STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

YOUTH CRIME WATCH OF AMERICA, )

)

Petitioner, )

)

vs. ) CASE NO. 92-1145BID

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to Notice, this cause was heard by Linda M. Rigot, the assigned Hearing Officer of the Division of Administrative Hearings, on March 4, 1992, in Tallahassee, Florida.

APPEARANCES

For Petitioner: John Lisk, Esquire

3675 Justison Road

Coconut Grove, Florida 33133

For Respondent: Linda Harris

Deputy General Counsel Department of Health and Rehabilitative Services Building One, Room 407 1323 Winewood Boulevard

Tallahassee, Florida 32399-0700 STATEMENT OF THE ISSUE

The issue presented is whether Respondent acted fraudulently, arbitrarily, illegally, or dishonestly in rejecting Petitioner's proposal.

PRELIMINARY STATEMENT

On January 29, 1992, Petitioner received correspondence from Respondent advising that Petitioner's proposal for funding had been rejected during the pre-screening stage because it lacked an essential requirement. That correspondence further referred Petitioner's attention to Section 120.53(5), Florida Statutes, which regulates the filing of bid protests. By letter dated January 31, 1992, Petitioner advised Respondent that it intended to file a written protest. By letter dated February 6, 1992, Petitioner advised Respondent that it was protesting Respondent's decision and set forth the reasons therefor. On February 19, 1992, Respondent transferred this matter to the Division of Administrative Hearings for the conduct of a formal proceeding.

Petitioner presented the testimony of Jeff Miller, Ann Lisk, and Kimberly Budnick. Additionally, Petitioner's Exhibits numbered 1-5 were admitted in evidence.

Both parties submitted post-hearing proposed findings of fact in the form of proposed recommended orders. A specific ruling on each proposed finding of fact can be found in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. The United States Department of Justice, Office of Juvenile Justice and Delinquency Prevention, is authorized by the Juvenile Justice and Delinquency Prevention Act of 1974, as amended, to provide monetary grants to states which can then provide grants and contracts to public and private agencies for education, training, research, prevention, diversion, treatment, and rehabilitation programs in the area of juvenile delinquency and programs to improve the juvenile justice system. Respondent has been designated the state planning agency responsible for the administration and implementation of Florida's programs pursuant to the federal Act. Respondent administers this program with the guidance of the Governor's Juvenile Justice and Delinquency Prevention Advisory Committee.

   
   

2. The federal Act requires that at least 66 2/3% of the funds received by a state must be "passed through" to (1) units of general local government or combinations thereof; (2) programs of local private agencies to the extent such programs are consistent with the State Plan, except that direct funding of any local private agency by a state shall be permitted only if such agency requests such funding after it has applied for and been denied funding by any unit of general local government or combination thereof; or (3) programs of Indian tribes that perform law enforcement functions. The other 33 1/3% of the funds may be retained by the state, may be used to pay administrative and planning expenses, or may, at the discretion of the state, be awarded to any qualified applicant.

   
   

3. Florida has chosen to "pass through" 82% of the federal funding instead of the 66 2/3% required by federal law. Florida uses the remainder of the funds (18%) to pay planning and administrative expenses.

   
   

4. Respondent determined that since it would treat all of the grants as "pass through" money, proof of denial of local funding would be required of all applicants for funding except for applicants who were governmental agencies. Accordingly, the same criteria would be applied to all entities seeking funding.

   
   

5. In preparation for announcing the instant request for proposals, Respondent conducted workshops around the state. A representative of Petitioner attended the workshop conducted on August 9, 1991, in West Palm Beach, Florida. Persons attending the workshop were permitted to ask questions regarding the forthcoming request for proposals and regarding proposals to be submitted in response thereto.

   
   

6. The Department's request for proposals was released on September 9, and a copy was mailed to Petitioner on that date. The request for proposals established a deadline of October 4, 1991, for receipt of written questions concerning the request for proposals and a deadline of October 31, 1991, for receipt of all proposals submitted pursuant to the request for proposals. Page

   9 of the request for proposals specifically set forth the procedures and

   deadlines by which any adversely affected person or firm could file a protest of either the specifications in the request for proposals or the subsequent award of grants.

