paul r. ezatoff, ronald r. richmond|Department of Lottery|do... -- eLawyers

Petitioner: BOZELL INC.
Respondent: DEPARTMENT OF LOTTERY
Judges: WILLIAM J. KENDRICK
Agency: Department of Lottery
Locations: Tallahassee, Florida
Filed: May 21, 1991
Status: Closed
Recommended Order on Thursday, July 25, 1991.
Latest Update: Apr. 16, 1992
Summary: At issue in this proceeding is whether the proposal of Earl Palmer Brown was responsive to the request for proposal issued by the Department of Lottery (Department), and whether the Department departed from the essential requirements of law in its evaluation of the responses to the request for proposal.Bidding agency couldn't waive statutorily required provisions of Request For Proposal (RFP) as minor irregularity. Agency further failed to follow criteria of RFP evaluation.

91-3165.PDF

STATE OF FLORIDA DIVISION OF ADMINISTRATIVE HEARINGS

BOZELL, INC., )

)

Petitioner, )

)

and BBDO SOUTH, )

)

Intervenor, )

)

vs. ) CASE NO. 91-3165BID

)

) STATE OF FLORIDA, DEPARTMENT ) OF LOTTERY, )

)

Respondent, )

)

and )

)

EARLE PALMER BROWN, )

)

Intervenor. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, William J. Kendrick, held a formal hearing in the above-styled case on June 5-7, 1991, in Tallahassee, Florida.

APPEARANCES

For Petitioner: Paul R. Ezatoff, Esquire

Marguerite H. Davis

Katz, Kutter, Haigler, Alderman, Davis, Marks & Rutledge, P.A.

Post Office Box 1877 Tallahassee, Florida 32302-1877

and

Ronald R. Richmond, Esquire Richmond Law Firm

102 South Monroe Street Tallahassee, Florida 32301

For Respondent: Paul J. Martin, Esquire

Harry F. Chiles, Esquire Assistant Attorneys General Department of Legal Affairs The Capitol - Suite 1501

Tallahassee, Florida 32399-1050

For Intervenor, Michael J. Glazer, Esquire Earle Palmer Brown: DuBose Ausley, Esquire

AUSLEY, McMULLEN, McGEHEE, CAROTHERS & PROCTOR

227 South Calhoun Street Post Office Box 391 Tallahassee, Florida 32302

For Intervenor,: R. David Prescott, Esquire BBDO South Mang, Rett & Collette, P.A.

660 East Jefferson Street Post Office Box 11127

Tallahassee, Florida 32302-3127 STATEMENT OF THE ISSUES

At issue in this proceeding is whether the proposal of Earl Palmer Brown was responsive to the request for proposal issued by the Department of Lottery (Department), and whether the Department departed from the essential requirements of law in its evaluation of the responses to the request for proposal.

PRELIMINARY STATEMENT

These proceedings arose as a result of a request for proposal (RFP) issued by respondent, Department of Lottery (Department), on March 12, 1991, for advertising and related services. By April 29, 1991, ten advertising agencies had submitted proposals in response to the RFP, and on May 1, 1991, the Department issued its notice of selection of finalists whereby it ranked the proposals in order of preference and, in accordance with the RFP, proposed to conduct oral presentations with the top five firms for the purpose of determining the final rankings. On May 8, 1991, after scoring the oral presentations and cost proposals, the Department issued its notice of intent to negotiate indicating that Earl Palmer Brown (EPB) was the highest ranked bidder and that petitioner, Bozell, Inc. (Bozell), was the second ranked bidder. On May 13, 1991, Bozell filed a formal written protest challenging the selection of EPB as the highest ranked bidder, as well as the propriety of the evaluation process. Subsequently, the matter was referred to the Division of Administrative Hearings for the assignment of a Hearing Officer to conduct a formal hearing pursuant to Section 120.57(1), Florida Statutes, and the petitions of EPB and BBDO South (the forth ranked bidder) for leave to intervene were granted.

At hearing, Bozell called as witnesses: William Paul Diaz; John Ruchalski; Richard W. Mizerski, accepted as an expert in marketing; Robert W. McKnight; Ben

Johnson; George Haynie; William T. Mattice; Christina Brochin; Bernard Edwards; and Craig A. Davis, accepted as an expert in advertising. Bozell's exhibits 1-32 and 34-47 were received into evidence. The Department called as witnesses: Allen G. Sawyer, accepted as an expert in advertising and marketing; Louisa H. Warren; Robert D. Fierro; and Robert W. McKnight. Department exhibits 1-16 were received into evidence. 1/ EPB presented the testimony of Craig A. Davis, and its exhibits 1-8 were received into evidence.

The transcript of hearing was filed June 24, 1991, and the parties were granted leave until July 5, 1991, to file proposed findings of fact. The
parties' proposals have been addressed in the appendix to this recommended order.

FINDINGS OF FACT

Background
1. On March 12, 1991, the Department of Lottery (Department) issued Request for Proposal No. 91-007-LOT/TEN/P entitled "Request for Proposal for the Provision of Advertising and Related Services to the Florida Lottery" (hereafter "the RFP"). The deadline for submitting sealed proposals in response to the RFP was established as April 22, 1991, but extended to April 29, 1991, by Amendment
  3 to the RFP. At the time of the deadline, ten proposals had been filed, including those of petitioner, Bozell, Inc. (Bozell), and intervenors, Earle Palmer Brown (EPB) and BBDO South (BBDO).
2. By "Notice of Selection of Finalists," dated May 1, 1991, and posted at the Department's headquarters, the Department advised all bidders that:
  
  After review of written proposals submitted in response to the subject RFP, the Florida Department of the Lottery's Evaluation Committee has ranked the responsive proposals in the following order of preference:
  1. Ogilvy & Mather
  2. Earle Palmer Brown
  3. BBDO South
  4. Bozell
  5. W.B. Doner
  6. Fahlgren Martin Benito
  7. West & Company
  8. Beber Silverstein
  9. LMPM
  10. The Ad Team

In accordance with Section 5.3 of the RFP, the Department intends to conduct oral presentations with the following firms for the purpose of determining final rankings:

Ogilvy & Mather
Earle Palmer Brown
BBDO South
Bozell
W.B. Doner

Pursuant to Florida Statute and Rule 53ER87-16, failure to file a formal written protest and the bond required by Section 287.042(2)(c), Fla. Stat., with the Secretary within 72 hours shall constitute a waiver of proceedings under Chapter 120, Florida Statutes.

Here, there was no showing that any protest was timely filed to contest the Department's selection of the five finalists.

The five finalists made oral presentations to the evaluation committee on May 7 and 8, 1991, and their cost proposals were opened and scored on May 8, 1991. At the conclusion of its work, the committee awarded EPB an average total
score of 174.550 and Bozell an average total score of 171.150; 200 points was the maximum total possible.
By notice dated Wednesday, May 8, 1991, at 8:07 p.m., the Department issued its "Notice of Intent to Negotiate a Contract" ranking the top five firms in the following order of preference: (1) EPB, (2) Bozell, (3) Ogilvy & Mather;
1. BBDO; and (5) W.B. Doner. Bozell filed its formal written protest and petition for formal administrative hearing with the Department of Monday, May 13, 1991, at 4:29 p.m.
  
  The Request for Proposals
The RFP consists of the original RFP issued by the Department, three amendments, and the Department's response to various written questions submitted by potential bidders. Pertinent to this case, the RFP provided:

