STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

THE AD TEAM OF FLORIDA, INC., ) BEBER SILVERSTEIN & PARTNERS ) ADVERTISING, INC., BENITO ) ADVERTISING, INC., d/b/a FAHLGREN )

MARTIN BENITO, on behalf of ) LINTAS: WORLDWIDE, and OGILVY ) GROUP, INC., d/b/a OGILVY & ) MATHER ADVERTISING, )

)

Petitioners, )

)

vs. ) CASE NOs. 91-7235BID

) 91-7236BID

) 91-7237BID and

DEPARTMENT OF LOTTERY, ) 91-7238BID

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was conducted in these consolidated cases at Tallahassee, Florida, on November 21 and 22, 1991, before Michael M. Parrish, a duly designated Hearing Officer of the Division of Administrative Hearings. Appearances for the parties were as follows:

APPEARANCES

For Petitioner, George N. Meros, Jr., Esquire The Ad Team of Rumberger, Kirk, Caldwell Florida, Inc.: & Wechsler

Suite 700

106 East College Avenue Tallahassee, Florida 32302

For Petitioner, John M. Alford, Esquire Beber Silverstein Holland & Knight

& Partners, Post Office Drawer 810 Advertising, Inc.: Tallahassee, Florida 32302

For Petitioner, John French, Esquire Benito Advertising, Darren A. Schwartz, Esquire Inc.: Haben, Culpepper, Dunbar

& French, P.A.

306 North Monroe Street Tallahassee, Florida 32301

For Petitioner, Benjamin K. Phipps, Esquire Ogilvy Group, Inc. James J. Cooney, Esquire

Suite 802

First Florida Bank Tower Tallahassee, Florida 32301

For Respondent, Paul J. Martin, Esquire Florida Department Assistant Attorney General Of the Lottery: The Capitol - Suite 1501

Tallahassee, Florida 32399-1050 STATEMENT OF THE ISSUES

This is a bid protest proceeding. The issue in each case is whether the proposal submitted by each Petitioner is responsive to the requirements of a request for proposals by the Department of the Lottery designated as RFP 92-005- LOT/TEN/P.

PRELIMINARY STATEMENT

Each of the four Petitioners submitted a proposal in response to RFP 92- 005-LOT/TEN/P. Proposals were also submitted by four other business entities who are not parties to this proceeding. Upon initial review of all proposals, the Department of Lottery concluded that the proposals submitted by each of the four Petitioners were, for several different reasons, not responsive to the requirements of the subject RFP. (The Department concluded that the other four proposals were responsive.) Each of the four Petitioners timely filed petitions seeking a determination that each of their respective proposals were responsive to the requirements of the RFP.

At the formal hearing, all parties presented testimony of witnesses and offered exhibits.1/ At the conclusion of the hearing the parties were allowed

10 days from the filing of the transcript within which to file their respective proposed recommended orders. The transcript was filed on December 6, 1991. Thereafter, an order was issued extending the deadline for proposed recommended orders until the close of business on December 18, 1991. Proposed recommended orders containing proposed findings of fact and conclusions of law were timely filed by all parties. Specific rulings on all proposed findings of fact are contained in the Appendix to this Recommended Order.

FINDINGS OF FACT

Findings regarding the RFP and all Petitioners

1. On September 3, 1991, the Department issued RFP 92-005-LOT-TEN-P by which it sought proposals for the provision of advertising and related services to the Florida Lottery. During the following two weeks, the Department received written questions from would-be vendors. On October 3, 1991, the Department circulated Addendum 3 to the RFP which included numerous changes to the RFP and which provided written answers to the questions which were submitted to the Department prior to September 17.

   
   

2. The Department of the Lottery had issued an earlier RFP to obtain substantially the same advertising and related services. The earlier procurement effort ended in a rejection of all bids and the initiation of the instant procurement effort.

3. The timetable set forth in the RFP indicated that on a date certain the Department would make determinations of non-responsiveness in accordance with Section 3.2 and post a Notice of Non-responsive Technical Proposals. Only after responsiveness had been determined would responsive technical proposals be presented to an evaluation committee for scoring in accordance with the criteria set forth in the RFP. (RFP Section 2.6) In addition, Section 6 of the RFP provides that the evaluation committee shall complete an evaluation of all responsive proposals.

   
   

4. All Petitioners timely submitted a proposal in response to RFP #92-005- LOT/TEN/P.

   
   

5. The issuing officer for RFP #92-005-LOT/TEN/P is Mr. Russ Rothman, CPPO, Office of Purchasing, Florida Lottery, 250 Marriott Drive, Tallahassee, Florida 32301.

   
   

6. As issuing officer, Mr. Russ Rothman served as agent of the Florida Department of the Lottery with respect to RFP #92-005-LOT/TEN/P, even though Mr. Rothman's regular employment is with the Department of Highway Safety and Motor Vehicles.

   
   

7. The person most directly responsible for preparing the RFP #92-005- LOT/TEN/P was Mr. Russ Rothman.

   
   

8. The person most directly responsible for initially determining whether each proposal was responsive or non-responsive was Mr. Russ Rothman.

   
   

9. Respondent deemed the proposals of each Petitioner to be non-responsive for the reasons set forth in a Notice Of Non-Responsive Technical Proposal And/Or Non-Responsible Respondent, which notice was posted on October 28, 1991. (Respondent's Exhibit 10) The specific reasons stated in that notice are as follows:

   
   

   Respondent Determination

   
   

   Lintas Non-responsive. Failed to submit a TV commercial storyboard required by Section 5.9.6,B.6. Failed to complete Disclosure Affidavit question 7.b.

   
   

   The Ad Team Non-responsive. Failed to submit TV commercial storyboard (5.9.6,B.6) and 3 product or package designs (5.9.5,3.f).

   Absence of certification re: lack of audited financial statements (5.9.3,F).

   Ogilvy & Mather Non-responsive. Failed to

   submit all resumes and/or selection criteria (5.9.5,2) and 30 second radio spot (5.9.6,B.3).

   Proposal bond late (3.26). Apparent non-

   compliance with 3.8, "Conflict of Interest and Disclosure." Failed to complete Disclosure Affidavit, question 7.

   
   

   Beber Silverstein Non-responsive. Failed to

   present complete financial statements as required by Section 5.9.3,F).

   Footnotes were not included in any of the three years' statements; disclaimer of opinion on 1989 Statements of Operations and Cash Flows; absence of certification for lack of audited statements (1990 & 1988).

   
   

10. Section 2.2 of the subject RFP contains the following definition of the terms "Responsive Proposal" and "Responsible Respondent."

    
    

    Responsive Proposal - A timely submitted proposal which conforms in all material respects to the RFP and which contains, in the manner required by this RFP, all documentation, drawings, information, plans, materials, certifications, affirmations, and documentation of qualifications and other matters required by the RFP.

    
    

    Responsible Respondent - A firm judged by the Lottery to be fully capable of providing the services required, considering security, integrity and financial condition.

    
    

11. Section 2.6 of the subject RFP contains the following regarding the timetable for the procurement:

    
    

    October 15, 1991: Separately sealed technical and price proposals must be received at the Lottery's Headquarters, Purchasing Office, 250 Marriott Drive, Tallahassee, Florida 32301, no later than 2:00 p.m. Proposals must be addressed to the Issuing Officer as specified in Section 2.3.

    All technical proposals will be opened by Lottery employees starting at or after 2:01

    p.m. at the Lottery Headquarters. The public may attend the opening but may not review any proposals submitted. The names of respondents will be read aloud, and the names of firms submitting "no proposal" responses will be read.

    
    

12. Section 3.1 of the subject RFP contains the following provisions regarding "Mandatory Requirements:"

    
    

    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.

    
    

13. Section 3.2 of the subject RFP contains the following relevant provisions regarding "Non-Responsive Proposals:"

    
    

    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 as mandatory, or without which an adequate analysis and comparison of proposals is impossible, or those which affect the competitiveness of proposals or the cost to the State. The Lottery reserves the right to determine which proposals meet the material requirements of the RFP.

    Respondents which in the Lottery's judgment, after the investigations required by Section 24.111, Florida Statutes, fail to demonstrate sufficient financial responsibility, security and integrity, shall be rejected as non-responsible.

    
    

14. Section 3.5 of the subject RFP includes the following provisions regarding an opportunity to ask questions about the RFP:

    
    

    Questions concerning conditions and specifications of this RFP, and/or requests for changes to conditions and specifications must be in writing, addressed to the Issuing Officer, and received no later than 5:00 p.m. on September 17, 1991. The Lottery will prepare tentative responses to all questions and/or requests for changes, timely received,

    for discussion at a pre-proposal conference to be held at 2:00 p.m., September 24, 1991. Copies of questions and final answers, along with any changes to the RFP resulting from or following discussion at the pre-proposal conference, will be mailed to all firms who were furnished a copy of this RFP by the Lottery, in the form of a written addendum, as soon as reasonably practicable.

    Respondents submitting a proposal must submit by the proposal deadline written acknowledgment of any addendum.