   
   

7. Section X on page 12 of the request for proposals reserved to the Department the right to reject any and all proposals and further provided that ". . . an application shall not be considered or scored if the application . . . [d]oes not contain evidence of a denial of local funding . . . (Governmental agencies are exempt) . . . ." Similarly, Section Z on page 12 of the request for proposals sets forth that all public and private agencies are eligible to receive awards and further provides on page 13 of the request for proposals as follows:

   
   

   2. Pursuant to 42 U.S.C. Section 5633 (a)(5)(b), local private agencies must submit evidence that they have requested and have been denied funding from any units of general local government or combinations thereof. Such evidence shall be either a certified copy of meeting minutes reflecting a request and denial of funds

   within the current budget cycle or a letter of denial of funds reflecting such action or a letter from a County Administrator or Manager of a Municipality indicating the unavailability of funds. Failure to submit evidence of denial of local funding shall make the applicant ineligible for funding. Governmental agencies are not required to comply with this requirement.

   
   

   Similarly, Section V on page 19 of the request for proposals provides as follows:

   
   

   Proof of Denial of Funding (Non-Governmental Agencies Only)

   Pursuant to 42 U.S.C. Section 5633(a)(5)(b), local private agencies must submit evidence that they have requested and have been denied funding from any units of general local government or combinations thereof. Such evidence shall be either a certified copy of minutes of meetings reflecting a request and denial of funds within the current budget

   cycle or a letter of denial of funds reflecting such action or a letter from a County Administrator or Manager of a Municipality indicating the unavailability of funds.

   Failure to submit evidence of denial of local funding shall make the applicant ineligible for funding.

   
   

   Similarly, Appendix D to the request for proposals is the Essential Requirement Checklist which provides, introductorily, as follows:

   
   

   Applicants must indicate the application page where the required essential documents are found and must initial the checklist to verify

   that they have reviewed the application and

   have included the essential documents. Failure to complete and include any of the required essential documents will result in elimination of the application from further consideration for funding.

   
   

   Item numbered 6 on the Essential Requirement Checklist calls for the inclusion of evidence of denial of local funding, refers the reader to Section III, Z, where that requirement is discussed, and further states "Governmental Agencies are exempt."

   
   

8. During the time period for submission of written questions regarding any of the terms contained in the request for proposals, the Department received seven written questions. Three of those questions involved the requirement for submitting proof of denial of local funding. Copies of the written answers to those questions were provided to all other known interested persons. Petitioner received copies of those letters.

   
   

9. The Department's answers contained in those three letters pointed out the requirement that local private agencies submit evidence that they had requested and been denied funding from any unit of general local government or combination thereof because the funds to be awarded are not to be utilized to supplant local government funds. The letters further pointed out the minimum requirement for establishing proof of denial by submitting a certified copy of minutes of meetings or a letter from a county or municipal administrator or manager. Examples of appropriate units of local government were provided, with a caveat that the Department was attempting to be as flexible as possible. Lastly, the Department's written answers specifically included the following information: ". . . any nongovernmental applicant which does not supply the denial of funding documentation with their application will be rejected at the pre-screening phase. The U.S. Department of Justice has made it very clear that there are no exceptions to this condition."

   
   

10. The Department received Petitioner's proposal on October 31, 1991, the last day for timely filing such proposals.

    
    

11. According to its proposal, Youth Crime Watch of America is a nonprofit organization. Petitioner's program is patterned on the citizens crime watch program but is based in the school setting. Petitioner performs two main functions. First, school systems contact Petitioner, which then provides information and training for the setting up of a youth crime watch program in that school system's schools. Second, Petitioner co-sponsors an annual conference with the National Crime Prevention Council of Washington, D.C. Petitioner's proposal sought funds to hire a state coordinator, to hire a conference coordinator, and to pay for printing, travel, and conference expenses.

