STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FSM, INC., )

)

Petitioner, )

)

vs. )

)

DEPARTMENT OF CORRECTIONS, )

) CASE NO. 94-1350BID

Respondent, )

and )

)

SOUTHWEST MICROWAVE, INC., )

)

Intervenor. )

)

RECOMMENDED ORDER

Pursuant to written Notice, a formal hearing was conducted in this proceeding before Daniel Manry, a duly designated Hearing Officer of the Division of Administrative Hearings, on March 28, 1994, in Tallahassee, Florida.

APPEARANCES

For Petitioner: Teresa Hurtado Schaefer, CEO

FSM, Inc.

3559 Southwest 69th Way Miramar, Florida 33023

For Respondent: R. Beth Atchison, Esquire

Assistant General Counsel

Florida Department of Corrections 2601 Blairstone Road

Tallahassee, Florida 32399-2500

For Intervenor: Michael G. Kanche, Jr.

Director of Sales and Marketing Southwest Microwave, Inc.

2922 South Roosevelt Street Tempe, Arizona 85282

STATEMENT OF THE ISSUE

The issue for determination in this proceeding is whether a contract for a perimeter security system at Calhoun Correctional Institution and Holmes Correctional Institution should be awarded to Intervenor.

PRELIMINARY STATEMENT

By letter dated May 1, 1994, Petitioner filed a formal written protest of Respondent's notice of intent to award a contract for perimeter security systems to Southwest Microwave, Inc. The matter was referred to the Division of Administrative Hearings for assignment of a hearing officer to conduct a formal hearing.

At the formal hearing, a Petition To Intervene was filed by Southwest Microwave, Inc. and granted without objection. The parties filed their Prehearing Stipulation. Respondent's request for official recognition of Section 489.503, Florida Statutes, was granted without objection.

Petitioner presented the testimony of one witness and submitted no exhibits for admission in evidence. Respondent called one witness and submitted four exhibits for admission in evidence. Intervenor called no witnesses and submitted no exhibits for admission in evidence. The identity of the witnesses and exhibits, and any rulings with regard to each, are set forth in the transcript of filed with the undersigned on April 8, 1994.

Petitioner timely filed proposed findings of fact and conclusions of law on April 19, 1994. Respondent filed proposed findings of fact and conclusions of law on April 18, 1994. No proposed findings of fact and conclusions of law were submitted by Intervenor. The proposed findings of fact filed by Petitioner and Respondent are addressed in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. On January 19, 1994, Respondent issued an Invitation To Bid, Bid No. 94-INST-6197, the ("ITB"). The ITB requested bidders to submit bids to supply materials for perimeter security systems and to provide training for the installation and maintenance of the systems at Calhoun Correctional Institution and Holmes Correctional Institution.

   
   

2. Responsive bids had to include materials and training necessary for Respondent to install and maintain the security systems. Bids had to be filed no later than February 10, 1994. Petitioner and Intervenor submitted bids along with three other bidders in a timely manner.

   
   

3. The ITB required bidders to hold a Florida alarm contractor's license. Intervenor does not hold such a license. However, the ITB defines the term "bidder" to include an individual, firm, partner, or corporation.

   
   

4. Intervenor's bid contemplated that it will supply the materials required in the ITB. Another company that holds a Florida alarm contractor's license will provide the training required for Respondent to install and maintain the security systems.

   
   

5. Intervenor and the other company responded to the ITB as partners in a single bid that provides a single price for all materials and training required by the ITB. Intervenor's bid complies with the terms of the ITB and is responsive.

   
   

6. Respondent notified Intervenor of its intent to award the contract to Intervenor as the lowest responsive bidder. Intervenor's bid is approximately

   $14,000 less than Petitioner's bid. Petitioner is the second lowest bidder.

7. Respondent's interpretation that the ITB allows materials and training to be supplied separately by Intervenor and its partner is a reasonable interpretation that is neither arbitrary nor capricious. The intent and purpose of such an interpretation is to encourage flexibility that may result in savings to the state. The provision of materials and services by separate companies in Intervenor's bid will, in fact, result in substantial savings to the state.

   
   

8. The terms of the bid does not create an unfair advantage for Intervenor. The term bidder is defined in the bid documents to include a partner and a corporation. Florida law expressly exempts Intervenor from the requirement for an alarm contractor's license if Intervenor merely supplies materials and does not fabricate or consume the materials in performing the work of a contractor. Section 489.503(10), Florida Statutes. Therefore, only Intervenor's partner is required to hold an alarm contractor's license, and, in fact, Intervenor's partner holds the requisite license.

