proposals and made his own evaluation. Mr. Cremer considered nine firms "highly qualified," five firms "qualified," and three firms "questionable." The principal difference was that Mr. Cremer considered FPC as one of the "very highest qualifiers."
After discussing his evaluation of the proposers with Mr. Boe, Mr. Cremer interviewed FPC concerning its interest in the project. Once satisfied of FPC's capabilities and interest in the project, Mr. Cremer recommended to
William Elmore, Vice President of Administrative Affairs, that FPC and Dravo Engineers, Inc. be added to the "finalists" list.
To the extent that Mr. Cremer was motivated to include FPC in the RFP- II process as a result of FPC's long-standing supplier relationship, he was not motivated out of any bias or prejudice against GRU or in favor of FPC, but rather was motivated by a sincere belief that FPC's demonstrated reliability in providing electrical power in the past was a legitimate consideration under RFP-
I. However, his recommendation is adequately supported by evidence of FPC's qualifications to proceed to RFP-II independent of FPC's prior service to University.
Mr. Elmore requested that Mr. Cremer discuss his recommendation with the team and get their concurrence. Although individual members of the team were not overly enthusiastic about Mr. Cremer's recommendation, the team concurred in the recommendation.
Because of Mr. Elmore's concern with adding only two of the seven proposers rated as "qualified" to the "finalists" list, he ultimately selected fourteen firms as qualified to continue on to RFP-II. The proposers selected by Mr. Elmore to continue on to RFP-II were rated by the team as "Best Qualified," "Highly Qualified" or "Qualified." Five proposers were found to have presented the most satisfactory response to RFP-I, and thus would automatically receive RFP-II, they were as follows: B&W, Dravo Engineers, Inc.., Foster-Wheeler Power Systems, Inc., GRU/EBASCO/APTCO and Impell Corporation/FPL Energy Services. The other nine proposers listed, including FPC, were required to request RFP-II in writing by July 15, 1986, if they wished to participate in RFP-II. FPC timely notified the University in writing of its desire to participate in RFP-II.
Mr. Elmore's decision was conveyed to the proposers on June 23, 1986, by letter from James E. Theroux, Purchasing Director. The letter advised the proposers that this was "official notice of award for RFP-I" and that "[f]ailure to file a protest within the time prescribed in Section 120.53(5), Florida Statutes, shall constitute a waiver of proceedings under Chapter 120, Florida Statutes." The letter also advised the proposers that all responses to RFP-II would be evaluated in accordance with RFP-II criteria.
Mr. Elmore was a stockholder in Florida Progress Corporation, the parent company of FPC, during the time he was involved in the decision making process for the cogeneration project. Due to this possible conflict of interest, Mr. Elmore removed himself from the process on November 9, 1987. Mr. Elmore did not use his position with the University to influence or persuade anyone, including Mr. Cremer or President Criser, to include FPC on the "finalists" list or to rate the proposal of Gator Power (GP), a joint venture of B&W and FPC, over any other proposal. Also the evidence is clear that Mr. Elmore would not benefit financially from FPC or GP ultimately contracting with the University to design, construct, finance and operate its cogeneration facility any more so than he would had FPC continued furnishing electricity to the University.
Mr. Elmore did not attempt to influence or dissuade anyone from moving forward with the cogeneration demonstration project at the University so that FPC could continue furnishing electricity to the University.
Although GRU was not aware of Mr. Elmore's financial interest in the Florida Progress Corporation, or Mr. Elmore's and Mr. Cremer's involvement in the selection process in regard to FPC when RFP-I award was announced, GRU was
aware that RFP-I had "anticipated" limiting those qualified to continue on to RFP-II to five and that fourteen proposers (FPC included) had been selected to continue on to RFP-II if they desired.
Neither GRU/EBASCO/APTCO, as a joint venture, nor GRU, individually, filed a protest, petition or objection in response to the June 23, 1986 notice of RFP-I award until April 1, 1988.
The University did not act arbitrarily or capriciously or abuse its discretion in its decision to allow the fourteen contractors rated as qualified to submit proposals for RFP-II. Nor was it erroneous or unreasonable for the University to allow the fourteen contractors rated as qualified to submit proposals for RFP-II. There was no prejudice to GRU by allowing the fourteen contractors rated qualified to submit proposals for RFP-II. Additionally, there is no competent, substantial evidence that FPC received unfair advantage or favored treatment in the University's evaluation of the proposals as a result of its long-standing relationship as supplier of electricity to the University, its various gifts to the University and sponsorship of the University programs, and its social and financial "ties" with the University officials, fund-raising entities, and alumni.
On November 5, 1986, the University proceeded to the second phase of the cogeneration procurement and issued RFP-II, inviting each of the fourteen finalists selected in RFP-I to submit a final proposal.
RFP-II required the proposer to provide comprehensive services, including the design, selection and installation of cogeneration equipment, and the operation, maintenance, servicing and financing of the facility. The proposer was required to provide thermal and electrical power from the facility to the University and to structure the University's payment obligations for those services. Each proposer was to determine for itself the system which could best satisfy the needs of the University and the proposer's requirements for return on investment. This was consistent with the demonstration character of the project and for flexibility.
Section 1B, RFP-II, lists the project objectives as follows:
Satisfy the site requirements for thermal and electrical power set forth in this RFP;
Maximize the benefits, ,financial and otherwise, available to the University in connection with the facility; and
Avoid any capital investment or financial guarantees by the University.
Although RFP-II required the proposals to meet the project objectives set out above, the University was required to evaluate each proposal using the evaluation criteria which were clearly and separately set out in Section IIID of RFP-II.
Section III, RFP-II, sets out certain rules and conditions for preparing and submitting the final proposal and the criteria and methodology to be used in evaluating the proposals. Additionally, the proposers are advised that selection to enter into contract negotiations with the University "does not mean that all aspects of the Final Proposal are acceptable to the University, and the University reserves the right to modify or reject terms and conditions
... as it deems necessary to ensure satisfactory development of the Facility."
Comments, both verbal and written, made during the proposal process indicated that the University understood that it could not request or allow changes in the proposals considered to be material modifications that would change the relative ranking of the different proposals after the opening at 4:00 p.m. EDT on March 5, 1987.
The selection under RFP-II only constituted a commitment by the University to enter into exclusive discussions with the selected contractor for the purpose of executing an agreement satisfactory to both parties after which the University would submit the proposed contract to the Board of Regents (BOR) for final approval.
RFP-II stated that after the BOR approved the contract between the University and the selected contractor, the selected contractor would be required to submit to the University a conditional commitment for financing satisfactory to the University in its sole discretion. It was only after the University's approval of the financing to be used subsequent to the initial contract approval that the contract would be executed by the University and the selected contractor. Addendum I to RFP-II provided that to facilitate the contractor's ability to obtain financing the University would, upon request, execute the contract prior to the contractor's efforts to obtain financing under Section C, 5(c) of the RFP-II. Under this situation, all contractual obligations of the University would be contingent upon the contractor's ability to obtain satisfactory financing.
RFP-II did not require proposers to have actually obtained their proposed financing at the time of proposal submission. Conditional commitments for financing could be submitted by the proposers 60 days after BOR contract approval. BOR's approval could occur as much as 105 days after selection of the successful contractor.
Section III, RFP-II, required that the proposals "reflect and be based on" specified conditions, which in pertinent part, provides:
The contractor must operate and maintain the Facility during the Contract Period.
The Contractor must either (i) operate the Facility for its own account and sell thermal and electrical output from the Facility to the
University pursuant to an energy services contract, or (ii) lease the Facility to the University pursuant to a tax-exempt lease purchase (conditional sale) arrangement, and operate the Facility for the account of the University pursuant to an operating agreement.
The University's payment obligation must be based on the reduction in the University's present costs....
If a service contract is proposed:
the University will agree to purchase all or part of its thermal and electrical requirements from the contractor as long
as the terms of the contract are met.
the contractor may sell excess electrical power to a public utility...
(i) ...
(ii) ...
the University must be given the option, but must not be required, to purchase the Facility from the Contractor at the end of the Contract Period.
If a lease purchase is proposed, the Facility must be transferred to the University for a nominal sum at the end of the Contract Period. The lease purchase must comply with all applicable laws and rules of the State of Florida.
The Contract Period is negotiable, however, the Contractor should be willing to enter into
an agreement of significant length (e.g. ten years or longer).
7. ...
8. The University intends that the Facility will be designed and built to accommodate all or part of the thermal and electrical power demands of the University.... The University will also consider proposals that include modifications to existing facilities (e.g. replacing a chiller) to increase efficiencies or compatibility with cogeneration system.
9. ...
10. ... In the event the University is given the option of purchasing the Facility from
the Contractor prior to the end of the Contract Period, any such agreements must be assignable to the University.
