STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

PRICE WATERHOUSE, )

)

Petitioner, )

)

v. ) CASE NO. 91-7998BID

) FLORIDA DEPARTMENT OF TRANSPORTATION, )

)

Respondent, )

)

and )

)

ROY JORGENSEN & ASSOCIATES, INC., )

)

Intervenor. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case on December 30, 1991, in Tallahassee, Florida, before the Division of Administrative Hearings, by its designated Hearing Officer, Diane K. Kiesling.

APPEARANCES

For Petitioner: Steven W. Huss

Attorney at Law

1017-C Thomasville Road Tallahassee, FL 32303

For Respondent: Susan P. Stephens

Assistant General Counsel Department of Transportation 605 Suwannee Street, MS-58 Tallahassee, FL 32399-0458

For Intervenor: William C. Grenke, Pro Se

Vice President

Roy Jorgensen & Assoc., Inc. 3735 Buckeystown Pike

Buckeystown, MD 21717 STATEMENT OF ISSUES

The ultimate issue is whether Price Waterhouse (Price) is the lowest responsive and responsible bidder on RFP-DOT-91/92-9005 or whether the award to Roy Jorgensen & Associates, Inc., (Jorgensen) should be upheld.

PRELIMINARY STATEMENT

Petitioner Price Waterhouse filed a formal protest on December 5, 1991, challenging the Florida Department of Transportation's (DOT) intent to award

RFP-DOT-91/92-9005 (RFP) to Jorgensen. Jorgensen filed a Petition to Intervene in the late afternoon on December 24, 1991. As a result of the intervening holidays, a ruling could not be made on the Petition to Intervene until the beginning of the hearing on December 30, 1991. The Petition to Intervene was granted, but William Grenke was deemed unqualified to represent Jorgensen pursuant to Rule 22I-6.008, F.A.C. The participation of Jorgensen through its representative (albeit unqualified) was limited to the testimony of Mr. Grenke.

Price filed a Second Amended Protest and requested that it be considered in conjunction with the First Amended Protest. There was no objection and the request was granted.

Price presented the testimony of Steve Simonetto, Don Hoffeditz, and James

1. Dolson, Jr. Price's Exhibits 1-3 were admitted and Price's Exhibit 4 was admitted solely as needed for reference to those portions used in attempted impeachment.

   
   

   DOT presented the testimony of William C. Conner, James F. Dolson, Jr., William C. Grenke, and Charles E. Johnson, Jr.

   
   

   Price called William C. Grenke as a rebuttal witness. Joint Exhibits 1-5 were admitted in evidence.

   The transcript of the proceeding was filed on January 7, 1992. Price and DOT timely filed their proposed findings of fact and conclusions of law on January 17, 1992. All proposed findings of fact and conclusions of law have been considered. A specific ruling on each proposed finding of fact is made in the Appendix attached hereto and made a part of this Recommended Order.

   
   

   FINDINGS OF FACT

   
   

   1. DOT issued a request for proposals (RFP) entitled Business Area Analysis in the Functional Area of Production Management, with proposals due on November 15, 1991. Eight proposals were timely filed.

      
      

   2. The RFP contains criteria for evaluating the proposals, including factors to be considered and available points to be awarded.

      
      

   3. Evaluation of the proposals was broken down into two parts, a technical review and a price review. The technical part was further broken down into evaluation of the Management Plan, worth up to 30 points, and of the Technical Plan, also worth 30 points. The price or cost review was worth 40 points.

      
      

   4. The technical review was also broken down into sub-parts based on the criteria contained in the RFP.

      
      

   5. The technical portion of the proposals was performed by a five-member committee, comprised of William Conner, James Dolson, Jr., Rebecca Clemens, Mavis Georgalis, and Paul Benner.

      
      

   6. All eight proposals were accepted by DOT as responsive and were furnished to each committee member for independent review and evaluation as required by the RFP.

      
      

   7. Following the independent evaluations, the committee met and discussed the proposals. While there was no requirement to do so, some committee members

      changed scores based on considerations raised in this discussion. However the changes were minor and did not alter the final result of the committee's ranking and award of points to the various proposals.

      
      

   8. The committee ranked the Price Waterhouse proposal highest on the technical portion, giving it a total of 48.2 points out of a possible 60. It ranked Jorgensen second, giving it a total of 43.8 points out of that possible 60.