SECTION 1: GENERAL INFORMATION
* * *
Responsive Proposal - Refers to a proposal which contains, in the manner required by this RFP, all documentation, drawings, information, plans, materials, certifications and affirmations, regardless of which section of the RFP sets forth the particular requirements.
* * *
The following timetable will be strictly adhered to in all actions relative to this procurement.
* * *
1. All proposals will be opened by Lottery employees at 2:00 p.m. on April 22,
  1991 [extended to April 29, 1991, by Amendment 3] in the Purchasing Office at the aforesaid Lottery Headquarters. The public may attend the opening but may not review any proposals submitted. The evaluation process will begin immediately following the proposal opening.
2. The Evaluation Committee will rank
  the proposals in order of preference based on the evaluation of the technical proposals in accordance with the criteria specified herein. Notice of selection of finalists shall be posted at the Lottery's headquarters.
3. If more than five Responsive Proposals are submitted, at least the five top firms which have submitted Responsive Proposals will be selected for oral presentations to be made in Tallahassee,
  Florida, at the Lottery's Headquarters. Oral presentations are tentatively scheduled for the week of April 29, 1991 [extended to the week of May 6, 1991, by Amendment 3] . . . .
4. The Evaluation Committee will score
  the oral presentations and then open and score the cost proposal.
5. The final rankings will be determined based on the evaluation of the technical proposals, oral presentations and cost proposals. Notice of Intent to negotiate with the highest ranked firm will be posted at the Lottery's headquarters. If negotiations with the highest ranked firm are
not successful, the Lottery may negotiate with the other listed firms in descending order of rank. Upon successful conclusion of negotiations with a Respondent, a Notice of Award of Contract will be posted at the Lottery's headquarters.
* * *
1.12. Proposal Submission.
It is the Respondent's responsibility to ensure that its proposal is delivered by the proper time at the place of the proposal opening....
* * *
1.14 Correction or Withdrawal of Proposal.
A correction to, or withdrawal of, a proposal may be requested within 72 hours after the proposal opening time and date. Requests received in accordance with this provision may be granted by the Lottery upon proof of the impossibility to perform based upon an obvious error. The Lottery, in its sole discretion, will determine whether a bid may be corrected or withdrawn.
Applicable provisions of all federal, state, county, and local laws and administrative procedures, regulations, or rules shall govern the development, submittal and evaluation of all proposals received in response hereto and shall govern any and all claims and disputes which may arise between persons submitting a proposal hereto and the Lottery. Lack of knowledge of the law or applicable administrative procedures, regulations or rules by any Respondent shall not constitute a cognizable defense against their effect.
* * *
The objective of the technical proposal is to demonstrate the Respondent's understanding and proposed method of rendering the requested services. Each Respondent shall provide a written statement of the firm's understanding of the services requested herein as well as a detailed written plan outlining how the firm proposes to go about providing the services set forth in Section 2.2.
At a minimum, the technical proposal shall consist of the following information and materials:
* * *
E. Firm Qualifications.
At a minimum, each Respondent must provide the following information which demonstrates the Respondent's ability to provide the services requested:
* * *
4. Resumes not to exceed one page each in length of all personnel who would be
assigned major roles in the fulfillment of the
work obligation outlined in Section 2.2, with a statement identifying the percentage of time, calculated annually, of each person who will work on the Lottery account.
* * *
12. Certified financial statements in customary form for the last three (3) fiscal years including an auditor's report. Certified financial statements must be the result of an audit of the Respondent's records in accordance with generally accepted auditing standards by a certified public accountant . . . .
* * *
18. List of type and number of additional employees that may be needed if awarded contract.
* * *
33. Disclosure information required by and listed in Section 24.111, Fla. Stat.
* * *
Section 3: INFORMATION REQUIRED FROM RESPONDENT
3.1. GENERAL INSTRUCTIONS.
* * *
D. Technical proposals must include the following information, be limited to not more than 100 pages (not including cover sheet, table of contents, divider pages, creative materials or resumes) and be presented in the following sequence:
* * *
1. Vendor Information Form (Attachment B).
  * * *
  1. Performance bond commitment letter required by Section 6.6.
  2. All material or information required to be submitted as part of the technical proposal required by Section 2.3.
  * * *
  13. Any other material or information required by this RFP.
  * * *
  3.4 Use of Subcontractors.
  If a Respondent proposes to use one or more subcontractors, the proposal must identify the contemplated subcontractor(s) and the scope of the subcontractor's services, and must include evidence of each subcontractor's ability to fulfill its respective duties on behalf of the Respondent. Respondent must also provide the information required by Section 24.111(2), Fla. Stat., for each subcontractor as if the subcontractor were itself a vendor.
  * * *
  3.6 Additional Information and Comments.
  Respondent shall not submit with their written proposals material beyond that which is covered in the 100-page technical proposal (not including cover sheet, table of contents, divider pages, creative materials or resumes), plus creative comps and samples, resumes of key personnel and the separate cost proposals. The Lottery reserves the right to request additional information from a Respondent in order to make a thorough review and fair comparison of all proposals submitted....
  Section 4: MANDATORY REQUIREMENTS
  1. Terms.
The Lottery has established certain mandatory requirements which must be included as part of any proposal. The use of the terms "shall," "must" or "will" (except to indicate simple futurity) in this RFP indicate a mandatory requirement or condition.
The words "should" or "may" in this RFP indicate desirable attributes or conditions, but are permissive in nature. Deviation from, or omission of, such a desirable feature will not by itself cause rejection of a proposal.
4.2 Non-responsive Proposals.
Proposals which do not meet all material requirements of the RFP or which fail to provide all required information, documents, or materials will be rejected as non- responsive. Material requirements of the RFP are those set forth in Section 3.1 and without which an adequate analysis and comparison of proposals is impossible. The Lottery reserves the right to determine which proposals meet the material requirements of the RFP and to accept proposals which deviate from the requirements of the RFP in a minor or technical fashion as determined by the Lottery.
SECTION 5: PROPOSAL REVIEW AND CRITERIA
FOR SELECTION
5.1. Proposal Submission.
Only proposals submitted in the time frame stated herein and with the content required above will be reviewed and considered by the Lottery.
A copy of Chapter 24, Florida Statutes, was attached to the RFP, and Section 24.111, Florida Statutes, was specifically referenced in Sections
2.3.E.33 and 3.4 of the RFP. The vendor information form itself referenced the requirements of Section 24.111(2), Florida Statutes.
In accordance with RFP Section 1.8, EPB submitted the following question, among others, to the Department: "Does Attachment B [Vendor Information Form] need to be completed by all company officers?" The Department answered "Yes, see question #8, BBDO Atlanta, letter dated March 26, 1991." The referenced answer to BBDO Atlanta emphasized that "a vendor information form
must be completed by each person listed in the instructions on the form [all officers, all directors, all owners, all partners, all trustees, all stockholders holding five percent or more, executive director and chairman of the board]." Even section 1.27 of the RFP required that vendor information forms be submitted to the Department prior to or at the time of submitting the proposal.

Responsiveness of proposals
Under the terms of the RFP, Sections 5.1 and 5.2, the Department was not to consider and evaluate non-responsive proposals. Non-responsive proposals are defined by Section 4.2 of the RFP as follows:

Proposals which do not meet all material requirements of this RFP or which fail to provide all required information, documents, or materials will be rejected as non- responsive. Material requirements of the RFP are those set forth in Section 3.1 and without which an adequate analysis and comparison of proposals is impossible. The Lottery reserves the right to determine which proposals meet the material requirements of the RFP and to accept proposals which deviate from the requirements of the RFP in a minor or technical fashion as determined by the Lottery.
At the time it submitted its proposal, EPB did not submit the vendor information forms required by subsections 2.3E33, 3.1 and 3.4 of the RFP and by Section 24.111(2), Florida Statutes, for at least three of its corporate officers or directors (Sally Brown, Louise Smoak, and Robert Morse), and did not submit any vendor information forms for its designated subcontractor, Premier Maldonado & Associates. The Department, through its counsel, first requested submission of these forms from EPB on May 8, 1991, the date on which the Notice of Intent to Negotiate was posted. EPB did not supply the missing forms for Premier Maldonado & Associates until May 14, 1991, and for the three corporate officers or directors until on or about May 29, 1991.
The RFP required that the vendor information forms be submitted with the proposal, and Section 24.111(2), Florida Statutes, provided in mandatory language that:
1. If the vendor is a corporation, the officers, directors, and each stockholder in
  such corporation, except that in the case of owners of equity securities of a publicly traded corporation, only the names and addresses of those known to the corporation to own beneficially 5 percent or more of such securities need be disclosed.
2. If the vendor is a trust, the trustee and all persons entitled to receive income or benefit from the trust.
3. If the vendor is an association, the members, officers, and directors.
4. If the vendor is a partnership or joint venture, all of the general partners, limited partners, or joint ventures.
If the vendor subcontracts any substantial portion of the work to be preformed to a subcontractor, the vendor shall disclose all of the information required by this paragraph to the subcontractor as if the subcontractor were itself a vendor. (Emphasis added)

The Department, at hearing offered proof that it did not consider the language of the RFP or Section 24.111(2), Florida Statutes, to require that all such forms be submitted at the time the proposal is submitted, and that it had been the Department's policy to allow bidders to submit additional forms after bid submission. The articulated rationale for such policy is that based solely on the proposals or, stated differently, absent investigation, the Department is unable to assure itself that forms for all required individuals are submitted with any proposal. Accordingly, the Department considers the omission of such forms a technical deficiency that can be cured up to the point of contracting, and limits its investigation to the successful bidder.
While the Department may find it difficult, absent investigation, to assure itself that the vendor information mandated by section 24.111(2) is submitted with the proposal, the mandate of section 24.111(2) and the RFP is clear and unequivocal: such information "must" be submitted with the proposal. Notably, under the provisions of the statute and RFP, the onus is on the bidder, the party privy to such information, to assure that its disclosure is complete and where, as here, its disclosure is not complete its bid is non-responsive, since it is at variance with the mandate of section 24.111(2) and the RFP.
Importantly, under the requirements of section 24.111(2), the Department is precluded from contracting with any bidder who fails to submit the required vendor information. Accordingly, a successful bidder who, wittingly or unwittingly, failed to make the required disclosure (such as EPB in the instant case) could subsequently decline to provide the Department with the information and thereby effectively withdraw its bid, contrary to the provisions of section
1.14 of the RFP. Such renders the failure to submit the required information at the time of bid submittal a material defect, since it accords such bidder an advantage not enjoyed by other bidders that submitted the required information.
In accordance with subsection 3.1D9 of the RFP, each bidder was required to submit with its technical proposal the performance bond commitment letter required by section 6.6 of the RFP. Section 6.6, as amended by Amendments 1 and 3, provided, in pertinent part:

The successful Respondent shall be required,
at the time of executing the Contract with the Lottery, to post an appropriate performance bond or other security acceptable to the Lottery in the amount of $2.5 million . . .
The other acceptable forms of security are:
irrevocable letter of credit; Certificate of Deposit assigned to the Lottery (which must be obtained from a financial institution having its principal place of business in the State of Florida) . . . .
Respondents must submit with their proposal evidence that they will be able to provide the performance bond or other security. Such evidence may include, but is not limited to,
a letter from an authorized agent of a bonding company committing to provide the performance bond or indicating that the bond underwriter is processing a request to provide the bond and stating unequivocally that the bond will be available upon execution of the Contract.
At the time it submitted its proposal, EPB submitted an April 25, 1991, letter addressed to it from Sovran Bank as evidence of its ability to provide the required security. That letter provided:

As follow up to our conversation yesterday, the company can restrict its revolving line of credit by $2,500,000 (Two Million Five Hundred Thousand Dollars) for a Letter of Credit of the same amount. The alternative is to apply for the Letter of Credit as a separate facility.
The particular terms and conditions of the Letter of Credit would be worked out at the time of application . . . .
While of the opinion that the Sovran letter evidenced EPB's ability to provide the required security, the Department likewise felt that the letter failed to evidence any commitment on EPB's part to restrict its line of credit to secure the subject letter of credit. Accordingly, it requested additional information from EPB, and by letter of May 1, 1991, EPB responded:

This is to clarify the language in the Sovran Bank letter of April 25, 1991, included as Page 9 in Earle Palmer Brown's Proposal . . .
Should Earle Palmer Brown be a successful respondent we will, at the time of executing the contract with the Lottery, either restrict our revolving line of credit with Sovran Bank by $2,500,000.00 for an irrevocable letter of credit, or will provide the Lottery with a surety bond for a like amount.
The letter of May 1, 1991, adds more confusion than enlightenment regarding EPB's commitment to provide a letter of credit. Clearly, under the provisions of subsection 6.6 of the RFP, EPB's bare assurance that it would, alternatively, provide the Department with a surety bond was not acceptable
evidence of its ability to provide such bond. As importantly, by phrasing its proposal as an alternative, to be exercised at its discretion, EPB lent confusion to the issue of what form of security it would provide.
Notwithstanding, the requirement of the RFP was that the bidders "submit with their proposals evidence that they will be able to provide the . . . security," and the letter of April 25, 1991, while perhaps sparse, is facially adequate in that regard. Notably, the proof in this case confirms that EPB does have an adequate credit line with Sovran Bank which could be so restricted for a $2.5 million irrevocable letter of credit.
In accordance with section 2.3E12 of the RFP, each bidder was required to submit with its technical proposal "certified financial statements in customary form for the last three (3) fiscal years including an auditor's report." In response to a question submitted pursuant to section 1.8 of the RFP, which asked: "If a company does not have certified financial statements for the last three years as required by Section 2.3.E.12 of the RFP, will it be disqualified from submitting a proposal?", the Department answered: "No. Although the absence of certified financial statements would render the proposal nonresponsive."
At the time EPB submitted its proposal, it submitted certified financial statements for fiscal years 1986, 1987, 1988 and 1989. As EPB's fiscal year is the calendar year, its auditors had not yet completed their audit for fiscal 1990 by the response deadline. When EPB's certified financial statement for its fiscal 1990 became available on May 14, 1991, it promptly delivered a copy to the Department.
While the RFP required financial statements for the last three fiscal years, the Department understood that a bidder's ability to provide such statements would depend on when its fiscal year closed. In this regard, it is common for an independent audit to require up to six months following the close of a fiscal year. Here, EPB was faced with exactly such a dilemma, specifically disclosed such dilemma in its proposal, and provided the financial statements for the last four fiscal years that were available to it. Under such circumstances, it cannot be concluded that the Department departed from the essential requirements of law when it declined to declare EPB's proposal non- responsive for its failure to include a certified financial statement for fiscal 1990, and accepted, as satisfying the requirements of the RFP, financial statements for the last three fiscal years that were reasonably available to EPB.
In accordance with the RFP, each bidder was to identify all personnel who would be assigned major roles in the fulfillment of work under the contract. Pertinent to this case, subsection 2.3E provided:

At a minimum, each Respondent must provide the following information which demonstrates the Respondent's ability to provide the services requested:
* * *
4. Resumes not to exceed one page each in length of all personnel who would be assigned major roles in the fulfillment of the work obligation outlined in Section 2.2, with a statement identifying the percentage of time, calculated annually, of each person who will work on the Lottery account.
* * *
18. List of type and number of additional employees that may be needed if awarded contract.
At the time EPB submitted its proposal, it identified twenty-four key positions in account service, creative, media and several other categories. As to the management supervisor, the employee is identified as "selected," and as to an account executive and public relations supervisor, the employee is identified as "TBD" (To Be Determined). All other positions were identified with specific individuals and resumes were included for each.
Here, Bozell contends that EPB's proposal is non-responsive because EPB did not name and include resumes for the foregoing three positions. Such contention is, however, unpersuasive. Section 2.3E18 clearly contemplated that some bidders would have to hire additional personnel if awarded the contract, and EPB complied with that section of the EPB by identifying such positions. Accordingly, EPB's proposal was not at material variance from the RFP in this regard.
Although the Department's "Notice of Selection of Finalists," dated May 1, 1991, discussed supra, purported to rank the "responsive proposals" in order of preference, the proof demonstrates that the evaluation committee, who was charged with such responsibility, did not, by consensus or otherwise, ever determine the responsiveness of any proposal. Here, for the reasons heretofore set forth, EPB's proposal was non-responsive to the RFP, and the committee's failure to address the issue of responsiveness prior to scoring the proposals, for reasons discussed infra, materially affected the fairness of the evaluation process. Bozell's proposal was, however, responsive to the RFP. 2/

The evaluation committee
Pursuant to Rule 53ER87-13(5)(i)(2), Florida Administrative Code, and Section 5.3 of the RFP, the Secretary of the Department appointed an evaluation committee, consisting of six members, to evaluate the proposals which were received from interested firms. Regarding the composition of such committee, the Department advised all prospective bidders, in response to a question posed pursuant to Section 1.8 of the RFP, that:

The Evaluation Committee will be comprised of Lottery staff and volunteers from a cross- section of Florida business and academic communities.

Subsequently, by notice of April 16, 1991, the Department advised all prospective bidders that the members of the evaluation committee would be as follows:

Bernard Edwards
Deputy Secretary Marketing Department of the Lottery Tallahassee, Florida

Ben Johnson Newspaper Columnist
Homles Beach, Florida
Robert W. McKnight Assistant Secretary Department of Lottery Tallahassee, Florida

Richard Mizerski Professor Tallahassee, Florida

John Ruchalski Retired Businessman Jupiter, Florida

Alan Sawyer Professor Gainesville, Florida

Of the six committee members, only two, Bernard Edwards and Robert W. McKnight, were employees of the Department. No objection to the composition of the committee was lodged until the filing of the subject protest; however, there was likewise no point of entry provided by the Department to challenge the composition of the committee.
Robert W. McKnight, who chaired the committee, has been employed by the Department as Assistant Secretary since March 4, 1991, and in such capacity has been responsible for the day-to-day operations of the Department. Mr. McKnight holds a B.S. and M.B.A. degree in business administration, with concentrations in advertising, and has in excess of fifteen years experience in marketing. Throughout the course of such employments, as well as his tenure as a Florida legislator, he has had the opportunity to monitor or supervise the work of advertising agencies employed to advance his products or person.
Bernard Edwards, currently Deputy Secretary for Marketing of the Department, has been with the Department since 1988. During that tenure, he has filled, at various times, all three deputy secretary positions (operations, administration and marketing), and has participated in the advertising operations of the Florida lottery. Prior to his employment with the Department, Mr. Edwards was Executive Director of the Washington, D.C., lottery, and from 1983 to 1987 Deputy Executive Director of the Pennsylvania State lottery.
During the course of such employments, Mr. Edwards has acquired significant experience in the marketing of lottery products, and the advertising incident thereto.
Alan Sawyer is a Professor of Marketing and Chairman of the Department of Marketing of the University of Florida in Gainesville, and holds a Ph.D. from Stanford University in marketing. In addition to his teaching and research, Dr. Sawyer has worked with the Federal Trade Commission, as well as numerous other clients, on advertising matters, including matters of advertising deception, and is a recognized expert in advertising and marketing.
Ben Johnson is a Doctoral Teaching Associate and Adjunct Professor at the University of South Florida where he teaches upper division and graduate College of Education courses in methods of teaching English, reading, and learning skills. In addition to teaching, Mr. Johnson has, for some years, been researching the lottery operations of various states. As a consequence of the knowledge he has gained concerning those operations he has written a book, The Lottery Book, scheduled for publication in September 1991, which provides
general information for players of various state lotteries, and has a nationally syndicated newspaper column called "The Lottery Column" wherein he answers readers' questions regarding lottery operations. From such experience, Mr.
Johnson has developed a knowledge of lottery operations, as well as an appreciation for effective lottery marketing and advertising.
John Ruchalski, currently retired, holds a degree in business and marketing, and has 35 years of retail management experience. Of those years, 17 were spent as Senior Vice President of Burdines, three as Chief Executive Officer of Bullock's, and two as president of Bloomingdale's. Mr. Ruchalski's past activities have also included service as president of the Florida Chamber of Commerce and chairman of the board of the Florida Retail Federation. In all, the proof shows that Mr. Ruchalski has a strong marketing background, and a familiarity with the advertising needs incident to such operations.
The final member of the committee, Richard Mizerski, is a Professor of Marketing at Florida State University, and holds a Ph.D. from the University of Florida in Economics and Business Administration, with a major concentration in marketing and a minor concentration in advertising. Dr. Mizerski, like Dr. Sawyer, has, in addition to his teaching and research, extensive consulting experience in marketing and advertising, and is a recognized expert in the field.
Overall, the proof demonstrates that the composition of the evaluation committee was appropriate for the work it was tasked to do, and that it had adequate time to perform an appropriate evaluation. Each committee member had experience and knowledge in marketing, and advertizing incident thereto, and lent to the evaluation process common and diverse experiences in such areas which helped provide a balanced consideration of the proposals. As importantly, each was shown to be committed to the integrity of the process, and complied with the provisions of Section 286.011, Florida Statutes, by assuring that all committee meetings at which official acts were to be taken were conducted publicly, and by not discussing any matter pertaining to their evaluations with any other member except during meetings that had been properly noticed.

