STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DELAD SECURITY, INC., )
)
Petitioner, )
)
vs. ) CASE NO. 95-4830BID
) DEPARTMENT OF HEALTH AND ) REHABILITATIVE SERVICES, )
)
Respondent, )
and )
)
50 STATE SECURITY )
SERVICE, INC., )
)
Intervenor. )
)
RECOMMENDED ORDER
Pursuant to notice, a formal hearing was conducted in this case on December 20, 1995, in Miami, Florida, before Stuart M. Lerner, a duly designated Hearing Officer of the Division of Administrative Hearings.
APPEARANCES
For Petitioner: Reginald J. Clyne, Esquire
Clyne and Associates, P.A. 2600 Douglas Road Penthouse Two
Coral Gables, Florida 33134
For Respondent: Meryl S. Gold-Levy, Esquire
Department of Health and Rehabilitative Services
District Eleven Legal Office
401 Northwest Second Avenue, N-1014 Miami, Florida 33128
For Intervenor: W. Douglas Moody, Esquire
Bateman Graham, P.A.
300 East Park Avenue Tallahassee, Florida 32301
Joseph C. Frechette, Jr., Esquire 11900 Biscayne Boulevard, Suite 780 North Miami, Florida 33161
STATEMENT OF THE ISSUE
Whether the Department of Health and Rehabilitative Services (hereinafter referred to as the "Department") should sustain Petitioner's challenge to the Department's decision to deem Petitioner's bid non-responsive and to award the contract advertised in ITB Number 11-95-001 to Intervenor, as the "lowest responsive bidder?"
PRELIMINARY STATEMENT
By letter dated June 26, 1995, Petitioner formally protested the Department's decision to deem Petitioner's bid non-responsive and to award the contract advertised in ITB Number 11-95-001 (for armed security services for the Department's food stamp offices in Dade County) to Intervenor, as the "lowest responsive bidder." In its letter, Petitioner argued:
The ultimate facts are that Delad had a lower bid price, a more comprehensive bid submission and should be awarded the contract. HRS has violated the 14[th] Amendment, Fla. Stat.
120.53(5) and F.A.C. 10-13.008. Furthermore, in light of the circumspect bid of 50 State any discrepancies in Delad's bid are minor.
HRS has the right to waive minor irregularities.
F.A.C. Rule 60A-1.007(13), especially when the bid did not specify that management experience should be a resume of the principal versus the
minimum requirements for each managerial position. Finally, Delad, clearly can meet the requirements of this bid, as it is presently providing services to HRS.
With respect to its position that "HRS has violated . . . Fla. Stat. 120.53(5) and F.A.C. 10-13.008," Petitioner elaborated:
Pursuant to Section 120.53(5), Fla. Stat. HRS is to promulgate rules specifying procedures for the resolution of protests arising from the contract
bidding process. This section outlines the minimum requirements that are to be set forth in the agency's rules. With regard to bid protests, the agency should promulgate rules permitting a procedure for
an amicable resolution of the bid dispute within 7 days. Failing an amicable resolution, "an informal proceeding shall be conducted pursuant to Section 120.57(2) and applicable agency rules before a person whose qualifications have been prescribed
by rules of the agency." 120.53(5)(d)(1).
HRS has properly promulgated rules regarding bid protests, which [are] set forth in F.A.C.
Rule 10-13.008. This rule requires that in
the event that there is not an amicable resolution of a bid protest and there is no disputed issue
of material fact, then the matter should be referred to a hearing officer. If there are material facts in dispute, then the matter
should be referred to the Division of Admin- istrative Hearings.
In the instant matter, there has been no amicable resolution and this matter should have been referred for hearing. As there are clearly disputed issues of material fact as to whether Delad's bid is non-responsive this matter should be set for hearing before an Administrative Hearing Officer.
HRS's violation of its own rules is grounds for invalidating its actions. . . .
On October 3, 1995, Petitioner's formal protest was referred to the Division of Administrative Hearings (hereinafter referred to as the "Division") for the assignment of a Division hearing officer to conduct a formal hearing on the matter. The assignment was made on October 5, 1995. On that same day, the Hearing Officer issued a Notice of Hearing scheduling the formal hearing for October 18, 1995.
On October 18, 1995, Petitioner, on behalf of both itself and the Department, filed a motion requesting that the final hearing in the instant case be continued. It was asserted in the motion that "both parties have agreed to a continuance of the hearing date in this matter, thereby waiving the 15 day hearing requirement." By order issued that same day, the motion was granted.
The final hearing was subsequently rescheduled for December 20, 1995.
On November 3, 1995, Intervenor filed an unopposed petition for leave to intervene in the instant case. By order issued November 9, 1995, the petition was granted.
On December 19, 1995, the parties filed a Joint Prehearing Stipulation in which they stated their respective positions as follows:
50 State and HRS believe that 50 State filed the lowest responsive bid and that Delad's bid was non-responsive. Delad's position is that its bid was the lowest responsive bid.
The disputed issues of fact and law were described as follows in the parties' Joint Prehearing Stipulation:
DISPUTED FACTS
Whether Delad should be deemed the lowest responsive bidder.
Whether 50 State should be deemed the lowest responsive bidder.
VIII DISPUTED QUESTIONS OF LAW
Whether HRS complied with the statutory mandate to have an open and competitive bidding process.
Whether HRS acted in an arbitrary and capricious manner when it withdrew the award of the contract from Delad.
The final hearing in this case was held, as scheduled, on December 20, 1995. At the outset of the hearing, Petitioner requested that the Hearing Officer deem the following matters set forth in the Request for Admissions that Petitioner had served on the Department, by hand delivery, on October 24, 1995, to have been admitted by the Department 1/ (pursuant to the provisions of Rule 1.370) in light of the Department's failure to have served a written answer or objection to the request in a timely manner:
Delad Security, Inc. was inititally deemed the lowest responsive bidder to BID NO. 11-95-001.
50 State Security Service, Inc. ("50 State") filed a formal protest of the award, which was reviewed by HRS without input from Delad.
Delad was not permitted to provide a response to the 50 State protest until after HRS had made a decision revoking the bid award to Delad.
Delad Security, Inc. is a majority African-American owned company.
50 State Security Services, Inc. is a majority Anglo-Saxon owned company.
Delad's price per guard per hour was
$12.11 which was lower than the price quoted by 50 State which was $12.23 per hour.