      
      

   9. The cost or price portion of the proposals was reviewed separately by Charles Johnson of the Contractual Services Office of DOT.

      
      

   10. Jorgensen was the lowest bidder and received the maximum available points of 40. Price bid the third highest price and received 29.50 points.

       
       

   11. When the points from the separate evaluations were totaled, Jorgensen received a total of 83.6 points and Price received a total of 77.7. Jorgensen was first and Price was second.

       
       

   12. On November 22, 1991, DOT posted the bid tabulations and indicated its intent to award the contract to Jorgensen.

       
       

   13. Price timely filed its initial protest and its formal protest.

       
       

   14. Read as a whole, the RFP requires that the proposed team members from each bidder have qualifications and substantial experience in the functional area of production management and also in the development of information systems. There is no requirement that all proposed team members have experience in both areas. A team which contains different members with expertise in each of the required areas is sufficient to be responsive to the RFP.

       
       

   15. The committee used solely the criteria in the RFP to evaluate the proposals.

       
       

   16. Petitioner singles out various sentences from the RFP to support its argument that each member of the team must have significant experience in development of business information systems, however in doing so it overlooks other requirements and it fails to read the RFP as a whole. Hence, all of Petitioner's proposed facts relating to this argument are rejected as irrelevant.

       
       

   17. Price also argues that the fact that Jorgensen's proposed team does not have a full-time member makes Jorgensen's proposal unresponsive, unworkable, and fatally flawed. This argument is also rejected along with those facts alleged in support of the argument.

       
       

   18. The RFP nowhere requires that one or more members of the proposed team be full-time.

       
       

   19. While the committee had some concerns about the lack of a full-time member on Jorgensen's proposed team, the points awarded reflect the extent of that concern. At no time did the committee intend that the points awarded on the proposals be contingent on Jorgensen changing its staffing pattern to include a full-time person.

       
       

   20. It was assumed by the committee, DOT, and both Price and Jorgensen that the actual staffing would be subject to adjustment after the contract was

       awarded and during the performance of the contract to reflect needs as they arose. Any negotiation of staffing patterns would occur after the bid award and the bid award would not be contingent on such negotiations.

       
       

   21. At no time prior to the posting of the bid tabulations and intent to award to Jorgensen did anyone from DOT contact Jorgensen to solicit a change in its proposed personnel allocation. Hence no unfair advantage was afforded to Jorgensen over Price.

       
       

       CONCLUSIONS OF LAW

       
       

   22. The Division of Administrative Hearings has jurisdiction of the parties to and subject matter of these proceedings. Sections 120.53(5) and 120.57(1), Florida Statutes.

       
       

   23. The burden of proof in a proceeding challenging the award of a contract to one bidder over another is on the protestor to show that it is entitled to the award pursuant to the statutory criteria applicable to that particular procurement process. The standard is not that found in Department of Transportation v. Groves-Watkins Constructors, 530 So.2d 912 (Fla. 1988), because that standard is limited to cases involving an agency's discretionary decision to reject all bids. The Groves-Watkins case does not apply to an administrative protest of an agency's evaluation of competitive responses to a RFP which were not rejected by the agency. The correct standard is that stated in Couch Construction Company v. Department of Transportation, 361 So.2d 184 (Fla. 1st DCA 1978), namely the lowest and best responsible and responsive bidder.

       
       

   24. An agency's discretion is limited by the nature of the competitive bidding process as established by statute. This procurement process arose pursuant to Section 287.057(2), Florida Statutes, which states in pertinent part:

       
       

       (2) When an agency determines in writing that the use of competitive sealed bidding is not practicable, commodities or contractual services shall be procured by competitive sealed proposals. A request for proposals which includes a statement of the commodities or contractual services sought and all contractual terms and conditions applicable to the procurement of commodities or contractual services, including the criteria, which shall include, but need not be limited to, price, to be used in determining

       acceptability of the proposal shall be issued.

       . . . The award shall be made to the responsible offeror whose proposal is determined in writing to be the most advantageous to the state, taking into consideration the price and the other criteria set forth in the request for proposals. . . .

       
       

       Additionally, Section 287.012(17) defines a "responsive offeror" to mean "a person who has submitted a bid or proposal which conforms in all material respects to the invitation to bid or request for proposals."