11. ...
12. ...
13. The economic assumptions contained in Appendix C must be used in performing all financial analysis required by this RFP-II. This requirement is to allow for a comparable evaluation of competing proposals only, and the University makes no representations that those assumptions are valid.
Appendix C supplied the methodology, assumptions, and formats for financial analysis which proposers were required to use in preparing their benefit analysis. Appendix C required that the financial analysis "cover an Operating Period of not less than 20 years..."
Section IIID, RFP-II, entitled "Evaluation Methodology," listed four categories of criteria in order of their relative importance: (1) "Financial Terms and Risks," (2) "Technical Approach," (3) "Experience, Qualifications and Management Ability of the Respondent," and (4) "Ability to Implement Project Promptly."
Each of the four listed criteria contained a number of subparagraphs reflecting "factors" to be considered. Factors listed under Financial Term and Risks were:
the proposed term (length) of the development agreement;
the projected net dollar benefit to the University;
the guaranteed net dollar benefit to the University;
the timing of projected and guaranteed economic benefits to the University;
the specific formula that will be used to determine the payment obligations of the parties;
the timing, terms and flexibility of the University's purchase options (both during and at the expiration of the term of the development agreement);
project financing commitment and interest, credibility of financing sources, and likelihood that the project will be financed as proposed;
respondent's strategies for minimizing the financial risk to the University, including insurance; and
sensitivity of financial proposal to variations in future fuel costs and electrical power revenues.
Factors listed under Technical Approaches were:
engineering design -- soundness and expected reliability of performance, operating and maintenance requirements;
efficiency and system size -- thermal and electrical production relative to side load requirements and physical size limitations overall efficiency based on fuel use;
respondent's strategies for minimizing the technical risk to the University;
effects on campus environment -- environmental and aesthetic aspects; security and access requirements;
quality, completeness and level of detail of technical information; and
conformity of proposed approach to all applicable rules, regulations, and laws.
Although the four categories of criteria were listed in the order of their importance, RFP-II did not quantify the weight that would be given to any of the four categories or to the various "factors" that appeared within the categories of criteria, nor did it indicate whether those "factors" appeared in the order of their relative importance.
On December 3, 1986, the University conducted the required on-site visit/conference with those contractors selected in RFP-I and wishing to respond to RFP-II. The University was represented by Mr. Cremer, Ms. Michaelson, Mr. Erikson, Ms. Wingo, Mr. Jack Winstead, Associate Director, University Purchasing Division, and Dr. Ed Coxe, RSH, the University's principal consultant in evaluating responses to RFP-II. Five potential Respondents attended, including representative of GRU, FPC and B&W.
Those proposers who attended the December 3, 1986, conference were permitted to ask questions concerning RFP-II and University's technical requirements. While immediate verbal responses were given, subsequent written
answers were provided to each proposer attending that were stated to be the official response of the University. This was in accordance with Section IIIB, 10, of RFP-II.
In response to a question concerning the length of the operating agreement, the University indicated no preference but that longer was not necessarily better.
In response to a question concerning weight to be given to the four evaluation criteria, the University answered that it had listed them in order of relative importance and felt it could make a fair evaluation without assigning weights.
In response to a concern expressed by a contractor that the University may request changes during contract negotiations, the University responded that it did not contemplate requesting changes in any proposal that would change the relative ranking of different proposals. Although this was not stated as the official position of the University in its written synopsis of the conference, it was stated in writing on several occasions by the University's Purchasing Director, James E. Theroux to both Richard Boe and Robert Cremer in response to letters from both Power Ventures and GRU dated July 8, 1987 and July 13, 1987, respectively, expressing their concern over the answers given by GP to written questions posed by the University on May 11, 1987.
It was reasonable for the University not to assign specific quantitative weights or relative weights to the various criteria or categories under the circumstances of this proposal. The proposal process was designed to create a demonstration project and develop a model contract. The University was not in a position, based on some prior experience or expertize, to know precisely what solution would exist to a problem never before formulated. It was, therefore, an appropriate exercise of discretion for the University to propound RFP-II in the fashion that it did. GRU filed no objection or protest to the reasonableness, necessity or competitiveness of any portion of RFP II prior to April 1, 1988.
On December 9, 1986, FPC filed a written request with the University to permit FPC and B&W to form a joint venture (GP) for the purpose of responding to RFP-II. Both FPC and B&W were rated qualified to submit RFP-II. Such substitution was provided for under Section IIIB, II, RFP-II. On December 18, 1986, the University approved the formation of the joint venture arrangement. The proposers attending the conference on December 3, 1986, including GRU, were made aware of this joint venture arrangement and approval by the University at the time they received the written synopsis of the December 3, 1986 conference. A joint venture agreement had not been signed by FPC and B&W at the time GP submitted its proposal or at the time of University's review of GP's proposal. However, there is no prohibition to this being finalized at or before the contract is executed. GRU filed no objection, protest, or petition objecting to the University approving and allowing GP as a joint venture to respond to RFP-II prior to April 1, 1988.
There is no evidence that the University acted arbitrarily or capriciously or abused its discretion in allowing GP, a joint venture formed by FPC and B&W, to respond to RFP-II. Certainly, all agreements, including the GP joint venture, must be finalized before the contract is signed.
On March 5, 1987, GP, GRU, and Power Ventures (FP&L/Energy Services) submitted proposals in response to RFP II. GRU uncoupled the joint venture of GRU/EBASCO/APTCO and proceeded with the RFP-II process on its own.
The proposal of Power Ventures is not at issue in this proceeding and is therefore not discussed.
GRU's proposal can be summarized in its material parts:
GRU would own the cogeneration facility and provide electricity and operating and maintenance services to the University.
The facility would consist of an LM 2500 aircraft derivative gas turbine, generator and
a separate steam turbine and generator. It would carry a capacity of approximately 25 megawatts (MW).
The University would purchase all of its electrical power from the GRU system and all of its thermal requirements up to the capability of the cogeneration facility. The University would be expected to provide its own backup or peak demand steam beyond that produced by the cogeneration facility.
GRU proposed an operating agreement of ten years beginning November 1, 1988, which was stated to be "renewable for five-year increments." The University interpreted this to mean that contract terms would have to be renegotiated at the beginning of each five-year term and it was not until December
3, 1987 in response to Dr. Coxe's finalized evaluation that GRU advised the University that "the option given the University to renew the contract has always meant that it world extend the terms of the contract as originally negotiated.
The University would have the option to purchase the facility at "fair market value" at the end of the initial contract term or at the end of any renewal term.
GRU's proposal included two pricing options: a shared savings option; and a guaranteed savings option.
Under the shared savings option, the University and GRU would split equally the savings generated by the contractual arrangements when compared to the University's existing mode of electrical and thermal energy supply. The University would also share the losses, if any.
Under the guaranteed savings option, GRU would provide "a reasonable guarantee of 15 percent savings for the supply of electricity when compared to that provided by its existing supplier and 5 percent savings for the supply for steam and chilled water when compared to the University's cost to generate Such energy. GRU would be responsible for all project risks but the University would bear the entire risk of increases in the applicable FPC rate because the savings rate was tied to the existing FPC rate.
Under either option, the Florida Public Service Commission (PSC) has rate structure jurisdiction over GRU and therefore, GRU's proposal is conditioned on PSC taking no action to disallow contract pricing.
GRU assumed in its financial analysis that it would need to build a new substation and transmission line for connection with the University. The cost for these facilities was estimated at $3.50 million.
The total cost for the cogeneration facility as proposed by GRU was
$28,033,000, including the substation and bond issuance costs. The unit would be financed by GRU through the sale of Tax Exempt Municipal Revenue Bonds. GRU utility system revenues would be pledged as collateral for the bonds. Repayment of the debt would be the sole obligation of GRU unless the University decided to "buy-out" the facility at the end of any contract period. In the event of a "buy-out" of the facility, the record is unclear whether any option existed for the University other than paying off the remaining debt at the time of the "buy- out."
GRU's cogeneration facilities would not satisfy all of the University's needs for steam and electrical energy. The remaining electrical energy required by the University would be supplied by GRU from its existing generation units. The remaining thermal energy would be supplied by the University's present system.
GRU's existing system currently has substantial excess capacity. GRU has a system-wide generating capacity, without the cogeneration facility, of approximately 470 MW, and a current peak demand of approximately 265 to 270 MW.
Under GRU's proposal, the University would have to purchase part of its power from the GRU system beginning the first year of operation. GRU proposed to operate the cogeneration facility as a "satellite" of its system, rather than a "free-standing" facility supplying all of University's needs through cogeneration. It is estimated that by 1995 the GRU cogeneration facility would supply only 66 percent of the University's projected electric load.
GRU calculated a total net present value (NPV) of benefits to the University of $26,529,000.