50 State's bid response did not address sections 1, 2, 3, 4 and 5 of BID 11-95-001.
50 State did not provide the required proof of automobile insurance.
50 State did not provide the required proof of licenses.
50 State did not provide the required proof of general liability insurance.
50 State did not provide the required proof of workers compensation insurance.
HRS promulgates an invitation to bid that outlines each requirement of performance.
Bidders are required to respond to every section of an invitation to bid.
All of the specifications in an HRS invitation to bid are important and must be addressed by bidders.
Delad's bid response provided responses to section 1, 2, 3, 4 and 5. 2/
In response to Petitioner's request, the Department moved the Hearing Officer to permit it to withdraw the admissions resulting from its failure to have timely answered or objected to Petitioner's Request for Admissions. After hearing argument on the matter, the Hearing Officer indicated that he would reserve ruling on Petitioner's and the Department's requests (as well as on the admissibility of any evidence that the Department might offer to refute the matters asserted in Petitioner's Request for Admissions 3/ ) in order to provide the parties with the opportunity to research and present further argument (in their proposed recommended orders) on these issues. Having carefully considered the arguments advanced by the parties, the Hearing Officer hereby GRANTS the Department permission to withdraw the admissions resulting
from its failure to have timely answered or objected to Petitioner's Request for Admissions. The Department's response (served on Petitioner on December 18, 1995) to Petitioner's Request for Admissions will be treated as if had been timely made under Rule 1.370, Florida Rules of Civil Procedure. See Wilson v.
Department of Administration, Division of Retirement, 538 So.2d 139 (Fla. 4th DCA 1989)(request to withdraw "technical admission was properly granted by the hearing officer," even though request was made orally immediately prior to the commencement of the evidentiary portion of the final hearing and "no real reason was offered for the failure to respond to the request for admission," where the attorney for the party who had requested the admission "did not satisfy the hearing officer that his case was in any way prejudiced by permitting withdrawal of the technical admission and permitting the case to proceed on the merits;" "[t]he Director [of the Division of Retirement] erred as a matter of law in determining that excusable neglect had to be shown in order to grant relief from the request for admissions").
A total of four witnesses testified at the December 20, 1995, final hearing held in the instant case: Selma Speakman, the Department's District 11 Purchasing Director; Dele Oladunni, Petitioner's President; William Murphy, Petitioner's Vice-President of Operations; and Lloyd Henry Hill, the Deputy District Administrator for the Department's District 11. In addition to the testimony of these four witnesses, 20 exhibits (Joint Exhibits 1 through 18, Petitioner's Exhibit 1, and Intervenor's Exhibit 1) were offered and received into evidence.
At the close of the evidentiary portion of the hearing, the Hearing Officer, on the record, advised the parties of their right to submit proposed recommended orders and established a deadline (15 days from the date of the Hearing Officer's receipt of the transcript of the hearing) for the filing of these proposed recommended orders. The parties agreed to waive the requirement of Section 120.53(5)(e), Florida Statutes, that the Hearing Officer issue his Recommended Order "within 30 days after receipt of the hearing transcript by the [H]earing [O]fficer."
The Hearing Officer received the hearing transcript on January 16, 1996.
Petitioner filed its proposed recommended order (as well as a supporting memorandum of law) ten days later, on January 26, 1996. On January 31, 1996, the last day of the 15-day filing period, Intervenor filed a motion requesting an extension of the deadline for the submission of its proposed recommended order. On February 2, 1996, Intervenor filed a response in opposition to Intervenor's motion for extension of time.
Oral argument on Intervenor's motion was held by telephone conference call (with all parties participating through their respective counsel) on February 12, 1996. During the telephone conference call, counsel for the Department indicated that the Department also needed additional time to prepare and file its proposed recommended order. She further stated that she had assumed that, if Intervenor's motion for extension of time was granted, the Department would also be granted a similar extension. The Hearing Officer advised counsel for Respondent that her assumption was erroneous inasmuch as Intervenor's motion requested an extension of time only for Intervenor to file its proposed recommended order. The Hearing Officer further indicated that he would consider the issue of whether the Department should be granted an extension of time to file its proposed recommended order only if the Department filed a written motion requesting such relief. Counsel for Petitioner indicated that he would oppose any such motion filed by the Department. In addition, he requested that the Hearing Officer not entertain any oral argument on such a motion, if filed.
By order issued February 13, 1996, the Hearing Officer extended the deadline for Intervenor to file its proposed recommended order to Tuesday, February 20, 1996, and gave Petitioner the opportunity "to file a supplemental or amended proposed recommended order within seven days of the date it receive[d] Intervenor's proposed recommended order." The following day (February 14, 1996), the Department filed a motion requesting a similar extension of time for it to file its proposed recommended order. The Hearing Officer, by order issued February 16, 1996, granted the request. He further provided in his order that Petitioner would "have the opportunity (but [would] not [be] required) to file a supplemental or amended proposed recommended order within seven days of the date it receive[d the Department]'s proposed recommended order."
On February 20, 1996, Intervenor and the Department filed separate proposed recommended orders. To date, Petitioner has not filed any supplemental or amended proposed recommended order.
The parties' proposed recommended orders have been carefully considered by the Hearing Officer. They each contain what are labelled as "findings of fact." These "findings of fact" proposed by the parties are specifically addressed in the Appendix to this Recommended Order.
FINDINGS OF FACT
Based upon the evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made:
The Invitation to Bid
Through Invitation to Bid Number 11-95-001, entitled "Armed Security Guard Service, Food Stamp Offices," (hereinafter referred to as the "ITB"), the Department solicited the submission of bids from prospective providers interested in providing the Department with armed security guard services at the Department's Dade County (District 11) food stamp offices.
The ITB was prepared by the Department's District 11 Purchasing Director, Selma Speakman.
Speakman was also involved in the advertising and distribution of the ITB, which began on or about February 10, 1995.
The ITB was a 12-page document.
The first page of the ITB contained a "Bidder Acknowledgment" form to be completed by the bidder and signed by the bidder's authorized representative. The form advised prospective providers that bids would be opened at 1:00 p.m. on March 14, 1995, and that "bid tabulations with recommended awards" would be posted on or about March 21, 1995.
General Conditions
The remaining portion of the first page and the second page of the ITB set forth the "general conditions" that would govern all bids submitted in response to the ITB.
General Condition 3 addressed the subject of "bid opening." It provided as follows:
BID OPENING: Shall be public, on the date location and the time specified on the bid form. It is the bidder's responsibility to assure that his bid is delivered at the proper time and place of the bid opening. Bids which for any reason are not so delivered, will not be considered. Offers by telegram or telephone are not acceptable. A bid may not be altered after opening of bids.