    
    

15. In response to a vendor inquiry as to the meaning of the term "minor irregularity," the Department responded in the last addendum to the RFP by citing and quoting Rule 13A-1.001(32), Florida Administrative Code, which reads:

    
    

    Minor Irregularity - A variation from the invitation to bid/request for proposal terms and conditions which does not affect the price of the bid/proposal, or give the bidder or offeror an advantage or benefit not enjoyed by other bidders or offerors, or does not adversely impact the interests of the agency.

    
    

16. Sections 3.7 and 3.8 of the subject RFP contain the following provisions regarding required disclosures.:

    
    

    1. Vendor Information and Disclosure.

       
       

       Respondents must provide information and disclosures required by Section 24.111, Florida Statutes. Copies of the Lottery's Vendor Information Addendum and Disclosure Affidavit Forms to be completed are attached hereto as Attachments "A" and "B." These forms must be properly completed, executed and submitted with Respondent's technical proposal.

       
       

    2. Conflict of Interest and Disclosure.

    
    

    The award hereunder is subject to the provisions of Chapters 24 and 112, Florida Statutes. Respondents must disclose with their proposals whether any officer, director, employee or agent is also an officer or an employee of the Lottery, the State of Florida, or any of its agencies.

    All firms must disclose the name of any state officer or employee who owns, directly or indirectly, an interest of five percent (5%) or more in the Respondent's firm or any of its branches or affiliates. All Respondents must also disclose the name of any employee, agent, lobbyist, previous employee of the

    Lottery, or other person, who has received or will receive compensation of any kind, or who has registered or is required to register under Section 112.3215, Florida Statutes, in seeking to influence the actions of the Lottery in connection with this procurement.

    
    

17. Section 3.26 of the subject RFP contains the following provisions regarding the required proposal bond:

    
    

    Each Respondent is required to accompany its technical proposal with a certified or cashier's check or bid bond in the amount of

    $125,000 or have on file with the Department of Lottery an annual bid bond of at least

    $125,000. The check or bid bond shall be payable to the Department of Lottery. This check/bond is to insure against withdrawal from competition subsequent to submitting of the proposal and to guarantee performance when the Contract is awarded. This check/bond will be returned to all unsuccessful Respondents immediately upon the execution of the Contract.

    
    

18. Sections 5.1, 5.2, and 5.3 of the subject RFP include the following requirements regarding the preparation and submission of proposals:

    
    

    1. Proposal Labeling.

       
       

       Respondent's technical proposal MUST be in a separate sealed envelope or other container and MUST be identified as the Respondent's technical proposal. The face of the envelope or other container shall contain the following information:

       
       

       Request for Proposal for Advertising and Related Services

       2:00 p.m.

       October 15, 1991 Technical Proposal Name of Respondent

       
       

       Each Respondent's price proposal MUST be in a separate sealed envelope and MUST be identified as the Respondent's price proposal. The face of the envelope shall contain the following information:

       
       

       Request for Proposal for Advertising and Related Services

       2:00 p.m.

       October 15, 1991 Price Proposal Name of Respondent

    2. Copies of Proposals.

       
       

       Respondents shall deliver an ORIGINAL AND SIX COPIES OF THE TECHNICAL PROPOSAL AND ONE COPY OF THE PRICE PROPOSAL AND CREATIVE

       SAMPLES to the Lottery no later than the date and time in which all proposals must be timely submitted. Information and materials submitted in response to a previous RFP will not be considered in connection with this RFP #92-005-LOT/TEN/P. This is not intended to preclude a respondent from submitting information or materials previously submitted provided they conform to the requirements of this RFP.

       
       

    3. 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. Proposals which for any reason are not timely received will not be considered. Late proposals will be declared non- responsive, and will not be scored. Unsealed and/or unsigned proposals by telegram, telephone, or facsimile transmission or other means are not acceptable, and will be declared non-responsive, and will not be scored. A proposal may not be altered after opening.

    
    

19. Section 5.9.3 of the subject RFP describes as follows the documentation which must be submitted to demonstrate vendor responsibility:

    
    

    The proposing firm must submit the following documentation to establish that it is a responsible respondent:

    
    

    1. Vendor Information Addendum (Attachment A)

    2. Disclosure Affidavit (Attachment B)

    3. Sworn Statement on Public Entity Crimes (Attachment C)

    4. Statement of Agreement to Abide by the Lottery's Code of Ethics, Rule 53ER88- 79(3), Florida Administrative Code (Attachment D)

    5. Proposal Bond required by Section 3.26, in the amount of $125,000.

    6. Certified financial statements in customary form for the last three (3) fiscal years if they are completed, 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 (CPA). If

       certified financial statements including an auditor's report were not prepared for one or more of the last three fiscal years respondent shall certify that fact, and shall submit in lieu thereof review reports of financial statements prepared by a CPA for

       the same period of time. The Lottery will not accept, in lieu thereof, financial statements prepared in whole or in part by an accountant as a result of a compilation engagement. If the parent company of Respondent intends to financially guarantee Respondent's

       performance of contractual obligations, then Respondent may, to satisfy this requirement, submit such financial statements of the parent company in lieu of its own plus a binding letter from the parent company expressing its commitment to financially guarantee the Respondent. In such event, the parent company shall be required to sign the Contract as Guarantor and shall be held accountable for all terms and conditions of the Contract.

       
       

20. The language in Section 5.9.3,F which conditions the use of review reports on the submission of a certificate that there are no audited financial statements was for the purpose of minimizing the possibility that a vendor who had received an adverse audited opinion might conceal the adverse opinion from the Department by obtaining and submitting a favorable review report which did not disclose the adverse opinion.

    
    

21. Section 5.9.4 of the subject RFP addresses the subject of "Firm Qualifications." The opening sentence of Section 5.9.4 reads as follows: "At minimum, each Respondent must provide the following information which demonstrates the Respondent's ability to provide the services requested."

    
    

22. Section 5.9.5 of the subject RFP includes the following provisions regarding personnel qualifications:

    
    

    Provide the following information:

    
    

    1. Address the firm's plans for staffing the Lottery account. Include position titles, numbers, duties and responsibilities, and names of incumbents proposed to work on the Lottery account. Include both agency and subcontractor personnel.

    2. Resumes not to exceed one page each in length of all agency and subcontractor personnel who would be compensated in accordance with section 5.11.1 of this RFP, with a statement identifying the percentage

       of time, calculated annually, of each person who will work on the Lottery account. If recruitment of personnel to fill a position will be required, indicate firm's criteria

       for selection including, as appropriate, education, experience, knowledge, skills and abilities, etc.

    3. Creative samples (one copy of each) previously produced for the Respondent with the participation of key members of the proposed Lottery creative team and equal to the quality of the products proposed in your marketing plan, to include:

    
    

    * * *

    
    

    f) Three examples of product design or package design.

    
    

23. Section 5.9.6 of the subject RFP contains the following provisions requiring a "Plan of Service:"

    
    

    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.

    It is the intent of the Lottery that the Plan of Service be based on the premise that all products and product attributes remain as they are now.

    The plan of service shall consist of the following information and materials:

    1. A proposed advertising approach for the Florida Lottery which addresses the following items:

       1. A two-year summary outline advertising plan. Respondents shall include recommendations for advertising and promotions, and shall provide a plan for progress reporting, and ongoing evaluation and monitoring.

       2. A proposed one-year timetable for advertising, showing development of creative, production, approval, placement and run-time.

       
       

    2. Plan, Script and Comprehensive artistic representations (comps) of the following:

       1. A detailed media plan for an eight (8) week Florida Lottery Instant Game which has a $1,250,000 budget;

       2. A name, ticket design and prize structure for the Instant Game;

       3. A 30-second radio spot for the Instant Game;

       4. A print ad for newspaper or magazine placement for the Instant Game;

       5. A point-of-sale example for the Instant Game;

       6. A television commercial storyboard.

          All exhibits must be permanently marked or labeled, with identification of the proposing firm, and the specific section(s) of the RFP to which they respond.

          
          

24. The requirement for submission of a television commercial storyboard was elaborated upon by responses which the Department made to two distinct questions submitted by the firms, Bozell, Inc., and West & Company.

    
    

25. West & Company asked if proposers were prohibited from submitting fully executed television commercials and the Department responded that proposers were prohibited from submitting fully executed television commercials in complying with the RFP requirement for a television commercial storyboard.

    
    

26. Bozell submitted a much more elaborate question in two parts. First, Bozell asked if a proposer could submit a television commercial in a more finished form using an animatic form as an example of a more finished form. The Department respondent in the negative. Second, Bozell asked if a proposer could submit such other more finished forms of television commercials in addition to the storyboard. Again, the Department answered in the negative.

    
    

27. In responding thusly, the Department clearly indicated that it desired only traditional two-dimensional storyboards and would not accept more finished forms of television commercial concepts such as animatics. Also, the Lottery indicated that it did not wish to receive television commercial concepts in any form other than the traditional two-dimensional storyboard.

    
    

28. The term "television commercial storyboard " is not defined in the RFP, but no definition is really necessary because the term has a clearly understood meaning in the advertising industry. It means a two-dimensional illustration of an advertising concept, presented on stiff cardboard or some similar material, and containing art work (illustrations or still photographs) to demonstrate the visual concept, and containing written words to demonstrate the text and/or describe any special effects. Television commercial storyboards have been in common use since the first days of television advertising and continue to be in common use today.

