STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

NATIONAL CLEANING OF FLORIDA, ) INC., )

)

Petitioner, )

)

vs. ) CASE NO. 92-4311BID

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Claude B. Arrington, held a formal hearing in the above-styled case on July 22, 1992, in Fort Lauderdale, Florida.

APPEARANCES

For Petitioner: Richard A. Cosby, Jr.

Vice President

1101 Holland Drive #32 Boca Raton, Florida 33487

For Respondent: Colleen A. Donahue, Esquire

Department of Health and Rehabilitative Services

201 W. Broward Blvd. Suite 513

Fort Lauderdale, Florida 33301

STATEMENT OF THE ISSUE

Whether Respondent properly rejected Petitioner's bid on the grounds that the bid did not meet a fatal item requirement.

PRELIMINARY STATEMENT

Petitioner responded to a Request for Proposal (RFP) issued by Respondent for the provision of housekeeping services to South Florida State Hospital.

Respondent's evaluation committee determined that Petitioner's response failed to meet a fatal item requirement. Consequently, Respondent rejected Petitioner's bid, and this proceeding followed.

At the formal hearing, the parties submitted five joint exhibits that were accepted into evidence. Respondent presented the testimony of one witness, Constance Owens, Respondent's district contract administrator. Richard A. Cosby, Jr., appeared on behalf of Petitioner and presented Petitioner's position on the issues. No other exhibits or witnesses were presented.

No transcript of the proceedings has been filed. Rulings on the parties' proposed findings of fact may be found in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. On April 24, 1992, Respondent published a Request for Proposals (RFP) for the provision of housekeeping services to South Florida State Hospital.

   
   

2. Attached to the RFP as Appendix I was a blank copy of Respondent's "Standard Contract" which is also referred to as its "core model contract".

   
   

3. Paragraph 1.a. of Section D of the RFP contains the following instructions to bidders:

   
   

   1. BIDDER RESPONSE

      a. State of Florida Request for Proposal Contractual Services Acknowledgment Form, Pur 7033

      The State of Florida Request for Proposal, Contractual Services Acknowledgment Form, PUR 7033, Appendix II must be signed and returned

      ... with the proposal or submitted by itself if you choose not to submit a proposal and wish to remain on the department's active vendor list.

      
      

4. Paragraph 1.g. of Section D of the RFP, contains the following instructions to bidders:

   
   

   1. Required Bidders Certification

      1. Contract Terms and Conditions

   The proposal must include a signed statement in response to the RFP indicating acceptance of the terms and conditions of provisions of service as specified in the RFP and contained in the core model contract.

   
   

5. Bidders were provided a copy of the RFP rating sheet which contained the following under the heading of Fatal Items:

The following criteria must be met in order for the proposal to be considered for evaluation, failure to receive a "Yes" response for any time [item] will result in automatic rejection of the proposal.

* * *

1. Does the proposal include a statement agreeing to terms and conditions set forth in the core model contract and the RFP?

   
   

2. Petitioner was represented at a "Bidders' Conference" held May 15, 1992, at which the fatal items were discussed. Bidders were advised that it

   would be necessary for the responses to contain a statement agreeing to the terms and conditions set forth in the core model contract.

   
   

3. The State of Florida Request for Proposal, Contractual Services Acknowledgment Form, PUR 7033, contains the following certification:

   
   

   I certify that this proposal is made without prior understanding, agreement, or connection with any corporation, firm, or person submitting a proposal for the same contractual services, and is in all respects fair and without collusion or fraud. I agree to abide by all conditions of this proposal and certify that I am authorized to sign this proposal for the proposer and that the proposer is in compliance with all requirements of the Request for Proposal, including but not limited to, certification requirements. In submitting a proposal to an agency for the State of Florida, the proposer offers and agrees that if the proposal is accepted, the proposer will convey, sell, assign or transfer to the State of Florida all rights, title and interest in and to all causes of action it may now or hereafter acquire under the Anti-trust laws of the United States and the State of Florida for price fixing relating to the particular commodities or services purchased or acquired by the State of Florida. At the State's discretion, such assignment shall be made and become effective at the time the purchasing agency tenders final payment to the proposer.

   
   

4. The State of Florida Request for Proposal, Contractual Services Acknowledgment Form, PUR 7033, was signed by Richard A. Cosby on behalf of Petitioner and submitted as part of Petitioner's response to the RFP.

   
   

5. Upon receipt of all responses, Respondent convened an evaluation committee to evaluate the responses. The evaluation committee determined that the response submitted by Petitioner did not contain the required statement agreeing to the terms and conditions set forth in the core model contract and the RFP. Consequently, the evaluation committee rejected Petitioner's proposal from further consideration.

   
   

6. Petitioner does not challenge the specifications of the RFP, but, instead, asserts that Mr. Cosby's execution of the State of Florida Request for Proposal, Contractual Services Acknowledgment Form, PUR 7033, was sufficient to meet the requirement the evaluation committee found lacking. The language of the Contractual Services Acknowledgment Form, PUR 7033, that most closely approximates the certification that the bidder accepts the terms and conditions set forth in the core model contract and of the RFP is as follows:

   
   

   I agree to abide by all conditions of this proposal and certify that I am authorized to sign this proposal for the proposer and that the proposer is in compliance with all

   requirements of the Request for Proposal, including but not limited to, certification requirements.

   
   

7. The proposal submitted by Petitioner did not contain any other statement which could be construed as accepting the terms and conditions set forth in the core model contract and the RFP. The broad language of the Contractual Services Acknowledgment Form, PUR 7033, upon which Petitioner relies does not state that the bidder accepts the terms and conditions set forth in the core model contract and the RFP. The evaluation committee properly determined that Petitioner's response failed to meet this fatal item.