   25. DOT applied this statutory standard by proposing to award the contract in this case to the responsive offeror who met the qualifications and specification set forth in the RFP, including criteria for both cost and technical considerations. Unless DOT's proposed award to Jorgensen is an arbitrary or capricious exercise of its discretion, because it fails to adhere to the statutory standard, the award to Jorgensen must stand.

       
       

   26. Turning to the evidence in this case, certain facts stand out in importance. First, Jorgensen's proposal did conform to and was responsive to the material aspects of the RFP. The methods used for the evaluation of all proposals was congruent with the standards and criteria specified in the RFP. The points awarded both by the individual committee members and by the committee's final tabulation are not arbitrary or capricious. The points awarded for cost are correct and are not arbitrary or capricious. Jorgensen was not given any advantage over the other bidders. Finally, Jorgensen's offer was the lowest responsive offer based on the criteria and standards contained in the statute and the RFP.

       
       

   27. Accordingly, it can only be concluded that Price failed to carry its burden of proof and Jorgensen is entitled to the award in RFP-DOT-91/92-9005.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Transportation enter a Final Order

awarding the contract in RFP-DOT-91/92-9005 to Roy Jorgensen and Associates, Inc., and denying the protest filed by Price Waterhouse.

DONE and ENTERED this 27th day of January, 1992, in Tallahassee, Florida.

DIANE K. KIESLING

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, FL 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 27th day of January, 1992.

APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 91-7998BID

The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on the proposed findings of fact submitted by the parties in this case.

Specific Rulings on Proposed Findings of Fact Submitted by Petitioner, Price Waterhouse

1. Each of the following proposed findings of fact is adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding

   of Fact which so adopts the proposed finding of fact: 1(1), 3(11), 4(8), and 13(13).

   
   

2. Proposed findings of fact 2, 5-8, 11, 12, 14-18, 56, 57, and 59 are subordinate to the facts actually found in this Recommended Order.

   
   

3. Proposed findings of fact 9, 10, 28-31, and 37-55 are unsupported by the competent and substantial evidence. For most of these proposals, the only record support is found in isolated words and statements which have been taken out of context or distorted. The greater weight of the credible evidence does not support these proposals.

   
   

4. Proposed findings of fact 19-27, 32-36, and 58 are irrelevant. See Findings of Fact 16 and 17.

Specific Rulings on Proposed Findings of Fact Submitted by Respondent, Department of Transportation

1. Each of the following proposed findings of fact is adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 1-3(1-3), 4(3), 5(4), 4(5&6), 5(6), 6&7(8), 8-12(9-13), 13(15), 14&15(14), 16(18), and 17(21). [Note: there are two paragraphs 4 and 5.]

COPIES FURNISHED:

Ben G. Watts, Secretary Department of Transportation 605 Suwannee Street

Tallahassee, FL 32399-0458

Susan P. Stephens Assistant General Counsel

Department of Transportation 605 Suwannee Street, MS-58 Tallahassee, FL 32399-0458

Steven W. Huss Attorney at Law

1017-C Thomasville Road Tallahassee, FL 32303

William C. Grenke Vice President

Roy Jorgensen & Associates, Inc. 3735 Buckeystown Pike

Buckeystown, MD 21717

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.

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AGENCY FINAL ORDER

=================================================================

STATE OF FLORIDA DEPARTMENT OF TRANSPORTATION

PRICE WATERHOUSE,

Petitioner,

vs.

FLORIDA DEPARTMENT OF

TRANSPORTATION, CASE NO. 91-7998BID

Respondent,

and

ROY JORGENSEN & ASSOCIATES, INC.,

Intervenor.

/

FINAL ORDER

After due notice, a hearing pursuant to Section 120.57(1), Florida Statutes, was held in this matter on December 30,1991, in Tallahassee, Florida, before Diane K. Kiesling, a duly assigned Hearing Officer of the Division of Administrative Hearings.

Appearances on behalf of the parties were as follows: For Petitioner: Steven W. Huss, Esquire

1017-C Thomasville Road

Tallahassee, Florida 32303

For Respondent: Susan P. Stephens

Assistant General Counsel 605 Suwannee Street, M.S. 58

Tallahassee, Florida 32399-0458

For Intervenor: William C. Grenke, Pro Se

Vice President

Roy Jorgensen & Associates, Inc. 3735 Buckeystown Pike

Buckeystown, Maryland 21717 STATEMENT OF ISSUES

The ultimate issue to be determined is whether Price Waterhouse is the lowest responsive and responsible bidder on RFP-DOT-91/92-9005 or whether the

Department of Transportation's (hereinafter Department) intended award to Roy Jorgensen & Associates (hereinafter Jorgensen) should be upheld.