    
    

29. Much more recently, especially since the advent of video cameras, alternative ways of presenting advertising concepts have come into popular use. These newer alternatives include video presentations, one type of which is known in the trade as "animatics," and another type of which is referred to as "stealamatics" or "ripamatics."

    
    

30. An "animatic" is, in essence, a series of artistic drawings which is recorded on video. The drawings are developed specifically for a given "animatic" and are presented on the video in a manner which conveys the scenes and sequences in a proposed commercial. An "animatic" typically looks very much like a rough moving cartoon. More often than not an animatic will also include a sound track with a rough version of the words or music for the proposed commercial. An "animatic" is a more finished product than a two-dimensional storyboard because it more nearly resembles the format of the final version of the proposed concept.

    
    

31. A "stealamatic" or a "ripamatic" is a video recording typically constructed from a variety of existing film footage and voice and music recordings. The film and sound used in a "stealamatic" or "ripamatic"

    frequently belong to people other than those who are creating the video, hence the name. "Stealamatics" and "ripamatics" are, in essence, a collage of second- hand images and sounds created for other purposes which are roughly edited together to demonstrate the creative concept of a proposed commercial. The video footage and sound track of a typical "stealamatic" or "ripamatic" is not of television commercial air quality and is not a finished product that can be used for actual advertising. The typical "stealamatic" or "ripamatic" is, in essence, a rough draft of a television commercial designed to demonstrate the primary ingredients of an advertising concept. Although rough, the typical "stealamatic" or "ripamatic" is a more finished product than an "animatic" in the sense that it more closely resembles the finished product than does an "animatic." If the concept of a proposed commercial involves critical timing, special effects, humor, or emotion, a "stealamatic" video is the most effective way, and often the only practical way, to present such a concept.

    
    

32. "Animatics" and "stealamatics/ripamatics" are now commonly used in the presentation of advertising concepts in lieu of the old-fashioned, but still often useful, two-dimensional storyboards; they are frequent substitutes for two-dimensional storyboards. But "animatics" and "stealamatics/ripamatics" have not become storyboards and the term "television commercial storyboard" still means a two-dimensional presentation on a board-like material.

    
    

33. Section 6.1 of the subject RFP contains the following provisions with regard to the allocation of points during the evaluation of the technical proposals:

    1. Firm Qualifications. - (Maximum 31 points) Size and Resources - Maximum 5 points

       Advertising Experience - Maximum 16 points

       Example of a Complete Campaign - Maximum 10 points

       
       

    2. Personnel Qualifications. - (Maximum 18 points)

    
    

    Staffing (numbers, levels, roles) - Maximum	5	points
    Resumes - Maximum	5	points
    Creative Samples - Maximum	8	points
    6.1.3. Plan of Service - (Maximum 16 points)
    Advertising Plan and Timetable - Maximum	8	points
    Plan, Script and Artistic - Maximum	8	points

    Representations

    
    

    6.1.4. Certified Minority Business Enterprise Participation. - (Maximum 10 points)

    
    

    Authorized Expenses - Maximum 5 points (1 point for each 2/10 percent (.2%)

    of participation)

    Agency Compensation - Maximum 5 points (Respondent's price) (1 point for

    each 3 percent (3%) of participation)

    
    

34. Section 5.9.3 of the subject RFP requires that the proposing firm must, among other things, submit a "Disclosure Affidavit." The Disclosure Affidavit is attached to the RFP and is designated as Attachment B. All

    proposing firms who were corporations were required to answer Question 7 on Attachment B. Question 7 on Attachment B reads as follows:

    
    

    7. Please complete either 7a or 7b, whichever is appropriate.

    
    

    1. RESPONDENT is not a publicly traded corporation. The names and addresses of the shareholders of RESPONDENT are as follows:

       
       

       The above-named persons constitute all of the shareholders of RESPONDENT.

       
       

    2. RESPONDENT is a publicly traded corporation. The names and addresses of the shareholders of RESPONDENT which own 5% or more of the corporate stock are as follows:

    
    

    The above-named persons constitute all of the shareholders of RESPONDENT which own 5% or more of the corporate stock.

    
    

    Findings regarding the Ad Team of Florida, Inc.

    
    

35. Paragraph 5.9.6,B,6 of the RFP (as amended by Addendum 3) requires the submission of a television commercial storyboard. The Ad Team attempted to comply with this provision by submitting a video cassette which contained two short video presentations illustrating proposed advertising concepts. One of these presentations, titled The Fortune Teller, is what is known in the advertising business as an "animatic;" a rough cartoon with some animation and a sound track. The other of these presentations, titled Stars and Stripes, is what is known in the advertising business as a "stealamatic" or "ripamatic." Neither of the presentations on the video cassette submitted by the Ad Team is a television commercial storyboard.

    
    

36. Section 5.9.5,3,F requires that a bidder provide three examples of product design or package design that, (1) were previously produced by the bidder, and (2) that were produced with the participation of key members of the proposed Lottery creative team. At the time of submission of its proposal, the Ad Team did not have three examples of product or package design that had earlier been produced with the participation of key members of the proposed Lottery team. Therefore, the Ad Team could not and did not submit three examples of product design or package design that had previously been produced with the participation of key members of the Lottery team. The Ad Team's failure to submit three examples of package or product design did not change the pricing of the proposal submitted to the Department by the Ad Team. The Ad Team did not gain a competitive advantage by virtue of its failure to submit three examples of product or package design.

37. The Ad Team submitted complete review reports of financial statements for the last three years. The Ad Team did not submit any document certifying that no audited financial statements had been prepared for the Ad Team for the past three fiscal years. The Ad Team did not gain a competitive advantage by virtue of its failure to submit the certification that it had no audited financial statements for the past three years. The failure to submit the subject certification leaves the Department with no basis in the proposal materials for having confidence that no adverse audited statements are being concealed, and to that extent diminishes the extent to which it is prudent for the Department to rely on the financial statements submitted.

    
    

    Findings regarding Beber Silverstein & Partners Advertising, Inc.

    
    

38. The only issue regarding the proposal submitted by Beber Silverstein relates to its efforts to comply with the requirements of Section 5.9.3,F of the RFP. In response to the requirements of that section of the RFP, Beber Silverstein supplied financial statements for the years 1988, 1989, and 1990. However, the footnotes to all of these financial statements were inadvertently omitted from Beber Silverstein's proposal. The footnotes were prepared by Beber Silversmith's accountants at the time the financial statements were prepared and were in Beber Silverstein's possession. The footnotes were simply inadvertently omitted during the preparation of Beber Silverstein's proposal.

    
    

39. The Department of the Lottery knew at the time it reviewed Beber Silverstein's proposal for responsiveness that the vendor possessed the footnotes to the financial statements. In fact, the Department had previously reviewed these footnotes in Beber Silverstein's response to the first Request for Proposal earlier during 1991 when Beber Silverstein's proposal in the earlier RFP was evaluated by the Department.

    
    

40. Beber Silverstein could have supplied the Department with the subject footnotes immediately after the omission was brought to Beber Silverstein's attention. The omission of the footnotes did not affect the cost or price of Beber Silverstein's proposal.

    
    

41. The footnotes to financial statements do not change the figures presented on the face of the financial statements, but the footnotes are an integral part of any financial statement. The vast majority of the information necessary to conduct a meaningful review of a company's financial responsibility is contained in the footnotes to the financial statements. It is not possible to determine a company's financial responsibility from a review of financial statements without footnotes.

    
    

42. In direct response to a request from its bank, Beber Silverstein had its balance sheet audited for the year 1989. However, it did not request its accountants to audit the statements of operations and cash flows for the year 1989 since the bank did not request it. Beber Silverstein provided the Department with all financial statements (except the footnotes) that were available on the company for the year 1989. The accountants' opinion for the 1989 statements clearly acknowledges that they were not engaged to audit the statements of operations and cash flows and, accordingly, no accountants' opinion was expressed on them. However the accountants' opinion for the 1989 statements does not explain why they were not engaged to audit the statements of operations and cash flows.

    
    

43. Even though the accountants' opinion for Beber Silverstein's 1989 financial statement does not contain any opinion regarding the statements of

    operations and cash flows, the level of analysis actually performed by the accountants on the 1989 statements of operations and cash flows met the minimum standards for a review report. This was clarified in a letter dated May 1, 1991, which was submitted in conjunction with Beber Silverstein's prior proposal, but which letter was not included as part of Beber Silverstein's current proposal.2/

    
    

44. Beber Silverstein failed to include in its proposal the certification required by Section 5.9.3,F of the RFP to the effect that it did not have any audited financial statements for 1988 or 1990. The omission of the certificate was inadvertent. The absence of the certificate did not affect the price of Beber Silverstein's bid.

    
    

45. Beber Silverstein supplied the Department with all financial statements (except for inadvertently omitted footnotes) that it had available. Although Beber Silverstein failed to provide a certificate, Beber Silverstein, in fact, did not have any audited financial statements (other than the 1989 balance sheet which was submitted).