GP's proposal can be summarized in its material parts:
GP would lease the cogeneration facility to the University under a tax-exempt, lease- purchase arrangement. The maximum lease period would be 20 years. The University would pay the purchase price of the facility over 20 years. The installed cost of the cogeneration facility,
including all associated development and financing costs, specifically the purchase of the substation from FPC for $2.4 million, was estimated at
$40,020,00. The total lease payments payable
over the twenty-year period would be approximately
$74 million. At the end of this period, the University would own the facility for a nominal payment. However, the University could "buy-out" the GP facility at the end of any operating period
without a large capital outlay by merely
"taking-over" the lease or debt service payments.
The GP facility would be capable of generating approximately 50 MW of electrical power and could supply 100 percent of the University's electrical needs for at least the 0-year period that the proposers had been instructed to assume for purposes of their proposals as the maximum contract term.
However, it was evaluated by the University
at only 92.5 percent reliability due to required down time for maintenance.
The GP facility was based on an LM 5000 aircraft derivative gas turbine. The gas turbine would drive a generator and a heat recovery boiler and would utilize exhaust gases to generate steam for sale to the University and for steam injection. The gas turbine would be capable of operating in a fully steam-injected mode ("full STIG"), by which steam would be injected at various entry points into the gas turbine, generating higher power outputs. Without STIG, the LM 5000 would supply approximately 31 MW of electrical power. With "full STIG," the LM 5000 would supply approximately
50 MW of electrical power.
GP would operate the facility and provide all of the University's electrical and thermal power. GP and the University would split equally the "net operating income" from the cogeneration
facility, and this would constitute the University's savings. "Net operating income" would essentially be the difference between what it costs GP to generate the electrical and thermal power and what it would have cost the University to purchase the same electricity from FPC at tariff rates and to generate the steam itself.
GP would lease the land on which the facility would be located from the University
at an annual charge of $200,000. GP specifically provided that the $200,000 lease payment "shall be due and payable regardless of the economic viability of the project and shall remain in force throughout the term of the Operating Agreement."
The ground lease payment, payable regardless of the economics of the project, would "assure the University that the sum of its fixed tax-exempt lease payment obligation and its Operating Agreement energy payment never exceeds the University's total avoided energy costs.
GP proposed to operate the unit under an Operating Agreement with the University. However, due to possible limitations imposed by the federal tax laws on the tax-exempt lease, the Operating Agreement was subject to a five year maximum term, including renewals. It was stated to be the intent of GP "to renew the Agreement after each five year
term, throughout the 20-year financing period." However, the mention of the five year restriction on the operating and maintenance agreement introduced ambiguity into the proposal which
was later clarified by GP in answer to questions posed by the University.
GP proposed to share the benefits of the project through two vehicles: a fixed cost ground lease of $200,000 per year; and a 50/50 sharing of profits between the University and GP. Using the University's standard set of assumptions the net present value (NPV) of the benefits discounted at
8 percent was projected at $28,161,000. Net present value means the present value of funds received in the future.
The Operating Agreement would include a "carry forward, carry back" loss recovery provision which would subject the University's previous savings to recapture if losses were experienced in excess of GP's previous operating profits. Sales of excess power were to be made from the energy generated by the cogeneration facility. A renegotiation clause was included which would provide for renegotiation of the contract if natural gas prices were to exceed a negotiated threshold. The proposal contained a letter from Smith Barney, Harris Upham & Co., Inc. which explained the financing to be arranged in accordance with Section IV, D-2(c) of the RFP-II.
The Lease Purchase Agreement would contain a non-appropriation clause. The non-appropriation clause was intended to allow the University to terminate the lease if the Legislature failed to appropriate funds beyond the current fiscal year or period. Unless the Legislature failed to make appropriations for the lease payment, the University would have an absolute and unconditional obligation to make lease payments.
The Lease Purchase Agreement would contain a non-substitution clause "to inhibit exercise of the non-appropriation clause." The purpose of the non- substitution clause was to prevent the Legislature from failing to fund the University's obligation to make payments on the lease purchase obligation. The clause would provide that if the University were to terminate or default under the lease, it may not "replace the facility" or "acquire by contract" or "provide itself the service or function which the Facility is intended to provide." The precise language of the non-substitution clause that would make it acceptable to the parties and the State Comptroller and legally enforceable would have to worked out during negotiation.
Non-substitution clauses are used in some of the State of Florida contracts, but must have the approval of the Comptroller. There was insufficient evidence to show that the non-substitution clause proposed by GP would be rejected by the Comptroller. This matter can be resolved before or during negotiation. Likewise, there was insufficient evidence to show that the non-substitution clause contained in the GP proposal was not responsive to RFP- II.
Section D-8 of the proposal provided that in addition to the University being treated as the owner of the facility for tax purposes, the University had the "right to purchase the facility at any time for the outstanding principal amount of the COPs [Certificates of Participation]..."
The total cost of the GP cogeneration facility would be approximately
$40,020,000.
In accordance with RFP-II the University conducted interviews with the proposers. The interviews, including presentation by the proposers, took place between April 21 and April 23, 1987. There was no intent on the part of the University, in proposing the verbal question to the proposers at the interviews, to somehow transmit to GP what the University was seeking so that GP could modify its proposal and thereby have a competitive edge on the other two proposers. The only purpose of the interviews was for clarification so that as many matters as possible could be resolved before negotiation with the selected contractor.
In accordance with the RFP-II, the proposers could be required to "clarify its proposal or further explain the elements of its proposed cogeneration system," and reduce "any clarification to writing" which would "be considered part of the proposal."
As a result of the University's review and questions developed during the presentation by proposers held on April 21-23, 1987, the University transmitted to each proposer a set of written questions on May 11, 1987. All responses to the questions were received by June 12, 1987, which date was considered by the University "to be the end of the proposal period." However, the University did not allow any material modifications that would change the relative ranking of the different proposals during the period of March 5, 1987, the date of proposal openings, and June 12, 1987, the date the University considered "to be the end of the proposal period," but did allow clarifications to the proposals during this period.
The questions were divided into "financial" and "technical" questions, and were further subdivided into "general" and "specific" questions. The general" questions went to all proposers. The specific questions were addressed to specific provisions of each proposal and went only to the relevant proposer.
Financial General Question No. 1 stated:
The University wishes to finalize as many business terms of each proposal as possible prior to selecting a contractor and beginning negotiations. On any issue where the contractor is unable to provide a firm commitment in its proposal (e.g., gas prices) the University will assume the most conservative potential scenario and apply it equally to each proposer. Any guarantee of benefits to the University must be clearly stated and quantified or the University will not include it in its final analysis.
In its response to Financial General Question No. 1, GRU stated that it had received letters of intent from three gas suppliers for the supply of natural gas to the project, but further stated that GRU would "require a commitment on the University's part before any agreement can be executed by GRU."
GP responded to Financial General Question No. 1 as follows:
Gator Power understands the University's intent to finalize as many business terms of each proposal as possible prior to selecting a contractor. We also understand the University's desires for guaranteed energy savings, based on predetermined formulas or algorithms. We have, therefore, structured an alternate proposal to meet those desires.
The alternate proposal in simple terms is a guarantee of a specific minimum (2 percent) and maximum (15 percent) energy savings. In further response to the question GP stated:
We have restructured our financing proposal to allow Gator Power to propose contractual terms that will meet the University's objectives. The tax- exempt lease structure has not been changed. However, the underlying tax-exempt bond issue will now be a private activity bond rather than a Governmental Bond. This change specifically avoids the five-year restriction on the term of the Operation and Maintenance Agreement and allows Gator Power to offer its guaranteed discount to the University over a contract period adequate to protect the University.
Financial General Question No. 4 stated:
Explain fully how your proposal fulfills the requirement of Section 255.258, Florida Statutes, which indicates that the Contractor must guarantee that the annual payments to the Contractor will always be less than the University's avoided costs. Clarify the minimum guaranty that you would offer and the split of revenues once revenues reach a fixed dollar amount. Please identify the value of the guarantee ... the point at which revenues would be shared with the University and the percentage of the revenues that would go to the University. Provide all information, including revised forms, that substantiate your response.
In its response, GRU stated that it did not believe that Section 255.258, Florida Statutes was particularly relevant to this project but that "GRU's guaranteed savings option would meet an interpretation of the Section that required a guaranteed reduction in the University's costs." GRU also indicated that its desire was to enter into a shared savings contract with the University, where both parties share equally in the benefits associated with the project. GRU's response also stated that:
As a clarification to GRU's reasonable guaranty ... we can make the following comments. GRU is willing to provide a floor on the savings and the shared savings option for example, some minimum savings to the University).