Market research data
Prior to reviewing the proposals, one or more of the committee members requested information from the Department that would accord them insight into the program area. In response to such request, the Department provided each committee member with the market research data it had available. Such data provided demographic insight into Florida lottery marketing operations.
At hearing, Bozell complained that it was never informed that the market research data had been provided to the committee, and offered proof, if credited, that had it known such fact it would have drafted its proposal differently. Such proof was not, however, persuasive, nor was the provision of such information to the committee inappropriate.
Here, the proof demonstrates that the data provided by the Department was a matter of public record, and many of the committee members, through their research and training, were already familiar with it prior to their appointment. Bozell, as the current provider of advertising services to the lottery, was very familiar with the data, its subcontractor had complied it, and Bozell used it extensively in its proposal.
In sum, Bozell was not disadvantaged by the provision of such data to the committee, and it was not treated any differently than any other bidder in this regard. As importantly, the provision of such information to the committee to lend insight into the program area for which services were being sought was quite appropriate to the evaluation process.

Technical proposed evaluation
Section 2.3 of the RFP describes the items required to be submitted with a firm's technical proposal, and was designed to assess a firm's understanding and proposed method of rendering the services requested by section
2.2 of the RFP. It provides that, "at a minimum," the proposal shall contain the information and materials requested by subsections 2.3A through 2.3E.
Subsection 2.3A required submittal of a proposed advertising approach for the Florida lottery which addresses a three-year summary outline advertising plan, to include recommendations for advertising and promotion, and a proposed one-year timetable for advertising, showing development of creative, production, approval, placement and run-time. Subsection 2.3B required comprehensive artistic representations consisting of a detailed media plan for an eight-week Florida lottery instant game within a $1,250,000 budget; a name, ticket design and prize structure for the instant game; a 30-second radio spot for the instant game; a print ad for newspaper or magazine placement for the game; and a point- of-sale example for the game. Subsection 2.3C required one complete advertising campaign representative of the firm's work, including budget, creative strategy, positioning, media strategy and execution, and post-buy analysis. Subsection 2.3D required creative samples previously produced by key members of the proposed creative team consisting of TV ads, radio ads, print ads, outdoor campaigns, and point-of-sale samples. Finally, subsection 2.3E, entitled "firm qualifications," required, "at a minimum," information concerning 33 specific items, "which demonstrates the [firm's] ability to provide the services requested." Among the items for which information was required were the following:

3. Brief and concise statement of Respondent's advertising philosophy, taking into consideration the following points and others that you may feel are appropriate:
1. Method the Respondent uses for developing advertising.
2. How the Respondent currently measures the effectiveness of its advertising.
* * *
1. Evidence of any work done for a state, multi-state, national or provincial lottery.
2. Information regarding any advertising or other experience with state agencies and other governmental entities.
* * *
12. Certified financial statements in customary form for the last three (3) fiscal years including an auditor's report . . . .
* * *
29. Discussion of contributions that your firm could make toward the growth of the Lottery.
Section 5.4 of the RFP set forth the general criteria by which a firm's response to subsections 2.3A-E would be evaluated. Such general criteria were the overall qualifications, experience and abilities of the firm, its staff, and contractors to provide timely and professional advertising and related services, determined by evaluating the information contained in subsection 2.3E; and, the relative creativity, approach, quality and thoroughness of the firm's proposed plans directed toward subsections 2.3A-D of the RFP. Such section concluded: "The evaluation worksheet for the technical proposal is attached as Attachment F."
Attachment F to the RFP set forth the specific criteria by which a firm's response would be evaluated. That attachment provided as follows:

This evaluation considers information submitted in the technical proposal. Emphasis is placed on the firm's qualifications and ability to do the work, which is addressed in the Technical Proposal. A total of 80 points is obtainable. The Technical Proposal shall be evaluated in accordance with the following criteria:
1. Overall Ability - 40 points maximum
  1. Do the resumes of the account team support the Respondent's competency to provide the services required by Section 2.2?
  2. Proposed Account Team:
    - Is the team make-up appropriate for the work?
    - Do the team members have experience with comparable work?
    - Are there any sub-contracted firms involved?
    - Are minority sub-contractors utilized?
    - Are the hours assigned to the various team members for each task appropriate?
  3. Has the Respondent provided advertising services of the scope required in the past?
    - Experience of the Respondent and staff providing advertising service within the State of Florida.
    - Experience of the Respondent and staff in providing Lottery, pari- mutuel, or other gaming related advertising.
    - Financial stability of the firm and financial capability to provide the entire scope of services.
    - Experience of the firm in providing advertising services to accounts
      in excess of $10 million.
    - Experience of the firm in placing large volumes of electronic media in all media markets in Florida.
  4. Based on 1-3, award points, as follows: 20-30 points for exceptional experience 10-20 points for average experience
    0-10 points for minimal experience
  5. Has the Respondent provided advertising services to other state or governmental entities?
    1. If the work was acceptable, award up to 3 points.
    2. If the firm has not done such work, award zero points.
  6. Does the Respondent possess unique abilities which would make a noticeable (positive) impact on the project?
    1. If the answer is yes, award up to
      1. points and note reasons.
    2. If the answer is no, award zero points.
  7. Does the team composition and each member's percentage of involvement, the use of subcontractors (if any), office location, and/or information contained in the proposal indicate that the Respondent will meet time and budget requirements?
    1. If the answer is yes, award up to
      1. points and note reasons.
    2. If the answer is no, award zero points.
  8. Does the Respondent's current workload make it likely the Respondent can provide timely and complete service?
    1. If the answer is yes, award up to
      2 points and note reasons.
    2. If the answer is no, award zero points.
2. Advertising approach and creative samples required by Sections 2.3A-D = 40 points
  1. The relative creativity, approach, quality and thoroughness of the firm's proposed plan for providing the requested services required by Section 2.3(A). Value: 10 points
  2. The relative creativity, approach, quality and thoroughness of the comprehensive artistic representations required by Section 2.3(B).
    Value: 10 points
  3. The relative creativity, approach, quality and thoroughness of the advertising campaign required by Section 2.3(C).
    Value: 5 points
  4. The relative creativity, approach, quality and thoroughness of samples required by Section 2.3(D).
    Value: 15 points
    The criteria for evaluating the creativity, approach, quality and thoroughness of above items B-1 through B-4 are as follows:
    1. Creativity
      1. Were the ideas and approach exciting and interesting?
      2. Did the samples evoke positive and appropriate emotions?
      3. Did the samples capture and hold attention?
      4. Did the samples demonstrate fresh and original thought or were they banal and mundane?
    2. Approach
      1. Was the approach germane and appropriate?
      2. Was the approach unified and integrated?
      3. Was the approach clear, direct and unambiguous?
    3. Quality
      1. Were images crisp, sharp, and distinct except where the intention is clearly otherwise?
      2. Was the production professional?
      3. Was sound free of distortion and visual free of unnecessary clutter?
    4. Thoroughness
      1. Did the advertising show an appropriate consideration for all facets of the market?
      2. Was the advertising comprehensive and balanced?
      3. Did the advertising use a full range of tools and techniques to ensure maximum penetration and retention?
By memo to all committee members, entitled "Instructions and Timetable for Evaluation Committee Members," and again at the commencement of their deliberations, all committee members were advised that they must evaluate the proposals based on the criteria set forth in the RFP, and to utilize their own individual expertise in applying the criteria. In this regard, the proof demonstrates that the members of the committee abided such directive, and scored the proposals based on the established criteria, except as hereinafter discussed, as applied through their own background and experience. 3/
At the commencement of their deliberations, the committee members agreed that the format they would follow in evaluating the technical proposals would be to first review all the proposals, and then score the proposals individually. This procedure was followed although, not unexpectedly, some members made preliminary assessments as they progressed through the various proposals. Upon completion of their review, the members then scored each proposal and, as appropriate, made adjustments to preliminary assessments they
had made based on the perspective they had acquired after their review of all the proposals.
Here, Bozell complains that the RFP did not permit the scoring of proposals relative to each other but, rather, required that the proposals be evaluated and scored solely by applying the criteria independently to each proposal, and that the failure of all committee members to so evaluate the proposals is a fundamental flaw in the evaluation process. Bozell's complaint is not, however, persuasive.
Here, the RFP required, among other things, a determination of the relative creativity, approach, quality and thoroughness of a firm's plans for providing the services requested by subsections 2.3A-D of the RFP. Under such circumstances, considering the subjective nature of the evaluation, it would not be unreasonable to assign points based on relative merit. And, considering the fact that the proposals were not scored until all proposals had been reviewed that, more likely than not, is what was done by each committee member, consciously or subconsciously. As importantly, each member of the committee scored the proposals independent of any other member of the committee, and was consistent with the approach he took as to each firm's proposal. 4/ Accordingly, it cannot be concluded, based on the proof in this case, that the evaluation process was fundamentally flawed because of the manner in which points were awarded. However, because points were awarded on a relative basis, the inclusions of non-responsive proposals in the evaluation process could have materially affected the scoring of proposals and the Department's failure to exclude non-responsive proposals from the scoring process, as required by section 5.1 of the RFP, was a material departure from the requirements of the RFP.
Bozell also complains that Mr. Johnson evaluated the technical proposals in light of his knowledge about the success of other states' lottery advertising. The application of such expertise to the criteria contained in the RFP was, however, appropriate, as discussed supra. As noted by Mr. Johnson:

. . . That's my frame of reference against which I measured all of the companies. I could tell that some of the companies really didn't know what they were talking about, because they were suggesting things that were failing in other states. And I was aware of that from my general information background. [Tr. 471]

As heretofore noted, selection of committee members with knowledge of the program area, and the exercise of that expertise in applying the criteria, is most appropriate to a reasoned evaluation of a proposal.
Finally, with regard to the evaluation of the technical proposals, Bozell offered proof that some committee members failed to apply specific criteria mandated by the RFP, or otherwise scored the proposals in a manner at variance with that called for by the RFP. In this regard, the proof demonstrates that while proposals were to be evaluated, at least in part, based on the different games and formats that were presented in the technical proposals (see subsection 2.3B of the RFP), Mr. Ruchalski did not do so because he had no knowledge upon which to base a decision. Regarding subsections A5-8 of Attachment F (the scoring criteria), Mr. Johnson did not award points in the manner mandated by each subsection. Finally, notwithstanding that an evaluation
of the overall ability of the applicant, as set forth in section A of Attachment F to the RFP, required an examination of the "financial stability of the firm and financial capability to provide the entire scope of services," no evaluation of the financial integrity and responsibility of any of the firms was made, and such criteria were not applied in the evaluation process. 5/
In its proposed recommended order, the Department suggests that it would be unnecessarily burdensome to require a detailed financial review by the agency at the initial bid analysis stage since, ultimately, only one firm will be awarded the contract, and because security and financial investigations will be done before a contract is awarded. While such may be the case, it was the Department's election to provide for an analysis of financial stability and capability as part of the review criteria.

Oral presentation evaluation
The second phase of the evaluation process was the scoring of the oral presentations. Pertinent to this case, section 5.3 of the RFP provided:

. . . The oral presentations must be made by the account service, creative and media personnel who would work on the account.
There will be no limitation on the information and materials pertinent to this RFP which may be utilized . . . .
Section 5.5 of the RFP provided that presentations would be scored based on the following general criteria: Understanding of services requested -- up to 20 points, account team -- up to 25 points, responsiveness to questions -- up to 15 points, and overall impression -- up to 20 points. Finally, Attachment G to the RFP provided that the evaluation relative to the account team would be scored as follows:
1. Account Team = 25 points maximum
  1. Did the proposed account team participate?
  2. Creativity, quality, uniqueness demonstrated by account team?
  3. Respondent's advertising philosophy demonstrated, long term image building?
  4. Did account team members prepare samples submitted?
EPB's oral presentation was made by Jeb Brown, the chief executive officer of EPB; Craig Davis, the president of EPB's Florida operations; Mike Knaisch, account group head; Kandi Kirkland, account supervisor; Bruce Ayers, media director; Scott Mackey, associate creative director; Pat Hanlon, creative director; Tom Hall, chairman of EPB; and Jeff Tucker, president of public relations. Each of the presenters were identified by EPB as key personnel to be assigned to the Florida lottery account, except Jeb Brown and Tom Hall.
As part of its oral presentation, EPB utilized a video tape, which presented favorable comments by the head of the Virginia lottery concerning EPB's performance for it. Addition-ally, EPB included in such video a character it utilizes for the Virginia lottery, "Lady Luck," who also said "nice things" about EPB.
Here, Bozell complains that the participation of Jeb Brown and Tom Hall, in the oral presentation, as well as the use of the video which included comments by the head of the Virginia lottery and "Lady Luck," was improper under the provisions of the RFP because they were not members of the account team. Such compliant is, however, unpersuasive.
While section 5.3 of the RFP did require that the oral presentation be made by the account, creative, and media personnel who would work on the account, it did not expressly preclude others from participating, and the RFP placed no restrictions on the information and materials pertinent to the RFP that could be utilized. Accordingly, EPB's oral presentation was not at variance from the RFP and, if it were, it was not shown to be a significant deviation.
As heretofore noted, the evaluation relative to the account team allowed an award of up to 25 points, and required, among other things, a determination of whether the account team participated; the creativity, quality and uniqueness demonstrated by the account team; and whether the account team members prepared the samples that were submitted. The committee members did not, however, make any specific inquiry regarding whether the account team participated or prepared the samples, although the bidders generally made it a practice to introduce the account team members, but assumed such to be the case for purposes of scoring the presentations. Here, Bozell contends that the committee's failure to expressly inform itself as to whether the account team participated and prepared the samples, as opposed to indulging the assumption that they did, constitutes a significant failing in the evaluation process. However, Bozell failed to demonstrate, at hearing, that the committee's assumption was misplaced.
Finally, Bozell offered proof that Dr. Sawyer awarded Bozell 21 points and EPB 22 points for "overall impression," when 20 points were the maximum contemplated by the RFP. Such error was, however, inadvertent, it simply being the intention of Dr. Sawyer to award EPB one more point than Bozell, and was harmless since it did not affect the overall outcome.

Cost proposal evaluation
Section 5.6 of the RFP provided the criteria for evaluation of the cost proposals and provided that:

Finalists' cost proposals will be given points based on an evaluation of the proposed compensation and the experience and qualifications of the proposed staff.

A maximum value of 40 points was established for this part of the evaluation.
The cost proposals, which the committee members were to evaluate, were contained in a "sealed cost proposal envelope" and were, pursuant to subsection 2.4B of the RFP, to contain:

The cost proposal shall include a calculation of the Respondent's proposed compensation for undertaking and completing all phases of the services requested and outlined in this RFP. The cost proposal shall be prepared in the same format as illustrated
on Attachment "E" and shall be completed as follows:
The Respondent shall provide an aggregate gross salary by work category and position classification for all personnel who will work on the Lottery's account. The aggregate gross salary shall include only that portion of each individual staff member's time that will be attributable to the Lottery account. The portion of time proposed in the cost proposal shall match the labor hour percentages proposed for each individual as required in Section 2.3(E)(4).
The Respondent shall also include a proposed multiplier of the type described in paragraph A above. The Respondent shall multiply the aggregate gross salary by the multiplier and the product shall be included in the cost proposal.
The Respondent shall also include, in the sealed cost proposal envelope, resumes for all personnel whose salary, or portion thereof, was included in the calculation of the proposed aggregate gross salary resumes shall be included regardless of whether the resumes have also been included in the technical proposal envelope.
While the RFP contemplated that all three sections of the proposal (technical, oral presentation, and cost) would be evaluated and scored independent of each other, and that the evaluation of the cost proposal would be limited to an evaluation of the information contained in the "sealed cost proposal envelope," not all committee members so limited their evaluation. Rather, some committee members utilized the knowledge they had gleaned from evaluating the technical proposals and oral presentations, as well as the scores they had assigned during the course of those evaluations, to assist them in assessing the qualifications and experience of the proposed personnel and weighing the firms' proposed compensation.
Indeed, it is difficult to imagine how any committee member could ignore the knowledge he had acquired during the course of his evaluations that was reflective of the quality and experience of the proposed staff, any more than he could ignore the expertise he had acquired through his life experiences, in evaluating the cost proposal. Notably, the RFP, as it related to the cost proposals, provided that "the portion of time proposed in the cost proposal shall match the labor hour percentages proposed for each individual as required by section 2.3(E)(4)" of the RFP [the key personnel], and the committee had, as part of their evaluation of the technical proposal, previously evaluated the proposed account team, as well as the relative creativity, approach, quality and thoroughness of their proposals relative to subsections 2.3A-D of the RFP. At the oral presentation, the committee had an opportunity to put faces with names, and broaden their knowledge of the individuals involved. Accordingly, when it came time to evaluate the cost proposals, which involved a consideration of staffing and salary, the members of the committee had certainly formulated opinions regarding the quality of the staff proposed by the respective firms, and balanced that opinion against the proposed compensation to derive the most cost effective proposal.
While it may seem unreasonable to restrict the committee to the bare resumes and costs set forth in the cost proposal, as the basis for their evaluation, the reasonableness of the provisions the Department formulated are not at issue in this proceeding. Accordingly, it is concluded that by going beyond the information contained within the cost proposal, the members of the committee materially deviated from the requirements of the RFP. This conclusion prevails, since those bidders who were favored in the evaluation of the technical proposals or oral presentation were, by the consideration of the opinions derived from such evaluations, accorded an unfair advantage over other bidders.

CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, these proceedings. Sections 120.53(5)(d)2 and 120.57(1), Florida Statutes.

Bozell's protest was timely
Pertinent to this case, Section 24.109(2), Florida Statutes, provides:

The provisions of s. 120.53(5) apply to the department's contracting process, except that:
(a) A formal written protest of any decision, intended decision, or other action subject to protest shall be filed within 72 hours after receipt of notice of the decision, intended decision, or other action.

And, section 1.25 of the RFP provided:

. . . any Respondent who disputes the Lottery's Notice of Selection of Finalists, Notice of Intent to Negotiate, or Notice of Award of Contract, shall file a formal written protest in appropriate form within 72 hours of the notices . . . .
The Department has adopted no rules of its own or otherwise prescribed the manner in which the 72-hour period is to be computed. Therefore, Model Rule 28-5.103, Florida Administrative Code, applies to these proceedings. Section 120.54(10), Florida Statutes, and Rule 28-5.101, Florida Administrative Code. That rule, provides:

Computation of Time. In computing any period of time prescribed or allowed by these rules, by order of a presiding officer, or by any applicable statute, the day of the act from which the designated period of time begins to run shall not be included. The last day of the period shall be included unless it is a Saturday, Sunday or legal holiday in which event the period shall run until the end of the next day which is neither a Saturday, Sunday or legal holiday. When the period of time prescribed or allowed is less than seven
days, intermediate Saturdays, Sundays and legal holidays shall be excluded in the computation. . . .
Since the time period for filing a formal protest under section 24.109 and the RFP is less than seven days, Saturdays and Sundays are not, under rule 28-5.103, included in computing the 72-hour period. Accordingly, Bozell's protest, filed on Monday, May 13, 1991, at 4:29 p.m. was timely.
While Bozell's protest of the "Notice of Intent to Negotiate a Contract" was timely, the Department and EPB have contended in these proceedings that Bozell has waived its right to challenge the responsiveness of EPB's proposal because it failed to file a protest within 72 hours after the "Notice of Selection of Finalists" was posted. Such contention is not, however, persuasive.
While the Department's "Notice of Selection of Finalists" purported to rank the "responsive proposals" in order of preference, the proof demonstrated that no finding of responsiveness had ever been made by the Department. Accordingly, it is concluded that such notice was not intended as a finding of responsiveness but, rather, a ranking of proposals, in accordance with the requirements of subsection 1.9F of the RFP, with an opportunity for protest by the unsuccessful bidders. Here, Bozell was not adversely affected by the notice of selection, since it was also selected as a finalist, and had no basis, in law or in fact, to challenge such decision. See generally: Agrico Chemical Co. v. Department of Environmental Regulation, 406 So.2d 478 (Fla. 2d DCA 1981), and Daniels v. Florida Parole and Probation Commission, 401 So.2d 1351 (Fla. 1st DCA 1981). Accordingly, the responsiveness of EPB's proposal is an appropriate subject for these proceedings.

The Department's evaluation departed from the essential requirements of law
Competitive bidding requirements, such as those imposed upon the Department, have as their purpose and object the following:

[T]o protect the public against collusive contracts; to secure fair competition upon equal terms to all bidders; to remove not only collusion but temptation for collusion and opportunity for gain at public expense; to close all avenues to favoritism and fraud in various forms; to secure the best values for the [public] at the lowest possible expense; and to afford an equal advantage to all desiring to do business with the [government], by affording an opportunity for an exact comparison of bids.

Wester v. Belote, 103 Fla. 976, 138 So. 721, 723-24 (Fla. 1931); Harry Pepper & Associates, Inc. v. City of Cape Coral, 352 So.2d 1190-92 (Fla. 2d DCA 1977).
In soliciting and accepting competitive bids, an agency has wide discretion. See D.O.T. v. Groves-Watkins Constructors, 530 So.2d 912 (Fla. 1988); Liberty County v. Baxter's Asphalt & Concrete, Inc., 421 So.2d 505 (Fla. 1982). Its discretion, while broad, is not, however, unbridled. It must exercise such discretion in a manner that is not illegal, dishonest, fraudulent,
arbitrary, unreasonable, capricious or in any other way that would subvert or undermine the purpose and object of competitive bidding. See D.O.T. v. Groves- Watkins Constructors, 530 So.2d 912 (Fla. 1988); Caber Systems v. Department of General Services, 530 So.2d 325 (Fla. 1st DCA 1988); Couch Construction Company, Inc. v. Department of Transportation, 361 So.2d 172 (Fla. 1st DCA 1978); and Wood-Hopkins Contracting Company v. Roger J. Au & Son, Inc., 354 So.2d 446 (Fla. 1st DCA 1978).
In exercising its discretion, an agency may not accept a bid that is materially at variance with the invitation to bid. "However, although a bid containing a material variance is unacceptable, not every deviation from the invitation to bid is material. It is only material if it gives the bidder a substantial advantage over the other bidders and thereby restricts or stifles competition." Tropabest Foods, Inc. v. Department of General Services, 493 So.2d 50, 52 (Fla. 1st DCA 1986). If it does not provide the bidder with such a palpable competitive advantage, it constitutes a minor irregularity that should be waived by the agency. See Robinson Electrical Co., Inc. v. Dade County, 417 So.2d 1032 (Fla. 3d DCA 1982).
Pertinent to the resolution of whether EPB's failure to submit the vendor information at the time it submitted the proposal, as mandated by the RFP, was a minor irregularity that could be waived by the Department, are the provisions of Subsection 24.111(2), Florida Statutes. Notably, that subsection provides:

The department shall investigate the financial responsibility, security, and integrity of any person who submits a
. . . proposal . . . as part of a major procurement. Any person who submits a
. . . proposal . . . as part of a major procurement must, at the time of submitting such . . . proposal, provide . . . [the required vendor information] . . .
The department shall not contract with any vendor who fails to make the disclosures required by this subsection . . . .
Here, due to the mandatory language of subsection 24.111(2), it could be reasonably concluded, as a matter of law, that EPB's failure to submit the vendor information with its proposal was not a minor irregularity that could be waived by the Department. See, e.g., Humhosco, Inc. v. Department of Health and Rehabilitative Services, 561 So.2d 388 (Fla. 1st DCA 1990). As importantly, EPB's failure to include the vendor information with its proposal could afford it an advantage not enjoyed by other bidders that complied with such requirement. Succinctly, since subsection 24.111(2) precludes the Department from contracting with a vendor who does not supply the required vendor information, EPB could effectively withdraw its proposal after bid opening, contrary to the provision of the RFP, by simply declining to provide the information. Under such circumstances, EPB's failure cannot be considered a minor irregularity and is not subject to waiver. See: Webster v. Belote, 103 Fla. 976, 138 So.721 (Fla. 1931), Harry Pepper & Associates, Inc. v. City of Cape Coral, 352 So.2d 1190 (Fla. 2d DCA 1977), Hotel China & Glassward Co. v. Board of Public Instruction of Alachua County, 130 So.2d 78 (Fla. 1st DCA 1961), and Saxon Business Products, Inc. v. Department of General Services, 4 FALR 1102 A (1982). Nor, can EPB cure such failure after bid opening, since
responsiveness must be determined at the time the proposals are made public. Rule 53ER87-12(19), Florida Administrative Code.
In addition to accepting, as the prevailing bidder, a proposal that was at material variance with the requirements of the RFP, the Department's election to evaluate all proposals, whether responsive or not, was likewise at variance with the express provisions of the RFP (see section 5.1) and resulted in a biased evaluation. In this regard, the proof demonstrated that some, if not all, of the committee members awarded points on a relative basis, comparing one applicant to another. Under such circumstances, the inclusion of non-responsive proposals in such process, particularly that of the prevailing bidder EPB, materially affected the scoring of proposals.
Finally, the Department also departed from the essential requirements of law when one member of its committee failed to evaluate the games and formats of the various proposals; another member failed to award points in the manner mandated by subsections A5-8 of Attachment F; the committee in toto failed to examine the financial stability and capability of the firms to provide the services as required by section A of Attachment F; and, the committtee failed to evaluate the cost proposals based solely on the information contained in such proposal and without reference to the technical proposals or oral presentation.
Central to the integrity of the competitive bidding process is the requirement that an agency prepare clear and precise bidding instructions. Aurora Pump v. Goulds Pump, Inc., 424 So.2d 70 (Fla. 1st DCA 1982), ("public agencies [should be encouraged] to prepare and disseminate clear and precise bidding instructions so the public may be protected against collusive contacts; to secure fair competition upon equal terms to all bidders; and to remove temptation for favoritism and fraud at the public expense.") The corollary of such mandate, and also required by rule 53ER87-13(5)(e), Florida Administrative Code, is that the agency evaluate all proposals based on the requirements set forth in RFP. See: Eccleston Properties, Ltd. v. Department of Health and Rehabilitative Services, 11 FALR 1185 (1989).
Here, the committee's failure to evaluate the proposals, as prescribed by the RFP, renders their scoring and ultimate ranking fatally flawed. First, required criteria were not evaluated, which could reasonably be expected to impact any points awarded. Second, points were not awarded in the manner prescribed by the RFP, which could likewise impact the scoring process.
Finally, by going beyond the information contained in the cost proposals, an advantage was accorded those bidders who were favored in the evaluation of the technical proposals and oral presentations.

