STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

NOBLES, VARNUM & HODGES, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 92-4671BID

) DEPARTMENT OF NATURAL RESOURCES, )

)

Respondent. )

)

RECOMMENDED ORDER

This matter was heard by William Dorsey, the Hearing Officer designated by the Division of Administrative Hearings, on December 3, 1992, in Tallahassee, Florida.

APPEARANCES

For Petitioner: Harold F.X. Purnell, Esquire

RUTLEDGE, ECENIA, UNDERWOOD & PURNELL, P.A.

315 South Calhoun Street, Suite 500 Tallahassee, Florida 32301

For Respondent: L. Kathryn Funchess, Esquire

Assistant General Counsel Department of Natural Resources 3900 Commonwealth Boulevard

Tallahassee, Florida 32399-3000 STATEMENT OF THE ISSUE

Whether the decision of the Department of Natural Resources to award a contract for professional land surveying to Bannerman Surveying, Inc. should be set aside for arbitrary action by the Department in the bid evaluation process.

PRELIMINARY STATEMENT

The Department of Natural Resources, Bureau of Survey and Mapping, gave notice of its intention to receive proposals for professional land surveying services for its use in land acquisition and land management for a number of counties in Volume 17, Number 52 of the Florida Administrative Weekly, published on December 27, 1991. Petitioner Nobles, Varnum and Hodges, Inc. and Bannerman Surveying both submitted written proposals, and after they were evaluated on their technical merits, both were invited to participate in interviews for ranking the finalists. After the interview, Bannerman Surveying, Inc. was selected as the most qualified firm, and notice of that selection was communicated to Nobles, Varnum and Hodges on February 11, 1992. On February 12, the president of Nobles, Varnum and Hodges filed his notice of protest, which was followed with a formal written protest and petition for formal

administrative hearing on February 24, 1992. These materials were returned to counsel for Nobles, Varnum and Hodges by the General Counsel of the Department on March 6, 1992, because the selection of Bannerman Surveying only permitted the Department to first attempt to reach agreement on a price with Bannerman, in default of which the Department would then attempt to negotiate with Nobles, Varnum and Hodges. The negotiations with Bannerman were still ongoing then, and the Department regarded the protest as premature. Ultimately the Department and Bannerman Surveying agreed on price and entered into a contract. A notice of protest was filed on June 15, 1992, a formal written protest was filed on June 25, 1992, and on July 30, 1992, the formal written protest was filed with the Division of Administrative Hearings.

The matter was set for hearing on September 21, 1992, but on September 4, the parties requested a 45 day continuance in which to attempt to schedule and conduct discovery. The matter was then renoticed for hearing on November 10, 1992. The parties again jointly moved for a continuance of the November 10 hearing; that motion was granted, the matter was ultimately set for December 3, 1992. At the hearing testimony of David Kealy, Terry Wilkinson, Allen Nobles, Robert Beck, Steve Kellogg, Scott Woolam, and Robert Bannerman was taken, and the Petitioners introduced 1, 2, 5, 6, 7 and 8. Exhibit 9 was marked for identification but not admitted into evidence. The Department submitted Exhibits 1-4, which were received into evidence. The parties were granted 20 days in which to file proposed recommended orders after the filing of the transcript in this proceeding. Thereafter, they sought a further extension of the time to file their proposed orders, which was granted in an Order entered on January 6, 1993.

FINDINGS OF FACT

1. Nobles, Varnum and Hodges, Inc. (Nobles) is a Florida corporation headquartered in Tallahassee. It provides surveying, civil engineering and landscape architecture services and held a DNR certificate of qualification as a surveyor.

   
   

2. The Bureau of Survey and Mapping of the Department of Natural Resources enters into contracts for surveying services on lands the State is considering purchasing, or already owns. The Department published on December 27, 1991, its request for proposal number BLA 92-06-395 in Volume 17, Number 52 of the Florida Administrative Weekly, at page 6206, seeking technical proposals for a five year contract for land surveying services for land acquisition and management in the four county area of Gadsden, Liberty, Calhoun and Franklin counties. The work to be done included the preparation of appraisal maps, boundary surveys, and related services. Proposals were due on January 12, 1992. Although Nobles implies that the Request for Proposals was published during the holiday season to minimize responses to it, I find no basis for the inference.

   
   

3. This procurement was conducted under the Consultants' Competitive Negotiation Act. The parties to this litigation, Nobles and the successful bidder, Bannerman Surveyors, submitted timely written technical proposals.