However, GRU is not willing to make guarantees that, over the long haul, expose the citizens of Gainesville to a loss. Our calculations show that it would require a significant increase in the cost of gas before this project would become uneconomical to GRU and the University, but our willingness to guarantee a savings to the University must be tied to the gas contract that GRU will negotiate. Unfortunately, the gas contract cannot be completed until the University makes some commitment to GRU.
In its response, GP advised the University that its "revised offer meets [the requirement of] Section 255.258, Florida Statutes, by offering a guaranteed discount on both electricity and steam delivered to the University." GP also stated:
Gator Power's original "split-the-savings" proposal also fulfills the requirements of Section 255.258, Florida Statutes. Since it [the split-the- savings proposal] includes a guarantee that the University's lease payment plus its payments to Gator Power never exceed business-as-usual, and it includes a separate guarantee of an annual $200,000 land lease payment, the University is always guaranteed that its energy costs will be at least $200,000 below business-as-usual.
Financial General Question No. 10 stated in pertinent part:
If the proposer suggested a separate operating and maintenance agreement, the proposer must provide a firm, nonnegotiable cost for this service in its response...
GRU responded that this question was not applicable to its proposal since there would be no separate O & M agreement.
In pertinent part GP responded as follows:
Our proposal dated March 4, 1987 assumed O & M costs in 1989 dollars itemized below. The maintenance estimate included allowances for planned overhauls and repairs, and minor unplanned outages, but did not specifically include reserves for undefined occurrences beyond the warranty period, where the risk is small. We have added $400,000/year in 1989 dollars to provide such a reserve and thus make the O & M costs firm for both our revised guaranteed savings proposal, as well as the original shared savings proposal which remains an option available to the University.
Financial Specific Question No. 1 to GP states:
As stated in the oral interviews, the University will not have the ability to carry forward or carry backward any portion of project revenues it receives. Please confirm your understanding of this situation with a statement in your response. GP responded as follows:
Gator Power understands that the University does not have the ability to carry forward or carry backward any savings that it receives. Gator Power's original "split-the-savings" offer remains in effect with that provision deleted.
The carry-forward, carry-back provision is not applicable to Gator Power's "guaranteed discount" offer.
Financial Specific Question No. 2 to GP states:
The proposal states that Gator Power will bear the risk of cost fluctuation for fuel supply, O & M, insurance, standby power, etc. Since the cost of each of these items will directly impact net revenues, and net revenues will be shared 50/50 with the University, it appears that the University shares the risk of cost increases. GP's response was as follows:
In Gator Power's original "split-the-savings" offer, the University shares in subject cost increases only to the point where costs equal revenues and project income is zero. Beyond this point, Gator Power assumes 100 percent responsibility for cost increases. Therefore, because of the fixed savings provided by the $200,000 per year land lease, the University is guaranteed always to receive a minimum annual savings of $200,000, and it has no risk that its expenses will be greater than business-as- usual.
In Gator Power's alternate guaranteed discount offer, the University shares no risk of fuel supply, O & M, insurance or other cost increases. The guaranteed discount is subtracted directly from "business-as-usual expenses
regardless of the level of project costs. This is a major risk protection feature of our revised offer.
Financial Specific Question No. 4 to GP states:
Since an energy-producing facility is characterized as an "exempt" facility, is it necessary to limit the operating agreement to five years? If so, what assurances can you provide to the University that the cost of this agreement will not increase unreasonably when it is time to sign a new agreement at the end of five years? GP's response in pertinent part was as follows:
After further consideration of the University's objectives and research into available financing alternatives, Gator Power is proposing that the project be financed through a Tax-Exempt Lease structured as a "private activity bond" rather than as a "Governmental Bond..." Review of the facts and circumstances by tax counsel indicates that this approach is feasible and appropriate. By structuring the financing as a "private activity bond," the Operation and Maintenance Agreement need not be limited to five years, but can be extended for the entire life of the issue consistent with other Agreements to provide the University with the desired cost protection.
Financial Specific Question No. 5 to GP states:
Please restate your position on a "renegotiation clause" as described on page D-3-4 of your proposal. If there is a provision that will allow Gator Power to negotiate in a situation in which gas prices increase substantially, would Gator Power be willing to consider allowing the University to renegotiate if major increases were to occur in the cost of the University's avoided power costs? GP responded as follows:
As this question applies to its original split-the- savings proposal, the answer is "yes."
The question is not applicable to our revised "guaranteed discount" proposal.
Financial Specific Question No. 3 to GRU states:
Is GRU willing to agree to provide standby and supplemental power and to negotiate a power purchase agreement with the University if the University decides to purchase the facility from GRU at some point in the future and become a qualifying facility? Would GRU be willing to help the University obtain QF status in the future, if such assistance is needed? GRU's response was as follows:
GRU is very willing to provide standby and supplemental power and to negotiate a power purchase agreement with the University if the University decides to purchase the facility from GRU at some time in the future. GRU is also willing to help the University in obtaining QF status in the future if such assistance is needed and desired. GRU believes that the University should not be greatly concerned about potential changes of QF requirements in the future.
The facility that GRU proposes does not marginally meet the QF "tests," but rather exceeds them by a wide margin. GRU believes that any changes to QF regulations in the future will be directed towards those facilities that are marginally eligible for QF status.
When asked in Financial Specific Question No. 4 to "provide a pricing formula that will be used to calculate fair market value at the termination of the ten-year period," GRU stated that, while a "number of methods" exist for determining fair market value, GRU was proposing a method in its answer, and was willing to discuss and negotiate the issue of method and final amount. As an additional option, GRU proposed that the fair market value of the facility be based on the NPV of the remaining principal at the beginning of the eleventh year.
Financial Specific Question No. 9 to GRU states:
One of the options in your proposal, and the University's preferred option both include a provision for guaranteed savings. Have you received Public Service Commission feedback on the potential of offering a "guarantee" to one customer? GRU's response was as follows:
We have discussed the guaranteed savings option with the PSC staff and have received mixed reactions. It is an obvious concern to the PSC if one customer is being subsidized by other customers. If the University requires that a guarantee be made, GRU may be unable to guarantee a fixed savings on electricity, but has complete flexibility to provide any discount to the steam and chilled water sold to the University, and can therefore guarantee that the total cost to the University will be some fixed amount less than they would have otherwise paid. This is the case because the PSC has absolutely no jurisdiction whatsoever with regard to steam and chilled water. GRU therefore sees no regulatory obstacle to providing the University with a guaranteed savings, but GRU must be concerned from a business perspective to achieve a return on its investment commensurate with the risk it assumes.
The written question the University submitted to the three proposers on May 11, 1987, which required an answer, were for purposes of clarification only and were consistent with the University's rights under RFP-II to seek further explanation from the proposers. The University did not attempt to require or to solicit modification of the GRU, GP or Power Venture proposals with verbal questions or discussions during the interviews with the proposers between April 21-23, 1987. Neither did the University, during the interview, attempt to solicit the proposers "best offer," as in an auction atmosphere, but rather obtained bona fide clarification of the proposals.
The possibility of GP's carry forward, carry back provision being invoked during the term of the Operating Agreement was highly unlikely, and GP's deletion of that provision in response to the University's Financial Specific Question No. 1 did not materially change GP's proposal such that GRU's proposal was placed in an economical disadvantaged position in the University's review. Deleting the carry forward, carry back provision did not give GP a competitive advantage over GRU in the University's review. Furthermore, there is insufficient evidence to show that even with the inclusion of the carry forward, carry back provision in the GP proposal that it was not responsive in that: (1) it constituted a financial guarantee by the University; (2) it did not ensure the University that each year its costs for electrical and thermal energy would be less than "business as usual" and; (3) a contract containing such a clause would not be approved by the Comptroller.
Additionally, there is insufficient evidence to show that the University would be prohibited from establishing a contingency fund account allowing for the deposit of the savings that may be subject to the CFCB provision outside the State Treasury until the contingency no longer existed or that the BOR and the
Executive Office of the Governor would not approve depositing such funds outside the State Treasury in accordance with Section 240.281(8), Florida Statutes.
GP's proposal stated GP's willingness to enter into a 20 year relationship with University but also indicated that federal tax laws restricted GP from doing so except through separate 5-year operating agreements.
GP proposed tax-exempt financing as a conceptual matter, not as a highly detailed or specific mechanism. There was no particular approach for achieving tax-exempt financing required in RFP-II.
The change from the financing being treated as a "government bond" to being treated as a private activity bond (PAB) did not affect the tax-exempt nature of the financing structure. It remained tax exempt at all times since both government bonds and PABs are exempt from federal income taxation. The change in COP nomenclature did not result in the GP financing proposal being restructured.