    
    

    Findings regarding Benito Advertising, Inc.

    
    

46. Benito Advertising, Inc., d/b/a Fahlgren Martin Benito, was founded in Tampa in 1954. It has offices in Tampa, Fort Lauderdale, Orlando, and Jacksonville. It employs approximately 70 people and its 1991 billings will be approximately $45 million.

    
    

47. Benito Advertising, Inc., was acquired in 1989 by the Interpublic Group of Companies. Interpublic is one of the largest publicly-held advertising agency holding companies in the world with billings of $13 billion a year. Benito was subsequently assigned to Lintas:Worldwide, an operating unit of Interpublic. Benito and Lintas:Worldwide are wholly-owned subsidiaries of Interpublic.

    
    

48. Attachment B to the RFP elicits the disclosure of ownership information (officers, directors, major shareholders, etc.) from vendors as required by Section 24.111, Florida Statutes. Question 7 thereof requires a corporate respondent to provide the names and addresses of its shareholders if the corporation is not publicly traded. A publicly traded corporation is required to state the names and addresses of those shareholders which own five percent or more of the corporate stock. The form which comprises Attachment B was never promulgated as a rule although it is intended for general use by the Lottery.

    
    

49. Benito submitted five separate Disclosure Affidavits - one for Benito itself, one for Lintas:Worldwide, one for Interpublic Group, one for its Hispanic minority contractor, and one for its other minority partner. Benito responded "not applicable" to question 7-A on its affidavit as well as on the affidavit for Lintas:Worldwide on the bases that neither are publicly traded corporations because both are wholly-owned subsidiaries of Interpublic. The balance of the information on the five affidavits concerning officers, directors, shareholders, etc., was provided and is correct.

    
    

50. Information concerning Benito's corporate status is alluded to throughout its proposal. More importantly, the corporate relationships as between Benito, Lintas, and Interpublic are explicitly stated in the Interpublic Annual Report which is a mandatory supplement to the proposal. Joan Schoubert, the Department accounting manager responsible for reviewing the annual reports

    and other financial statements, noted these corporate relationships in conjunction with her review and included the following statement on her reviewing document:

    
    

    Benito Advertising, Inc., d/b/a Fahlgren Martin Benito is a wholly - owned subsidiary of Lintas:Worldwide. Lintas:Worldwide is one of three operating subsidiaries of Interpublic Group of Companies, Inc. (guarantor of Respondents performance- bindings letter present)

    
    

51. In the review of other proposals submitted in response to the subject RFP, the Department has overlooked an omission of information in response to a specific question if that information was otherwise available elsewhere in the proposal. An example of this is shown by the following notations on the Department's checklist concerning another proposal:

    
    

    Transmittal letter did not list subcontractors but they are revealed elsewhere, minor irregularity. Billings by media shown in percentages but can be interpreted in connection with Number 8.

    
    

52. Paragraph 5.9.6,B,6 of the RFP (as amended by Addendum 3) requires the submission of a television commercial storyboard. Benito attempted to comply with this provision by submitting a so-called "video storyboard" which was recorded on a video cassette. This was submitted along with the balance of the proposal. Benito clearly stated in the text of the proposal that its "storyboard" was in video form. Benito's so-called "video storyboard" was in a format also referred to in the advertising business as a "stealamatic" or "ripamatic."

    
    

53. Benito chose to utilize a "stealamatic" to convey its concept which, in essence, is nature photography with human voices inputed to the animals. This is very difficult to express in a two-dimensional format in that the concept does not have an actor carrying a story line. Furthermore, Benito knew

    that it was not going to be able to present the concept in person and thus could not explain it to the people who were to evaluate it. Given the reliance of the Benito message on animals, another medium would not have been as effective.

    
    

    Findings regarding Ogilvy & Mather Advertising

    
    

54. At the time it submitted its proposal, Ogilvy Group, Inc., d/b/a Ogilvy & Mather, failed to submit all resumes and/or selection criteria required in Section 5.9.5,2 of the RFP. Further, it failed to submit a 30-second radio spot as required by Section 5.9.6,B,3 of the RFP and it failed to submit with its proposal the appropriate proposal bond required by Section 3.26 of the RFP. It further failed to comply with Section 3.8 of the RFP by failing to disclose the name of any employee, agent, lobbyist, previous employee of the Lottery, or other person who has received compensation of any kind or who has registered under Section 112.3215, Florida Statutes, in seeking to influence the actions of the Lottery in connection with this procurement. Finally, Ogilvy Group, Inc., failed to complete question 7 of the Disclosure Affidavit required by Section

    3.7 of the RFP.

55. With regard to the failure of Ogilvy Group, Inc., to submit all resumes and/or selection criteria required by Section 5.9.5,2 of the RFP, its submission in this regard was missing 17 resumes and 6 descriptions of selection criteria. The 6 missing descriptions covered 13 positions. Three of the missing resumes were found to be located in other portions of the Ogilvy Group, Inc., proposal, but 14 resumes are nowhere to be found in the proposal. Without the information of the missing resumes and in the missing descriptions of selection criteria, it would be difficult, if not impossible, for the Department to perform an adequate analysis and comparison of the Ogilvy Group, Inc., proposal with other proposals.

    
    

56. The Ogilvy Group, Inc., also failed to submit a 30-second radio spot. Instead it submitted two 60-second radio spots because of its belief that 30- second radio spots are not economically feasible.

    
    

57. With regard to the late submission of Ogilvy Group's, Inc., proposal bond, its attorney and lobbyist, James J. Cooney, Esquire, delivered its bid package (which included the original and six copies of its technical proposal) to the offices of the Department of the Lottery sometime shortly after 1:00 p.m. on October 21, 1991. The original technical proposal and each copy of the technical proposal contained a photocopy of the Ogilvy Group, Inc., proposal bond, which was in the form of a certified check in the amount of $125,000.00. The original certified check was in Mr. Cooney's pocket.

    
    

58. The Ogilvy Group, Inc., proposal materials (minus the original certified check, which remained in Mr. Cooney's pocket) were logged-in and officially received by the Department of the Lottery at 1:39 p.m. that afternoon. Mr. Cooney then physically accompanied the dolly on which the Ogilvy & Mather proposal materials had been placed, up the elevator and into the room designated for the bid opening. After Mr. Cooney had accompanied the proposal materials to the room where the bid opening was to occur, Mr. Cooney handed the

    $125,000.00 certified check to Russ Rothman. The delivery of the check to Mr. Rothman occurred shortly after 2:00 p.m., but shortly before any of the proposals were opened. The deadline for submitting bids was 2:00 p.m.

    
    

59. Ogilvy Group, Inc., has retained the services of James J. Cooney, Esquire, as a registered lobbyist and attorney. Mr. Cooney is registered as a lobbyist for Ogilvy Group, Inc., pursuant to Section 112.3215, Florida Statutes. During the period between the issuance of the subject RFP and the submission of the subject proposals, Mr. Cooney on several occasions contacted functionaries of the Department of the Lottery, including the Issuing Officer, Mr. Rothman, in attempts to influence the Department's decision with respect to using previously submitted materials as part of the Ogilvy Group, Inc., proposal in the instant RFP. Such communications by Mr. Cooney were efforts to influence the actions of the Department of the Lottery in connection with the instant procurement. Officials of Ogilvy Group, Inc., were aware of Mr. Cooney's efforts in this regard.

    
    

60. Ogilvy Group, Inc., is a corporation that does business under the fictitious name of Ogilvy & Mather. Ogilvy Group, Inc., was the proposing entity on its proposal. As proposing entity, it executed a Disclosure Affidavit (Attachment B to the RFP). Corporations submitting a Disclosure Affidavit were required to answer either Question 7a or 7b. The Ogilvy Group, Inc., did not provide any answer to either Question 7a or 7b. This was because the Chief Financial Officer of the Ogilvy Group, Inc., did not believe that Question 7a was applicable and did not believe that any answer to 7b was required because

    there was no one who owned five percent or more of the stock of WPP Group, plc, the parent company of which Ogilvy Group, Inc., is a wholly-owned subsidiary.

    
    

61. Even though Ogilvy Group, Inc., failed to answer either Question 7a or 7b on the Disclosure Affidavit, information concerning its corporate status and its relationship to WPP Group, plc, is contained in other portions of its proposal. Joan Schoubert, the Department accounting manager responsible for reviewing the annual reports and other financial statements, was able to determine from the information in other portions of the proposal that Ogilvy Group, Inc., was a wholly-owned subsidiary of Ogilvy & Mather Worldwide, which was in turn a wholly-owned subsidiary of WPP Group, plc.

    
    

    CONCLUSIONS OF LAW

    
    

62. 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.

    
    

63. Section 24.103(5), Florida Statutes (1989), contains the following definition:

    
    

    (5) "Major procurement" means a procurement for a contract for the printing of tickets for use in any lottery game, consultation services for the startup of the lottery, any goods or services involving the official recording for lottery game play purposes of a player's selections in any lottery game involving player selections,

    any goods or services involving the receiving of a player's selection directly from a player in any lottery game involving player selections, any goods or services involving the drawing, determination, or generation of winners in any lottery game, the security report services provided for in this act, or any goods and services relating to marketing and promotion which exceed a value of

    $25,000.