Note: Bid tabulations will be furnished upon written request with an enclosed, self addressed, stamped envelope and payment of a predetermined fee. Bid files may be examined during normal working hours by appointment. Bid tabulations will not be provided by telephone.
General Condition 5 addressed the subject of "interpretations/disputes." It provided as follows:
INTERPRETATIONS/DISPUTES: Any questions concerning conditions and specifications shall be directed in writing to this office for receipt no later than ten (10) days prior to the bid opening. Inquiries must reference the date of bid opening and bid number. No interpretation shall be considered binding unless provided in writing by the State of
Florida in response to requests in full compliance with this provision. Any person who is adversely affected by the agency's decision or intended decision concerning a procurement solicitation
or contract award and who wants to protest shall file a protest in compliance with Rule 13A-1.006(3), Florida Administrative Code. Failure to file a protest within the time prescribed in Section 120.53(5), Florida Statutes, shall constitute
a waiver of proceedings under Chapter 120, Florida Statutes.
General Condition 7 addressed the subject of "awards." It provided as follows:
AWARDS: As the best interest of the State may require, the right is reserved to make award(s) by individual service, group of services, all or none, or a combination thereof; to reject
any and all bids or waive any minor irregularity or technicality in bids received. Bidders are cautioned to make no assumptions unless their bid has been evaluated as being responsive.
General Condition 10 addressed the subject of "legal requirements." It provided as follows:
LEGAL REQUIREMENTS: Applicable provision of all Federal, State, county and local laws, and all ordinances, rules and regulations shall govern development, submittal and evaluation of all
bids received in response hereto and shall govern any and all claims and disputes which may arise between person(s) submitting a bid response hereto and the State of Florida, by and through its officers, employees and authorized representatives, or other person, natural or otherwise; and lack of knowledge by any bidder shall not constitute a cognizable defense against the legal effect thereof.
Purpose and Scope of Work
On page three of the ITB, the purpose of the ITB and the "scope of work" to be performed pursuant to the advertised contract were described as follows:
The purpose of this bid is to obtain competitive prices for a contract for armed security guard service for the State of Florida, Department of Health and Rehabilitative Services, District 11. Armed security guard service will be provided for various Food Stamp Offices located in Dade County, according to the attached Bid Data Sheet. The effective date for this bid is July 1, 1995 through June 30, 1996.
SCOPE OF WORK:
The contractor will provide armed, uniformed security guards as per schedule on Bid Data Sheet. The number of guards, locations and times required may vary from time to time and the contractor must be flexible. Should a situation arise which requires an increase or decrease in the number
of guards needed, not to exceed ten guards, the contractor shall have a reasonable time to adjust said number of guards provided. Additional coverage required will be furnished at the bid rate, not overtime rates.
Bid Data Sheet
The aforementioned "Bid Data Sheet" was found on page 11 of the ITB. It identified 16 locations where armed security guard services would have to be provided under the contract awarded pursuant to the ITB. It further indicated that a total of 22 security guards (working a total of 58,280 hours per year) would be needed to provide such services.
Specifications
"Specifications" were set forth on pages three through seven of the
ITB.
Specification I described the "minimum requirements for security personnel," including the requirement that a guard "wear[] the uniform of the company."
Specification II listed the following as "guard duties:"
Maintain crowd control.
Organize and supervise lines.
Control disruptive individuals.
Prevent unauthorized individuals from entering restricted areas.
Keep issuance area under constant surveillance while food stamps are issued.
Contact the police department if he/she is no longer in control of a situation or in the event of a robbery.
Ensure that individuals present a food stamp identification card prior to being admitted to cashier area.
Directs traffic as necessary; vehicles as well as pedestrians.
Specification III described "guard qualifications," including the requirement that a guard "have at least three to five (3-5) years experience as an Armed Security Officer."
Specifications IV and V addressed "minimum training requirements" and "background requirements," respectively.
The final specification dealt with "communications" and provided as follows:
Hand-held Radios: Two-way hand-held radios, with Emergency Protection button, licensed for use by the Federal Communications Commission, are to be provided by the Contractor to all on-duty contract security officers.
Contractor Central Dispatch: The Contractor will provide a centralized dispatching service through use of a stationary base station manned
by experienced personnel. Contractor's personnel must be available at the Central Dispatch Station, and have the ability and authority to take immediate action, as required.
System Quality: Radio communications among system users is expected to be strong and clear at all times ("five by five"), both transmitting and receiving. The Contractor shall be totally responsible for providing and maintaining required system quality.
Special Conditions
Pages seven though ten of the ITB contained 15 "special conditions."
Special Condition I addressed the subject of "contractor's insurance." It provided, in part, as follows:
The contractor shall secure and maintain, at his sole expense and for the duration of the contract term, the following insurance coverage written on companies and on policy forms acceptable to the department.
Worker's Compensation . . . .
Comprehensive general liability insurance covering all operations and services under the contract . . . .
Comprehensive automobile liability insurance, including ow[n]ed, non-ow[n]ed and hired vehicle coverage of not less than $100,000 combined single limit issued on a per occurrence basis, if operations and service under the contract involve the use or operation of automotive vehicles on the department's premises.
No insurance will be acceptable unless written by
a company licensed by the State of Florida Insurance Department to do business in Florida where the work is to be performed at the time the policy is issued.
Special Condition II addressed the subject of "licenses." It provided as follows:
All contractors, including prime, general and subcontractors, where applicable, must have all licenses and/or permits in accordance with city and county ordinances, rules and regulations and all licenses . . . must be obtained at the contractor's expense.
Special Condition III addressed the subject of "federal and state laws and regulations." It provided as follows:
To comply with Title VI and VII, Civil Rights Act of 1964, respective federal regulations and Executive Order 11246 as amended.
To comply with all the provisions of Section
504 of the Rehabilitation Act of 1973, Non- Discrimination as to Handicapped Individuals.
It is expressly understood that upon receipt of substantial evidence of any such discrimination, the department shall have the right to terminate the contract for breach.
Special Condition IV addressed the subject of contract renewal. It provided as follows:
Option to Renew
This contract shall end on June 30, 1996 with a two (2) year Option to Renew. Renewal to be based on mutual consent of both parties.
Renewal must be exercised within sixty (60) days and not later than thirty (30) days prior to
termination of contract.
Renewal of this contract will be based upon satisfactory performance evaluations by the department.
Subject to the availability of funds, the maximum percentage increase that may be paid is based on the current award amount plus 3 percent for first renewal and 3 percent for second renewal.