GP's response to Financial Specific Question No. 4 constitutes a permissible clarification of the effect of the federal tax laws on GP's stated willingness to enter into an operating agreement of up to 20 years, and is not an impermissible material modification. Furthermore, as an alternate analysis, Dr. Coxe assumed the University did not accept Gator Power's clarifications regarding the specific type of tax-exempt financing and evaluated the Gator Power proposal based on a tax-exempt lease with a five-year operating agreement arid concluded that even with a tax-exempt lease with a five year operating agreement, the GP proposal was significantly better than the GRU proposal. Therefore, any change from a government bond to a PAB was not a material modification of the GP Proposal.
If GP's tax exempt financing structure is to be treated as a PAB, GP could not sell power to FPC from the cogeneration facility, except on an emergency basis. This is as a result of treasury regulations, which summarized, prohibit sales by such a facility to a utility which serves more than two contiguous counties. FPC serves more than the two contiguous counties.
Nothing in the GP proposal establishes that such sales of electric power to FPC were essential or that the economic viability of the GP cogeneration facility was dependent upon such sale.
The deletion of excess sales as contemplated in the original GP proposal amounted to no more than $8,000 revenue per year, out of a total "base cost" projected revenue of more than $2 million.
Deletion of excess sales as contemplated in the original GP proposal does not constitute a material modification of the GP proposal nor does it place GRU in a less competitive position than it previously occupied. Furthermore, it had no effect on the responsiveness of the GP proposal.
Although GP's "alternate" guaranteed savings was discussed by GP in its answers to both Financial Specific and Financial General Questions posed by the University and discussed by the University evaluators during the evaluation process, the "alternate," guaranteed savings was neither accepted by the University nor used by the University in its evaluation of the GP proposal. However, had the University accepted the "alternate" guaranteed savings proposed by GP and used it in its evaluation of the GP proposal, it would have been a permissible clarification and not an impermissible modification.
The fixed O & M proposal set out in GP's response to Financial General Question No. 10 did not enter into the University's evaluation and ranking and therefore did not afford GP any competitive advantage over GRU.
Although GP responded affirmatively to financial specific Question No.
5 in that it would consider a renegotiation clause, the renegotiation clause was not considered by the University in its evaluation or ranking and therefore did not afford GP any competitive advantage over GRU.
A large portion of GRU's projected savings to the University comes from the way GRU prices the supplemental electricity which it will furnish to the University from its existing power plant. The savings to the University from this supplemental electricity was considered in the University's evaluation of GRU's proposal. However, had the NPV of GRU's projected savings been evaluated only on the basis of the savings coming from the cogeneration facility, the savings to the University would have dropped 27 percent from the projection used in the University's evaluation.
Because a portion of the University's electricity needs was to come from GRU's existing facilities, resulting in price negotiation for the supplemental electricity in the event of a "buy-out" by the University, GRU's proposal contained a disincentive for "buy-out." There was no showing of any economic advantage in the University taking over GRU's cogeneration facility.
GP offered a firm guarantee of savings while GRU's guarantee was conditioned on not exposing "the citizens of Gainesville to a loss," and not establishing such guarantee until after its selection as the contractor and negotiation of a gas contract. Additionally, any "guaranteed savings" on the energy produced at the cogeneration facility proposed by GRU, as well as any supplemental electrical power furnished from GRU's existing system, hinges, not only on GRU not exposing the citizens of Gainesville to a loss, but on the PSC not disallowing the rate structure as proposed by GRU or through reduced charges for the steam and chilled water to compensate for any possible changes in the rate charges for electrical power presently proposed by GRU.
After considering all the evidence of whether GP's proposal would qualify for tax-exempt status as PAB (assuming the deletion of the sales of "excess" electricity to FPC), no definitive conclusion can be reached; however, there is a high probability that it will qualify for tax-exempt status. The University intends to require an unqualified opinion letter from bond counsel or a private letter ruling from the Internal Revenue Service on the question of tax exemption; therefore, this matter cannot be resolved until such time as GP moves forward on its financing arrangements which may not occur, under Addendum I to RFP-II, until after contract negotiations are finalized.
The LM 5000 does not have extensive field experience operating in the full Stig mode. However, at those sites visited by Dr. Coxe where the LM 5000 with steam injection was operating, the LM 5000 had experienced very satisfactory performance and reliability. The availability of the LM 5000 was comparable to the LM 2500. There is competent, substantial evidence to conclude that the LM 5000 is technologically sound. There is insufficient evidence to conclude that GP's selection of the LM 5000 placed its proposal in a more technically risky position than the GRU proposal using the LM 2500. Additionally, under the GP proposal, the LM 5000 will, in the early years of operation, be able to supply all of the University's electrical power needs
without operating in full Stig mode, thereby giving the industry additional time to work out any technical problems that may exist with the LM 5000.
On June 16-18, 1987, Dr. Edwin Coxe conducted site visits with the three proposers and allowed them to review and comment on the economic model (model) developed to evaluate the financial aspects of the proposals.
Dr. Coxe developed the model based upon proposed economic models submitted by GRU, GP and Power Ventures and contained as much detail or sophistication as contained in any of the models submitted by the three proposers.
All three proposers were given the same opportunity to review, comment on, and question the model.
GRU commented on and offered suggested changes to the model. All concerns about the model or the calculations were adequately resolved to the satisfaction of GRU, GP, Power Ventures and Dr. Coxe.
Dr. Coxe prepared draft evaluations of the proposals and circulated them for review and comment to the University, GEO and Lane & Edson in August and October of 1987.
Dr. Coxe prepared a finalized evaluation (Evaluation) and gave a formal presentation of the Evaluation on November 13, 1987 to University President Marshall Criser, the University staff, and representatives of GRU, GP and Power Ventures.
In the Evaluation all proposals were evaluated using the specific criteria set out in RFP-II, including an early buy-out which was required by the authorizing legislation. The University in using buy-out as one of the evaluation criteria in the evaluation process was neither acting arbitrarily or capriciously nor abusing its discretion. At no time prior to April 1, 1988 did GRU file a protest or object to the University's use of buy-out as one of the evaluation criteria.
Although GP and Power Ventures proposed variable rate financing with interest rates substantially lower than that posited by GRU, all proposals were assumed to require fixed-rate financing at the rate proposed by GRU to put all proposals on a comparable basis. However, in subsequent calculations different interest rates were used and the projected NPV savings were fairly insensitive to changes in interest rates. A one percent increase in interest rate would reduce the NPV savings for the GP proposal by 1.2 million dollars. Likewise, a reduction in the interest for GRU would not significantly affect the savings or change GRU's ranking.
NPV figures were used as one of the evaluation tools in Dr. Coxe's financial analysis. An NPV of benefits to the University from a proposer represented a projection of benefits which might be gained. This projection was based on various assumptions and estimates. The NPV of benefits in Dr. Coxe's analysis were not based on fixed or firm costs and thus were strictly forecasts.
Dr. Coxe's financial evaluation applied the factors in RFP-II and consisted of: (1) a review of the calculation methodology and the projected savings characteristics of each proposal; (2) a determination of evaluation parameters such as interest rates, ownership terms, and fuel and electric rates;
(3) a calculation of net present value savings; (4) a performance of sensitivity
evaluation; (5) a comparison of savings guarantees and; (6) an analysis of the risk/benefit scenarios depicted by each proposal.
Although the three proposers projected savings based upon different assumptions, Dr. Coxe established evaluation parameters that made the assumptions consistent among the proposals and consistent with the proposed operating agreements.
Similarly, Dr. Coxe made assumptions as to the conditions for the renewal/renegotiation of the operating agreement and for comparison evaluated the proposals by assuming that the University would purchase the GRU and GP facilities at the end of the first ten years of operation, and would purchase the Power Ventures facility at the end of the first five years of operation. Under this evaluation the GP proposal yields were substantially higher than GRU's proposed yields. These calculations are shown in Joint Exhibit 3, Tab 4, page 33-34. However, basing the calculations on a buy-out in the twentieth year, GRU's yield would be approximately $4 million more than GP's yield at the twentieth year.
Dr. Coxe also considered the sensitivity of the projected NPV figures to higher gas rates, lower and higher availability, and various buy-out periods and did not factor into these figures any regulatory uncertainty with respect to the rates charged by GRU.
Dr. Coxe evaluated GP's proposal without regard to the "renegotiation clause" because he assumed the University would not agree to such a clause in the negotiation process. Thereby Dr. Coxe ignored any implication of such clause changing the savings projection calculated by Dr. Coxe for the GP proposal.
Although there were some questions concerning the ability of GP to obtain tax exempt financing, Dr. Coxe assumed those problems would be "worked out" in the negotiation process or during the financing under Addendum I.
Dr. Coxe's assumed that the University could operate the GP facility at GRU's project cost rather than the higher project cost proposed by GP. That assumption was based on the University having the same type costs as GRU and not the additional corporate costs that GP would have. That assumption was reasonable.
