vs. ) CASE NO. 90-2667BID
Respondent. )
Upon due notice, this cause came on for formal hearing on May 11, 1990 in Tallahassee, Florida, before Ella Jane P. Davis, a duly assigned Hearing Officer of the Division of Administrative Hearings.
For Petitioner: Thomas W. Brooks, Esquire
Meyer and Brooks, P.A.
Suite 131, The Montgomery Building 2562 Executive Center Circle, East Tallahassee, Florida 32302
Whether or not Petitioner's response to Respondent's RFP 90 PY is responsive so as to be eligible for an award of "Wagner-Peyser 10% funds."
At formal hearing, Petitioner presented the oral testimony of Ernest Urassa and Dr. Charles R. Russell and had six exhibits admitted in evidence.
Respondent presented the oral testimony of Larry McIntyre, Roy Chilcote, Dan Faughn, and Julian Spradlin and had five exhibits admitted in evidence.
The Prehearing Stipulation was admitted as HO Exhibit A.
The transcript herein was filed on June 1, 1990, and all timely filed proposed findings of fact have bean ruled upon in the Appendix hereto, pursuant to Section 120.59(2) F.S.
Section 7(b)(2) of the Wagner-Peyser Act, 29 U.S.C. s. 49f. is a federal grant source which permits ten percent of the sums allotted by Congress to each state to be used to provide certain services and functions within the discretion of the governors of the respective states. Included among such services are job placement services for groups determined by the Governor of Florida to have special needs as set forth in Subsection 7(b)(2) of the Wagner- Peyser Act.
Petitioner Goal Employment is a private-for-profit Florida corporation engaged in the business of finding gainful employment for offenders, i.e., those persons who have been convicted of a crime but who are now out of prison seeking employment.
On January 26, 1990, the Respondent, Division of Labor, Employment and Training (LET) of the Florida Department of Labor and Employment Security (LES), published a request for proposals (RFP) soliciting competitive sealed proposals for job placement programs in accordance with Section 287.057(3) F.S. and the federal grant source, commonly referred to as "Wagner-Peyser 10% funds." The response date and time for this 1990 RFP, a/k/a RFP 90 PY, was 3:00 p.m., March 23, 1990.
Petitioner, Goal Employment, filed a timely proposal with Respondent, but the agency found Goal Employment's proposal to be nonresponsive and notified Petitioner of this determination in a letter dated April 4, 1990. That letter set out the grounds of the Respondent agency's determination as follows:
This nonresponsiveness is due to failure to have proposed program activities that are legal and allowable, i.e., private for profit entities are not eligible to apply for
Wagner-Peyser 7(b) funds.
Petitioner had 72 hours from that notification in which to protest.
It has been stipulated that Goal Employment's proposal would have been found responsive but for the exclusion of private-for-profit organizations from eligibility.
By letter dated April 9, 1990, Petitioner gave written notice of receipt of notification of nonresponsiveness on Saturday, April 7, 1990 "around 10:00 a.m." and of its intent to file formal written protest. Date and time of Respondent's receipt of this letter of intent are not clear, but Respondent has not asserted lack of timeliness.
Interim negotiations failed, and on April 17, 1990 Petitioner timely filed a formal written protest, which was "fast-tracked" at the Division of Administrative Hearings, pursuant to Section 120.53(5) F.S.
In the immediate past, the Respondent agency had, indeed, permitted contracting with private-for-profit organizations, and Petitioner corporation had been a successful bidder in Respondent's 1988 and 1989 letting of similar contracts. Therefore, Petitioner's principal and president, Ernest S. Urassa, was thoroughly familiar with how these types of contracts had been bid in the past. Mr. Urassa's familiarity with the earlier agency bid policy and procedure was also the result of his prior employment by the agency.
The RFP for 1989 did not prohibit private-for- profit organizations from participating. Goal Employment's contract pursuant to that prior RFP had not been completed as of the date of formal hearing, and at all times material to the 1990 RFP which is at issue in this proceeding, Mr. Urassa and Goal Employment coordinated the 1989 contract's compliance through an agency contract manager, Dan Faughn. On November 8, 1989, before the final draft of the 1990 RFP was finalized, Mr. Faughn informed Mr. Urassa by telephone that for the next program year, that is for the 1990 RFP, the agency would no longer permit private-for-profit company participation in Wagner-Peyser contracting.
In response to January 11, 1990 oral inquiries from Mr. Urassa, the Chief of Respondent's Bureau of Job Training, Shelton Kemp, sent Mr. Urassa a January 16, 1990 letter as follows:
The program year 1990 Request for Proposals prohibits private-for-profit companies from participating in Wagner-Peyser 7(b) contracting.
