STATE OF FLORIDA DIVISION OF ADMINISTRATIVE HEARINGS

DADE COUNTY INVESTMENTS )

COMPANY AND LOUIS CRUZ, )

)

Petitioners, )

)

vs. ) CASE NO. 91-4471RU

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent. )

)

FINAL ORDER

Pursuant to notice, a formal hearing was held in this case on August 26, 1991, in Tallahassee, Florida, before Stuart M. Lerner, a duly designated Hearing Officer of the Division of Administrative Hearings.

APPEARANCES

For Petitioners: Jose Villalobos, Esquire

Brickel Bay Office Tower 1001 South Bayshore Drive Suite 2704

Miami, Florida 33131

For Respondent: Morton Laitner, Esquire

Department of Health and Rehabilitative Services

401 N.W. 2nd Avenue, S-424 Miami, Florida 33128

STATEMENT OF THE ISSUES

Whether that portion of Respondent's leasing manual, HRSM 70-1, which defines the term "dry and measurable" should be declared an invalid exercise of legislatively delegated authority?

PRELIMINARY STATEMENT

On July 8, 1991, Petitioners filed a petition with the Division of Administrative Hearings pursuant to Section 120.56, Florida Statutes, challenging, on the grounds that it constitutes an invalid exercise of legislatively delegated authority, that portion of Respondent's leasing manual, HRSM 70-1, which defines the term "dry and measurable." The final hearing on the matter was originally scheduled for August 19, 1991, but was rescheduled for August 26, 1991, at Petitioners' request and without any objection by Respondent.

Four witnesses testified at hearing: 1/ Louis Russo, the General Services Manager for Respondent's District 11; Alvaro Lopez, an architect whose services were retained by Petitioners; Javier Arrizabalaga, the Vice-President of Petitioner Dade County Investments Company; and Steven Gertel, Respondent's Assistant Staff Director for Facilities. In addition to the testimony of these two witnesses, a total of 18 exhibits were offered and received into evidence.

At the close of the evidentiary portion of the hearing on August 26, 1991, the Hearing Officer announced on the record that post-hearing submittals had to be filed no later than 14 days following his receipt of the transcript of the hearing. The hearing transcript was filed on September 6, 1991. Petitioners and Respondent filed their proposed final orders on September 20, 1991, and September 18, 1991, respectively. The proposed findings of fact set forth in these proposed final orders have been carefully considered and are specifically addressed in the Appendix to this Recommended Order.

FINDINGS OF FACT

Based on the record evidence, the following Findings of Fact are made:

1. Earlier this year, Respondent issued an Invitation to Bid for Lease No. 590: 2286 (hereinafter referred to as the "ITB").

   
   

2. The first page of the ITB contained the Bid Advertisement, which read as follows:

   
   

   The State of Florida, Department of Health and Rehabilitative Services is seeking an existing facility in Dade County to lease for use as office space containing approximately 30,086 net rentable square feet. The space proposed must be an office environment.

   Converted factories/warehouses in industrial areas are not acceptable. The facility shall be located within the following boundaries: North By S.W. 8th Street, South By S.W. 88th Street, East By S.W. 37th Avenue, Southeast By South Dixie Highway, and West By S.W. 87th Avenue. Any facility located on a parcel of land which abuts any of the street boundaries is consider[ed] within the boundaries.

   Occupancy date of 8/01/91. Desire a Ten (10) year lease with three (3)- two (2) year renewal options. Information and specifications may be obtained from Mr. Philip

   1. Davis, Facilities Services Manager, 401

      N.W. 2nd Avenue, Suite S721, Miami, Florida 3312, (305) 377-5710. Please reference lease number 590: 2286. Program requirements will be discussed at a pre-proposal conference to be held at 10:00 a.m. on 4/22/91 at 401 N.W. 2nd Avenue, Suite S721 Miami, Florida 33128. Bid opening date will be on 5/30/91 at 10:00

      a.m. at the above mentioned address. Minority business enterprises are encouraged to attend the pre-proposal conference and participate

      in the bid process.The Florida Department of

      Health and Rehabilitative Services reserves the right to reject any and allbids and award to the bid judged to be in the best interest of the state.