   
   

9. Respondent's interpretation of the ITB is consistent with applicable law. Any other interpretation of the ITB by Respondent would have purported to impose a stricter licensing requirement than that imposed by the legislature.

   
   

   CONCLUSIONS OF LAW

   
   

10. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter in this proceeding. Section 120.57(1), Florida Statutes. The parties were duly noticed for the formal hearing.

    
    

11. Petitioner has the burden of proof in this proceeding. Petitioner must show by a preponderance of the evidence that Respondent's proposed award of the contract to Intervenor is arbitrary, capricious, or beyond the scope of Respondent's discretion as a state agency. Department of Transportation v. Groves-Watkins Constructors, 530 So.2d 912, 913-914 (Fla. 1988); Liberty County

    v. Baxter's Asphalt and Concrete, 421 So.2d 505 (Fla. 1982); Asphalt Pavers, Inc. v. Department of Transportation, 602 So.2d 558 (Fla. 1st DCA 1992); Moore

    v. Department of Health and Rehabilitative Services, 596 So.2d 759 (Fla. 1st DCA 1992); Capeletti Brothers, Inc. v. State, Department of General Services, 432 So.2d 1359, 1363 (Fla. 1st DCA 1983); Volume Services Division v. Canteen Corp.,

    369 So.2d 391, 395 (Fla. 2d DCA 1979); Mayes Printing Company v. Flowers, 154 So.2d 859, 864 (Fla. 1st DCA 1963); William A. Berbusse, Jr., Inc. v. North Broward Hospital Dist., 117 So.2d 550 (Fla. 2d DCA 1960).

    
    

12. Intervenor's bid is responsive and does not deviate from the terms of the ITB. The division of work between a corporation to supply the materials required by the terms of the ITB and a partner to supply the training required by the ITB was consistent with the express terms of the ITB. Respondent's interpretation that allows such a bid is a reasonable interpretation that is consistent with licensing requirements under applicable statutes. Section 489.503(10), Florida Statutes.

    
    

13. Even if Intervenor's bid is a deviation from the ITB, it is not a material deviation. A deviation is material or substantial if its waiver would either: (a) deprive the public body of an assurance that a contract will be entered into, performed, and guaranteed in accordance with specified requirements; or (b) adversely affect competitive bidding. Robinson Electrical Co., Inc. v. Dade County, 417 So.2d 1032, 1034 (Fla. 3d DCA 1982). A deviation adversely affects competitive bidding if its waiver would either place a bidder in a position of advantage over other bidders or otherwise undermine the necessary common standard of competition. Id.

14. A determination of whether a deviation is material or substantial must be made based on the facts and circumstances present in a particular case. A deviation in a bid proposal in which the proposed yield exceeded the yield requirements for beverage mixes solicited in the invitation for bid was found not be a material or substantial deviation. Tropabest Foods, Inc. v. Florida Department of General Services, 493 So.2d 50 (Fla. 1st DCA 1986). The submission of either a cashier's check instead of a required bid bond or a bid bond instead of a required certified check was found not to be a material deviation. Robinson Electrical, 417 So.2d at 1034-1035 (citing Bryan Construction Co. v. Board of Trustees, 106 A.2d 303 (N.J. App. 1954) for the latter proposition).

    
    

15. Deviations in a bid proposal comprised of the failure to comply with the form required by a public body and the failure to list exceptions to the successful bidder's proposal for maintenance and service of a city water system were found to be deviations that could be waived. Any subsequent exceptions to the maintenance and service proposed by the successful bidder could be treated by the public body as nonbinding proposed alternatives. Technical Sales of Jacksonville, Inc., v. City of Jacksonville, 258 So.2d 839 (Fla. 1st DCA 1972).

    
    

16. Intervenor's failure to hold an alarm contractor's license when Intervenor is going to supply materials without fabricating or consuming those materials in performing the work of a contractor is immaterial, insubstantial, and can be waived by Respondent. A contractor's license is not mandated for Intervenor by applicable statutes, and the ITB expressly contemplates that a bid may be submitted by a corporation and a partner.