Special Condition V provided that "[a]ny person submitting a bid in response to this invitation must execute the enclosed form PUR. 7068, SWORN STATEMENT UNDER SECTION 287.133(a), FLORIDA STATUTES, ON PUBLIC ENTITY CRIMES, including proper check(s), in the space(s) provided, and enclose it with the bid."
Special Condition VI addressed the subject of "protest." It provided as follows:
Any actual or prospective bidder who desires
to file a formal protest of this ITB, as outlined in Item 5 of the General Conditions sections on the PUR 7031 form, must accompany that protest
with a bond payable to the department in the amount of $5,000 or 1 percent of the department's estimate of the total volume of the proposed contract, whichever is less. A bidder may submit, in lieu
of a bond, a cashier's check or money order in the amount of the bond.
Special Condition VII provided that the "[b]id will be awarded to the lowest responsive bidder."
Special Condition VIII provided that "[p]ayment shall be made in accordance with Section 215.422, F.S., which states the contractor's rights and the state agency's responsibilities concerning interest penalties and time limits for payment of invoices."
Special Condition IX provided that "[t]he State of Florida encourages minority business enterprise participation in any bid solicitation."
Special Condition X addressed the subject of contract termination and described three ways ("termination at will," "termination because of lack of funds," and "termination of breach") in which the contract to be awarded pursuant to the ITB could be terminated.
Special Condition XI provided that "[t]he contractor shall secure and maintain a Blanket Fidelity Bond on all of the company's employees providing services under the provisions of this contract in an amount not to exceed an aggregate policy limit of $10,000.00 per occurrence."
Special Condition XII was entitled, "References." It provided as follows:
The ability of bidders to meet the requirements
of this bid is of prime concern to the department. In this regard, it is required that each bidder furnish the department with justification supportive
of his ability to meet this obligation. This information should briefly identify the company's personnel and equipment resources and include a minimum or three (3) representative customers as references. This documentation must accompany bid, along with financial reports and management experience.
Special Condition XIII provided that "[t]here will be a wage determination of $9.50 per hour."
Special Condition XIV addressed the subject of "invoices and payment." It provided as follows:
The contractor will submit invoices on a monthly basis following delivery of services. Invoice(s) should be based on the quoted price per hour and reflect the address for which services were performed, month for which payment of services rendered is requested and Contract Number. Backup time sheets, approved by the Department, will be required.
Special Condition XV provided that "[t]he Contractor shall provide documented evidence that they are capable of providing a contingency force of similarly qualified personnel equal to one-third of the force needed in case of emergency situations that would affect the health and welfare of clients and the daily operations of HRS offices."
Bid and Signature Sheet
The twelfth and final page of the ITB consisted of a "Bid and Signature Sheet" to be completed by the bidder and signed by the bidder's authorized representative. On the sheet, the bidder had to indicate, among other things, its "[p]rice per [g]uard per [h]our."
Petitioner's and Intervenor's Bid Submissions
Petitioner and Intervenor were among those prospective providers that timely submitted bids in response to the ITB.
Both Petitioner and Intervenor included in their bid submissions completed and signed "Bidder Acknowledgment" forms, PUR 7068 forms and "Bid and Signature Sheets."
Petitioner's "Bidder Acknowledgment" form, PUR 7068 form and "Bid and Signature Sheet" were all signed by Petitioner's President, Dele Oladunni. Oladunni has been licensed as a security guard for approximately the past five years. He manages all of Petitioner's projects with the help of an assistant. 4/ At the time of the submission of Petitioner's bid, Oladunni's assistant, like Oladunni, had approximately five years experience in the armed security business.
On its "Bid and Signature Sheet," Petitioner indicated that its "[p]rice per [g]uard per [h]our" was $12.11.
On its "Bid and Signature Sheet," Intervenor indicated that its "[p]rice per [g]uard per [h]our" was $12.23.
Other Materials Submitted by Petitioner
Petitioner's bid submission also included the following documentation: a list of customer references; a document entitled, "Delad Security Inc. Income Statement and Retained Earnings November 30th 1993;" certificates of insurance; a copy of its security agency license issued by the Department of State, Division of Licensing, on December 19, 1994; 5/ and a "Business Management/Technical Plan," which, including attachments, consisted of approximately 50 pages.
Petitioner provided 14 customer references on the list it submitted to the Department. Among these customer references was the Federal Aviation Administration, to whom, according to the representation made on the list, Petitioner had "provide[d] armed security service." 6/ Another customer reference listed by Petitioner was the Department itself. (At the time of the submission of its bid, Petitioner was providing the Department, at its CYF North Service Center in Miami, with armed security guard services pursuant to a contract into which it had entered with the Department. Speakman had received no complaints concerning Petitioner's performance of its obligations under this contract.)
In Section 1.1 of the "Business Management/Technical Plan" (hereinafter referred to as the "Plan") that Petitioner submitted to the Department as part of its bid, Petitioner stated the following:
BUSINESS MANAGEMENT APPROACH
Delad Security, Inc., a minority owned African American Business, proposes to provide security support services to the Department of Health and Rehabilitative Services as required by adopting and implementing the professional business philosophy established in our current relationship for the provision of services: 7/
Task Analysis
Planning
Implementation
Reporting
Quality Control
Delad Security, Inc., has the resources, the flexibility and the experience to fulfill the security needs of the Department of Health and Rehabilitative Services[. T]his includes personnel management involvement, outstanding supervision, a well trained, qualified security force which places emphasis on both the public relations and security aspects of its functions. 8/
Petitioner asserted in Section 1.1.1 of the Plan that "Delad Security, Inc., has enjoyed an excellent business reputation" and that it "conduct[s] business in accordance with all local laws and regulations."
Section 1.1.2 of the Plan advised that "Delad Security, Inc.['s], proven management concept is to permit the local site management teams, particularly the project Manager/Client Service Supervisor (CSS) and their support staff, to exercise full administrative and technical control of the project."
In Section 1.1.3 of the Plan, Petitioner represented that, if awarded the contract pursuant to the ITB, such a management team, comprised of a Client Service Supervisor, with a "[m]inimum of three (3) year's previous experience in the management and operation of security or police services," and a Local Site Supervisor, with a "[m]inimum of one year of experience in the management and operation of security or police services," would be assigned to assist in the management of the project.
Petitioner claimed in Section 1.2 of the Plan that, "[i]n accordance with Delad Security['s] long standing experience and management policies," it would "provide the full necessary Corporate assistance and support to ensure the success of the project," including (as enumerated in Section 1.2.2 of the Plan): "[p]rocurement and provisioning of equipment, materials and supplies;" "[g]uidance and instructions in management of security personnel matters based on our proven experience in such projects;" and "[a]vailability of backup emergency management, security cleared, personnel."