   
   

4. Under the Consultants' Competitive Negotiation Act a contract is awarded in a three step process. All written technical proposals are first evaluated, and those who submit the best proposals are then invited to an interview with the selection committee, after which the proposals are ranked in order of overall quality. The Department then attempts to negotiate a price with the best proposer, and if successful, a contract is awarded. If the highest ranked proposer and the Department cannot reach agreement on price, the

   Department then attempts to negotiate price with the next most highly ranked proposer, and continues in series as negotiations are unsuccessful until all those ranked have participated in price negotiations.

   
   

5. The proposals here were rated by an evaluation committee consisting of three members, the section administrator for surveying, Bob Beck; the contract administrator for this surveying contract, Dave Kealy; and another Department surveyor, Steve Kellogg. They evaluated the written technical proposals according to a structured methodology and determined the three top contenders, which included the parties here and a third entity known as Baskerville-Donovan Engineers, Inc., which has not participated in this proceeding.

   
   

6. Each of these three bidders was invited to give an oral presentation at an interview with the committee, which was evaluated in a less structured fashion than the written technical proposals. The interview invitation tells each bidder that the agenda for the interview will be:

   
   

   1. Discussion of who your consultants will be.

   2. Review of your proposal and discussion of any additions.

   3. Questions and discussion by Department of Natural Resources staff (DNR Exhibit 4).

      
      

7. At the interview stage, the committee members evaluated the services offered on eight factors, which they rated on a scale of from 1 through 5.

   These are: approach to the project; adequacy; background; ability of personnel; location of the firm in relation to the project site; ability and willingness to meet time schedules; workload; and volume of work previously awarded to the firm by the Department. An additional factor can be considered for minority contractors, but none of the three firms interviewed here were minority owned and controlled.

   
   

8. This was the first DNR project on which Mr. Nobles and the Nobles firm had bid. Before submitting the proposal, he had spoken with Bob Beck and another surveyor in the office, Scott Woolam, about how to put the written technical proposal together. Mr. Nobles got the impression that the technical proposal was merely a means to qualify for the interview stage, so Nobles put the greatest effort into his interview presentation. This is reflected in the fact that, at the first stage, where the technical proposals were reviewed, Nobles' firm ranked third, but after the interview, his firm was second overall. Although Mr. Nobles recanted the comment at hearing, he did acknowledge that Bannerman submitted a better technical proposal, which is consistent with his testimony that he focused the greater part of his energy on the interview process.

   
   

9. One of the significant aspects of the contract was that the surveying area included the Forbes tract, a large Spanish land grant. This area had not been part of the general U.S. Government survey of Florida, which had divided almost all of the State into townships and ranges. That government survey was not done in areas of Spanish land grants. The absence of an underlying U.S. Government survey for large areas required a different approach to surveying in land grant areas than would be made in an ordinary survey. Bannerman and his group devoted a significant portion of their presentation to explaining how they would deal with this unusual aspect of the project, but Mr. Nobles did not address this significant aspect of the work at any length during his interview.

10. The manner in which committee members assign points on the 1 to 5 scale at this stage is a matter of individual judgement. According to the evidence, all evaluators did not award points in the same manner. Mr. Beck awarded scores which were a composite of his evaluation of how well the proposer did in relation to a hypothetical perfect presentation, as well as how good the presentation was in comparison to the two other firms that made the cut for the interview. Mr. Kellogg would award a 5 if he considered that aspect of the presentation excellent, 4 if it were good, 3 if it were average, and so on. At the close of the evaluation, the scores for Bannerman on the committee's score sheets were 31, 27 and 31 (total 89 points); for Nobles they were 28, 25 and 27 (total 80 points). The testimony of all committee members was convincing at the final hearing that the proposal from Bannerman was the best proposal. While each of the evaluators was scoring on the same topics but not on precisely the same basis, and others assigned to the committee might have scored the performance of the three firms differently, each evaluator for this contract offered reasons for the overall score assigned (see the following Finding).

    None were arbitrary in their scoring. The factors they considered were derived from the applicable statute, and their use was appropriate.

    
    

11. After receiving notification that his firm had not received the highest ranking, Mr. Nobles came to the Department's office to see the score sheets committee members had filled out after the interview. He spoke with Mr. Kealy and Mr. Beck, who gave him reasons why the Bannerman proposal was superior. Some of the reasons for the outcome were:

    
    

    1. Bannerman had an associate, Broward Davis, who is familiar with surveying the area from other surveying work he has already done in the project area.

    2. Bannerman's consultants included Buster Ratliff, who was already familiar with a major tract in the area to be surveyed, because Ratliff had been employed for 35 years by the prior owner of a large block of land (Buckeye Cellulose).