      
      

3. The ITB contained the definitions of various terms used therein. Among the terms defined were "dry and measurable" and "existing building."

   
   

4. "Dry and measurable" was defined as follows:

   
   

   These are essential characteristics to describe "existing" proposed space. To be considered as "dry and measurable" the proposed space must be enclosed with finished roof and exterior walls in place. Interior floors need not be completed. Exterior windows and doors need not be installed. The proposed area is not required to be completed. These characteristics conform to standard lessor construction practices.

   
   

   This definition is identical to the definition of this term found on page 1-5 of Respondent's leasing manual, HRSM 70-1. 2/

   
   

5. "Existing building" was defined as follows:

   
   

   To be considered as existing the entire space being bid must be dry and capable of being physically measured to determine net rentable square footage. at the time of bid submittal.

   
   

6. Attached to the ITB and incorporated therein was a document entitled "Standard Method of Space Measurement." It read as follows:

   
   

   The purpose of this standard is to permit communication and computation on a clear and understandable basis. Another important purpose is to allow comparison of values on the basis of a generally agreed upon unit of measurement (net square footage).

   It should also be noted that this standard can and should be used in measuring office space in old as well as new buildings, leased office space as well as State-owned office space. It is applicable to any architectural design or type of construction because it is based on the premise that the area being measured is that which the agency may occupy and use for its furnishings and its people.

   This standard method of measuring office space measures only occupiable space, undistorted

   by variances in design from one building to another. It measures the area of office building that actually has usable (rental) value and, therefore, as a standard can be used by all parties with confidence and a clear understanding of what is being measured.

   Area Measurement in office buildings is based in all cases upon the typical floor plans, and barring structural changes which affect materially the typical floor, such measurements stand for the life of the building, regardless of readjustments incident to agency layouts.

   All usable (rentable) office space, private sector leased, State-owned, or other publicly owned shall be computed by:

   Measuring to the inside finish of permanent outer building walls to the office side of corridors and/or other permanent partitions, and to the center of partitions that separate the premises from adjoining usable areas.

   This usable (rentable) area shall EXCLUDE:

   bathrooms, public corridors, stairs, elevator shafts, flues, pipe shafts, vertical ducts, air-conditioning rooms, fan rooms, janitor closets, electrical closets, telephone equipment rooms, - - and such other rooms not actually available to the tenant for his furnishings and personnel - - and their enclosing walls.

   No deductions shall be made for columns and projections structurally necessary to the building.

   The attached typical floor plan illustrates the application of this standard. 3/

   
   

7. Petitioners submitted a bid in response to the ITB. 4/ In their bid they proposed to lease to Respondent space on the first and second floors of a building located at 8500 S.W. 8th Street in Miami, Florida. The space offered by Petitioners is currently occupied.

   
   

8. At the time of bid submittal, all of the proposed space on the second floor was "dry and measurable," as that term is defined in the ITB. It encompassed a total of 26,540 square feet.

   
   

9. At the time of bid submittal, only a portion of the proposed space on the first floor, amounting to 4,400 square feet, was "dry and measurable," as that term is defined in the ITB, inasmuch as the proposed space on this floor included a breezeway area that did not have either a front or back exterior wall in place. 5/ Subsequent to the submission and opening of bids, Petitioners enclosed this breezeway area by erecting exterior walls.

   
   

10. Accordingly, the entire space offered by Petitioners was not "dry and measurable" at the time of bid submittal as required by the ITB.

    
    

11. Bids were opened by Respondent on May 30, 1991.

    
    

12. By letter dated June 18, 1991, Respondent notified Petitioners that their bid had been deemed non-responsive. The letter read as follows:

    
    

    The bid you submitted for lease No. 590: 2286 has been determined to be non-responsive because the proposed space is not dry and measurable. The breezeway area proposed on

    the ground level of your premises at 8500 S.W.

    8 Street, Miami, does not have exterior walls in place.

    The invitation to bid on lease No. 590: 2286 provides on page 2:

    "Dry and Measurable- These are essential characteristics to describe "existing" proposed space. To be considered as "dry and measurable," the proposed space must be enclosed with finished roof and exterior walls in place.