In Section 1.3.3.2 of the Plan, Petitioner stated, among other things, the following:
If awarded the contract, the Delad District office will have immediately available all the uniforms and accessories require[d]. Procurement of uniforms will be handled both locally and at the Corporate level. Issuance of uniforms will be coordinated with the local District Project Team. Each employee issued uniforms would have to sign the Uniforms and Accessories Record.
All guards will be issued the uniform items as required by the HRS.
Petitioner made the following representations regarding "personnel administration" in Section 1.4 of the Plan:
Delad Security, Inc. recognizes that a high percentage of this contract's cost is related to direct labor or personnel. The efficient administration and management of personnel, therefore, depends on reliable information and controls. Delad will administer this contract
based on a personnel administration program that takes into account a full understanding of the local labor laws and the policies to recruit and retain a highly qualified professional guard force. Our experience over the past years as
a contractor to Federal, State and Municipal entities, has enabled Delad to be fully prepared to meet all challenges in this area.
In Section 1.4.1 of the Plan, Petitioner indicated that one of its "personnel administration objectives" would be to "[r]ecruit and maintain an
abundance of qualified and experienced personnel to support the operational security requirements of the HRS."
To this end, according to Section 1.4.4 of the Plan, "[a]ll employees assigned to work under this contract shall receive competitive wages, so as to attract qualified personnel interested in long term job security."
Petitioner stated the following regarding "incumbent personnel" in Section 1.4.9 of the Plan:
If awarded the contract, Delad will accept incumbent personnel who meet our stringent screening standards. In order to qualify for employment, the incumbent personnel must meet the employment standards and receive favorable recommendations from HRS contract personnel.
Section 1.4.10 of the Plan detailed Petitioner's personnel recruitment process, including its policy that personnel hired to perform contract work "meet all requirements of the Scope of Service section of the BID."
In Section 1.4.11 of the Plan, Petitioner stated the following:
The officers selected for this project will
be highly trained and experienced. Delad will augment their ability with refresher, site specific and sustainment training."
Petitioner asserted the following in Section 1.5.2 of the Plan:
At the Corporate level, Mr. Dele Oladunni has been assigned as the Quality Control Coordinator for previous joint projects. Mr. Oladunni has the requisite knowledge and experience to ensure compliance with all requirements of the BID.
In Section 1.6 of the Plan, Petitioner made the following assertion:
Delad Security, Inc. ha[s] the experience in effecting large scale transition operations of this nature. Our proposed transition and implementation plan is included.
Petitioner's proposed transition and implementation plan (which, as Petitioner represented in Section 1.8 of its "Business Management/Technical Plan," was a part of its bid submission) consisted of a series of 11 "tasks."
Task 4 of these 11 "tasks" involved "labor pool analysis" and was described as follows in the proposed transition and implementation plan:
Delad Personnel units will immediately begin reviewing our backlog of current applicants and make an initial determination of the number of available and suitable candidates for assignment to the Department of Health and Rehabilitative
Services. Since a larger pool of licensed officers
is required, Delad will begin the recruiting and training process. We have identified candidates for key positions and they will be available for personal interviews by the HRS Security Coordinator prior to final selection.
Task 5 involved "personnel selection and screening of current security staff" and was described as follows in the proposed transition and implementation plan:
Delad recognize[s] the possibility that some of the current security officers may meet the
upgraded personnel requirements and HRS general criteria for hire. Due to their familiarity with security work, these officers could be valuable employees for assignment at the Depart- ment of Health and Rehabilitative Services Sites or elsewhere with Delad.
The personnel units will undertake the screening and interviewing of these officers. If they meet HRS standards, they will be given priority consideration for employment.
Task 6 involved "screening of new personnel" and was described as follows in the proposed transition and implementation plan:
As soon as current applicants have been con- tacted and we begin to receive response[s] to recr[u]itment efforts, the screening process will begin in earnest.
All applicants, whether current Security Officers at the Department of Health and Rehabilitative Services or new applicants, will be subject to the Delad screening and recruitment procedures.
To assure a smooth selection process, Delad proposes to conduct interviews and local reference checks focusing on human relations skills to achieve a preliminary qualification status. If acceptable, the selectee would th[e]n undergo the required background investigation and standard interview process.
Task 7 involved "on-site training of all personnel" and was described as follows in the proposed transition and implementation plan:
After the screening process and after all personnel selected for the Department of Health
and Rehabilitative Services Security Force complete the required training and orientation, site training will begin at HRS sites.
The on-site training covers all the topics in the specifications as well as those identified during the transition period as necessary for
the effective functioning of officers assigned to the HRS sites. The training is scheduled to augment and not interfere with the present
day-to-day operations.
The training is scheduled on a per shift basis and allows for the initial cross training process
to begin. Upon completion of the on-site training all security officers will be issued certificates.
Task 8 involved "logistical activity" and was described as follows in the proposed transition and implementation plan:
Delad is fully aware of any equipment and material requirement specified and inherent in the contract.
The coordination of the logistics is the responsi- bility of the Client Service Supervisor under the overall direction of the Project Coordinator. The proposed schedule is as follows:
Equipment, radios, weapons, armed security officers uniform accessories will be ordered upon award of the contract.
Uniforms fitted for all personnel within the first two weeks.
Uniforms at District Office and issued- third week.
Each logistical requirement will be addressed in advance by the appropriate Transition Team member to minimize duplication of efforts and unnecessary costs.
Task 9 involved "operational dynamics during changeover" and was described as follows in the proposed transition and implementation plan:
We believe that a smooth transfer of responsi- bilities can be effected at the termination of the existing proprietary force through the full involvement of the transition Team.
Additional and retained personnel will be issued their uniforms and any equipment required prior to Transition week.
Project supervisory personnel will be made available during the pre-transition period to assure a smooth transition. This consistency of supervision will continue throughout the contract period assuring all security officers are cognizant and knowledgeable of their duties and responsibilities.
Task 10 involved "transfer of responsibility and liability" and was described as follows in the proposed transition and implementation plan:
Additional and sufficient manpower from Delad Security will be on-site at the facility to supervise and assist the critical transfer of services.
These additional transition personnel will be fully knowledgeable of the sensitivity of their positions and objective- a smooth transfer of security operations.
In the section of Petitioner's "Business Management/Technical Plan" dealing with "corporate management involvement/support," Petitioner stated the following:
Delad has earned and achieved a reputation of professionalism and excellenc[e] in the performance of its projects.