    
    

12. Petitioner's proposal includes the Essential Requirement Checklist. Petitioner checked item numbered 6 to signify that evidence of denial of local funding was included, and stated that such evidence could be found on pages 37 and 38 of Petitioner's proposal. Petitioner's executive director initialled that entry to verify that the application had been reviewed and the essential documents had been included. Page 37 of Petitioner's proposal was a copy of a letter from the Florida Department of Education, a state agency, denying Petitioner's request for funding. Page 38 was a copy of a letter from the United States Department of Justice, a federal agency, denying funding for a

    proposal submitted by Petitioner. No other proof of denial of local funding was submitted by Petitioner, and, therefore, no evidence of denial of local funding was included in Petitioner's proposal.

    
    

13. Page 21 of Petitioner's proposal contains a section entitled "Denial of Funding" which reads as follows:

    
    

    Due to the unique position of the Youth

    Crime Watch Program of America and it's [sic] affiliates, local funding denial stipulations do not apply for this grant application.

    All local funding goes directly to the local affiliates. YCWA has received small local contributions designated for use in the production of the Annual Conference. Those contributions are made at the time of the Conference and do not impact the General Operating Budget. YCWA did, however, recently apply for Federal Office of Juvenile Justice & Delinquency Prevention Funding and was denied. A copy of that denial is included in the appendices of this application.

    
    

    Accordingly, the text of Petitioner's proposal advised Respondent both that Respondent's local funding denial requirement did not apply to the Petitioner and that Petitioner had received small local contributions.

    
    

14. The word "statewide" appears only one time in Petitioner's proposal. It is found on page 28 of the 42-page proposal in the job description for the National Youth Crime Prevention Conference coordinator and refers to student scholarships. However, on page 7 of Petitioner's proposal the text explains that Petitioner has brought its program to school districts in 34 counties in the state of Florida and that the annual conference which Petitioner co-sponsors is attended by persons from around the United States and from around the world.

    
    

15. The Department employee assigned as the contact person for this particular grant program reviewed all proposals received in response to the Department's request for proposals. Specifically, she reviewed the Essential Requirement Checklist to verify that each proposal contained all essential documents. She determined that Petitioner's proposal failed to contain evidence of denial of local funding and that Petitioner's proposal further indicated that Petitioner had received some form of local funding. Petitioner's proposal was therefore disqualified and was not reviewed by the screening committee and then by the Governor's Juvenile Justice and Delinquency Prevention Advisory Committee. That Advisory Committee met on January 8, 1992, to review the recommendations of the screening committee and to make final funding decisions.

    
    

16. By letter dated January 24, 1992, Petitioner was advised that its proposal was not considered because it failed to meet the essential requirement of proof of denial of local funding. Petitioner received that letter on January 29, 1992. By letter dated January 31, 1992, Petitioner advised Respondent that it intended to file a written protest. By letter dated February 6, 1992, Petitioner advised Respondent of the specific basis for the protest.

    
    

17. In addition to Petitioner, two other applicants were rejected for lack of proof of denial of local funding.

18. The State Plan defines local private agency as a private nonprofit agency or organization that provides program services within an identifiable unit or combination of units of general local government.

    
    

19. The parties have stipulated that Petitioner was an eligible applicant to apply for a grant under the request for proposals, that Petitioner's request for a hearing was timely, and that Respondent did not act fraudulently or dishonestly in removing Petitioner's proposal from consideration by the screening committee and then by the Governor's Advisory Committee.

    
    

    CONCLUSIONS OF LAW

    
    

    The Division of Administrative Hearings has jurisdiction over the parties hereto and the subject matter hereof. Section 120.57(1), Florida Statutes.

    
    

20. It is undisputed that Petitioner bears the burden of proof in this proceeding. Although Petitioner relies on a case standing for the well-settled proposition that ambiguity in an insurance contract should be construed against the insurer and in favor of the insured, that law has no application in this proceeding. Rather, the law is well-settled that the hearing officer's sole responsibility in a bid protest proceeding brought pursuant to Section 120.53(5), Florida Statutes, is to determine whether the agency acted fraudulently, arbitrarily, illegally, or dishonestly. See, for example, Department of Transportation v. Groves-Watkins Constructors, 530 So.2d 912 (Fla. 1988); Scientific Games v. Dittler Bros., Inc., 586 So.2d 1128 (Fla. 1st DCA 1991); and Moore d/b/a Fort Knox Center v. Department of Health and Rehabilitative Services, et al., So.2d (Fla. 1st DCA 1992, opinion filed April 2, 1992). In other words, the agency's decision will not be overturned when based on an honest exercise of its discretion. The parties have stipulated that Respondent did not act fraudulently or dishonestly. Petitioner has failed to meet its burden of proving that the agency acted arbitrarily or illegally.