    You have the right to file a protest. The protest must be filed in accordance with S.120.53(5), Florida Statutes and Chapter

    10-13.11 Florida Administrative Code. Failure to file a protest within the time prescribed in S.120.53(5), Florida Statutes, shall constitute a waiver of proceedings under chapter 120, Florida Statutes.

    To comply with the referenced statute, a written notice of intent to protest must be filed with the contact person listed on the Invitation to Bid for lease No. 590: 2286 within 72 hours after receipt of this notice. Within ten calendar days after the notice of protest is filed, a formal written protest and protest bond must be filed with the contact person. The bond must be payable to the department in an amount equal to one percent of the total lease payments over the term of the lease or $5,000, whichever is less.

    
    

13. This determination was the product of, not any unlawful bias or prejudice against Petitioners, but rather the honest exercise of the agency's discretion.

    
    

14. Petitioners subsequently filed a protest of this preliminary determination to find their bid non-responsive.

    
    

15. They also filed a rule challenge petition alleging that Respondent's leasing manual, HRSM 70-1, to the extent that it purports to define the term "dry and measurable, represents an invalid exercise of legislatively delegated authority. It is this petition that is the subject of the instant proceeding.

    
    

    CONCLUSIONS OF LAW

    
    

16. This is not the first time that the Division of Administrative Hearings has been presented with a rule challenge petition filed pursuant to Section 120.56, Florida Statutes, contesting the provisions of Respondent's leasing manual, HRSM 70-1.

    
    

17. Such a challenge was made in the case of Infantino v. Department of Health and Rehabilitative Services, 12 FALR 4332 (DOAH 1990). The challenge was successful. The Hearing Officer declared in his Final Order that the manual was "invalid as a rule for failure to promulgate pursuant to Section 120.54, Florida Statutes." 6/ No appeal of the Hearing Officer's Final Order was taken.

    Accordingly, by operation of Section 120.56, Florida Statutes, 7/ the manual must be deemed "void" and without any force and effect as a rule. 8/

    
    

18. Because the manual has already been declared invalid by a Division of Administrative Hearings Hearing Officer, the relief sought by Petitioners is unnecessary. Their petition therefore should be dismissed. Cf. Town of Palm Beach v. Palm Beach Local 1866, International Association of Fire Fighters, 275 So.2d 247 (Fla. 1973)(repeal of law being challenged on appeal renders appeal moot and subject to dismissal).

Based upon the foregoing Findings of Fact and Conclusions of Law, it is ORDERED that Petitioners' challenge to that portion of Department of Health

and Rehabilitative Services' leasing manual, HRSM 70-1, that defines the term

"dry and measurable" is hereby DISMISSED on the ground that the manual has already been declared invalid by a Division of Administrative Hearings Hearing Officer pursuant to Section 120.56, Florida Statutes, and therefore is "void" as a rule without the need of any further formal pronouncement by the Division of Administrative Hearings.

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

STUART M. LERNER

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 September, 1991.

ENDNOTES

1/ With the agreement of the parties, the instant case was consolidated for purposes of hearing only with DOAH Case No. 91-4470BID, a bid protest case in which Petitioners have contested Respondent's initial decision to deem their bid not responsive to Respondent's Invitation to Bid for Lease No. 590: 2286 because the space proposed in their bid did not meet the "dry and measurable" requirement specified in the Invitation to Bid.

2/ As Respondent concedes in its proposed final order, this definition has not been adopted by Respondent as a rule pursuant to the procedures prescribed in Section 120.54, Florida Statutes.

3/ The foregoing is essentially a restatement of the Department of General Services' Standard Method of Space Measurement found in Florida Administrative Code Rule 13M-2.003.

4/ The bid opening officer initially determined Petitioners' bid to be untimely, but subsequently reconsidered his determination.

5/ The opening in the front was approximately 30 feet across. The opening in the rear was approximately 16 feet across.

6/ In his Final Order in Infantino, the Hearing Officer made the following observation regarding the significance of his declaring the manual invalid as a rule:

The Department's admitted failure to promulgate this policy [set forth in the manual] as a rule is not fatal to its application of that policy on a case-by-case basis. Agencies are given the choice of properly promulgating policies as rules and applying them with the force and effect of law, or of fully explicating those policies and exposing them

to challenge every time they are applied in an adjudicatory procedure. McDonald v.