A major contributor to such a reputation is the high level of personal interest, support and commitment that Delad top Corporate Management afford to its field operations - - particularly the protective support services for facilities of critical importance to the State of Florida and its economy.
Delad Security Inc.['s] Corporate Management is bound by this same commitment and certifies that it will devote whatever resources are needed to make this Project a total success.
Petitioner asserted in Section 1.8 of the Plan that it "takes no exceptions to, nor intends to deviate from, the Scope of Service requirements in the solicitation."
In an attachment to the Plan, Petitioner made the following additional statements relating to its experience in the "security management field:"
Delad Security Inc. pride[s itself] on being
[a] leader[] within the security management field regarding proactive planning and prepar- ation for un-announced contingencies. It is only through such enlightened management and supervision that problem areas can be identified in sufficient time to insure prevention of unsatisfactory performance.
Delad Security has advanced several uniquely designed programs focused upon identifying potential liabilities before they become major shortcomings and generating a specific response to bring about early resolution. . . .
Delad Security Inc. [h]as implemented a company- wide program of soliciting from our clients a quarterly evaluation of the quality of services received. The Business Unit sends the question-
naires/evaluation to the client and data generated from these questionnaires helps to insure that high standards of service delivery are sustained.
Through the Plan and its attachments, as well as the list of references Petitioner submitted as part of its bid, Petitioner provided the Department (albeit in a manner that could have been more clear and concise and less general) with information concerning the personnel and equipment resources, as well as the management experience, that Petitioner would have available to draw upon to meet the requirements of the contract advertised in the ITB.
Other Materials Submitted by Intervenor
Intervenor included in its bid submission, in addition to the completed and signed "Bidder Acknowledgment" form, PUR 7068 form and "Bid and Signature Sheet," the following documentation: a list containing five customer references; a list of "equipment references;" a statement of assets and liabilities, as of September 30, 1994, of Florida National Industries (which Intervenor identified in its bid submission as Intervenor's "parent company") and of Florida National Industries' subsidiaries; the "declarations" of an "executive protection policy" issued Intervenor by the Federal Insurance Company; 9/ short, written statements containing biographical information about Intervenor's President, Ted Kretzschmar, its Vice President of Operations, William Murphy, and its Secretary and Personnel Manager, Lianne Kretzschmar;
and a one-page written statement (on Intervenor's letterhead), which read as follows:
With regards to Section XI of the Invitation
to Bid entitled "FIDELITY BOND," 50 State provides the attached copy of our current Fidelity Bond;
With regards to Section XII of the Invitation to Bid entitled "REFERENCES," 50 State Security Service, Inc. submits the following supportive justification for those items:
PERSONNEL
50 State Security currently employes approximately
350 Security Officers and is one of the largest security providers in South Florida. Of these 350 officers, over 150 are licensed as armed security officers by the State of Florida with a "G" license. 10/
EQUIPMENT
50 State Security has a twenty-four hour per day, seven days per week dispatching station at our North Miami headquarters. This Central Control station is manned by fully trained personnel at all times. 50 State currently operates with over
100 handheld and 15 mobile radios under a UHF voting system that allows radio coverage through- out Dade County.
CUSTOMER REFERENCES
See attached list of Contract Experience.
FINANCIAL REPORTS
See attached Statement for Florida National Industries (parent company).
MANAGEMENT EXPERIENCE
See attached biographies for Ted Kretzschmar, William Murphy, and Lianne Kretzschmar.
With regards to Section XV of the invitation to Bid entitled "CONTINGENCY," 50 State Security Service, Inc. submits the following:
50 State is readily able to supply qualified officers in amounts far in excess of the contract requirements to cover any contingency.
HRS Manual No. 75-2
The Department has a manual, HRS Manual No. 75-2, that "establishes policy and furnishes the procedures to ensure that the department, through its contracting process, protects the funds it disburses, derives the maximum return of services from those funds and is in compliance with applicable state and federal law, rules, and regulations governing contracts for services," such as the one advertised in the ITB.
Section 5-12 of the manual provides that the following procedures must be followed in the "evaluation of responses" to invitations to bid and requests for proposals:
A selection team of at least three employees who have experience and knowledge in the program areas and service requirements for which contractual services are sought,
will be appointed by the appropriate authority to aid in the selection of providers for contracts exceeding the threshold amount for Category Four. 11/ It is recommended that a selection team of at least three employees be used for all contracts, regardless of dollar amount.
It is required that each prospective member of the selection team complete the Conflict of Interest Questionnaire (Appendix J) to ensure that no team member has any conflict of interest which would interfere in selection of a provider. If a proposed team member answers "yes" to any question, his/her participation on the selection team must
be reviewed by the contract manager in conjunction with legal counsel.
If the selection team is organized to assist in the development of the RFP/ITB and its evaluation criteria, the Conflict of Interest Questionnaire must be completed prior to such involvement. Each member must approach the development of evaluation criteria in a manner which promotes fair and open competition.
The selection team must evaluate ITB bids
based on the lowest price and must evaluate RFP proposals using the weighted evaluation sheet contained in the published RFP. The selection team, upon completion of their review, may be required to submit their recommendation (a ranked list of the top three or five bidders) to the contract signer for review. The contract signer will then decide which person or firm is to be awarded the contract based upon the recommendation made by the selection team and taking into consi- deration which bidder's offer is most advantageous to the state. If the highest ranked bidder, as reported by the selection team, is not selected, the reason for the selection of another bidder must be set forth in writing and included in the contract manager's bid file.
Section 5-15 of the manual provides that, "[i]n the case of an ITB, the contract shall be awarded to the responsive and responsible bidder with the lowest price."
The Initial Evaluation of Petitioner's, Intervenor's and the Other Bids
The bids that the Department received in response to the ITB were reviewed and evaluated by a two-member evaluation team. The members of the team were Speakman and another Department employee, Jorge Gonzalez.
Speakman and Gonzalez reasonably determined that both Petitioner's and Intervenor's bid submissions were responsive to the ITB, including the provisions of Special Condition XII which required each bidder to "furnish the department with justification supportive of [its] ability to meet th[e contractual] obligation[s]" prescribed in the ITB by "briefly identify[ing] the company's personnel and equipment resources" and providing information concerning its "management experience."
Speakman, however, was concerned that Petitioner's bid price was so low that Petitioner would not be able to make a profit and that therefore any arrangement with Petitioner would "not . . . work out." She telephoned Oladunni to express her concerns and to ask him if Petitioner intended to "stand by" its bid price.