The composition of the evaluation committee
As heretofore noted in the findings of fact, the evaluation committee consisted of six members, only two of which were employees of the Department. Such composition, Bozell asserts, is contrary to the provisions of Section 287.057(16), Florida Statutes, which requires that a selection committee be composed of "at least three employees who have experience and knowledge in the program areas and service requirements for which contractual services are sought."
Pertinent to this dispute, Section 24.105(15), Florida Statutes, provides that the Department shall:

Have the authority to perform any of the
functions of the Department of General Services under chapter 255, chapter 273,
chapter 281, chapter 283, or chapter 287, or any rules adopted under any such chapter, and may grant approvals provided for under any such chapter or rules. If the department finds by rule that compliance with any such chapter would impair or impede the effective or efficient operation of the lottery, the department may adopt rules providing alternative procurement procedures. Such alternative procedures shall be designed to allow the department to evaluate competing proposals and select the proposal that provides the greatest long-term benefit to the state with respect to the quality of the products or services, dependability and integrity of the vendor, dependability of the vendor's products or services, security, competence, timeliness, and maximization of gross revenues and net proceeds over the life of the contract.
Pursuant to the express authorization of section 24.105(15), the Department made findings by rule that compliance with Chapter 287 and rules adopted thereunder would impair and impede the effective and efficient operation of the lottery, and adopted its own rules governing the procurement of commodities and services. Rule 53ER87-11, Florida Administrative Code. Among the provisions of Rule 53ER87-13, "Procurement of Commodities and Services," is the following provision:

(5) Source Selection and Contract Formations.
* * *
(i) When it is considered in the best interest of the State, the Department can acquire goods and services, including major procurements through a competitive negotiation process.
* * *
2. A selection committee appointed by the Secretary . . . will review all of the proposals and shall select no less than three proposals as finalists deemed to be the most highly qualified to perform the required services.
The Department's rules do not define the term "committee," or otherwise address the manner in which the committee should be composed; however, at hearing, the Department offered proof that it interprets the foregoing rule as reposing discretion in the Secretary to determine the composition of the committee, presumably "designed to allow the Department to evaluate competing proposals and select the proposal that provides the greatest long-term benefit to the state with respect to the quality of the . . . services" as envisioned by section 24.105(15), Florida Statutes, and, that such rule does not require that any such committee include any particular number of employees of the Department.
Generally, an administrative construction of a statute by an agency responsible for its administration is entitled to great deference and should not be overturned unless clearly erroneous. Department of Environmental Regulation
v. Goldring, 477 So.2d 532 (Fla. 1985), All Seasons Resorts, Inc. v. Division of Land Sales, Condominiums, and Mobile Homes, 455 So.2d 544 (Fla. 1st DCA 1984), and Sans Souci v. Division of Land Sales and Condominiums, 421 So.2d 623 (Fla. 1st DCA 1982). The same deference has been accorded to rules which have been in effect over an extended period and to the meaning assigned to them by officials charged with their administration. Pan American World Airways, Inc. v. Florida Public Service Commission, 427 So.2d 716 (Fla. 1983), and State Department of Commerce, Division of Labor v. Matthews Corp., 358 So.2d 256 (Fla. 1st DCA 1978). 6/ Moreover, the agency's interpretation of a critical term, here "committee," does not have to be the only one or the most desirable one; it is enough if it is permissible. Pan American World Airways, Inc. v. Florida Public Service Commission, supra, and Florida Power Corp. v. Department of Environmental Regulation, 431 So.2d 684 (Fla. 1st DCA 1983). Such being the standard, it is concluded that the Department's interpretation of its rule is a permissible interpretation, and not clearly erroneous. Accordingly, the composition of the evaluation committee selected by the Secretary was appropriate.

The standing of BBDO
The Department and EPB have contested the standing of BBDO to intervene in these proceedings. Considering the nature of the bidding process employed in the instant case, that is the ranking of bidders in order of preference for negotiation, and the possibility that BBDO, as the fourth ranked bidder, is in the line of succession to negotiate with the Department, it is concluded that BBDO has standing to intervene to protect its position, as well as to examine, to the extent raised by Bozell, the propriety of the evaluation process. See: Argico Chemical Co. v. Department of Environmental Regulation, supra.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered which rejects all bids, and that

a new invitation to bid be extended.

DONE AND ENTERED in Tallahassee, Leon County, Florida, this 25th day of July 1991.

WILLIAM J. KENDRICK

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 25th day of July 1991.

ENDNOTES

1/ Department exhibit 16 was a late filed exhibit, consisting of six volumes, which was received into evidence without objection.

2/ BBDO and Oglivy & Mather may have also failed to submit all of the vendor information required by the RFP and section 24.111(2); however, the responsiveness of their proposals was not at issue in these proceedings and, therefore, a record was not developed that would, appropriately, permit a conclusion to be drawn regarding the responsiveness of their proposals.

3/ While the proof supports the conclusion that the criteria established by the RFP were followed, there was also proof offered that the Department felt it appropriate for the members of the committee to deviate from the criteria if they so desired. In their regard, Robert Fierro, Director of Administrative Services, speaking on behalf of the Department, testified that a committee member could use any, all, or reject all the criteria and apply factors that were not even listed to evaluate proposals. And, Mr. McKnight was of the opinion that the criteria set forth in the RFP were the minimum criteria and each member could use additional criteria if he felt it appropriate, although they were not encouraged to do so. While such views are troubling, they were not shared by the committee, and even Mr. McKnight did not go beyond the criteria in evaluating proposals.

4/ While some of the committee members testified at hearing that they evaluated each proposal independent of the other it is more likely than not that their prior review of all proposals influenced the manner in which they scored any particular proposal, since it provided them with a point of reference by which to gauge the merit of any single proposal.

5/ The committee did not review the financials, but deferred to staff for such analysis. Staff's analysis was limited to assuring that the required financial statements were in proper form, and made no analysis of financial stability or capability.

6/ In the Pan American World Airways case, opinion rendered February 17, 1983, the rule of the Public Services Commission for which interpretation was accorded deference had been in effect since June 1980; a period of about two and half years. Here, the Department's rule has been in effect since June 26, 1987; a period of over four years.

APPENDIX TO RECOMMENDED ORDER

Bozell's proposed findings of fact are addressed as follows:

1 & 3. To the extent pertinent, addressed in paragraph 1.

2. Addressed in paragraph 5 and paragraph 14 of the Conclusions of Law.

4 & 5. Addressed in paragraphs 24-31. 6-8. Addressed in paragraphs 2-4.

Addressed in paragraph 5.
Addressed in paragraph 6.
Addressed in paragraphs 36-39. 12-14. Addressed in paragraph 7.

15-26 & 29-40. To the extent pertinent, addressed in paragraphs 8-23.

27 & 28. Addressed in paragraph 45.

29-42, 44-50 and 53-56. Addressed in paragraphs 36-46 to the extent relevant or supported by persuasive proof.

43. Not relevant.

51-52. Addressed in paragraphs 32-35.

57-59. To the extent pertinent, addressed in paragraphs 47-54. With regard to the last sentence of proposed paragraph 59, the weight to be given the criteria and the ultimate balancing was within Mr. McKnight's discretion.

60 & 61. Addressed in paragraphs 55-59.

To the extent pertinent, addressed in paragraphs 24-31, and footnote 3.
Not relevant or not supported by the proof.
Addressed in paragraph 54.

The Department's and EPB's proposed findings of fact are addressed as follows:

1-7. To the extent pertinent, addressed in paragraphs 1-4, and 24-31.
1. & 9. Addressed in paragraphs 5, 38, 39, 48, and 55. 10-19. Addressed in paragraphs 24-31.
  20-24. Addressed in paragraphs 32-35.
  25-27, 31-34, and 54-99. Addressed in paragraphs 8-23, and 46. Otherwise rejected as argument or unnecessary. In this regard, proposed paragraphs 35-53 are argumentative, and paragraphs 61-65, while supported by the proof, are not relevant.
  100-105. Supported by competent proof, but unnecessary to the result reached or not relevant.
  106-116. Addressed in paragraphs 47-54.
  BBDO's proposed findings of fact are addressed as follows: 1-6. Addressed in paragraphs 1-4, and 24-31.
  7, 8, and 11-34: To the extent pertinent, addressed in paragraphs 5, 8-23, and 36-46. Proposed paragraph 31 is rejected as not supported by the proof, and paragraph 32 as an unwarranted characterization of the testimony.
2. & 10. To the extent pertinent, addressed in paragraph 23. 35-43. Addressed in paragraphs 47-54, and footnote 3.
44-58. Addressed in paragraphs 55-59.
59-64. Addressed in paragraphs 32-35.
Rejected as not relevant, and not a fair characterization of the testimony.