Department of Banking and Finance, 346 So.2d

569 (1 DCA Fla. 1977); Gulf Coast Health Service of Florida, Inc. v. Department of Health and Rehabilitative Services, 513 So.2d 704 (1 DCA Fla. 1987). The opportunity for exposure and challenge to the policy is available in a Section 120.57(1), Florida Statutes, proceeding, in lieu of the Section 120.54, Florida Statutes, rule making-process.

Id. at 4335, 4336.

7/ Section 120.56, Florida Statutes, provides, in pertinent part, that a "rule or part thereof declared invalid [by a Division of Administrative Hearings Hearing Officer] shall become void when the time for filing an appeal expires or at a later date specified in the decision."

8/ Although the manual is "void and without any force and effect as a rule, that is not to say, as the Hearing Officer in Infantino suggested, that as a consequence Respondent is foreclosed from using the definition of "dry and measurable" contained in the manual in an invitation to bid and thereafter successfully defending against a challenge to its use of this definition in a bid protest proceeding initiated pursuant to Section 120.53(5), Florida Statutes.

9/ Petitioners' Exhibit 2, not 1, contains the Bid Advertisement which is described in this proposed finding.

10/ That the bid opening officer accepted another bidder's bid, notwithstanding that it may have been submitted after the 10:00 a.m. submittal deadline set forth in the ITB, does not demonstrate that Respondent acted fraudulently, arbitrarily, illegally or dishonestly in preliminarily deciding to reject Petitioners' bid because it did not meet the "dry and measurable" requirement specified in the ITB.

11/ There was no need to take precise measurements of the space offered by Petitioners because it was obvious from a mere visual inspection that it did not constitute an "existing building," as that term is defined in the ITB, in that it was not "dry and measurable" in its entirety.

12/ The greater weight of the evidence establishes that there were 30,940 square feet of "dry and measurable" space offered by Petitioners.

13/ Bid opening was on May 30, 1991, not April 22, 1991. April 22, 1991, was the date of the pre-bid conference.

APPENDIX TO FINAL ORDER

The following are the Hearing Officer's specific rulings on the findings of fact proposed by the parties in the instant case:

Petitioners' Proposed Findings of Fact

1. To the extent that this proposed finding states that Petitioners' Exhibit 1 was "received into evidence," it has been rejected because it is more in the nature of a statement of the case than a finding of fact. To the extent that it asserts that this exhibit "defines the scope of this hearing," it has been rejected because it constitutes argument inappropriate for inclusion in the Hearing Officer's Findings of Fact. Furthermore, the description given in this proposed finding of the contents of Petitioners' Exhibit 1 is inaccurate. 9/

   
   

2. To the extent that it states that the ITB indicated that Respondent was seeking to lease "approximately 30,086 net rentable square feet" of office space, this proposed finding has been accepted and incorporated in substance in this Recommended Order. To the extent that it suggests that the ITB specified that "approximately" meant "more or less 3%," this proposed finding has been rejected because it is not supported by persuasive competent substantial evidence.

3-6. Accepted and incorporated in substance.

1. Rejected because it would add only unnecessary detail to the factual findings made by the Hearing Officer. 10/

   
   

2. Rejected as a finding of fact because it is more in the nature of a statement of the case.

   
   

3. Rejected because it is more in the nature of a summary of testimony than a finding of fact based upon such testimony.

   
   

4. To the extent that this proposed finding states that the space offered by Petitioners is presently occupied, it has been accepted and incorporated in substance. To the extent that it asserts that the space is "licensed to do rental business in Dade County, Florida," it has been rejected because it is not supported by persuasive competent substantial evidence.

11-12. Rejected because they would add only unnecessary detail to the factual findings made by the Hearing Officer.

13-14. Rejected because they are unclear.

15. Rejected because it would add only unnecessary detail to the factual findings made by the Hearing Officer.

16-18. Accepted and incorporated in substance.

19. First sentence: Rejected because it would add only unnecessary detail to the factual findings made by the Hearing Officer; Second sentence: Accepted and incorporated in substance.

20-22. Rejected because they would add only unnecessary detail to the factual findings made by the Hearing Officer.