    
    

21. In its letter of protest and in its evidence presented during the final hearing in this cause, Petitioner takes the position that the federal Act only requires proof of denial of local funding from local private agencies, that Petitioner is a statewide agency and not a local agency, that as a statewide agency Petitioner is not eligible for local funding, that Petitioner is therefore not required to provide verification of denial of local funding, and that the Department applied an inappropriate criterion to the Petitioner because of its "unique" status. Petitioner reasons, therefore, that its proposal was entitled to be reviewed by the screening committee and Advisory Committee pursuant to the criteria set forth in the federal Act. Petitioner's argument is without merit for two reasons.

    
    

22. First, it is clear that Petitioner's complaint is that Respondent applied an inappropriate criterion in its request for proposals and that criterion does not apply to Petitioner because of its "unique" status. Accordingly, Petitioner's argument is with the request for proposals, i.e., the bid specifications used by Respondent to solicit proposals for funding. Section 120.53(5)(b), Florida Statutes, provides as follows:

    
    

    (b) Any person who is affected adversely by the agency decision or intended decision shall file with the agency a notice of protest in writing within 72 hours after the posting of the bid tabulation or after receipt of the notice of the agency decision or intended

    decision and shall file a formal written protest within 10 days after the date he filed the notice of protest. With respect to a protest of the specifications contained in an invitation to bid or in a request for

    proposals, the notice of protest shall be filed in writing within 72 hours after the receipt

    of the notice of the project plans and specifications or intended project plans and specifications in an invitation to bid or request for proposals, and the formal written protest shall be filed within 10 days after the date the notice of protest is filed. Failure to file a notice of protest or failure to file a formal written protest shall constitute a waiver of proceedings under this chapter.

    The formal written protest shall state with particularity the facts and law upon which the protest is based.

    
    

23. Accordingly, Petitioner was required to file its notice of protest and then its formal protest to the agency's requirement that all nongovernmental agencies provide proof of denial of local funding within 72 hours and then 10 days, respectively, of the date that Petitioner received the request for proposals, assumedly a few days after the request for proposals was mailed to Petitioner on September 9, 1991. The statute clearly provides that failure to timely file the notice of protest and formal written protest shall constitute a waiver of proceedings. Petitioner's notice of protest dated January 31, 1992, is clearly untimely, and Petitioner has waived entitlement to protest the criteria for proposals contained within the request for proposals.

    
    

24. Second, although Petitioner is correct that the federal Act only required proof of denial of local funding from local private agencies receiving funds pursuant to the 66 2/3% "pass through" requirement, Petitioner overlooks the fact that the remaining 33 1/3% of the funds were discretionary funds to be given, or not, as Respondent saw fit. Respondent chose to apply the criterion of proof of denial of local funding to all applicants, whether they be local, statewide, national, or international agencies. Although Respondent did, repeatedly in its request for proposals and in its written answers to questions concerning that request, rely on the federal Act's language that local private agencies were required to provide proof of denial of local funding, Respondent did also make it clear, repeatedly in its request for proposals and in its written answers to questions concerning the local funding requirement, that all applicants who were not governmental agencies would be required to submit proof of denial of local funding or their proposals would be summarily rejected. Petitioner chose not to follow the criteria established by Respondent for this grant program but chose instead to apply its own criteria according to its interpretation of the federal Act and submit its proposal in accordance with its own criteria. Petitioner's proposal was clearly not responsive to the request for proposals.

    
    

25. Nowhere does Petitioner contend that it was unable to provide proof of denial of local funding. Petitioner stated in its formal protest and in its evidence at the final hearing that it was not eligible for local funding. All Petitioner had to do was to provide a letter showing that, and Petitioner's proposal would have been considered by the screening committee and then the

    Advisory Committee like all other proposals that complied with Respondent's minimum required criteria.