    
    

64. The powers and duties of the Department of the lottery enumerated at Section 24.105, Florida Statutes (1990 Supp.), includes a provision that the Department shall:

    
    

    (15) 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.

    
    

65. Section 24.111, Florida Statutes (1989), contains the following pertinent language:

    
    

    (2) The department shall investigate

    the financial responsibility, security, and integrity of any person who submits a bid, proposal, or offer as part of a major procurement. Any person who submits a bid, proposal, or offer as part of a major procurement must, at the time of submitting such bid, proposal, or offer, provide the following:

    1. A disclosure of the vendor's name and address and, as applicable, the name and address of the following:

       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 venturers.

       
       

       If the vendor subcontracts any substantial portion of the work to be performed to a subcontractor, the vendor shall disclose all of the information required by this paragraph for the subcontractor as if the subcontractor were itself a vendor.

    2. A disclosure of all the states and jurisdictions in which the vendor does business and of the nature of that business for each such state or jurisdiction.

    3. A disclosure of all the states and jurisdictions in which the vendor has contracts to supply gaming goods or services, including, but not limited to, lottery goods

       and services, and of the nature of the goods or services involved for each such state or jurisdiction.

    4. A disclosure of all the states and jurisdictions in which the vendor has applied for, has sought renewal of, has received, has been denied, has pending, or has had revoked a gaming license of any kind and of the disposition of such in each such state or jurisdiction. If any gaming license has been revoked or has not been renewed or any gaming license application has been either denied or is pending and has remained pending for more than 6 months, all of the facts and circumstances underlying this failure to receive such a license must be disclosed.

    5. A disclosure of the details of any conviction or judgment of a state or federal court of the vendor of any felony or any other criminal offense other than a traffic violation.

    6. A disclosure of the details of any bankruptcy, insolvency, reorganization, or any pending litigation of the vendor.

    7. Such additional disclosures and information as the department may determine to be appropriate for the procurement involved.

    
    

    The department shall not contract with any vendor who fails to make the disclosures required by this subsection, and any contract with a vendor who has failed to make the required disclosures shall be unenforceable. Any contract with any vendor who does not comply with such requirements for periodically updating such disclosures during the tenure of such contract as may be specified in such contract may be terminated by the department. This subsection shall be construed broadly and liberally to achieve the ends of full disclosure of all information necessary to allow for a full and complete evaluation by the department of the competence, integrity, background, and character of vendors for major procurements.

    
    

66. Many of the legal principles applicable to a case of this nature were addressed in the Recommended Order in Bozell, Inc., et al. v. State, Department of Lottery, et al., DOAH Case No. 91-3165BID (RO issued July 25, 1991). In that case, Hearing Officer Kendrick included the following in his conclusions of law:

    
    

    [7.] 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).

    
    

    [8.] 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 Constructions, 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 Transpor-tation, 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).

    [9.] 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).

    [10.] 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

    . . . .

    
    

    [11.] 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 subsec-tion 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.

    [12.] 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.

    [13.] 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 committee 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.

    [14.] 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 [the] RFP. See: Eccleston Properties, Ltd. v.

    Department of Health and Rehabilitative Services, 11 FALR 1185 (1989).

    
    

    * * *

    [17.] 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.

    
    

    [18.] 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.

    
    

    * * *

    
    

    [20.] 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).

    (Footnote omitted) 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).

    
    

67. The Recommended Order in Bozell, supra, also included the following observations at pages 16 and 17:

    
    

    [11.] 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.

    
    

    [12.] 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.

    
    

68. Among the rules adopted by the Department of the Lottery is Rule 53ER87-12, Florida Administrative Code, which contains the following definition at Section (19) of the rule:

    (19) Valid Bid/Proposal -- A responsive offer in full compliance with the bid/proposal specifications and conditions by a responsible person or firm. The responsiveness of the bid or proposal and the qualifications or responsibility of the offeror will be determined as of the time the bids/proposals are made public.

    1. Responsive bidder/offeror means a person or firm which has submitted a bid/proposal which conforms in all material respects to the invitation to bid or request for proposal.

    2. Responsible or qualified bidder/offeror means a person or firm with the capability in all respects to perform fully the contract requirements, and the integrity and reliability to assure good-faith performance. Failure to provide information to determine responsibility in response to a condition of a bid/proposal requiring information may be cause for such bid/proposal to be rejected.

    
    

    Conclusions regarding the Ad Team

    
    

69. Attention is now directed to the details of the specific issues involving each of the Petitioners in these consolidated cases. Turning first to the issues involving the Ad Team, there are three matters which require attention: (1) the TV commercial storyboard issue, (2) the product or package design issue, and (3) the certification of no audited statements issue.

    
    

70. With regard to the television commercial storyboard issue, the Ad Team first argues that its submission of a video cassette containing an "animatic" and a "stealamatic" complies with the requirement of the RFP for a "television commercial storyboard." That argument has been resolved against the contentions of the Ad Team in the findings of fact. It being resolved factually that the video cassette provided by the Ad Team does not comply with the requirement of Section 5.9.6,B,6 of the RFP, the only remaining issue in this regard is whether the failure to comply with the requirement of Section 5.9.6,B,6 is a material deviation from the requirements of the RFP, or a waivable minor irregularity. It is first noted that the subject requirement is mandatory. See Sections 3.1 and 3.2 of the RFP. Failure to provide the required television commercial storyboard adversely impacts the interests of the Department by depriving the Department of information "without which an adequate analysis and comparison of proposals is impossible." See Section 3.2 of the RFP, the definition of "minor irregularity" incorporated into the last addendum to the RFP, and Rule 53ER87-12(19), Florida Administrative Code. Further, if the Ad Team were to be allowed to substitute a "stealamatic" for the required television commercial storyboard, the Ad Team would enjoy a competitive advantage over other bidders who complied with the RFP because, as noted in the findings of fact, "animatics" and "stealamatics" are more finished products than the traditional two-dimensional storyboard and can often effectively express creative concepts that cannot be effectively presented by means of a two-dimensional storyboard. For the foregoing reasons, the submission of a video cassette in lieu of the television commercial storyboard required by Section 5.9.6,B,6 of the RFP is a material deviation which causes the proposal to be non-responsive.

71. With regard to the Ad Team's failure to submit anything in response to the requirement of Section 5.9.5,3,F of the RFP that it provide three examples of product design or package design, there is no dispute that the Ad Team failed to comply with this requirement; it admitted that it could not comply with the requirement. Failure to provide the three examples of product design or package design adversely impacts the interests of the Department by depriving the Department of information "without which an adequate analysis and comparison of proposals is impossible." See Section 3.2 of the RFP, the definition of "minor irregularity" incorporated into the last addendum to the RFP, and Rule 53ER87- 12(19), Florida Administrative Code. Therefore, the Ad Team's failure to comply with that requirement is a material deviation which causes the proposal to be non-responsive.

    
    

72. With regard to the Ad Team's failure to submit a certification that it had no audited financial statements for any of the three relevant years, there is no dispute about the fact that the certification was required and simply was not furnished. Therefore, the issue to be resolved is whether that failure is a material deviation from the requirements of the RFP, or a waivable minor irregularity. It is first noted that the requirements of Section 5.9.3,F of the RFP are mandatory. See Sections 2.2, 3.1, and 3.2 of the RFP. Further, Section 24.111, Florida Statues (1989), charges the Department with a duty to "investigate the financial responsibility" of any person who submits a proposal in a major procurement. Although the statute does not specifically require vendors to submit financial statements, it specifically authorizes the Department to require the submission of "[s]uch additional disclosures and information as the department may determine to be appropriate for the procurement involved." The appropriateness of requiring reliable financial statements as a basis upon which to fulfill a statutory duty to "investigate the financial responsibility" of a person can not seriously be debated. The Ad Team's failure to provide the required certification leaves the Department with no basis in the proposal materials for having confidence that no adverse audited statements are being concealed, and to that extent the failure diminishes the extent to which it is reasonable for the Department to rely upon the financial statements submitted. In view of the Department's duty under Section 24.111, Florida Statutes (1989), to "investigate the financial responsibility" of any person who submits a proposal in a major procurement, the submission of the certificate required by Section 5.9.3,F is a material requirement of the RFP. Without some basis within the proposal itself to confirm that there are no undisclosed audit reports, the Department's ability to perform its duty to investigate the financial responsibility of the Ad Team is diminished. Therefore, the Ad Team's failure to comply with that requirement is a material deviation which causes the proposal to be non-responsive.

