STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

PROFESSIONAL TESTING SERVICE, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 92-0577F

)

DEPARTMENT OF PROFESSIONAL )

REGULATION, )

)

Respondent. )

)

FINAL ORDER

This matter came before the undersigned on a petition for attorney's fees and costs filed by Professional Testing Service, Inc. under Section 57.111, Florida Statutes (1991).

APPEARANCES

For Petitioner: Joseph W. Lawrence, Esquire

Post Office Box 1116

Ft. Lauderdale, Florida 33302-1116

For Respondent: Vytas J. Urba, Esquire

1940 North Monroe Street, Suite 60

Tallahassee, Florida 32399-0792 STATEMENT OF THE ISSUES

The issue is whether petitioner is entitled to attorney's fees and costs under Section 57.111, Florida Statutes (1991).

PRELIMINARY STATEMENT

This matter began on January 30, 1992, when petitioner, Professional Testing Service, Inc., filed a petition for attorney's fees and costs seeking an award of fees and costs in the amount of $12,049.93. The petition was filed under Section 57.111, Florida Statutes (1991). As grounds, petitioner alleged generally that it was a prevailing small business party in Case No. 91-7429BID, a case involving the award of a contract for real estate licensure services by respondent, Department of Professional Regulation (DPR). It alleged further that DPR, without substantial justification or special circumstances being present, had originally awarded the contract to a materially nonresponsive bidder, and that after a protest was filed and a hearing held, petitioner eventually prevailed on all material issues and was awarded the contract. On February 19, 1992, respondent filed its response to the petition.

By notice of hearing dated March 12, 1992, a final hearing was scheduled on April 20, 1992, in Tallahassee, Florida. However, because neither party requested a hearing, the hearing was later cancelled and the parties were

advised that pursuant to Rule 22I-6.035(7), Florida Administrative Code, the matter would be decided based upon the pleadings and supporting documents. A memorandum of law and two exhibits (including an affidavit) were subsequently filed by petitioner on April 13, 1992. Thereafter, on April 24, 1992, respondent filed a memorandum in opposition to the petition and a motion to exclude the affidavit as being untimely and unreliable. A memorandum in response to that memorandum was filed by petitioner on April 28, 1992. This order has accordingly been prepared on the basis of the pleadings and supporting documents and the files and records of the Division of Administrative Hearings. The supporting documents include a copy of the agency's final order and the recommended order entered in Case No. 91-7429BID, an affidavit of fees and costs, an affidavit as to reasonableness of fees and costs, the affidavit of petitioner's counsel and, subject to respondent's motion to exclude, the affidavit of Charles E. Barner, Jr., petitioner's registered administrative/legislative lobbyist.

FINDINGS OF FACT

Based upon all of the evidence, including the pleadings and supporting documents, the following findings of fact are determined:

1. On August 16, 1991, respondent, Department of Professional Regulation (DPR), issued Request For Proposal No. 92-002 (RFP) in which it invited various firms to submit proposals for assisting DPR and the Florida Real Estate Commission (Commission) in the production and scoring of the Florida Real Estate and Appraisal Examination for the period beginning January 1, 1992, through June 30, 1993, with a renewal option of one to two years. Such proposals were to be filed no later than September 20, 1991. After all proposals were filed, the RFP called for an evaluation of such proposals by a six-person evaluation committee who would make a recommendation to the Secretary of DPR. In addition, the Commission made a non-binding recommendation to the Secretary who retained final authority to award the contract.

   
   

2. Proposals were timely filed by three firms, including petitioner, Professional Testing Service, Inc. (PTS), Applied Measurement Professionals, Inc. (AMP), and National Assessment Institute. After an evaluation of the proposals was made, the committee recommended that the contract be awarded to AMP. By a 4-3 vote, the Commission concurred in this recommendation. Thereafter, on October 24, 1991, the Secretary selected AMP as the recipient of the contract. A protest was then filed by PTS, and after informal efforts to resolve the dispute were unsuccessful, the matter was forwarded to the Division of Administrative Hearings and was assigned Case No. 91-7429BID.