    
    

26. Petitioner argues that it is not a local private agency because it does not provide program services within an identifiable unit or combination of units of general local government. Petitioner provides services to police agencies and to school boards, each an identifiable unit of local government. Further, Petitioner contends that it is a statewide organization. Yet, its evidence at the final hearing was that it operates in five different states, and its proposal sets forth that the annual conference which it co-sponsors with the National Crime Prevention Council is attended by people from all over the world. Whether Petitioner is a local private agency, a statewide agency, a national agency, or an international agency need not be determined. Respondent clearly set forth the same criterion to be applied to all types of private agencies, no matter what their scope of geographic involvement, and that minimum threshold requirement was that all private agencies provide proof of denial of local funding. Respondent's advice to applicants submitting proposals that failure to submit proof of denial of local funding would disqualify an applicant's proposal was clearly stated in numerous places. Respondent properly followed the course it had announced it would follow by withdrawing Petitioner's proposal from consideration for failure to comply with the minimum requirements.

    
    

27. It is interesting to note that although Petitioner states in its formal protest that the denial of local funding criterion does not apply to Petitioner, yet, Petitioner submitted its proposal as though it did. In its Essential Requirement Checklist Petitioner affirmatively marked that it had submitted as part of its proposal evidence of denial of local funding and recited that such evidence could be found on pages 37 and 38 of its proposal. When those pages were consulted, it was discovered that the alleged denial of local funding was denial of state and federal funding, not of local funding. Further, Petitioner's proposal on page 21, contrary to its assertion on the Essential Requirement Checklist that it was including proof of denial of local funding, set forth that it had received local funds. Although Petitioner attempted to explain this assertion during the final hearing in this cause, such explanation is not relevant since the compliance or noncompliance of the proposal submitted pursuant to the request for proposals is judged on the proposal itself, not on subsequent information made available to the agency after the bid solicitation process has closed and awards have been made.

    
    

28. Accordingly, it is clear that Petitioner's protest should be dismissed since it was not timely filed as a protest to the request for proposals which is, in fact, what Petitioner is protesting. Although the parties stipulated that the petition for hearing was timely filed, that stipulation can only relate to Respondent's notification to Petitioner that Petitioner's proposal had not been considered. The parties cannot stipulate to the petition for hearing being timely filed related to a protest of the criteria contained in the request for proposals since this protest of the request for proposals is untimely as a matter of law, Petitioner has waived its entitlement to protest the request for proposals as a matter of law, and parties cannot stipulate to jurisdiction of the Division of Administrative Hearings to adjudicate a protest where the protester has waived its right to protest as a matter of law. Alternatively, Petitioner's protest should be dismissed because the request for proposals clearly set forth that only governmental entities were exempt from the requirement that an applicant submit proof of denial of local funding, and Petitioner chose not to comply with that minimum requirement.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered dismissing Petitioner's protest. DONE and ENTERED this 23rd day of April, 1992, at Tallahassee, Florida.

LINDA M. RIGOT

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675 SC 278-9675

Filed with the Clerk of the Division of Administrative Hearings this 23rd day of April, 1992.

APPENDIX TO RECOMMENDED ORDER

1. Petitioner's proposed findings of fact numbered 1-3 have been adopted either verbatim or in substance in this Recommended Order.

2. Petitioner's proposed findings of fact numbered 4-6 have been rejected as being unnecessary to the issues involved herein.

3. Petitioner's proposed finding of fact numbered 7 has been rejected as not constituting a finding of fact but rather as constituting argument of counsel, a conclusion of law, or recitation of the testimony.

4. Respondent's proposed findings of fact numbered 1-11 have been adopted either verbatim or in substance in this Recommended Order.

COPIES FURNISHED:

John Lisk, Esquire 3675 Justison Road

Coconut Grove, Florida 33133

Linda Harris, Deputy General Counsel Department of Health and

Rehabilitative Services Building One, Room 407 1323 Winewood Boulevard

Tallahassee, Florida 32399-0700

Sam Power, Clerk Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32399-0700

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: 92-001145BID

Orders for Case No: 92-001145BID