The Wagner-Peyser Act, Section 7(b)(2), allows the governor of each state to provide, "...services for groups with special needs, carried out pursuant to joint agreements between the employment service and the appropriate private industry council, and chief elected official or officials or other public agencies or private nonprofit organizations,..." [Emphasis supplied]
Those involved in the agency RFP process had reached the foregoing position after receiving advice from their General Counsel who, in turn, had relied on legal advice from the Governor's legal staff.
Roy Chilcote, Labor Employment and Training Specialist Supervisor in Respondent's Contract Section, participated in the draft of the 1990 Project Year Request for Proposal (RFP 90 PY) which is at issue in these proceedings. Prior to drafting the 1990 RFP, Mr. Chilcote was unable to locate any written issue papers or legal opinions interpreting the following language contained in the Wagner-Peyser legislation:
...the Governor of each such State to provide--
(2) services for groups with specific needs, carried out pursuant to joint agreements between the employment service and the appropriate private industry council and chief elected officials or other public agencies or private nonprofit organizations; [Emphasis supplied]
Up until that time, the issue of whether private-for-profit organizations could compete had not resulted in any specific opinion from legal personnel, however it is fair to say that lay personnel of the agency, including Mr. Urassa, who had previously been employed there, had based agency policy and earlier RFP requirements on lay interpretations either of the foregoing statutory language or of the Job Training Partnership Act's (JTPA) pre-amendment language, and that the lay interpretations had always permitted private-for- profit organizations to bid for Wagner-Peyser 10% funds just as they had
competed for JTPA funds. Upon his own review of the statutory language, Mr. Chilcote, also a layman, did not share his predecessor's opinion, and he requested legal advice from the agency's General Counsel, and, in turn, received the legal interpretation that private-for-profit organizations were ineligible. Mr. Chilcote received this legal advice in the fall of 1989, and he accordingly drafted the 1990 RFP to preclude private-for-profit entities as bidders for Wagner-Peyser funds.
The actual language contained in the 1990 RFP published January 26, 1990, as found on page 2 thereof, is as follows:
All governmental agencies and nongovernmental organizations (both for profit and not for profit entities) may apply for funds under the JTPA Title I Program. All governmental agencies and not for profit nongovernmental organizations (private for profit entities are not eligible) may apply for funds under the Wagner-Peyser 7(b) program. Documen- tation supporting the legal structure of the proposer must be on file with the Bureau of Job Training before any contract resulting from a response to the RFP can be executed. [Original emphasis]
Under the next major heading of the 1990 RFP (page 5 thereof), all potential bidders, including Petitioner, were advised:
The Bureau of Job Training conducts a two step proposal review process. The first step is a technical review to determine if a proposal is responsive to the requirements of the RFP and the second step is a programmatic review of the relative merit of that proposal. The following is a description of the specific criteria that the Bureau will use to determine the responsiveness of a proposal. Each of the criteria listed must be satisfactorily addressed for a proposal to be determined responsive. A proposal determined nonresponsive will be given no further consideration. The proposer will be notified in writing of the nonresponsive determination and the reason(s) for the determination. No exception will be made to these requirements.
Although the "specific criteria" listed thereafter do not make reference to the ineligibility of for-profit organizations, that contract specification was clearly noted and emphasized under the preceding heading. See, Finding of Fact 14, supra.
Before publication of the 1990 RFP, Mr. Chilcote circulated the draft within the agency for comments. It was at this point, November 8, 1989, approximately 10 weeks before the 1990 RFP was published, that Mr. Faughn orally notified Mr. Urassa of its contents, that Mr. Faughn and Mr. Urassa began inquiries concerning the reinterpretation, and that Mr. Faughn and Mr. Urassa commented unfavorably on the new draft RFP because it precluded private-for- profit bidders. See, Finding of Fact 9, supra.
The agency's position allowing Wagner-Peyser 7(b) funding for private- for-profit organizations prior to Program Year 1990 was based in part upon its earlier layman's understanding of the Congressional intent underlying the language of Section 7(b)(2). See, Findings of Fact 12-13, supra. In 1990, the agency altered its position so as to begin excluding for-profit organizations from eligibility for Wagner-Peyser money solely due to its reinterpretation of the statute by legal counsel. This reinterpretation was applied to prohibit the agency from contracting for the delivery of services with all private-for-profit organizations and has not been formally adopted as a rule pursuant to Section
120.54 F.S.
Petitioner has been aware of this reinterpretation since November 8, 1989 (actual oral notice), was notified of it in writing on January 16, 1990 (Shelton Kemp's letter), and was again notified of it in writing on January 26, 1990 (1990 RFP publication). Petitioner did not file a formal rule challenge directly with the Division of Administrative Hearings.