In response to Speakman's telephone call, Oladunni, on April 24, 1995, sent Speakman (by facsimile transmission) the following letter:
Thank you for the opportunity to present our cost breakdown for the HRS Security Service to Food Stamp Offices. The Breakdown is as follows:
Contract HRS: 58,280
LABOR HOURLY COST
Security Officers wage: $ 9.50 Payroll Tax and
Insurance P.T.I. (.151 percent) 1.43
Direct Labor: 10.93 10.93/HRS
EQUIPMENT
Radios: 22 at 400= $8,800.00
Tax at 6 1/2 percent= 572.00 TOTAL $9,372.00
3 years depreciation 3,124.00
yearly which equates to .06/hour
Weapons: 30 @ 2400= $7,200.00
tax @ 6 1/2 percent= 468.00 TOTAL $7,668.00
5 years depreciation 1,533.60
yearly which equates to .03/hour
Uniforms and Accessories:
30 people @ 250= $7500.00
tax 6 1/2= 487.50
TOTAL $7,987.50
uniform per hrs .14
BENEFIT: .19
CURRENT OFFICE OVERHEAD .50
PROFIT at 2 percent .26 TOTAL BILL RATES: 12.11
Speakman and Gonzalez determined that Petitioner was the "lowest responsive bidder," within the meaning of Special Condition VII of the ITB," and that Petitioner therefore should be awarded the contract pursuant to the ITB.
Thereafter, the Department gave notice of its decision to award the contract to Petitioner.
Intervenor's Protest
After learning of the Department's decision, Intervenor (by letter dated May 1, 1995, from its counsel, Joseph Frechette, Jr.) advised Speakman that it was protesting the Department's determination to award the contract to Petitioner.
On May 10, 1995, Intervenor filed a formal protest (in the form of a letter dated May 9, 1995, from Frechette). The letter read as follows:
By and through [its] undersigned attorney,
50 State Security Service, Inc., (hereinafter "50 State"), files this formal protest of the awarding of ITB Number 11-95-001 to Delad Security, Inc. (hereinafter "Delad Security").
50 State Security is located [at] 820 N.E. 126th Street, North Miami FL 33161.
50 State Security was entitled to the award of the aforementioned contract. 50 States' interest will be severely affected by a loss of revenue and exposure if the award of this contract to Delad Security is not overturned as required
by law.
50 State was notified on April 27, 1995, by telephone, that Delad Security was awarded the aforementioned contract. On May 1, 1995, 50 State filed their written notice of protest, and files this formal protest in accordance with Florida Statute 120.53.
Florida Statute 287.032 and 287.001 both indicate the legislature's intent on public procurement and the purpose of the Division
of Purchasing. Both of these Statutes discuss the requirement that there be "uniform contractual service procurement policies, rules and procedures." The legislature set up these bid guidelines precisely and purposely.
The failure of Delad to follow these guidelines established by the State was in violation of Florida Statutes, and thus their bid must be declared nonresponsive.
Special Condition Section XII of the bid specifications, entitled references, specifically discusses the fact that "the ability of bidders to meet the requirements of this bid is of prime concern to the department." This section also "required that each bidder furnish the department with justification supportive of his ability to meet this obligation." Delad Security was in breach of Section XII. First, [it] failed to "identify the company's personnel and equipment resources." Second Delad failed to furnish management experience documentation as required by this section of the Invitation to Bid. Delad did not fulfill this section requirement; and the general conditions (Section 10) of the bid requirements dictate [it] should not be awarded this contract.
Florida Statute 287.012 specifically addresses Delad's failure to meet statutory requirements. Section 17 of the Statute states that the respon- sive bid must conform "in all material respects
to the invitation to bid or request for proposals." Section 18 of the Statute states that "Responsive bidder or responsive offeror means a person who
has submitted a bid or proposal which conforms in all material respects to the invitation to bid or request for proposals." Delad has not met these requirements. They failed to provide
the documentation and information on both manage- ment experience and personnel and equipment resources requirements of section XII of the
bid. [Its] failure to provide this information violates the aforementioned Statute by not conforming to the bid specifications.
There is no dispute of material fact other than
50 States' position that, as a result of Delad's failure to fulfill all of the bid requirements, Delad should not have been awarded the above listed contract.
Delad Security failed to fulfill the requirements set forth under Special Conditions Section XII of the Invitation to Bid. Delad Security did not submit documentation of [its] company's management experience. They also failed to identify the company's personnel and equipment resources. The Florida Legislature placed specific requirements on the bid process. Delad Security's failure to fulfill these requirements is in violation of
the Florida Statutes, therefore Delad should not have been awarded this contract.
Delad did not conform with the General and Specific Conditions of the Invitation to Bid. This protest has demonstrated that Delad violated Florida Statutes 287.012, 287.032 and 287.001.
50 State therefore demands that the Delad Security bid be deemed nonresponsive, and requests that the lowest responsive bidder, 50 State Security, be awarded ITB 11-95-001.
Intervenor's formal protest was referred to the Department's District
11 Deputy District Administrator, Lloyd Henry Hill. Along with Intervenor's formal protest, Hill was furnished copies of the ITB and Petitioner's and Intervenor's bid submissions.
Hill did not fill out a Conflict of Interest Questionnaire (Appendix J to HRS Manual No. 75-2). If he had, however, it would not have reflected that he had any conflict of interest that might have interfered with his fairly and impartially resolving Intervenor's formal protest.
After reviewing the materials with which he had been furnished, 12/ Hill determined that Intervenor's bid submission was responsive to the ITB, but that Petitioner's bid submission was clearly non-responsive because, in his opinion, it did not identify Petitioner's existing personnel and equipment resources, nor did it describe Petitioner's management experience, 13/ as required by Special Condition XII of the ITB (as interpreted by Hill 14/ ).
Therefore, in Hill's opinion, as between Petitioner and Intervenor, Intervenor was the lowest responsive bidder.
Accordingly, on June 13, 1995, Hill sent the following letter to Oladunni:
This is to notify you that after further review
of your company's bid for the referenced contract, the Department of Health and Rehabilitative Services has determined your bid to be non-responsive. HRS will award the bid to 50 State Security, the lowest responsive bidder.
Failure to file a protest within the time prescribed in section 120.53(5), Florida Statutes, shall constitute a waiver of proceedings under chapter 120, Fla. Stat.