    3. During the interview Mr. Nobles had been equivocal on who his consultants would

       be. The committee members knew that he had only three field crews, which would not be sufficient to do all of the work required in-house.

    4. Bannerman had an in-house satellite global positioning system which is very useful in performing large surveys. While Nobles could contract for those services with a qualified subcontractor, Bannerman would have better control of scheduling its internal global

       positioning system. Nobles would have to work out the availability of the subcontractor to use its global positioning system. The committee members regard this as less desirable from the Department's point of view.

    5. Bannerman had made an effort to bring his subcontractors to the interview with him,

       and to integrate into his presentation

       their skills and experience in surveying in the area, which made a more effective overall presentation about how his group would accomplish work. Bannerman concentrated during the one hour allotted to his presentation on the issues of greatest interest to the committee.

       Nobles took more time to explain his firm to the committee members, since they had not done business with him before, they were not familiar with his firm's capabilities, or those of his employees or subcontractors and he made a less effective presentation on how he would accomplish the work.

       
       

12. Mr. Nobles reviewed the score sheets. He was unable to understand why he received the scores assigned to his firm by each of the three interviewers; he could discern no logic to the scores. Mr. Nobles asked Mr. Kealy if it was worth competing against Bannerman for future work, and Kealy told him that it was, but when Nobles pressed him, Kealy was unable to identify a specific contract the Department would be letting in the near future, which he thought the Nobles firm would win. Mr. Nobles had also talked to Mr. Beck, and was not satisfied that Beck had a good rationale for the scores he had assigned to Nobles. Mr. Nobles alleges that Beck told him the committee members decide who they want to receive the contract and tailor their scores to reach that result. While it is not clear what Beck said to Mr. Nobles, Beck did not say what Mr. Nobles ascribed to him. The scoring had a logical basis, as set forth above in Finding 11.

    
    

13. Already suspicious of the timing of the Department's publication of the announcement that it would receive proposals and of what Mr. Nobles viewed as their illogical scoring, Mr. Nobles was more upset when he found out that David Kealy had a social relationship with Mr. Bannerman. Kealy had known Bannerman for many years. At the time they were both members of a group known as the Chipola River Hunting Club. Mr. Nobles had received an invitation to join the club, but had not done so. That club leased hunting rights over 3,000 acres for hunting. It advertised for members in the publication of the Florida Society of Professional Land Surveyors, "PLUMB Lines," and the advertisement included a notice for those interested in joining to call any of three people: Mr. Bannerman, another member, Mr. Evers, or David Kealy. The ad included Kealy's work number at the Department of Natural Resources. Mr. Kealy had not placed the ad, an the person who did so included Kealy's work number without Mr. Kealy's consent. Mr. Nobles may believe that, out of friendship, Mr. Kealy gave Mr. Bannerman prior notice of the contract Nobles lost to Bannerman, which could have given Bannerman more time to prepare both his technical proposal and his interview presentation. There is no credible evidence that this occurred. Membership in the club is not an advantage in obtaining survey work. Mr. Kealy sat on the evaluation committees for other surveyors who are members of the Chipola Hunt Club, and on those occasions, the members who also belong to the hunt club were unsuccessful on three occasions, and successful on one.

    
    

14. Mr. Nobles also contended that the scoring was arbitrary and unfair because Mr. Kealy and Mr. Bannerman have hunted together on two occasions, one a

    10 day trip to Colorado, and another shorter trip to Alabama. They split expenses on both of these trips. On the Colorado trip, Bannerman procured the cabin, and Kealy paid to rent a car, paid for the gas, one-half of the food and

    three-quarters of the restaurant meals. On the Alabama trip, Bannerman again obtained the use of a hunting cabin through a friend, and Kealy bought the gas, and split the food costs. Mr. Bannerman did not make a gift of the trips to Mr. Kealy, they split expenses.

    
    

15. The presence of Mr. Kealy on the evaluation committee was not unfair to Mr. Nobles. It is common for surveyors to know and socialize with other surveyors. Those sort of social contacts are not disqualifying.

    
    

16. The evidence does not demonstrate that the evaluation process for the proposals at issue was arbitrary. The reasons given for the superior scores assigned to Mr. Bannerman by all evaluators are persuasive.