Prior to the March 3, 1990 bid/proposal deadline, the agency held three RFP workshops: February 20, 22, and 23, 1990. At no time during this process was Petitioner led to believe that private-for-profit entities were to compete for the 1990 RFP.
Nonetheless, Petitioner, a private-for-profit entity, submitted its proposal timely before the March 23, 1990 bid closing and was rejected as nonresponsive. It thereafter proceeded solely with a bid protest. See, Findings of Fact 3, 4, and 5, supra.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction of the parties and subject matter of this cause. See, Sections 120.53(5) and 120.57(1) F.S.
Much of the thrust of the petition, Petitioner's presentation of its case at formal hearing, and Petitioner's post-hearing proposal purports to be in the nature of a rules challenge or an assault on uncodified or allegedly "incipient" agency policy. However, at no point has Petitioner availed itself of the provisions for obtaining a Final Order pursuant to Section 120.54 or
120.56 F.S. This situation was brought to the parties' attention by the undersigned at the commencement of formal hearing (TR 5-7). Accordingly, this proceeding must be resolved solely upon an application of the de novo evidentiary provisions of Section 120.57(1) F.S. and the organic law as expressed in Sections 120.53(5) and 287.057 F.S. and their case law progeny. See, Capelletti Brothers, Inc. v. DOT, 489 So.2d 855 (Fla. 1st DCA 1986).
It is peripherally noted that just as a change in statutory language does not always embody intent to change the law, but sometimes merely effects clarification of existing authority (see, Keyes Investors Series 20 Ltd. v. Dept. of State, 487 So.2d 59 (Fla. 1st DCA 1986), a reinterpretation of a statute, which interpretation merely is different or more enlightened than the
interpretation urged by a non-agency party is not, per se, a "rule." Also, it is noted that, even in a rules proceeding, an agency's construction of a statute it is charged with administering should be given great weight and should not be overturned unless clearly erroneous. See, Island Harbor Beach Club v.
Department of Natural Resources, 495 So.2d 209 (Fla. 1st DCA 1986).
However, to the degree a formal evidentiary hearing pursuant to Section 120.57(1) F.S. may explore agency interpretations of statutes, this case has done so. See, MacDonald v. Department of Banking and Finance, 346 So.2d 569 (Fla. 1st DCA 1977); State ex rel. Department of General Services v. Willis, 344 So.2d 580 (Fla. 1st DCA 1977).
In a bid case, the burden to go forward as well as the burden of proof is upon Petitioner. A protestor has the ultimate burden of persuasion, but the agency is required to defend its policy and give the basis for it, State Department of Administration v. Harvey, 356 So.2d 323 (Fla. 1st DCA 1977).
The facts are largely undisputed, and the material chronology is as follows: The 1988 and 1989 RFPs permitted private-for-profit organizations to bid. Petitioner was one such successful bidder and was completing its 1989 proposal under the supervision of agency representative Dan Faughn when Mr. Faughn orally informed Petitioner that the draft RFP for 1990 would preclude private-for-profit organizations due to a revised agency interpretation of the enabling legislation. On January 16, 1990, the agency gave Petitioner the same information in writing. On January 26, 1990, the 1990 RFP was issued. That 1990 RFP specifically precluded participation therein by private-for-profit organizations. Despite the clear language of the RFP, Petitioner still filed a proposal. Petitioner's proposal was rejected as nonresponsive because Petitioner clearly was a private-for-profit organization, which the bid precluded. At no point prior to the April 4, 1990 rejection of its proposal did Petitioner file any formal protest to the RFP as a rule or otherwise. The unrefuted evidence shows that Petitioner is in a category which is precluded from participation as a bidder by the clear and unequivocal language of the 1990 RFP.
The exclusion of certain potential bidders reflects a major change in the RFP requirements, but absent some showing of vagueness, arbitrariness, capriciousness, favoritism, statutory bar, or similar impediment, Petitioner has no vested right in any statutory interpretation being reflected in a bid specification. LES demonstrated good reason to change its RFP specifications because LES has a right to solicit bids only from those entities whom its enabling or grant legislation recognizes as eligible to carry out the contract. Although Petitioner has eloquently argued that the new agency interpretation placed upon the enabling or grant legislation in this case is clearly erroneous due to the "intent" of such legislation as that intent is described within that legislation, as that intent is manifested by similar legislation, and as that legislative intent is understood by those lay persons who have administered the legislation in question and similar legislation at various levels of the governmental and private sectors over a period of time, it is not necessary to search high and low for a statute's intent when its language is clear on its face. See, Department of Legal Affairs v. Sanford-Orlando Kennel Club Inc., 434 So.2d 879 (Fla. 1983); St. Petersburg Bank & Trust Co. v. Hamm, 414 So.2d 1071 (Fla. 1982); Graham v. State 362 So.2d 924 (Fla. 1978); Englewood Water District
v. Tate, 334 So.2d 626 (Fla. 2d DCA 1976); Leigh v. State ex rel. Kirkpatrick,
298 So.2d 215 (Fla. 1st DCA 1974); American Bankers Ins. Co. of Fla. v. U.S.,
265 F. Supp. 67 aff. 388 F.2d 304 (Fla. 1967); Vocelle v. Knight Bros. Paper Co., 118 So.2d 664 (Fla. 1st DCA 1960); McDonald v. Roland, 65 So.2d 12 (Fla.