    
    

    Conclusions regarding Beber Silverstein

    
    

73. The issues regarding Beber Silverstein all relate to its submission of the financial statements required by Section 5.9.3,F of the RFP. There is no material dispute about the facts in this regard. The facts reveal three shortcomings in Beber Silverstein's submission of financial statements: (1) It failed to submit the footnotes for any of the financial statements, (2) it failed to submit a certification that it had no audited financial statements for the years 1988 and 1990, and (3) the audited financial statements it submitted for 1989 expressly disclaimed any opinion on the firm's statements of operations and cash flows. The basic facts being clear, the issue remaining to be resolved is whether some or all of the shortcomings in Beber Silverstein's proposal are material deviations from the requirements of the RFP, or waivable minor

    irregularities. For the same reasons discussed in the immediately preceding paragraph it is concluded that Beber Silverstein's failure to submit a certification that it had no audited financial statements for the years 1988 and 1990 is a material deviation from the requirements of the RFP which causes the proposal to be non-responsive. For the following reasons, the same conclusion is reached regarding the two other shortcomings in Beber Silverstein's proposal.

    
    

74. With regard to Beber Silverstein's failure to submit the footnotes to any of its financial statements, as noted in the findings of fact, it is not possible to determine a company's financial responsibility from a review of financial statements without footnotes. With regard to Beber Silverstein's financial statements for 1989, which contained a specific disclaimer of any opinion as to the statements of operations and cash flows, there is simply no basis for placing any confidence in financial statements which are not supported by an accountant's opinion. These shortcomings in Beber Silverstein's effort to comply with the requirements of Section 5.9.3,F of the RFP all deprived the Department of required information which was necessary to a meaningful determination of the firm's financial responsibility. Therefore, these shortcomings in Beber Silverstein's proposal are also material deviations from the requirements of the RFP which cause its proposal to be non-responsive.

    
    

75. Beber Silverstein has argued that it should have been permitted to cure the shortcomings addressed above by supplementing its proposal after the proposals were opened. Section 5.3 of the RFP includes the following: "A proposal may not be altered after opening." Rule 53ER87-12, Florida Administrative Code, provides, among other things, that the responsiveness of proposals ". . . will be determined as of the time the bids/proposals are made public." A reasonable interpretation of the cited rule is that it precludes the addition of any material to proposals once the proposals have been opened. As noted by Hearing Officer Kendrick in addressing a similar situation in Medco Containment Services, Inc., et al. v. Department of Administration, Division of State Employees' Insurance, et al., DOAH Case No. 91-5421BID (RO issued October 23, 1991):

    
    

    [8.] It is axiomatic that rules of an administrative agency, made under the power conferred by statute, have the force and effect of the statute. State v. Jenkins,

    469 So.2d 733 (Fla. 1985), and Florida Livestock Board v. Gladden, 76 So.2d 291 (Fla. 1954). It is also fundamental that an agency is charged by law with the duty to apply the rules applicable to its decision making authority as written. Boca Raton Artificial Kidney Center, Inc. v. Department of Health and Rehabilitative Services, 493 So.2d 1055 (Fla. 1st DCA 1986); Kearse v. Department of Health and Rehabilitative Services, 474 So.2d 819 (Fla. 1st DCA 1985); and Gadsden State Bank v. Lewis, 384 So.2d

    343 (Fla. 1st DCA 1977). Under such circumstances, it cannot be concluded that the Department acted irrationally or otherwise departed from the essential requirements of law when it decided to strictly enforce the time requirements provided in the request for proposal.

    Similarly, it must be concluded that in view of the provisions of Rule 53ER87- 12(19), Florida Administrative Code, there is no departure from the essential requirements of law in the Department's decision to strictly enforce the RFP provision precluding the post-opening supplementation of proposals.3/

    
    

    Conclusions regarding Benito Advertising, Inc.

    
    

76. With regard to Benito Advertising, Inc., there are two issues to be addressed: (1) the television commercial storyboard issue and (2) the Disclosure Affidavit issue. The issue regarding the television commercial storyboard requirement has been fully discussed above with regard to the Ad Team. (See Paragraph 9 of these Conclusions of Law.) For those same reasons it must be concluded that the submission by Benito Advertising, Inc., of a video cassette containing a "stealamatic" in lieu of the television commercial storyboard required by section 5.9.6,B,6 of the RFP is a material deviation which causes its proposal to be non-responsive.

    
    

77. With regard to the failure of Benito Advertising, Inc., to list the names of stockholders on the Disclosure Affidavits (Attachment B to the RFP) submitted on behalf of Benito Advertising, Inc., and Lintas:Worldwide, this is really a matter of form over substance. Although the information identifying stockholders was not specifically listed in the place where it should have been listed, the information was readily discoverable in other portions of the proposal submitted by Benito Advertising, Inc., and was, in fact, discovered by functionaries of the Department when they reviewed the proposal. The failure to place the information in the correct place did not deprive the Department of any necessary information, nor does it appear to have inconvenienced the Department in any meaningful way. Therefore, the failure of Benito Advertising, Inc., to place its stockholder information on the subject Disclosure Affidavits is a minor irregularity which should be waived, and is not a separate basis for concluding that the proposal is non-responsive.

    
    

    Conclusions regarding Ogilvy Group, Inc.

    
    

78. Disposition of the Ogilvy Group, Inc., petition requires that attention be addressed to five issues: (1) the resumes and selection criteria issue, (2) the 30-second radio spot issue, (3) the last proposal bond issue, (4) the lobbyist disclosure issue, and (5) the Disclosure Affidavit issue. With regard to the failure of Ogilvy Group, Inc., to submit all of the required resumes and descriptions of selection criteria, that failure adversely impacts the interests of the Department by depriving the Department of information "without which an adequate analysis and comparison of proposals is impossible." See Section 3.2 of the RFP, the definition of "minor irregularity" incorporated into the last addendum to the RFP, and Rule 53ER87-12(19), Florida Administrative Code. Therefore, the Ad Team's failure to comply with that requirement is a material deviation which causes the proposal to be non- responsive. For the same reasons, the same conclusion must be reached with regard to the failure of Ogilvy Group, Inc., to submit the 30-second radio spot required by Section 5.9.6,B,3 of the RFP.

    
    

79. With regard to its efforts to submit the performance bond required by Section 3.26 of the RFP, Ogilvy Group, Inc., argues that, because its certified check in the amount of $125,000.00 was in Mr. Cooney's pocket, and because Mr. Cooney accompanied the Ogilvy Group, Inc., proposal materials from the time they were logged in by the Department until the materials were delivered to the room where the proposals were to be opened, Ogilvy Group, Inc., has complied with the

    mandate of Section 3.26 of the RFP to the effect that each person submitting a proposal ". . . is required to accompany its technical proposal with a certified or cashier's check or bid bond in the amount of $125,000. . . ." Without attempting to conclude whether the argument was made facetiously or seriously, it is concluded that the argument is without merit, because it fails to take into account several other requirements of the RFP. First, Section 5.1 of the RFP states, in pertinent part: "Respondent's technical proposal MUST be in a separate sealed envelope or other container and MUST be identified as the Respondent's technical proposal." Second, Section 5.2 of the RFP states, in pertinent part: "Respondents shall deliver an ORIGINAL AND SIX COPIES OF THE TECHNICAL PROPOSAL AND ONE COPY OF THE PRICE PROPOSAL AND CREATIVE SAMPLES to

    the Lottery no later than the date and time in which all proposals must be timely submitted." When the requirements of Sections 3.26, 5.1, and 5.2 are read together, the most logical conclusion that can be reached is that for the proposal bond to "accompany" the technical proposal, it must be inside the separate sealed envelope or other container required by Section 5.1.

    Accordingly, it must be concluded that Mr. Cooney's act of carrying the check in his pocket in close physical proximity to the other proposal materials does not constitute compliance with the requirement of Section 3.24.4/

    
    

80. Even more importantly, the argument described above overlooks the crucial point that the proposal bond is an essential part of the proposal and, like all other parts of the proposal, it must be submitted on time. It was not timely submitted; to the contrary, the proposal bond was not delivered to the Department until a few minutes after the 2:00 p.m. deadline. In this regard, Section 5.3 of the RFP provides:

    
    

    It is the Respondent's responsibility to ensure that its proposal is delivered by the proper time at the place of the proposal opening. Proposals which for any reason are not timely received will not be considered. Late proposals will be declared non- responsive, and will not be scored.

    
    

    Application of the foregoing provision may seem harsh in a case like this where the tardiness in delivering the last essential part of the proposal is a matter of only a few minutes, but the line must be drawn somewhere and it is within the Department's discretion to insist upon strict compliance with the time deadlines in the RFP. See, generally, Medco Containment Services, Inc., et al., v.

    Department of Administration, Division of State Employees' Insurance, et al., DOAH Case No. 91-5421BID (RO issued October 23, 1991), quoted above in the conclusions regarding Beber Silverstein. For the foregoing reasons, it is concluded that, under Section 5.3 of the RFP, Mr. Cooney's late delivery of the cashier's check in the amount of $125,000.00, resulted in the proposal being non-responsive.5/

    
    

81. With regard to the failure of the Ogilvy Group, Inc., to comply with the requirements of Section 3.8 of the RFP by disclosing that Mr. Cooney was acting as its lobbyist in this matter, there are conflicting contentions as to whether Mr. Cooney acted as a lobbyist by seeking to influence the Department on a matter relating to the instant procurement. Those contentions have been resolved by findings of fact to the effect that efforts were made to influence the Department on a matter relating to the instant procurement. It has also been found that officials of Ogilvy Group, Inc., knew about those efforts. Therefore, Ogilvy Group, Inc., was required to comply with Section 3.8 of the RFP and failed to do so. Section 3.8 of the RFP is a mandatory provision. Were

    the Department to waive compliance with such a provision, it would do so at the risk of casting doubts on the integrity of the procurement process.