    
    

    CONCLUSIONS OF LAW

    
    

17. The Division of Administrative Hearings has jurisdiction over this matter. Section 120.53(5), Florida Statutes.

    
    

18. In most substantial interest cases under Section 120.57(1), Florida Statutes, the proceeding is de novo, and designed to formulate rather than review final agency action. This had been true in bid disputes. Capelletti Bros., Inc. v. Dept. of General Svcs., 432 So.2d 1359, 1362-64 (Fla. 1st DCA 1983). After the decision of the Supreme Court of Florida in Groves-Watkins Constructors v. Dept. of Transportation, 530 So.2d 912 (Fla. 1988), the Hearing Officer's role in bid protest proceedings brought under Section 120.53(5) was circumscribed. The court treated Hearing Officers as having the same limited role under the Administrative Procedure Act which the circuit courts have when they review decisions awarding public contracts of city councils or boards of county commissioners, even though those bodies are not subject to Chapter 120. Cities and counties enjoy wide discretion in selecting successful bidders on public contracts. As long as the local government's discretion is exercised honestly, their decisions will not be overturned by courts even if they seem to be erroneous. Liberty Co. v. Baxter's Asphalt and Concrete, Inc., 421 So.2d 505, 507 (Fla. 1982). The Supreme Court's decision in Groves-Watkins states that the Hearing Officer should do no more than determine whether a state agency's decision to award a contract to the successful bidder was fraudulent, arbitrary, illegal or dishonest. 530 So.2d at 914, see also, Moore v. State, Dept. of Health and Rehabilitative Svcs., 596 So.2d 759 (Fla. 1st DCA 1992); Procacci v. Dept. of Health and Rehabilitative Svcs., 603 So.2d 1299 (Fla. 1st DCA 1992); Scientific Games v. Dittler Bros., 586 So.2d 1128, 1131 (Fla. 1st DCA 1991).

    
    

19. Nobles has contended that the Department's action in ranking the Bannerman proposal over that of Nobles was arbitrary. In a different context, an arbitrary act has been characterized as one that is unsupported by facts or logic. Agrico Chemical Co. v. Dept. of Environmental Reg., 365 So.2d 759, 763 (Fla. 1st DCA), cert. den., 376 So.2d 74 (Fla. 1979). That analysis is appropriate here. On this record, the Department's decision to rank the Bannerman proposal higher is not illogical or devoid of factual support. The reasons given for assigning higher scores to Bannerman are persuasive.

    
    

20. The Department followed the competitive selection process by conducting discussions with at least three firms regarding their qualifications, approach to the project, and ability to furnish the services required. Section 287.066(4), Florida Statutes. The Department selected, in order of preference, three firms which it deemed to be those most highly qualified to perform the services it wished to purchase. Section 287.055(4)(b), Florida Statutes. The

    criteria which the members of the evaluation committee used in scoring during the interview process are those which are listed in Section 287.055(4).

    Although the statute does not require that those factors be operationalized by scoring applications on a scale from 1 through 5 for each factor, the use of the scale is one reasonable method an agency can use to implement a statutory evaluation criteria.

    
    

21. All members of the selection committee believed Bannerman had the best proposal, and this demonstrates adequate consistency in grading, although each of the evaluators appears to have used somewhat different subjective standards in determining what grade to assign on the 1 through 5 scale.

    
    

22. There is no proof that the Department acted in an arbitrary, capricious, fraudulent or dishonest fashion in awarding this bid to Bannerman.

RECOMMENDATION

It is recommended that the Department of Natural Resources enter a Final Order which dismisses the bid protest filed by Nobles, Varnum and Hodges, Inc.

DONE and ORDERED this 2nd day of August, 1993, in Tallahassee, Florida.

WILLIAM R. DORSEY, JR.

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 2nd day of August, 1993.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 92-4671BID

The following constitute my rulings on specific findings of fact proposed by the parties. Findings proposed by Nobles, Varnum and Hodges, Inc..

1. Adopted in finding 1.

2. Adopted in finding 2.

3. Adopted in finding 2.

4. Adopted in findings 5 and 10.

5. Adopted in the preliminary statement, except for the final sentence, which is unnecessary.

6. Adopted in the preliminary statement.

7. Adopted in the preliminary statement.

8. Adopted in the preliminary statement, except that the final sentence is rejected as unnecessary.

9. Adopted in the preliminary statement.

10. Adopted in the preliminary statement.

11. Adopted in finding 2, except for the final sentence which is rejected in finding 2.

12. Rejected as unnecessary.

13. Rejected as unnecessary.

14. Adopted in finding 5.

15. Rejected as unnecessary and, to some extent, adopted in the first sentence of finding 10.

16. Adopted in finding 4.

17. The first sentence is adopted in finding 5. The remainder is rejected as irrelevant.

18. Rejected as unnecessary.

19. Sentence one adopted in finding 13. The remainder is adopted in finding 14.

20. Rejected as unnecessary. From the evidence, it appears that the $800,000 in the survey contracts Bannerman has received in Levy County is a single contract. All members of the evaluation committee downgraded Bannerman on the factor dealing with volume of work previously awarded to the firm by the Department (factor 8) and gave Nobles, Varnum and Hodges a higher score, because they had not worked for the Department. The specific scores from each evaluator were not identical, but the trend is the same across all three evaluators. Even if the Hearing Officer had the authority to adjust the evaluators' scores, a change in the scoring of factor 8 would not shift the ultimate outcome of the rankings.