PRELIMINARY STATEMENT

Petitioner, Price Waterhouse, Filed a formal protest on December 5, 1991, of the Department's intent to award RFP-DOT-91/92-9005 (hereinafter RFP), to Jorgensen. Jorgensen Filed a Petition to Intervene in the matter on December 24,1991. The petition was granted but William Grenke was deemed unqualified to represent Jorgensen pursuant to Florida Administrative Code Rule 221-6.008. The participation of Jorgensen through its unqualified representative was limited to the testimony of Mr. Grenke.

Price Waterhouse Filed a Second Amended Protest and requested that it be considered in conjunction with the First Amended Protest. There was no objection and the request was granted.

Price Waterhouse presented the testimony of Steve Simonetto, Don Hoffeditz, and James F. Dolson, Jr. Price Waterhouse's exhibits 1-3 were admitted and its Exhibit 4 was admitted solely as needed for reference to those portions used in attempted impeachment. The Department presented the testimony of William C. Conner, James F. Dolson, Jr., William C. Grenke, and Charles E. Johnson, Jr.

Price Waterhouse called William C. Grenke as a rebuttal witness. Joint Exhibits 1-5 were admitted into evidence.

The transcript of the proceeding was filed on January 7, 1992. Price Waterhouse and the Department timely filed their proposed Findings of Fact and Conclusions of Law on January 17, 1992. Price Waterhouse timely filed exceptions to the hearing officer's Recommended Order with the Department's Clerk of Agency Proceedings on February 7, 1992. Price Waterhouse's exceptions are addressed individually as set out below.

References to the Joint Prehearing Stipulation will be noted as (JPS); references to the hearing transcript will be noted as (Tr. p. , 1. ); references to exhibits will be noted as (Pet. Ex. # or Resp. Ex. # ).

Exception #1 - Price Waterhouse objects to the Hearing Officer's Factual Finding #6 that "[a]ll eight proposals were accepted by DOT as responsive and were furnished to each committee member for independent review and evaluation as required by the RFP," as not established by the record. Ample competent substantial record evident supports this factual finding. (JPS - Admitted Fact #2; Pet. Ex. #2, p. 9, 1-12 and p. 17, 1. 10-20; Pet. Ex. #3, p. 45, 1. 15-25

and p. 46,1. 24-25 and p. 47, 1. 1-6; Tr. p. 100, 1. 9-11 and p. 101, 1. 14-16)

Therefore, Price Waterhouse's exception to Factual Finding No. 6 is rejected as having no basis in the record.

Exception #2 - Price Waterhouse objects to the Hearing Officer's Factual Finding #7. Price Waterhouse fails to cite to any record support for its objection and it is therefore rejected as unsubstantiated.

Exception #3 - Price Waterhouse merely disagrees with - the Hearing Officer's Factual Finding #14 but falls to cite to any record evidence to support its exception. It is therefore rejected as unsubstantiated.

Exception #4 - Price Waterhouse disagrees with the hearing officer's finding that "[t]he committee used solely the criteria in the RFP to evaluate

the proposals," and fails to cite to any record support for its exception. This exception is therefore rejected.

Exception #5 - Price Waterhouse disagrees with the hearing officer's factual Finding that the RFP taken as a whole does not require each member of the team to have "significant experience in development of business information systems... ." The hearing officer found that Price Waterhouse sought out various sentences in the RFP but failed to look at the document as a whole which rendered the sentences cited by Price Waterhouse irrelevant in determining this issue. Price Waterhouse cites no record support for its position and therefore this exception if rejected.

Exception #6 - Price Waterhouse falls to cite to any provision in the RFP that does make it a requirement that one or more members of the proposed team be full-time. Therefore, absent any record support, this exception is rejected.

Exception #7 - This exception if treated in the same manner as the previous exception.

Exception #8 - Price Waterhouse failed to cite to any record support for its exception and it appears that the hearing officer's finding is supported by competent substantial record evidence. This exception is therefore rejected.

Exception #9 - Price Waterhouse fails to cite to any record support which purportedly "clearly reflects staffing patterns were intended or were assumed to be negotiable by the review committee members and such negotiation was a condition precedent to the award of the contract to Jorgensen." This exception is therefore rejected as unsupported.