Dr. Coxe considered all of the criteria of RFP-II in making the Evaluation and did not rely solely on the estimated NPV savings in making his recommendation.
After considering all the criteria, Dr. Coxe ranked GP first, GRU second and Power Ventures third.
On December 3, 1987, the University received comments from the three proposers in response to the Evaluation and on January 5, 1988, Dr. Coxe responded to the comments from the three proposers.
Dr. Coxe responded in detail to each of GRU's comments regarding the ranking and evaluation methodology used by him, and carefully reviewed and described how each of GRU's concerns did not change his evaluation based upon all of the required criteria set out in RFP-II.
On January 13, 1988, Dr. Coxe gave a briefing to the Faculty Technical Advisory Committee. As a result of this briefing and in conjunction with the advise of Dr. Brigham, an economics professor at the University and a member of the committee, Dr. Coxe re-analyzed the NPV of the project to reflect the probability of the buy-out in a particular year. Dr. Coxe employed a uniform probability distribution, a recognized economic concept, since there was no certainty as to which year the buy-out might occur. Under that calculation, the GP proposal offers the greatest opportunity for the University to take over the project prior to the end of the 20-year horizon examined. Dr. Coxe's calculations are shown in Joint Exhibit 4, Tab 6, page 1-2.
On January 14, 1988, Dr. Coxe submitted a supplement to the Evaluation, including the reanalyzed NPV, which showed the GP proposal to be the best proposal considering all the criteria contained in RFP-II.
On February 11, 1988, Dr. Coxe gave a formal presentation of his response to the three proposers to President Criser, the Provost, and seven Vice-Presidents. Also at this same presentation, the three proposers, at the specific request of President Criser, were permitted to make a "live" presentation to him, the Provost and the seven Vice-Presidents, in order to expand upon their comments and criticisms of the Evaluation, the response and the supplemental report
On February 26, 1988, Dr. Coxe submitted a response to the proposers presentations given on February 11, 1988. GRU submitted to President Criser comments on Dr. Coxe's response.
On March 3, 1988, Mr. Cremer forwarded a report to Associate Vice President Schaeffer recommending that the University negotiate with GP ("Cremer Report"). Concurring with the Cremer Report were the Faculty Technical Advisory Committee, the GEO, the Lawson McWhirter law firm, and various University officials.
After the Cremer Report, GRU was permitted to submit comments and those comments were evaluated.
Coxe's evaluations, GRU's comments, and the Cremer Report, as well as other documents, were furnished to the Provost and Vice Presidents. The Vice Presidents attended two meetings with RSH, GRU and GP where the proposals were discussed. The Provost and Vice Presidents unanimously recommended GP.
Thereafter, President Criser read the proposals and reports, and on April 1, 1988, determined that the University would proceed to negotiate the contractual relationship between the University and GP. Criser's determination was based upon his review of the proposals and reports, his presence at two meetings, the recommendations of RSH, Lane and Edson, GEO, University Faculty Technical Advisory Committee, Director of the Purchasing Division, Director of the Facilities Planning Division, Campus Engineers-Physical Plant Division, seven University Presidents, the Provost and Lawson McWhirter, the evaluation criteria set forth in RFP II and the requirements of Section 255.258, Florida Statutes. There is competent, substantial evidence in the record to show that the University's decision to negotiate with GP rather than GRU was neither arbitrary or capricious nor an abuse of its discretion.
Dr. Coxe did not evaluate any of the responses to RFP-II for responsiveness, however there is competent, substantial evidence in the record
to show that the University not only considered, but found both GP's and GRU's responses to RFP-II of March 5, 1987, to be responsive.
Additionally, there is competent, substantial evidence in the record to show that both GP's and GRU's responses to RFP-II of March 5, 1987, were responsive.
GRU's proposal, as well as those of GP and Power Ventures were subjected to criticism, although not unwarranted, during the evaluation process; however, there is insufficient evidence to show that such criticism resulted in the GRU proposal being treated unfairly, or the GP proposal being treated favorably at the expense of the GRU proposal.
The State of Florida has a "volume cap" on the amount of funds available for PAB allocation. The balance of funds available, even a zero (0) balance, is subject to change on a day to day basis, depending on recaptured amounts. Therefore, trying to determine the availability of funds for PAB allocation at some point in the future when the bonds are to be issued is premature in that one can only speculate as to the availability of sufficient volume cap.
GRU responded to both oral and written questions from University and to the consultant's report concerning its position on a building to enclose a portion of the facility, contract renewal terms, the regulatory issue and the determination of the "fair market value" of the facility at a given point. However, GRU's responses were for clarification only and did not constitute material modifications that would change the relative ranking of the different proposals. Furthermore, the University did not consider GRU's clarification concerning the enclosure for a portion of the facility or its intent concerning contract terms in its evaluation of GRU's proposal.
In terms of barrels of oil saved over the 20 year period, the energy conservation benefits to the University are approximately 20 percent greater with the GP proposal than with the GRU proposal.
Although a AAA rating for the COP's would lower the interest rate for the GP proposal, there was insufficient evidence to show that the COP's would obtain such a rating.
The University's concerns over the possibility of PSC disallowing or modifying the lower rates at which GRU proposed to sell electrical power to the University under GRU's proposal at the time the University was evaluating GRU's proposal were legitimate. And, although GRU later obtained a declaratory statement from PSC supporting its contention that PSC had no jurisdiction over rates charged the University for steam and water by GRU, it does not prevent PSC from exercising its rate structure jurisdiction over the present electrical rates charged by GRU or any future electrical rates GRU may charge the University under changed circumstances such as in the case of a "buy-out" of the facility by the University.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, this proceedings pursuant to Section 120.57(1), Florida Statutes.
This cause arises from GRU's challenge of the University's proposed selection of GP under Section 255.258, Florida Statutes, as the entity with which it would negotiate a contract for the construction and operation of a cogeneration facility. Section 255.258(3), Florida Statutes, requires that such contracts be considered contracts for the acquisition or purchase of commodities as defined in Chapter 287, Florida Statutes.
Section 287.062(1)(e), Florida Statutes, provides for the procurement of commodities through request for proposals (RFP) when an agency determines that the use of solicitation for competitive bids (invitation for bid) is not practicable.
The invitation for bid (IFB) process is rigid and identifies the solution to the problem, whereas the RFP process is flexible, identifies the problem and requires the proposers to find a solution to the problem. System Development v. Dept. of Health and Rehabilitative Serv. and EDS Federal Corporation, 423 So.2d 433 (1 DCA Fla. 1982). Because of the flexibility offered by the RFP, the University, after considering the factors involved in developing a cogeneration facility, decided to use the RFP process and selected a two phase proposal plan -- RFP-I and RFP-II.
GRU contends that since the RFP-I anticipated allowing only five proposers to participate in the RFP-II, it was improper or inappropriate for the University to allow FPC to participate because FPC was not one of the top five qualifiers and FPC's close personal, business and social "ties" to the University and Mr. Elmore's ownership of stock in Florida Progress Corporation created a bias in favor of FPC. GRU failed to timely file a protest of the award in RFP-I in accordance with Section 120.53(5), Florida Statutes, and has waived its right to protest FPC's inclusion in the list of proposers allowed to make a response to RFP-II. However, assuming arguendo that GRU's lack of knowledge of FPC's alleged influence with the University and Mr. Elmore's stock ownership would make GRU's April 1, 1988, protest timely in accordance with Section 120.53(5), Florida Statutes, there has been no showing that FPC's close "ties" with the University or Mr. Elmore's stock ownership influenced the University's decision to allow FPC to participate in RFP-II.
There is no statutory or rule requirement that an RFP be evaluated based on arithmetical weights, points or per centum increments, but only that there be evaluation criteria, with their relative importance stated, and that such criteria be used in the evaluation of the proposals. Section 287.012(11), Florida Statutes and Rule 13A-1.001(5), Florida Administrative Code. The evaluation criteria was clearly set out and listed in order of relative importance in RFP-II. The University in discussing the criteria with the proposers clearly advised them that a fair evaluation could be made without assigning weights to the criteria. The University has clearly met the statutory and rule requirements of the RFP process.
The RFP process properly encourages the exchange of information between the agency and the proposers, Westinghouse Electric Corporation v. Jacksonville Transportation Authority, and MARTA Transport S.A., 490 So.2d 1230 (1 DCA Fla. 1986). Therefore, the exchange of information between the University and the proposers in the interviews and the written questions and answers was proper in light of the fact that the purpose of the interviews and questions was for the University to obtain clarification of the different proposals.
An agency's evaluation of a bid is controlled by cost, while an agency's consideration of an RFP is controlled by technical excellence as well as cost. Accredited Medical Serv. v. Dept. of Health and Rehabilitative Serv.,
8 FALR 3209 (Final Order entered April 15, 1986). Therefore, the University's consideration of technological and energy conservation factors and financial and technical benefits to the University was proper.