21. Adopted in finding 13.

22. Rejected as irrelevant.

23. Generally adopted in finding 4, except for the last sentence which is unnecessary.

24. Rejected as unnecessary, there is no dispute that the technical proposals were evaluated appropriately.

25. Rejected because the scoring of the technical proposal is not at issue.

26. Rejected as unnecessary.

27. Adopted in finding 6.

28. Rejected because it is not the role of the Hearing Officer to rescore the evaluations by committee members. The trend of the evaluation for factor 8, work previously granted to Bannerman by the Department, has already been discussed. All evaluators gave Nobles, Varnum and Hodges higher scores on this factor than they assigned to Bannerman, which is consistent with the intent behind that factor.

29. Rejected because it essentially seeks to have the Hearing Officer rescore the evaluation. The assignment of points was judgemental, but not arbitrary.

30. Addressed in Finding 10.

31. Rejected because this objection was never raised in any of the pleadings bringing the subcontractors, and touting their abilities at the interview, is consistent with the first factor which the invitation to the interview states will be discussed: who the consultants will be on the project.

32. Rejected. There is no inconsistency, it merely shows that when the subcontractors are known, the committee evaluates them. The reason for giving a higher score to Bannerman for having the in-house global positioning system is reasonable. See Finding 11.

33. Rejected, Mr. Nobles only covered the Forbes purchase superficially at the interview. The decision whether to discuss the topic was Mr. Nobles'.

34. Rejected as irrelevant. The consultants working with Bannerman were evaluated on their quality, not whether they were "joint venturers" or subcontractors.

35. Rejected. This proposal seeks a rescoring of the interview applications. Good experience with Mr. Bannerman in the past obviously bears on such factors as background and ability and willingness to meet time schedules, which are factors derived from the statutory review criteria, and are appropriate considerations. The allegation that the score sheets are a means to justify a decision without regard to the evaluation factors is rejected in finding 12.

36. Rejected as irrelevant.

37. Rejected as seeking rescoring of Kealy's evaluations.

38. Rejected as a conclusion.

The proposal submitted by the Department:

1. Adopted in finding 2.

2. Rejected as unnecessary, but see finding 3.

3. Adopted in finding 8.

4. Rejected as unnecessary, the ranking of the technical proposals is not at issue.

5. Adopted in Finding 8.

6. Adopted in finding 5.

7. Adopted in finding 6.

8. Implicit in finding 7.

9. Implicit in finding 6.

10. Adopted in finding 10.

11. Implicit in the preliminary statement and the description of the selection process under the Consultants' Competitive Negotiation Act found in finding 4.

12. Discussed in the preliminary statement.

13. Implicit in finding 7.

14. Adopted in finding 7.

15. Adopted in finding 7.

16. Implicit in finding 10.

17. Discussed in finding 10.

18. Rejected as unnecessary.

19. Adopted in finding 10.

20. Adopted in finding 9.

21. Implicit in finding 9.

22. Adopted in finding 11.

23. Adopted in finding 11.

24. Adopted in finding 11.

25. Adopted in finding 13.

26. Adopted in finding 13.

27. Adopted in finding 13.

28. Rejected as unnecessary.

29. Generally adopted in finding 13.

30. Generally rejected as unnecessary.

31. Rejected as unnecessary.

COPIES FURNISHED:

Harold F.X. Purnell, Esquire RUTLEDGE, ECENIA, UNDERWOOD

& PURNELL, P.A.

315 South Calhoun Street, Suite 500 Tallahassee, Florida 32301

L. Kathryn Funchess, Esquire Department of Environmental Protection 2600 Blair Stone Road

Tallahassee, Florida 32399-2400

Virginia B. Wetherell, Secretary Department of Environmental Protection 2600 Blair Stone Road

Tallahassee, Florida 32399-2400

Kenneth Plante, Esquire Acting General Counsel

Department of Environmental Protection 2600 Blair Stone Road

Tallahassee, Florida 32399-2400

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: 92-004671BID

Orders for Case No: 92-004671BID