1953); Gay v. City of Coral Gables, 47 So.2d 529 (Fla. 1950). Moreover, there can be no more reliable an indication of legislative intent than the statutory words selected by Congress in delineating the powers conferred. Ray Baillie Trash Hauling, Inc. v. Kleppe, 477 F.2d 696 reh. den. 478 F.2d 1403 cert. den. 44 S.Ct. 1410, 415 U.S. 914, 39 L. Ed. 2d 468.
In 1982, Congress passed the Job Training Partnership Act (JTPA) for the purpose of affording job training to individuals facing serious barriers to employment. 29 U.S.C. Sections 1501 et seq. The same legislation that enacted the JTPA (Public Law 97-300, October 13, 1982, 96 Stat. 1322) amended the Wagner-Peyser Act so as to allow
. . . the Governor of each such State to provide--
(2) services for groups with specific needs, carried out pursuant to joint agreements between the employment service and the appropriate private industry council and chief elected officials or other public agencies or private, nonprofit organizations; [Emphasis supplied]
The Respondent agency's interpretation that private-for-profit entities may not receive Wagner-Peyser 10% funds is a reasonable reading of the foregoing statute.
Agencies are afforded wide discretion and interpretation of the statute which they administer and will not be overturned on appeal unless clearly erroneous. See, School Board of Pinellas County v. Florida Department of Administration, Division of Retirement, 492 So.2d 764 (Fla. 1st DCA 1986); Tri-State Systems v. Department of Transportation, 491 So.2d 1192 (Fla. 1st DCA 1986); Sans Souci v. Division of Land Sales and Condominiums, 421 So.2d 623, (Fla. 1st DCA 1982); Department of Environmental Regulation v. Goldring, 477 So.2d 532 (Fla. 1985). The agency's interpretation does not have to be the only one or the most desirable one, it is enough if it is permissible, Florida Power Corp. v. Department of Environmental Regulation, 431 So.2d 684 (Fla. 1st DCA 1983).
The RFP correctly excluded Petitioner and its bid was nonresponsive.
Upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Labor and Employment Security enter a final order ratifying its previous decision that the Respondent's 1990 bid/proposal is nonresponsive.
DONE and ENTERED this 29th day of June, 1990, at Tallahassee, Florida.
ELLA JANE P. DAVIS, Hearing Officer Division of Administrative Hearings The DeSoto Building
Filed with the Clerk of the Division of Administrative Hearings this 29th day of June, 1990.
APPENDIX TO RECOMMENDED ORDER, CASE NO. 90-2667BID
F.S. upon the parties' respective proposed findings of fact (PFOF): Petitioner's PFOF:
1-2, 15 Accepted.
5-6 Subordinate and cumulative.
7-10, 19 Accepted.
11-14, 16, 18 Rejected as mere legal argument.
17 Rejected as subordinate.
1-5 Rejected as mere legal argument.
LES hereby adopts and incorporates by reference the findings of fact set forth in the Recommended Order, with the exception of finding of fact 11, which is hereby rejected.
LES hereby adopts and incorporates by reference the conclusions of law set forth in the Recommended Order.
ADJUDGED, that the previous decision that Petitioner's 1990 bid/proposal is nonresponsive is hereby RATIFIED, and Petitioner's Petition be and the same is hereby DISMISSED.
THIS ORDER CONSTITUTES FINAL AGENCY ACTION. JUDICIAL REVIEW OF THIS PROCEEDING MAY BE INSTITUTED BY FILING A NOTICE OF APPEAL IN THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WERE A PARTY RESIDES IN ACCORDANCE WITH SECTION 120.68, FLORIDA STATUTES. SUCH NOTICE MUST BE FILED WITH THE DISTRICT COURT OF APPEAL WITHIN THIRTY (30) CALENDAR DAYS OF THE DATE THIS ORDER IS FILED IN
AS INDICATED IN THE CERTIFICATE OF CLERK BELOW, OR FURTHER REVIEW OF THIS ACTION WILL BE BARRED.
DONE and ORDERED in Tallahassee, Florida, on this 27th day of August, 1990.
HUGO D. MENDEZ, Secretary Florida Department of Labor and