Section 287.012(12), Florida Statutes, defines a "responsive offeror" as a person who has submitted a bid (response to a request for proposal) which conforms in all material respects to the request for proposal. Also see: Rule 13A-1.001(13)(a), Florida Administrative Code. Although responsiveness is determined as of the time the proposal is made public, there is no prohibition to an agency seeking clarification of the proposal as submitted after it is made public and including such clarification in its evaluation of the proposal. Rule 13A-1.001(13), Florida Administrative Code. There is competent, substantial evidence in the record to support a finding that the responses of GP and GRU conform in all material respects to the University's RFP-II.
A material variance is unacceptable and must be disqualified. A variance is material if it gives the bidder substantial advantage over other competing bidders, changes the price bid, or stifles the competitive process. Non-material variations in a bid may be waived by the awarding agency and the integrity of the bidding procedure is not violated. Tropabest Foods, Inc. v. State, Department of General Services, 493 So.2d 50 (1 DCA Fla. 1986). Although the University allowed GP to clarify its proposal after the proposals were made public on March 5, 1987, and considered those clarifications in its evaluation of GP's proposal, there is competent, substantial evidence to support a finding that these clarifications were not material variances but were either permissible clarifications of GP's proposal or non-material variances.
An agency has wide discretion in evaluating proposals and in awarding contracts. Nevertheless, it may not act arbitrarily and capriciously. Wood- Hopkins Contracting Co. v. Roger J. Au & Son Inc., 354 So.2d 446 (1 DCA Fla. 1978). If an agency acts in good faith, "even though it may reach a conclusion on facts upon which reasonable men may differ, the courts will not generally interfere with their judgment, even though the decision reached may appear to some persons to be erroneous." Volume Services Div. Etc. v. Canteen Corp., 369 So.2d 369, 391 (2 DCA Fla. 1979), quoting Culpepper v. Moore 40 So.2d 366, 370 (Fla. 1949). Absent a finding that the agency has acted fraudulently, arbitrarily, illegally, or dishonestly to subvert the competitive bidding process, its decision based upon an honest exercise of its discretion cannot be overturned. Department of Transportation v. Groves-Watkins Constructors, 13 FLW
462 (Fla. opinion filed August 18,1988); Liberty County v. Baxter's Asphalt & Concrete Inc., 421 So.2d 505 (Fla. 1982). The facts in this cause will not support such a finding. To the contrary, the University's very lengthy and very open evaluation process, which involved so many talented people who were unanimous in support of GP being chosen as the cogeneration contractor, is indicative of the University's desire to avoid being fraudulent, arbitrary, illegal, or dishonest.
As the party asserting an affirmative issue before an administrative tribunal, the burden of proof is on GRU to prove the truth of its allegations. Florida Dept. of Transp. v. J. W. C. Company Inc., 396 So.2d 778 (1 DCA Fla. 1981). GRU has failed to carry its burden of proof.
Having considered the foregoing findings of fact, conclusions of law, the evidence of record and the candor and demeanor of the witnesses, it is, therefore,
RECOMMENDED that the University enter a final order denying the City of Gainesville, Gainesville Regional Utilities' amended petition and confirming the Findings of University President Marshall Criser which authorized the designation of a negotiating team to finalize the contractual relationship between the University of Florida and Gator Power as the cogeneration developer to construct and operate the facility.
Respectfully submitted and entered this 30th day of November, 1988, in Tallahassee, Leon County, Florida.
WILLIAM R. CAVE
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 30th day of November, 1988.
APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-2034BID
The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on the proposed findings of fact submitted by the parties in this case.
Specific Rulings on Proposed Findings of Fact Submitted by Petitioner, Gainesville Regional Utilities
Each of the following proposed findings of fact are adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 1(3); 3(4); 4(5); 6(8); 7-8(11); 11(12-13); 12(13); 13(14); 14(14); 15(15); 16(15); 17(16); 20(18); 21(18-19); 23(21); 25(23); 26(26); 27(27); 28(28); 29(32); 30(33);
31(34-36); 35-37(29-38); 42(37); 43(39); 44(40); 45(41); 46(41); 47(43); 50(45);
51-52(47); 53(48-50); 54(50); 55(52); 56(53-54); 58(43- 45); 59-60(58); 61(62);
62-63(58); 64(58-59); 65(60); 66(61); 93(32); 100(61); 104(63-64); 106(48);
108(58); 131(65); 138(67); 139-140(72); 158(70); 165(59); 171(67); 175-176(69);
180(41); 186(47); 190-191(127); 198(123-124); 202(125); 224(59); 228-229(58).
Proposed finding of fact 2 is covered in the background.
3. Proposed findings of fact 9, 49, 57, 7, 83, 97, 101, 123, 169, 170,
172, 207-211, 230-236, 238, 245, 257 and 274-276 are unnecessary or irrelevant.
4. Proposed findings of fact 5, 10, 18, 33, 34, 75,80, 86, 89, 90, 94, 96,
107, 110, 113, 116-118, 122, 132, 133-136, 141, 145,147,148, 156, 159, 160, 177,
178, 182, 183, 185, 187- 189, 192-197, 199-201, 203-206, 212, 218, 221, 225,
254, 255 and 269-272 are subordinate to the facts actually found in this Recommended Order.
5. Proposed findings of fact 19, 24, 32, 38, 39, 48, 67-7'4, 78-79, 84-85,
92, 98, 99, 102, 103, 105, 109, 111, 112, 114, 115, 119-121, 124-127, 129, 130,
149-153, 157, 161- 164, 166,174, 179, 181, 219, 223, 227, 240, 243, 246-252,
259-263, 265-268, 273 and 277 are rejected as being unsupported by competent, substantial evidence in the record.
6. Proposed findings of fact 22, 40, 41, 81, 82, 137, 142-144, 146, 155 ,
167, 168, 213-217, 244 and 258 are rejected as being argument rather than findings of fact even though certain facts set out in the proposed findings of fact have been adopted in the Findings of Fact of this Recommended Order or have been determined to be subordinate to the facts found in this Recommended Order or found to be unnecessary or irrelevant.
Proposed findings of fact 76 and 207 are rejected as being a restatement of testimony rather than findings of fact.
The first sentence in proposed finding of fact 77 is rejected as being unsupported by competent, substantial evidence in the record, the balance is subordinate to facts actually found in this Recommended Order.
The first sentence of proposed finding of fact 87 is adopted in Finding of Fact 62. The balance of proposed finding of fact 87 is rejected as being unsupported by competent, substantial evidence in the record.
The first sentence of proposed finding of fact 88 is adopted in Finding of Fact 126. The balance of proposed finding of fact 88 is subordinate to the facts actually found in this Recommended Order.
The first two sentences of proposed finding of fact 91 are rejected as being argument rather than a finding of fact, the balance is rejected as being a restatement of testimony rather than a finding of fact.
The first two sentences of proposed finding of fact 95 are unnecessary or irrelevant, the balance is rejected as being unsupported by competent, substantial evidence in the record.
The first sentence in proposed finding of fact 128 is adopted in Finding of Fact 65, the balance is subordinate to the facts actually found in this Recommended Order.
The first sentence of proposed finding of fact 154 is rejected as being unsupported by competent, substantial evidence in the record, the balance is adopted in Findings of Fact 59 and 83.
The first sentence of proposed finding of fact 173 is rejected as being unsupported by competent, substantial evidence in the record, the balance is subordinate to the facts actually found in this Recommended Order.
The proposed finding of fact 184 is rejected as being a restatement of testimony although it is subordinate to facts actually found in this Recommended Order.
The first sentence of proposed finding of fact 220 is rejected as being unsupported by competent, substantial evidence in the record, the balance is subordinate to facts actually found in this Recommended Order.
The first sentence of proposed finding of fact 222 is subordinate to facts actually found in this Recommended Order, the balance is rejected as being unsupported by competent, substantial evidence in the record.
The first and last sentence of propose finding of fact 226 is rejected as being unsupported by competent, substantial evidence in the record, the balance is subordinate to the facts actually found in this Recommended Order.
The first sentence of proposed finding of fact 237 is unnecessary or irrelevant, the balance is rejected as being argument rather than a finding of fact.
The first sentence of proposed finding of fact 239 is subordinate to the facts actually found in this Recommended Order, the balance is unnecessary or irrelevant.
The first two sentences of proposed finding of fact 241 are subordinate to the facts actually found in this Recommended Order, sentence 5 is unnecessary or irrelevant and the balance is rejected as being unsupported by competent, substantial evidence in the record.
The first sentence of proposed finding of fact 242 is subordinate to the facts actually found in this Recommended Order, the balance is rejected as being unsupported by competent, substantial evidence in the record.