23. Accepted and incorporated in substance.

24-27. Rejected because they would add only unnecessary detail to the factual findings made by the Hearing Officer. 11/

28. Rejected because it is more in the nature of a summary of testimony than a finding of fact based upon such testimony.

29-31. Rejected because they would add only unnecessary detail to the factual findings made by the Hearing Officer.

1. Accepted and incorporated in substance.

   
   

2. Rejected because it is more in the nature of a summary of testimony than a finding of fact based upon such testimony.

34-36. Rejected because they would add only unnecessary detail to the factual findings made by the Hearing Officer.

1. Accepted and incorporated in substance.

   
   

2. First and second sentences: Rejected because they would add only unnecessary detail to the factual findings made by the Hearing Officer; Third sentence: To the extent that it states that the ITB indicated that Respondent was seeking to lease "approximately 30,086 net rentable square feet" of office space, this proposed finding has been accepted and incorporated in substance.

   To the extent that it suggests that the ITB specified that "approximately" meant "more or less 3%," this proposed finding has been rejected because it is not supported by persuasive competent substantial evidence.

   
   

3. Rejected because it is not supported by the greater weight of the evidence. 12/

   
   

4. Rejected as a finding of fact because it is more in the nature of a statement of the case.

41-42. Rejected because they would add only unnecessary detail to the factual findings made by the Hearing Officer.

43. Rejected because it is more in the nature of a summary of testimony than a finding of fact based upon such testimony.

44-46. Rejected because they would add only unnecessary detail to the factual findings made by the Hearing Officer.

1. Rejected because it is more in the nature of a summary of testimony than a finding of fact based upon such testimony.

   
   

2. Rejected because it would add only unnecessary detail to the factual findings made by the Hearing Officer.

Respondent's Proposed Findings of Fact

1. First and second sentences: Accepted and incorporated in substance; Third sentence: Rejected because it is not supported by persuasive competent substantial evidence. 13/

2-5. Accepted and incorporated in substance.

1. Rejected because it is more in the nature of a description of photographs that were received into evidence than a finding of fact based upon this exhibit.

   
   

2. To the extent that it states what the plans submitted by Petitioners "show," this proposed finding has been rejected because it would add only unnecessary detail to the factual findings made by the Hearing Officer. To the extent that it asserts that "at the time of bid opening no walls existed in said openings," this proposed finding has been accepted and incorporated in substance.

8-10. Accepted and incorporated in substance.

11-12. Rejected because they constitute argument inappropriate for inclusion in the Hearing Officer's Findings of Fact.

13-15. Accepted and incorporated in substance.

16. Rejected because it is not supported by persuasive competent substantial evidence.

17-18. Rejected because they constitute argument inappropriate for inclusion in the Hearing Officer's Findings of Fact.

COPIES FURNISHED:

Jose A. Villalobos, Esquire Brickel Bay Office Tower 1001 South Bayshore Drive Suite 2704

Miami, Florida 33131

Morton Laitner, Esquire Department of Health and

Rehabilitative Services

401 N.W. 2nd Avenue, S-424 Miami, Florida 33128

Harleston R. Wood, Esquire 1000 Brickell Avenue, 3rd Floor Miami, Florida 33131

R.S. Power, Agency Clerk Department of Health and Rehabilitative Services

1323 Winewood Boulevard Building One, Suite 407 Tallahassee, Florida 32399-0700

John Slye, Esquire General Counsel Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32399-0500

Carroll Webb, Executive Director Administrative Procedures Committee Holland Building, Room 120 Tallahassee, Florida 32399-1300

NOTICE OF RIGHT TO JUDICIAL REVIEW

A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL REVIEW PURSUANT TO SECTION 120.68, FLORIDA STATUTES. REVIEW PROCEEDINGS ARE GOVERNED BY THE FLORIDA RULES OF APPELLATE PROCEDURE. SUCH PROCEEDINGS ARE COMMENCED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF THE DIVISION OF ADMINISTRATIVE HEARINGS AND A SECOND COPY, ACCOMPANIED BY FILING FEES PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL, FIRST DISTRICT, OR WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE PARTY RESIDES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED.

Docket for Case No: 91-004471RU

Orders for Case No: 91-004471RU