COPIES FURNISHED:

Paul R. Ezatoff, Esquire Marguerite H. Davis

Katz, Kutter, Haigler, Alderman, Davis, Marks & Rutledge, P.A.

Post Office Box 1877 Tallahassee, Florida 32302-1877

Ronald R. Richmond, Esquire Richmond Law Firm

102 South Monroe Street Tallahassee, Florida 32301

Paul J. Martin, Esquire Harry F. Chiles, Esquire Assistant Attorneys General

Department of Legal Affairs The Capitol - Suite 1501

Tallahassee, Florida 32399-1050

Michael J. Glazer, Esquire DuBose Ausley, Esquire AUSLEY, McMULLEN, McGEHEE,

CAROTHERS & PROCTOR

227 South Calhoun Street Post Office Box 391 Tallahassee, Florida 32302

R. David Prescott, Esquire Mang, Rett & Collette, P.A. 660 East Jefferson Street Post Office Box 11127

Tallahassee, Florida 32302-3127

Dr. Marcia Mann, Secretary Department of Lottery

250 Marriot Drive Tallahassee, Florida 32301

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the final order in this case concerning agency rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.

Docket for Case No: 91-003165BID

Issue Date	Proceedings
Apr. 16, 1992	Memorandum From Kent Hart General Counsel Lottery to Harry F Chiles &copy to S. Smith & W.J. Kendrick( RE;Notice of Voluntary Dismissal signed by attorneys for plaintiffs) filed.
Aug. 21, 1991	Final Order filed.
Jul. 25, 1991	Recommended Order sent out. CASE CLOSED. Hearing held 6/5-7/91.
Jul. 16, 1991	Defendant Florida Department of Lottery`s Motion and incorporated memorandum to dismiss or, alternatively, for summary judgment filed.
Jul. 05, 1991	Joint Proposed Findings of Fact and Conclusions of Law of Department of the Lottery and Earle Palmer Brown filed. (from Paul J. Martin & DuBose Ausley)
Jul. 05, 1991	Petitioner`s Proposed Recommended Order filed. (From Paul R. Ezatoff)
Jul. 03, 1991	BBDO South`s Proposed Recommended Order filed.
Jun. 24, 1991	Transcript (6 Volumes) filed.
Jun. 19, 1991	Letter to WJK from R. David Prescott (re: Bozell, Inc. Exhibit) filed.
Jun. 19, 1991	Letter to WJK from Harry F. Chiles (re: composite exhibit submitted by Mr. Ezatoff) filed.
Jun. 17, 1991	Letter to WJK from Michael J. Glazer (re: Exhibit Mr. Ezatoff Submitted w/ltr dated June 14, 1991) filed.
Jun. 14, 1991	Exhibit 16 (6 Book Binders) w/cover ltr filed. (From Paul R. Ezatoff)
Jun. 07, 1991	Notice of Service of Petitioner`s First Set of Interrogatories, Request to Produce and Request for Admissions to Respondent filed. (From Laura P. Gaffney)
Jun. 05, 1991	Final Hearing Held 6/5-7/91; for applicable time frames, refer to CASE STATUS form stapled on right side of Clerk's Office case file.
Jun. 05, 1991	Bozell's Second Motion to Amend Formal Written Protest and Petition For Formal Administrative Hearing; Certificate of Service of Bozell's Answers to Earle Palmer Brown's Interrogatory No. 1; Bozell's Answer toEarle Palmer Brown's Interrogatories No. 1; S
Jun. 04, 1991	Order sent out. (BBDO`s Petition is granted subject to proof of standing at hearing)
Jun. 04, 1991	(Circuit Court) Notice of Emergency Hearing filed.
Jun. 04, 1991	Order sent out. (Petitioner`s Motion for continuance DENIED)
Jun. 04, 1991	Notice of Emergency Hearing filed. (from Paul R. Ezatoff)
Jun. 04, 1991	Earle Palmer Brown`s Motion to Strike w/exhibit-A filed. (from Michael Glazer)
Jun. 04, 1991	Earle Palmer Brown`s Motion to Strike w/exhibit-A; Earle Palmer Brown`s Objections to Petitioner`s Exhibits filed. (from DuBose Ausley)
Jun. 04, 1991	Bozell`s Response to First Request for Production of Documents filed.(From Paul R. Ezatoff)
Jun. 04, 1991	Amended Notice of Taking Deposition Duces Tecum filed. (From Paul Ezatoff)
Jun. 04, 1991	Deposition of Louisa Warren filed.
Jun. 04, 1991	Complaint for Declaratory and Injunctive Relief; Motion for Temporary Injunction; Memorandum in Support of Motion for Temporary Injunction& cover ltr filed. (From Paul R. Ezatoff)
Jun. 04, 1991	Joint Prehearing Stipulation & Attachments filed. (From P. R. Ezatoff)
Jun. 04, 1991	Petitioners Motion for Continuance (Exhibit A-C) filed.
Jun. 04, 1991	(Petitioner) Notice of Hearing (June 4, 1991: 1:00 pm) filed.
Jun. 03, 1991	Order sent out. (Re: Respondent`s Motion for Sanctions is denied).
Jun. 03, 1991	Memorandum in Opposition to Earle Palmer Brown`s Motion to Dismiss Petition to Intervene filed. (From R. David Prescott)
Jun. 03, 1991	Notice of Taking Telephonic Deposition filed. (From D. Ausley)
May 31, 1991	Notice of Taking Telephonic Deposition filed. (From DuBose Ausley)
May 31, 1991	Order sent out. (Motion to Compel granted)
May 31, 1991	(Intervenor) Motion to Dismiss Petition to Intervene (Exhibit A) filed.
May 30, 1991	Earle Palmer Browns Response to First Request for Production of Documents (Preliminary Exhibit List for Earle Palmer Brown Att.) filed.
May 30, 1991	(Intervenor) Petition to Intervene filed.
May 30, 1991	Certificate of Service of Bozell`s Answers to Respondents Interrogatories filed.
May 29, 1991	(Intervenor) Notice of Taking Deposition; Notice of Service of Interrogatory Answers filed.
May 28, 1991	Order sent out. (Petitioner`s Motion to amend formal written protest granted)
May 28, 1991	Earle Palmer Browns Notice of Service of First Interrogatories to Plaintiff, Bozell, Inc. filed. (from DuBose Ausley and Michael J. Glazer); Earle Palmer Browns First Request for Production
May 28, 1991	Response to Motion to Amend Formal Written Protest and Petition for Formal Administrative Hearing filed. (From D. Ausley)
May 28, 1991	Notice of Taking Deposition Duces Tecum (4); Certificate of Service of Bozell`s First Interrogatories to Respondent; Certificate of Service of Bozell`s First Interrogatories to Intervenor filed. (From P. R. Ezatoff)
May 24, 1991	Bozell`s Motion to Amend Formal Written Protest and Petition for Formal Administrative Hearing; Amended Formal Written Protest and Petition for Formal Administrative Hearing filed.(from P. R. Ezatoff)
May 24, 1991	Respondent`s First Request for Production of Documents to Petitioner;Interrogatories to Bozell, Inc. filed.
May 24, 1991	Bozell`s First Request for Production of Documents to Intervenor filed.
May 24, 1991	Order sent out. (Re: Rulings on Motions).
May 24, 1991	(Respondent) Motion for Protective Order filed. (from P. Ezatoff)
May 23, 1991	Notice of Taking Deposition; Bozell`s First Request for Production of Documents; Bozell`s Motion to Expedite Discovery filed. (from Paul R. Ezatoff)
May 23, 1991	Petition to Intervene filed. (From DuBose Ausley)
May 23, 1991	(Respondent) Motion to Dismiss filed. (from P. Martin)
May 22, 1991	Notice of Hearing sent out. (hearing set for June 5-7, 1991; 9:00am;Tallahassee).
May 21, 1991	Agency referral letter; Formal Written Protest and Petition for Formal Administrative Hearing filed.

Orders for Case No: 91-003165BID

Issue Date	Document	Summary
Aug. 21, 1991	Agency Final Order
Jul. 25, 1991	Recommended Order	Bidding agency couldn't waive statutorily required provisions of Request For Proposal (RFP) as minor irregularity. Agency further failed to follow criteria of RFP evaluation.

Source: Florida - Division of Administrative Hearings

BOZELL INC. vs DEPARTMENT OF LOTTERY, 91-003165BID (1991)

Docket for Case No: 91-003165BID

Orders for Case No: 91-003165BID

Jeff Goodman

Ronald Ray Richmond

Harry Frazier Chiles

Charles DuBose Ausley

R David Prescott

Marguerite Herr Davis

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BOZELL INC. vs DEPARTMENT OF LOTTERY, 91-003165BID (1991)

Docket for Case No: 91-003165BID

Orders for Case No: 91-003165BID

Lawyers who claimed

Jeff Goodman

Ronald Ray Richmond

Harry Frazier Chiles

Charles DuBose Ausley

R David Prescott

Marguerite Herr Davis

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