Proposed finding of fact 253 is unnecessary or irrelevant since that fact alone is not determinative of "coming on line sooner" and the other evidence was insufficient to show that GRU would come on line sooner than the other proposers.
The first two sentences of proposed finding of fact 256 are subordinate to facts actually found in this Recommended Order, the balance is rejected as being unsupported by competent, substantial evidence in the record.
Proposed finding of fact 264 is rejected as being a restatement of opinions witnesses or their testimony rather than a statement of fact.
Specific Rulings on Proposed Findings of Fact Submitted By Respondent, University of Florida
1. Each of the following proposed findings of fact are adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 1(122); 2- 3(119-121); 5(1); 6(2); 7(3); 14,26(4); 28-30(7); 31(8); 32(12); 33(6); 34(7); 35(15); 36-37(14); 38-39(15-16); 40(18); 41(19); 42-43(20); 44(23); 47-48); 49(43); 50(12,14); 51(45); 52(132); 53(38); 54-55(77); 56-61(21-22); 64(7); 66(21); 68(26); 69(27); 70-71(29); 72(64); 73(63); 74(13); 75(37; 76(45); 77(63); 78-79(65); 82(70); 83(77); 84(78); 85(61); 86(67); 87(92); 88-89(58); 90(67); 91-93(68,92); 94(27); 95-98(29); 99(30); 100(63,64,77); 101(63); 102(65- 77); 105-107(72,79-82); 109(30-31); 110-113(58,72,82); 114(28); 117-118(29,32); 119-123(32,101); 124(58); 125(101); 126(94)); 127(90,91); 129(47,54-56,90); 130- 134(58,94); 137-138(54,56,58); 139-140(102)); 146-147(95); 148-149(96); 150(97); 151,153(98); 154-157(100-101); 160(102); 161(103); 162(104'; 163(105); 164- 166(106); 167(107); 168(107); 169(111); 171(112); 172-173(113); 174,176(114); 178-180(115,116); 183(117); 184-185(118); 189(128); 205,208(119); 209-210(121); 211-212(122).
2. Proposed findings of fact 4, 12, 13, 15, 17, 18, 21, 22, 23, 24 and 25 are covered in the Background to this Recommended Order.
3. Proposed findings of fact 8, 9, 10, 11, 16, 19, 20, 116, 144, 145, 175,
197, 198, 199, 200, 215 and 216 are unnecessary or irrelevant.
4. Proposed findings of fact 27, 45, 46, 62, 63, 65, 67, 80, 81, 103, 104,
108, 115, 128, 135, 136, 143, 152, 158, 159, 170, 177, 186-188, 190-195, 201-
204, 206, 207, 213 and 214 are subordinate to the facts actually found in this Recommended Order.
Proposed findings of fact 141, 142 and 196 are rejected as being unsupported by competent, substantial evidence in the record.
The first two sentences of proposed finding of fact 217 are unnecessary or irrelevant, the last sentence is adopted in Finding of Fact 122.
Specific Rulings on Proposed Findings of Fact Submitted by Intervenor, Gator Power
Each of the following proposed findings of fact are adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 6(3); 7(2); 8(6); 9-11(4-5); 12-13(8); 14(10); 15(12); 16(13); 17(15); 18(14-15);19(14); 20(15); 21-23(16); 24-25(17-18); 26(19); 27-29 19-20); 30(24); 31(19); 32-35(26-
29); 36(29-31); 37(64); 38-39(33); 40(34); 41(36); 43(42); 44(37); 46-47(38-39);
48-50(43); 51-52(45-46); 53(47-51,53); 54(55); 55(54); 56-57(56-57); 58(58,62);
59-61(59); 62-67(60,61,59,58,63); 69(65-66); 70-71(67); 72-73(68); 74(75);
75(74); 76-77(76); 78-80(67,68,71); 81-84(72); 85(73); 86(94); 87-
90(99,100,112,113); 91-93(114); 94-100(116-122); 102(112); 107-108(76); 117-
119(108); 121-122(113-114); 125-126(114-116); 148-149(43); 160,164(17); 169(21);
180(78); 186(58); 187(70); 188,190(78); 191,193(67,87); 195(58); 197(58,79));
198(72); 200(80); 201(32,80); 202(80); 203(72); 205,209(82); 213(72); 217(81);
219(82); 223-225(83,59,84); 227-228(85-86); 233-234(69); 237-239(88,58,73);
241(73,89); 243(89);250(42); 253(28); 261-262(40-34); 263(32-34); 294(93).
Proposed findings of fact 1-5, 101, 130 and 172 are covered in the Background to this Recommended Order.
3. Proposed findings of fact 109, 110, 144-145, 162, 163, 208, 210, 222,
226, 231, 232, 240, 244, 245, 247, 295 and 320 are unnecessary or irrelevant.
4. Proposed findings of fact 42, 45, 68, 103-106, 111-116, 120,123, 124,
127, 129, 131, 132, 138, 156-159, 161, 170, 171, 173, 175, 176, 182, 196, 199,
204, 206, 207, 211, 214, 215, 218, 230, 235, 283, 285 310-312, 315-319, 321-328,
332, 333, 341, 344-347 and 350-353 are subordinate to the facts actually found in this Recommended Order.
5. Proposed findings of fact 128, 133-137, 139-143, 146, 147 150-155, 165-
168, 174, 177, 178, 181, 183-185, 189, 192, 194, 212, 216, 220, 221, 229, 236,
242, 246, 248, 249, 251, 252, 254-260, 264, 265-282, 287-289, 293, 296-298, 302,
305-309, 313, 314, 330, 334-340, 342, 343, 348-349 are rejected as being
argument rather than findings of fact even though certain facts set out in these proposed findings of fact have been adopted in the Findings of Fact of this Recommended Order or have been determined to be subordinate to the facts actually found in this Recommended Order or have been rejected as being unnecessary or irrelevant.
Proposed findings of fact 284, 286, 290-292, 299-301 and 303 have been rejected as being a restatements of testimony rather than findings of fact even though some of the testimony may have been adopted in the Findings of Fact of this Recommended Order or have been determined to be subordinate to the facts actually found in this Recommended Order or have been rejected as being unnecessary or irrelevant.
Proposed finding of fact 179 is adopted in Finding of Fact 70 with the exception that the deletion of CFCB was in response to Financial Specific Question 1 rather than Financial Specific Question 4.
The first sentence of proposed findings of fact 329 and 331 are unnecessary or irrelevant, the balance of proposed findings of fact 329 and 331 is rejected as being a restatement of testimony rather than a finding of fact.
COPIES FURNISHED:
Marshall M. Criser, President University of Florida
226 Tigert Hall Gainesville, Florida 32611
Ann Carlin, Esquire
Post Office Box 490, Station 52
Gainesville, Florida 32602 Attorney for Petitioner
Kenneth G. Oertel, Esquire
R. L. Caleen, Jr., Esquire Oertel and Hoffman, P.A.
2700 Blairstone Road, Suite C Tallahassee, Florida 32301 Attorney for Petitioner
Barbara C. Wingo, Esquire University of Florida
207 Tigert Hall Gainesville, Florida 32611 Attorney for Respondent
John W. McWhirter, Jr., Esquire Lawson, McWhirter, Grandoff & Reeves
201 East Kennedy Boulevard, Suite 800 Tampa, Florida 32602
Attorney for Respondent
James F. Stanfield, Esquire Senior Counsel
Office of General Counsel Florida Power Corporation Post Office Box 14042
St. Petersburg, Florida 33733 Attorney for Intervenor
Robert Pass, Esquire
Carlton, Fields, Ward, Emmanuel Smith & Cutler, P.A.
Post Office Box 3239 Tampa, Florida 32601 Attorney for Intervenor
| Issue Date | Proceedings |
|---|---|
| Nov. 30, 1988 | Recommended Order (hearing held , 2013). CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Feb. 23, 1989 | Agency Final Order | |
| Nov. 30, 1988 | Recommended Order | Absent a finding that agency acted fraudulently, illegally or dishonestly to subvert Bid process decision based upon honest discretion will not overturn. |
LINDER-FUNK-OERTEL INTEREST vs DEPARTMENT OF CORRECTIONS, 88-002034BID (1988)
NICHOLAS R. HALL vs UNIVERSITY OF SOUTH FLORIDA AND ANTHONY J. READING, 88-002034BID (1988)
GIBBONS & COMPANY, INC. vs BOARD OF REGENTS, 88-002034BID (1988)
CONSTRUCTION INDUSTRY LICENSING BOARD vs. ABRAHAM SCOTT, JR., 88-002034BID (1988)
CLARK, ROUMELIS AND ASSOCIATES, INC. vs DEPARTMENT OF COMMUNITY AFFAIRS, 88-002034BID (1988)