    Accordingly, the failure of Ogilvy Group, Inc., to comply with the requirements of Section 3.8 is a material deviation which causes its proposal to be non- responsive.

    
    

82. With regard to the failure of the Ogilvy Group, Inc., to answer either Question 7a or 7b on the Disclosure Affidavit (Attachment B to the RFP) required by Section 5.9.3 of the RFP, it is clear from the facts in this case that Ogilvy Group, Inc., failed to provide any answer to either Question 7a or 7b. It is also clear from other information in the proposal submitted by Ogilvy Group, Inc., that it is a wholly owned subsidiary of WPP Group, plc. As a wholly owned subsidiary, all of its stock is ultimately owned by its parent, which ownership could be discovered and, in fact, was discovered by functionaries of the Department from the information included elsewhere in the proposal. Therefore, as with the similar issues involving Benito Advertising, Inc., the failure of the Ogilvy Group, Inc., to answer either Question 7a or 7b on the subject Disclosure Affidavit is a minor irregularity which should be waived, and is not a separate basis for concluding that the proposal is non-responsive.

RECOMMENDATION

For all of the foregoing reasons, it is RECOMMENDED that the Department of Lottery issue a final order in these consolidated cases concluding that, on the basis of the findings of fact and conclusions of law set forth above, all four of the proposals submitted by all four of the Petitioners are not responsive to RFP #92-005-LOT/TEN/P.

DONE AND ORDERED in Tallahassee, Leon County, Florida, this 7th day of January 1992.

MICHAEL M. PARRISH

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 7th day of January 1992.

ENDNOTES

1/ Rulings on the exhibits are memorialized in the transcript of the hearing and need not be repeated here.

2/ See Beber Silverstein's Exhibit 3. Even if the letter had been included as part of the current proposal, it would not have cured the problem, because the letter of May 1, 1991, only addresses the standards of the review. The letter does not express an opinion as to whether the 1989 statements of operations and cash flows are in conformity with generally accepted accounting principles.

3/ This conclusion applies equally to the other three Petitioners to the extent that they may wish to make post-opening supplements to their proposals in an effort to cure any of the deficiencies discussed in this Recommended Order.

4/ Were it necessary to decide the issue, it would probably be concluded that failure to place the proposal bond inside the sealed envelope containing the technical proposal was a minor irregularity, provided the proposal bond was delivered to the Department of the Lottery prior to the deadline for submission of proposals. But that issue need not be reached here because Ogilvy Group, Inc., did not submit its proposal bond until after the deadline for submission of proposals.

5/ The same conclusion is reached if the late delivery of the certified check is considered to be an effort by Ogilvy Group, Inc., to supplement its proposal after the deadline for submissions. For reasons discussed with regard to Beber Silverstein, the Department is within its discretion to refuse to allow proposals to be supplemented after the deadline established in the RFP.

APPENDIX TO RECOMMENDED ORDER IN CASE NOS.

91-7235BID, 91-7236BID, 91-7237BID, & 91-7238BID

The following are my specific rulings on all of the proposed findings of fact submitted by all of the parties in these consolidated cases.

Findings proposed by the Ad Team of Florida, Inc.: Paragraphs 1 through 3: Accepted in substance.

Paragraph 4: Rejected as constituting conclusions of law, rather than

proposed findings of fact. The proposed conclusions are addressed in the conclusions of law portion of this Recommended Order.

Paragraph 5: Accepted in substance.

Paragraph 6: Rejected as subordinate and unnecessary details. Paragraph 7: Rejected as irrelevant to the issues in this case.

Paragraph 8: Rejected as subordinate and unnecessary details that are substantially irrelevant in view of the fact that this is a de novo proceeding under Chapter 120, Florida Statutes.

Paragraph 9: Rejected as irrelevant to the issues in this case. Paragraph 10: Rejected as irrelevant to the issues in this case, and as,

in any event, conclusions of law rather than proposed findings of fact. Paragraph 11: Rejected as irrelevant to the issues in this case. Paragraph 12: Rejected as constituting argument or conclusions of law,

rather than proposed findings of fact.

Paragraph 13: Rejected as irrelevant and as constituting argument about the meaning of documents.

Paragraph 14: Rejected as subordinate and unnecessary details.

Paragraphs 15 and 16: Rejected as subordinate and unnecessary details that are substantially irrelevant in view of the fact that this is a de novo proceeding under Chapter 120, Florida Statutes.

Paragraph 17: Rejected as not fully consistent with the greater weight of the evidence.

Paragraphs 18 through 21: Rejected as subordinate and unnecessary details that are substantially irrelevant in view of the fact that this is a de novo proceeding under Chapter 120, Florida Statutes.

Paragraphs 22 through 24: Accepted in substance.

Paragraph 25: Rejected as contrary to the greater weight of the evidence.

Paragraphs 26 and 27: Irrelevant in light of the meaning of the term "storyboard."

Paragraph 28: Rejected as being contrary to the greater weight of the evidence.

Paragraph 29: The description of the historical development of the manner in which concepts are presented is for the most part accepted, with the exception of the portions that imply that "animatics" and "stealamatics" are storyboards. The last-mentioned portions are rejected as contrary to the greater weight of the evidence.

Paragraph 30: Rejected as inaccurate due to being incomplete; there are more elements to such a decision.

Paragraph 31: Rejected as subordinate and unnecessary details.

Paragraph 32: First sentence is accepted in substance. The second sentence is rejected as subordinate and unnecessary details.

Paragraph 33: Rejected as subordinate and unnecessary details and as not fully supported by persuasive evidence.

Paragraph 34: Rejected as subordinate and unnecessary details.

Paragraphs 35 and 36: Rejected as being contrary to the greater weight of the evidence.

Paragraph 37: The first sixteen words and the last six words of this paragraph are accepted. The remainder of this paragraph is rejected as being contrary to the greater weight of the evidence.

Paragraph 38: Accepted in substance, but with the additional finding that a "stealamatic" is more nearly like an "animatic" than like a "storyboard."

Paragraph 39: First sentence is accepted in substance. The second sentence is rejected as a overly broad generalization that may or may not be true in a specific case.

Paragraph 40: Rejected as being contrary to the greater weight of the evidence.

Paragraph 41: Rejected as irrelevant to the issues in this case and as not fully consistent with the greater weight of the evidence.

Paragraphs 42 and 43: Rejected as subordinate and unnecessary details and as argument about the credibility of witnesses. The arguments are not persuasive.

Paragraphs 44 through 50: Rejected as subordinate and unnecessary details. Paragraphs 51 through 55: Accepted in substance.

Paragraph 56: Rejected as repetitious.

Paragraph 57: Rejected as irrelevant to the issues in this case.

Paragraph 58: Accepted in substance, with the deletion of some editorial language.

Paragraph 59: Accepted in substance.

Paragraph 60: Rejected as irrelevant to the issues in this case. Paragraph 61: Rejected as irrelevant to the issues in this case. Paragraph 62: Rejected as subordinate and unnecessary details.

Paragraph 63: Accepted in substance.

Paragraph 64: Rejected as subordinate and unnecessary details and as irrelevant in view of the fact that the Department of the Lottery could not rely on the financial statements without the required certification.

Paragraph 65: The first sentence is rejected as being contrary to the greater weight of the evidence. The second sentence is rejected as irrelevant to the issues in this case.

Paragraph 66: Rejected as being contrary to the greater weight of the evidence; the absence of the required certification does affect the substance of the matter.

Paragraphs 67 and 68: Rejected as subordinate and unnecessary details that are substantially irrelevant in view of the fact that this is a de novo proceeding under Chapter 120, Florida Statutes.

Paragraphs 69 and 70: Rejected as irrelevant to the issues in this case.

Paragraph 71: Rejected as subordinate and unnecessary details that are substantially irrelevant in view of the fact that this is a de novo proceeding under Chapter 120, Florida Statutes.

Findings proposed by Beber Silverstein:

Paragraphs 1 through 9: Accepted in substance.

Paragraph 10: Rejected as subordinate and unnecessary details.

Paragraph 11: First sentence accepted in substance. Second sentence rejected as irrelevant.

Paragraphs 12 and 13: Accepted in substance.

Paragraphs 14 through 17: Rejected as subordinate and unnecessary details. Paragraphs 18 and 19: Accepted in substance.

Paragraph 20: Rejected as irrelevant to the issues involving Beber Silverstein.

Paragraph 21: Accepted in substance. Paragraph 22: Rejected as repetitious.

Paragraph 23: Rejected as irrelevant to the issues involving Beber Silverstein.

Paragraphs 24 through 29: Accepted in substance.

Paragraph 30: Rejected in part as repetitious and also rejected as subordinate and unnecessary details that are substantially irrelevant in view of the fact that this is a de novo proceeding under Chapter 120, Florida Statutes.

Paragraph 31: Accepted in substance.

Paragraph 32: Rejected as subordinate and unnecessary details.