FINDINGS OF FACT

Based on a review of the record in its entirety, the hearing officer's Findings of Fact are adopted by the Department and incorporated and made a part hereof as if fully set out herein.

CONCLUSIONS OF LAW

Based on the foregoing Findings of Fact, the following conclusions are made. The hearing officer's conclusions of law are accepted in part and amended and expanded as set out below.

The appropriate standard for the burden of proof in a proceeding challenging the award of a contract to one bidder over another is that set out in Department of Transportation v. Groves-Watkins Constructors, 530 So.2d 912 (Fla. 1988), and recently applied by the First District Court of Appeal in Scientific Games. Inc. v. Dittler Brothers. Inc., 586 So.2d 1131 (Fla. 1st DCA 1991). There the court held that:

The Hearing Officer need not, in effect, second guess the members of the evaluation committee to determine whether he and/or other reasonable and well- informed persons might have reached a contrary result. . . . The hearing officer's sole responsibility is to ascertain whether the agency acted fraudulently,arbitrarily, illegally, or dishonestly. Groves-Watkins, 530 So.2d at 914. Groves-Watkins does apply to an administrative protest of an agency's evaluation of competitive responses to an RFP. The Florida Supreme Court overturned Couch Construction Company v. Department of Transportation, 361 So.2d

184 (Fla. 1st DCA 1978), by implication. The First District Court of Appeal

applied the Groves-Watkins standard in Scientific Games and therefore has expressed its intention to follow the supreme court's standard for the burden of proof in this type of case rather than that contained in its own decision rendered a decade prior to the Groves-Watkins decision.

Jorgensen's proposal did conform to and was responsive to the material aspects of the RFP. The methods used for the evaluation of all proposals was congruent with the standards and criteria specified in the RFP. The points awarded both by the individual committee members and by the committee's final tabulation are not arbitrary or capricious. The points awarded for cost are correct and are not arbitrary or capricious. Jorgensen was not given any advantage over the other bidders. Jorgensen's offer was the lowest responsive offer based on the criteria and standards contained in the statute and the RFP.

Finally, nothing contained in the record reflects that the Department acted fraudulently, illegally, or dishonestly. Accordingly, it can only be concluded that Price Waterhouse failed to carry its burden of proof and Jorgenson is entitled to the award of a contract in RFP-DOT- 91/92-9005.

WHEREFORE, based on the foregoing Findings of Fact and Conclusions of Law and a review of the record in its entirety, it is

ORDERED that Price Waterhouse's protest of the Department's intent to award the contract in RFP-DOT-91/92-9005 to Roy Jorgensen and Associates, Inc., is hereby DISMISSED.

DONE AND ORDERED this 4th day of March, 1992.

BEN G. WATTS, P.E.

Secretary

Florida Department of Transportation Haydon Burns Building

605 Suwannee Street

Tallahassee, Florida 32399

NOTICE OF RIGHT TO APPEAL

THIS ORDER CONSTITUTES FINAL AGENCY ACTION AND MAY BE APPEALED BY PETITIONER PURSUANT TO SECTION 120.68, FLORIDA STATUTES, AND RULE 9.110, FLORIDA RULES OF APPELLATE PROCEDURE, BY FILING A NOTICE OF APPEAL CONFORMING TO THE REQUIREMENTS OF RULE 9.110(D), FLORIDA RULES OF APPELLATE PROCEDURE, BOTH WITH THE APPROPRIATE DISTRICT COURT OF APPEAL, ACCOMPANIED BY THE APPROPRIATE FILING FEE, AND WITH THE DEPARTMENT'S CLERK OF AGENCY PROCEEDINGS, HAYDON BURNS BUILDING, 605 SUWANNEE STREET, M.S. 58, TALLAHASSEE, FLORIDA 32399-0458, WITHIN THIRTY

(30) DAYS OF RENDITION OF THIS ORDER.

Copies furnished to:

Diane K. Kiesling Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

Steven W. Huss Attorney at law

1017-C Thomasvi1le Road Tallahassee, Florida 32303

William C. Grenke Vice President

Roy Jorgensen & Associates, Inc. 3735 Buckeystown Pike

Buckeystown, MD 21717

Susan Stephens

Assistant General Counsel

Florida Department of Transportation 605 Suwannee Street

Tallahassee, Florida 32399

Docket for Case No: 91-007998BID

Orders for Case No: 91-007998BID