    
    

17. Respondent's determination that Intervenor's bid is responsive is neither arbitrary, capricious, nor beyond the scope of Respondent's discretion as a state agency. A public body has wide discretion in soliciting and accepting bids. The decision of a public body will not be overturned if it is based on an honest exercise of discretion. Liberty County, 421 So.2d at 507; Culpepper v. Moore, 40 So.2d 366 (Fla. 1949). In this instance, Respondent's determination that Intervenor's bid is responsive is not only an honest exercise of discretion but one that is consistent with applicable licensing statutes and one that results in substantial savings to the state.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner's written formal protest be DENIED.

DONE AND ORDERED in Tallahassee, Leon County, Florida, this 26th day of April, 1994.

DANIEL MANRY

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 26th day of April, 1994.

APPENDIX

Petitioner's Proposed Findings of Fact 1.-5., 7-8. Accepted in substance

6. Irrelevant and immaterial

1. Rejected as recited testimony

2. Accepted in substance

11.-13. Rejected for the factual and legal reasons stated in the Recommended Order

Respondent's Proposed Findings of Fact

All of Respondent's proposed findings of fact are accepted in substance.

COPIES FURNISHED:

1. Beth Atchison, Esquire Assistant General Counsel

   Florida Department of Corrections 2601 Blair Stone Road Tallahassee, FL 32399-2500

   
   

   Teresa Hurtado Schaefer, CEO FSM, Inc.

   3559 S. W. 69th Way

   Miramar, FL 33023

   
   

   Harry K. Singletary, Jr. Secretary

   Department of Corrections 2601 Blairstone Road

   Tallahassee, FL 32399-2500

   
   

   Louis A. Vargas, Esquire General Counsel Department of Corrections 2601 Blairstone Road

   Tallahassee, FL 32399-2500

   
   

   Michael G. Kanche, Jr. Southwest Microwave

   2922 South Rosevelt Street Tempe, Arizona 85282-2042

   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.

   
   

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

   AGENCY FINAL ORDER

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

   
   

   STATE OF FLORIDA

   DIVISION OF ADMINISTRATIVE HEARINGS

   
   

   FSM, INC.,

   
   

   Petitioner,

   
   

   vs. Case No. 94-1350BID

   
   

   DEPARTMENT OF CORRECTIONS,

   
   

   Respondent,

   and

   
   

   SOUTHWEST MICROWAVE,

   
   

   Intervenor.

   /

   
   

   FINAL ORDER

   
   

   This matter comes before the Department of Corrections (the "Department") for consideration and final agency action after an administrative hearing was conducted before Daniel Manry, Hearing Officer, Division of Administrative Hearings, Department of Administration. A Recommended Order was rendered by the Hearing Officer on April 26, 1994. No exceptions were filed thereto by Petitioner or Intervenor.

   
   

   Based upon the complete record submitted to the Department by the Division of Administrative Hearings, together with the Recommended Order, the Department makes the following findings:

   
   

   FINDINGS OF FACT/CONCLUSIONS OF LAW

   
   

   1. The Department adapts and incorporates into this Final Order the Recommended Order, including the Findings of Fact and Conclusions of Law dismissing Petitioner's formal protest of the Department's decision to award the bid to Southwest Microwave as the lowest responsive bidder.

   2. Petitioner is hereby charged $196.40 for the Department's court reporter fees and other costs of this proceeding, pursuant to Florida Statutes, Section 287.042(c).

This order may be appealed within thirty days by filing a notice of appeal with the agency and the district court of appeal. Except in cases of indigence, the court will require a filing fee and the agency will require payment for preparing the record on appeal. For further explanation of the right to appeal, refer to Section 120.68, Florida Statutes, and the Florida Rules of Appellate Procedure.

DONE AND ORDERED this 10th day of May, 1994 in Tallahassee, Florida.

HARRY K. SINGLETARY, JR., SECRETARY

Department of Corrections 2601 Blairstone Road

Tallahassee, Florida 32399-2500

(904)488-2326

Copies furnished to:

Teresa Hurtado Schaefer, CEO FSM, Inc.

3559 S.W. 69th Way

Miramar, Florida 33023

Michael G. Kanche, Jr.

Director of Sales and Marketing Southwest Microwave, Inc.

2922 South Roosevelt Street Tempe, Arizona 85282

Daniel Manry, Hearing Officer Division of Administration Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

Filed in the official records of the Department of Corrections on this 10th day of May, 1994.

LESLIE S. RHODES, Agency Clerk

Docket for Case No: 94-001350BID

Orders for Case No: 94-001350BID