   
   

3. An evidentiary hearing on the bid dispute was conducted on December 2, 1991. Thereafter, on January 3, 1992, a recommended order was issued recommending that AMP's proposal be found materially nonresponsive and that the contract be awarded to one of the other two vendors. It is noted that, with one minor exception, the recommended order found each of the grounds raised by PTS to be meritorious. On January 23, 1992, DPR issued a final order adopting in toto the findings of fact and conclusions of law and awarding the contract to PTS. That order was not appealed and is now final.

   
   

4. Because it is undisputed that PTS is a corporation having its principal place of business in this state, has less than 25 full-time employees and a net worth of not more than $2 million, PTS is a prevailing small business party in Case No. 91-7429BID.

5. Through affidavits attached to its petition, PTS has established that the requested amount of $12,049.93 in attorney's fees and costs is reasonable and accurate. Respondent does not contest the fact that petitioner incurred that amount of fees and costs in prosecuting the bid protest.

   
   

6. Petitioner contends that there was no rational justification for DPR making an award of the contract to AMP since AMP's bid was clearly nonresponsive on its face and DPR had ample opportunity to ascertain those defects prior to the award of the contract. Findings of fact 27 through 30 in the recommended order issued in Case No. 91-7429BID and adopted by DPR in its Final Order establish that AMP's proposal filed on September 20, 1991, deviated in several material respects from the RFP. These included a failure by AMP to differentiate between costs incurred for candidates examined and candidates who were scheduled to take the examination but did not appear, the use of nine cost components to develop the cost per candidate scheduled instead of the eight components specified in the RFP, the proposed use of DPR personnel rather than its own personnel to provide unofficial grade reports to candidates at the examination site, and a failure to agree to establish an office in the greater Orlando area. All of these deficiencies were present in AMP's original proposal filed on September 20, 1991, and were known by both the evaluation committee and the DPR Secretary prior to the award of the contract. Indeed, this was confirmed by testimony adduced at the evidentiary hearing. In addition, there was an evidentiary showing that DPR allowed AMP to amend and clarify its proposal after all proposals had been filed and declined to enforce material requirements in the RFP. The lack of a reasonable basis in law or fact to justify the preliminary award of the contract to AMP was further corroborated by the statements contained in the affidavit of Charles E. Barner, Jr. Therefore, it is found that the agency was not substantially justified in initially awarding the contract for RFP-91-002 to AMP and that there were no special circumstances present which justified the agency's actions.

   
   

7. There is no evidence to support a finding that the parties intended for Subsection 287.042(2)(c), Florida Statutes (1991) to apply to this proceeding. Indeed, it was not shown that petitioner was required to post a bond with DPR at the time it filed its formal written protest to the award of the contract, and the agency's final order did not contain a provision reimbursing PTS for "fees and charges excluding attorney's fees" incurred in prosecuting Case No. 91- 7429BID.

   
   

   CONCLUSIONS OF LAW

   
   

8. The Division of Administrative Hearings has jurisdiction of the subject matter and the parties hereto pursuant to Sections 57.111 and 120.57(1), Florida Statutes (1991).

   
   

9. Under well-established principles of law, petitioner bears the burden of showing that it is a prevailing small business party within the meaning of the law, and that the requested fees and costs, which cannot exceed $15,000, are reasonable and necessary. Once this burden is met, respondent must then demonstrate that it was "substantially justified" in initiating the bid proceeding or that special circumstances existed to do so. In other words, DPR must show that on October 24, 1991, it had a reasonable basis in law or fact or that other special circumstances existed to justify the issuance of its notice of intent to award the contract for RFP 91-002 to AMP. Department of Professional Regulation v. Toledo Realty, Inc., 549 So.2d 715, 717 (Fla. 1st DCA 1990).

10. Respondent first contends that section 57.111 is not applicable since the bid dispute was not initiated by a state agency (DPR) but rather began through the filing of a formal written protest by PTS. However, this contention must be rejected since the term "initiated by a state agency" is defined in Subsection 57.111(3)(b)3., Florida Statutes (1991) to mean when the state agency was required by law or rule to advise a small business party of a clear point of entry after some recognizable event in the investigatory or other free-form proceeding of the agency.

    
    

    In this case, the agency was obliged to "advise (PTS) of a clear point of entry after (it determined that the contract would be awarded to AMP)."