Paragraph 33: Rejected in part as repetitious and in part as inaccurate; the review reports for the years in question were incomplete because they were not accompanied by the footnotes.

Paragraphs 34 through 36: Accepted in substance.

Paragraph 37: Rejected as contrary to the greater weight of the evidence, because the review is irrelevant without an opinion.

Paragraph 38: Rejected as subordinate and unnecessary details. Paragraph 39: Rejected as subordinate, unnecessary, and irrelevant. Paragraphs 40 and 41: Accepted in substance.

Paragraph 42: First two sentences accepted in substance. Last sentence rejected as an erroneous conclusion, the error being that the contents of the proposal did not contain information sufficient to dispel the concerns.

Findings proposed by Benito Advertising, Inc.:

Paragraphs 1 through 7: Accepted in substance.

Paragraph 8: Rejected as subordinate and unnecessary details that are substantially irrelevant in view of the fact that this is a de novo proceeding under Chapter 120, Florida Statutes.

Paragraph 9: Accepted in substance, with some unnecessary argumentative details omitted.

Paragraphs 10 and 11: Accepted in substance.

Paragraph 12: First sentence accepted in substance. Second sentence rejected as contrary to the greater weight of the evidence.

Paragraphs 13 through 15: The vast majority of the findings proposed in these paragraphs are rejected as being contrary to the greater weight of the evidence. There is conflicting evidence regarding the meaning of the term "storyboard" in the advertising industry. I have resolved the conflict contrary to the view that underlies the findings proposed in these paragraphs.

Paragraph 16: Accepted in substance, with some additional clarifying details.

Paragraph 17: Accepted in substance, with the exception of the last eight words. The last eight words are contrary to the greater weight of the evidence.

Paragraph 18: Accepted in substance.

Paragraph 19: The first sentence is rejected as contrary to the greater weight of the evidence. The second sentence is accepted in substance, but with the additional finding that a "stealamatic" is more nearly like an "animatic" than like a "storyboard." The third sentence is rejected as contrary to the greater weight of the evidence; a "stealamatic" is a more finished product that a two-dimensional storyboard. The fourth sentence is rejected as contrary to the greater weight of the evidence.

Paragraph 20: The first sentence is accepted in substance. The second sentence is rejected as irrelevant. The third sentence is rejected as subordinate and unnecessary details that are substantially irrelevant in view of the fact that this is a de novo proceeding under Chapter 120, Florida Statutes. The fourth sentence is rejected as based on an erroneous assumption that the term "storyboard" does not have a clear meaning.

Paragraph 21: Rejected as primarily comprised of argument, rather than proposed findings of fact.

Findings proposed by Ogilvy & Mather Advertising:

Paragraph 1: Accepted in substance, with the observation that there is other language in the RFP that bears on this subject.

Paragraph 2: Accepted in substance.

Paragraph 3: Accepted in substance, with deletion of some editorial comments.

Paragraph 4: First two sentences accepted in substance. Last sentence accepted in substance up to the comma; the portion after the comma is rejected as contrary to the greater weight of the evidence. The Ogilvy & Mather check was the last check received.

Paragraph 5: The first two sentences are rejected as contrary to the greater weight of the evidence. (See Section 5.1 of the RFP.) The third sentence is rejected as irrelevant. The last sentence is contrary to the greater weight of the evidence.

Paragraph 6: First sentence is accepted in substance. Second sentence is rejected because it is an incorrect interpretation of the cited document. Third sentence is accepted in substance. Fourth and fifth sentences rejected first because they are summaries of testimony, rather than proposed findings of fact, and are also rejected because the factual premise which underlies both sentences contains implications that are contrary to the greater weight of the evidence.

Whether acting in his capacity as "attorney" or in his capacity as "lobbyist," Mr. Cooney communicated with agents of the Department of the Lottery for the purpose of attempting to influence their decision on matters related to the instant procurement.

Paragraph 7: The first two sentences are accepted in substance. The third and fourth sentences are rejected as constituting primarily summaries of testimony, rather than proposed findings of fact. Further, to the extent that the essence of these two sentences tends to imply that Mr. Cooney was not trying to influence the Department's decision regarding one aspect of this case, the sentences are contrary to the greater weight of the evidence. The fifth sentence is rejected as subordinate and unnecessary details. The last sentence is rejected as constituting argument about credibility, rather than a proposed finding of fact.

Paragraph 8: Rejected as constituting argument, rather than proposed findings of fact.

Paragraph 9: Rejected as constituting conclusions of law, rather than proposed findings of fact.

Paragraph 10: First sentence rejected as comprised of subordinate and unnecessary details. Remainder of this sentence rejected as comprised of legal argument rather than proposed findings of fact.

Paragraph 11: Accepted in substance.

Paragraph 12: First and third sentences are accepted in substance. Second sentence is rejected as constituting argument rather than proposed findings of fact.

Paragraph 13: Accepted in substance with some unnecessary details omitted.

Paragraph 14: First sentence accepted in substance. Last two sentences rejected as erroneous conclusions.

Paragraph 15: First sentence is rejected as incorrect. Second sentence is rejected as not supported by persuasive competent substantial evidence and as, in any event, being so vague as to be without relevance to the disposition of issues in this case. Third sentence is rejected as irrelevant; regardless of the industry practice, the resumes were required by the RFP.

Paragraph 16: Rejected as constituting argument, rather than proposed findings of fact.

Paragraph 17: The portions of this paragraph preceding the last two sentences are accepted by quoting from the relevant portion of the RFP. The next to last sentence is rejected as an incorrect interpretation of Section

5.9.5. The last sentence rejected as constituting argument, rather than proposed findings of fact.

Paragraph 18: Rejected as incorrect because the quotation in this paragraph does not appear in the document cited.

Paragraph 19: Rejected as irrelevant to the resolution of the issues in this case.

Paragraph 20: Rejected both as irrelevant to the resolution of the issues in this case and as not supported by persuasive evidence that the Bozell radio spot was a 60-second spot.

Paragraph 21: Rejected as constituting argument, rather than proposed findings of fact.

Findings proposed by the Department of the Lottery: Paragraphs 1(a) through 1(l): Accepted.

Paragraph 2: Accepted in substance.

Paragraph 3: Rejected as constituting commentary on the legal positions of the parties, rather than proposed findings of fact.

Paragraphs 4 through 6: Accepted in substance.

Paragraphs 7 and 8: Rejected as subordinate and unnecessary details. Paragraphs 9 and 10: Accepted in substance.

Paragraph 11: Accepted in substance, with exception of the last sentence. The last sentence is a conclusion of law, which is addressed in the conclusions of law portion of this Recommended Order.

Paragraph 12: The first sentence is rejected as not completely accurate. (The relevant provisions of the RFP are quoted in the findings of fact.) The last sentence is accepted in substance.

Paragraphs 13 through 19: Accepted in substance.

Paragraph 20: Most of this paragraph is rejected as consisting of a mixture of argument and subordinate and unnecessary details. However, the basic proposition that "stealamatics" are not storyboards is accepted.

Paragraphs 21 and 22: Accepted in substance.

Paragraph 23: Rejected as constituting the ultimate conclusion of law, rather than a proposed finding of fact. The proposed conclusion is addressed in the conclusions of law portion of this Recommended Order.

Paragraphs 24 through 27: Accepted in substance.

Paragraph 28: Rejected as constituting the ultimate conclusion of law, rather than a proposed finding of fact. The proposed conclusion is addressed in the conclusions of law portion of this Recommended Order.

Paragraph 29: Accepted in substance.

Paragraph 30: Most of this is rejected as argument about the meaning of the applicable provisions of the RFP, which is resolved by quoting the applicable text of the RFP in the findings of fact. It is however, accepted that adequate analysis and comparison would be difficult, if not impossible, without the information requested by Section 5.9.5 of the RFP.

Paragraphs 31 through 33: Accepted in substance.

Paragraph 34: The first and third sentences are accepted in substance.

The second sentence is rejected as irrelevant.

Paragraph 35: Rejected as constituting the ultimate conclusion of law, rather than a proposed finding of fact. The proposed conclusion is addressed in the conclusions of law portion of this Recommended Order.

COPIES FURNISHED:

George N. Meros, Jr., Esquire Rumberger, Kirk, Caldwell

& Wechsler Suite 700

106 East College Avenue Tallahassee, Florida 32302

John M. Alford, Esquire Holland & Knight

Post Office Drawer 810 Tallahassee, Florida 32302

John French, Esquire

Darren A. Schwartz, Esquire Haben, Culpepper, Dunbar

& French, P.A.

306 North Monroe Street Tallahassee, Florida 32301

Benjamin K. Phipps, Esquire James J. Cooney, Esquire Suite 802

First Florida Bank Tower Tallahassee, Florida 32301

Paul J. Martin, Esquire Assistant Attorney General The Capitol - Suite 1501

Tallahassee, Florida 32399-1050

Dr. Marcia Mann, Secretary Department of Lottery

250 Marriott Drive Tallahassee, Florida 32301

Ken Hart General Counsel

Department of Lottery

250 Marriott 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: 91-007235BID

Orders for Case No: 91-007235BID