   
   

8. In this proceeding, there was evidence that the Respondent routinely inserts in its Request for Proposals the fatal item requirement that the bidders agree in writing to accept the terms and conditions set forth in the core model contract and the RFP, and that Respondent has never waived that fatal item requirement. There was no evidence that Respondent was using this fatal item requirement to discriminate against or in favor of any bidder.

   
   

   CONCLUSIONS OF LAW

   
   

9. The Division of Administrative Hearings has jurisdiction over this matter. Section 120.57(1), Florida Statutes.

   
   

10. Part I of Chapter 287, Florida Statutes, pertains to the procurement of contractual services by agencies of the State of Florida. Section 287.057(1), Florida Statutes, requires that the contractual services involved in this proceeding be procured by competitive bid.

    
    

11. Section 287.012(13), Florida Statutes, provides the following definition of the term "responsive bidder":

    
    

    (13) "Responsive bidder" or "responsive offeror" means a person who has submitted a bid which conforms in all material respects to the invitation to bid or request for proposals.

    
    

12. The purpose of the competitive bidding laws has been discussed by the Florida Supreme Court in Wester v. Belote, 103 Fla. 976, 138 So. 721, at 724 (Fla. 1931) as follows:

    
    

    ... [T]hey thus serve the object of protecting the public against collusive contracts and prevent favoritism toward contractors by public officials and tend to secure fair competition upon equal terms to all bidders, they remove temptation on the part of public officers to seek private gain at the taxpayers's expense, are of highly remedial character, and should receive a construction always which will fully effectuate and advance their true intent and purpose and which will avoid the likelihood of same being circumvented, evaded, or defeated.

    Compare, Harry Pepper & Associates, Inc. v. City of Cape Coral, 352 So.2d 1190, 1192 (Fla. 2nd DCA 1977).

    
    

13. The basic principles of the competitive bidding process are stated in Hotel China & Glassware Co. v. Board of Public Instruction, 130 So.2d 78, 81 (Fla. 1st DCA 1961), as follows:

    
    

    ... Competitive bidding statutes are enacted for the protection of the public. They create a system by which goods or services required by public authorities may be acquired at the lowest possible cost. The system confers upon both the contractor and the public authority reciprocal benefits, and exacts from each of them reciprocal obligations. The bidder is assured fair consideration of his offer, and is guaranteed the contract if his is the lowest and best bid received. The principle benefit flowing to the public authority is the opportunity of purchasing the goods and services required by it at the best price obtainable. Under this system, the public authority may not arbitrarily or capriciously discriminate between bidders, or make the award on the basis of personal preference. (Footnote

    omitted).

    
    

14. An agency has wide discretion in soliciting and accepting bids, and its decision, if based on an honest exercise of this discretion, will not be overturned even if reasonable persons may differ with the outcome. C. H. Barco Contracting Co. v. State, Dept. of Transportation, 483 So.2d 796 (Fla. 1st DCA 1986); Liberty County v. Baxter's Asphalt & Concrete, Inc., 421 So. 2d 505 (Fla. 1982). The request for bid proposal form promulgated by the Respondent specifies certain fatal items and reserves the right to the Respondent to reject any bid that fails to meet all fatal items.

    
    

15. It is well-established that a public authority may not arbitrarily or capriciously reject responsive bids. D.O.T. v. Groves-Watkins Construction, 530 So.2d 912 (Fla. 1988). The agency soliciting bids must have a rational basis for rejecting responsive bids. To permit the soliciting agency to arbitrarily reject responsive bids would undermine and eventually destroy the integrity of the competitive bid process.

    
    

16. The role of the undersigned is to ascertain whether Respondent acted with the requisite "rational basis" or "good cause" in rejecting the subject bid. The Court, in Groves-Watkins, supra, at 914, phrased that responsibility as follows:

    
    

    Thus, although the APA provides the procedural mechanism for challenging an agency's decision to award or reject all bids, the scope of the inquiry is limited to whether the purpose of competitive bidding has been subverted. In short, the hearing

    officer's sole responsibility is to ascertain whether the agency acted fraudulently, arbitrarily, illegally, or dishonestly.

    
    

17. Petitioner failed to establish that Respondent acted fraudulently, arbitrarily, illegally, or dishonestly in rejecting the proposal. Because Petitioner did not include the fatal item certification, Respondent acted within its discretion in determining that the proposal was non-responsive.

RECOMMENDATION

Based upon the foregoing findings of fact and conclusion of law, it is hereby RECOMMENDED that the Respondent dismiss Petitioner's bid protest.

DONE AND ENTERED this 18th day of August, 1992, in Tallahassee, Leon County, Florida.

CLAUDE B. ARRINGTON

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 18th day of August, 1992.

APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 92-4311BID

The following rulings are made on the proposed findings of fact submitted on behalf of the Petitioner.

1. The proposed findings of fact submitted by Petitioner are accepted in material part by the Recommended Order. Petitioner's conclusions based on those facts are rejected for the reasons discussed in the Recommended Order.

The following rulings are made on the proposed findings of fact submitted on behalf of the Respondent.

1. The proposed findings of fact submitted by Respondent are adopted in material part by the Recommended Order.

COPIES FURNISHED:

Richard A. Cosby, Vice President National Cleaning of Florida, Inc. 1101 Holland Drive, #32

Boca Raton, Florida 33487

Colleen A. Donahue, Esquire District 10 Legal Office Room 513

201 West Broward Boulevard

Fort Lauderdale, Florida 33301-1885

Sam Power, Agency Clerk Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32399-0700

John Slye, General Counsel 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: 92-004311BID

Orders for Case No: 92-004311BID