    
    

11. Because PTS is a small business party that received a final order in its favor, it is concluded that PTS is a prevailing small business party within the meaning of the statute and that the requested fees and costs are reasonable and necessary. In response to this showing, and other than a general denial in its answer to the petition, DPR offered no evidence to show that its proposed agency action was substantially justified. Given the specific finding that the agency knew or should have known that the proposal submitted by AMP was materially nonresponsive to the RFP and thus AMP was not qualified, and the uncontroverted, corroborative affidavit of Barner, it is concluded that the agency was not substantially justified in preliminarily awarding the contract to AMP and thus initiating this action.

    
    

12. Notwithstanding the above conclusion, DPR contends that this case is controlled by Subsection 287.042(2)(c), Florida Statutes (1991) rather than section 57.111, and that under the former statute, a non-agency prevailing party in a bid protest is limited to recovery of "cost and charges, . . . excluding attorney's fees." The statute in question reads as follows:

    
    

    (c) Any person who files an action protesting a decision pertaining to contracts

    administered by the division or a state agency pursuant to s. 120.53(5)(b) shall post with the division or the state agency at the time of filing the formal written protest a bond payable to the division or state agency in an amount equal to 1 percent of the division's or the state agency's estimate of the total volume of the contract or $5,000, whichever is less,

    which bond shall be conditioned upon the payment of all costs which may be adjudged against him in an administrative hearing in which the action is brought and in any subsequent appellate court proceeding. . . . If, after completion of the administrative hearing process and any appellate court proceedings, the agency prevails, it

    shall recover all costs and charges which shall be included in the final order of judgment, excluding attorney's fees . . . If the person protesting the award prevails, he shall recover from the agency all costs and charges which

    shall be included in the final order of judgment, excluding attorney's fees.

    
    

    Respondent's argument is deemed to be unavailing for several reasons. First, there is no indication in this record or Case No. 91-7429BID that the parties

    intended this provision to control when Case No. 91-7429BID was inititated. Second, counsel has cited no authority to support the proposition that subsection 287.042(2)(c) is the exclusive means by which a prevailing party in a bid dispute can make himself whole. Indeed, the courts have held that section

    57.111 was enacted "to provide alternative, and in some cases, additional means for a small business to recover costs and attorney fees when a state agency inititates action against it." City of Naples Airport Authority v. Collier Development Corporation, 515 So.2d 1058, 1059 (Fla. 2d DCA 1987). Accord: Ann & Jan Retirement Villa, Inc. v. Department of Health and Rehabilitative Services,

    580 So.2d 278, 280 (Fla. 4th DCA 1991). This holding is further supported by the fact that subsection 287.042(2)(c) does not authorize the award of attorney's fees but is limited to only "costs and charges". Finally, there is precedent for a prevailing party in a bid dispute to file a claim under section

    57.111. See, e. g., Global Marketing of North Carolina v. Department of Environmental Regulation, 13 F.A.L.R. 3440 (DOAH, August 9, 1991). Given these considerations, the undersigned rejects the contention that subsection 287.042(2)(c) is the exclusive means for recovering costs in a bid dispute and that PTS is thus barred from filing a claim under section 57.111.

    
    

13. Respondent's motion to exclude the affidavit of Barner is denied.

Based on the foregoing findings of fact and conclusions of law, it is, ORDERED that the petition for attorney's fees and costs filed on behalf of

Professional Testing Service, Inc. be GRANTED and that the Department of

Professional Regulation pay petitioner $12,049.93 in such fees and costs. DONE and ORDERED this 6th day of May, 1992, in Tallahassee, Florida.

DONALD R. ALEXANDER

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 6th day of May, 1992

COPIES FURNISHED

Joseph W. Lawrence, Esquire Post Office Box 1116

Fort Lauderdale, Florida 33302-1116

Vytas J. Urba, Esquire

1940 North Monroe Street, Suite 60

Tallahassee, Florida 32399-0792

Jack L. McRay, Esquire

1940 North Monroe Street, Suite 60

Tallahassee, Florida 32399-0792

NOTICE OF RIGHT TO JUDICIAL REVIEW

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

Docket for Case No: 92-000577F

Orders for Case No: 92-000577F