Any person who is affected adversely by this decision or intended decision and chooses to protest the decision shall file a notice of protest in writing with the Director of Purchasing within
72 hours after the posting of the bid tabulation or within 72 hours after receipt of the notice of
the agency decision or intended decision, and shall fil[e] a formal written protest within ten days after the date of the filing of the notice of protest. Failure to file a notice of protest or failure to file a formal written protest shall constitute a waiver of proceedings under Chapter 120, Fla. Stat. The formal written protest shall state with particularity the facts and law upon which the protest is based.
Thank you for your interest.
In resolving Intervenor's formal protest in Intervenor's favor, Hill acted without the Petitioner's input or agreement and without there having been a Section 120.57(1) or (2) proceeding conducted on the matter.
After receiving Hill's June 13, 1995, letter, Petitioner filed the protest that is the subject of the instant Section 120.57 proceeding.
CONCLUSIONS OF LAW
With certain exceptions not applicable to the instant case, state agencies must purchase commodities and contractual services through the process of competitive bidding. Section 287.057, Fla. Stat.
It has been said on more than one occasion that competitive bidding requirements, such as those imposed upon state agencies, have as their purpose and object the following:
[T]o protect the public against collusive con- tracts; to secure fair competition upon equal terms to all bidders; to remove not only collusion but temptation for collusion and opportunity for gain at public expense; to close all avenues to favoritism and fraud in various forms; to secure the best values for the [public] at the lowest possible expense;
and to afford an equal advantage to all desiring to do business with the [government], by affording an opportunity for an exact comparison of bids.
Wester v. Belote, 103 Fla. 976, 138 So. 721, 723-24 (Fla. 1931); Harry Pepper and Associates, Inc. v. City of Cape Coral, 352 So.2d 1190, 1192 (Fla. 2d DCA 1977).
In soliciting and accepting competitive bids or proposals, a state agency has wide discretion. See D.O.T. v. Groves-Watkins Constructors, 530 So.2d 912, 913 (Fla. 1988); Liberty County v. Baxter's Asphalt and Concrete, Inc., 421 So.2d 505, 507 (Fla. 1982).
Its discretion with respect to these matters, while broad, is not unbridled. It must exercise its discretion in a manner that is not illegal, dishonest, fraudulent, arbitrary, unreasonable, capricious or in any other way that would subvert or undermine the purpose and object of competitive bidding. See D.O.T. v. Groves-Watkins Constructors, 530 So.2d 912, 913-14 (Fla. 1988); Caber Systems v. Department of General Services, 530 So.2d 325, 336 (Fla. 1st DCA 1988); Couch Construction Company, Inc. v. Department of Transportation,
361 So.2d 172, 175 (Fla. 1st DCA 1978); Wood-Hopkins Contracting Company v. Roger J. Au and Son, Inc., 354 So.2d 446, 450 (Fla. 1st DCA 1978).
Section 287.057(1), Florida Statutes, mandates that, where, as in the instant case, competitive bidding for contractual services is required, the "[c]ontract shall be awarded . . . to the qualified and responsive bidder who submits the lowest responsive bid." A "qualified and responsive bidder [or offeror]," within the meaning of Section 287.057(1), Florida Statutes, is "a person who has the capability in all respects to perform fully the contract requirements and has the integrity and reliability which will assure good faith performance." Section 287.012(14), Fla. Stat. A "responsive bid [or proposal]," within the meaning of Section 287.057(1), Florida Statutes, is "a bid or proposal submitted by a responsive, and responsible or qualified bidder or offeror which conforms in all material respects to the invitation to bid or request for proposals." Section 287.012(17), Fla. Stat. In determining whether there is such conformance, the invitation to bid or request for proposal should be construed, "if at all reasonable, in a way that would give all bidders an opportunity to compete." Air Support Services International, Inc. v. Metropolitan Dade County, 614 So.2d 583, 584 (Fla. 3d DCA 1993).
Section 287.057(1), Florida Statutes, makes it illegal for an agency to use criteria "in determining the acceptability of [a] bid that w[ere] not set forth in the invitation to bid." See also Air Support Services International, Inc. v. Metropolitan Dade County, 614 So.2d 583, 584 (Fla. 3d DCA 1993)("[p]ublic bid requirements may not be materially altered subsequent to the submission of bids").
A state agency may not accept a bid that is materially at variance with the bid specifications. See Rule 60A-1.002(12), Fla. Admin. Code ("[v]ariations which are not minor cannot be waived"); see also Rule 10-13.012, Fla. Admin. Code (Department rule which also provides that "[v]ariations which are not minor cannot be waived"). "[A]lthough a bid containing a material variance is unacceptable, not every deviation from the [bid specifications] is material. It is only material if it gives the bidder a substantial advantage over the other bidders and thereby restricts or stifles competition." Tropabest Foods, Inc. v. Department of General Services, 493 So.2d 50, 52 (Fla. 1st DCA 1986). If it does not provide the bidder with such a palpable competitive advantage, it constitutes a minor irregularity that should be waived by the agency. See Robinson Electrical Co., Inc. v. Dade County, 417 So.2d 1032, 1034 (Fla. 3d DCA 1982); Rule 60A-1.002(12), Fla. Admin. Code ("[t]he [a]gency shall reserve the right to waive any minor irregularities in an otherwise valid bid/proposal" 15/ ); see also Rule 10-13.012, Fla. Admin. Code (Department rule which states that "[t]he Department shall reserve the right to waive minor irregularities in an otherwise valid bid or proposal;" "[a] minor irregularity is a variation from the bid invitation or proposal terms and conditions which
does not affect the price of the bid, or give the bidder an advantage or benefit not enjoyed by other bidders, or does not adversely impact the interests of the Department").
"There is a very strong public interest in favor of saving tax dollars in awarding public contracts. There is no public interest, much less a substantial public interest, in disqualifying low bidders for technical deficiencies in form, where the low bidder did not derive any unfair competitive advantage by reason of the technical omission." Intercontinental Properties, Inc. v. Department of Health and Rehabilitative Services, 606 So.2d 380, 386 (Fla. 3d DCA 1992).
An unsuccessful bidder or proposer may file a protest with the soliciting state agency challenging the agency's contract award. The protest must be resolved in accordance with the rules adopted by the agency pursuant to Section 120.53(5), Florida Statutes, which provides, in part, as follows:
An agency which enters into a contract pursuant to the provisions of . . . chapter 287 . . . shall adopt rules specifying procedures for the resolution of protests arising from the contract bidding process. Such rules shall at least provide that:
The agency shall provide notice of its decision or intended decision concerning a bid solicitation or contract award as follows:
1. For a bid solicitation, notice of a decision or intended decision shall be given by United States mail or by hand delivery.
* * *
3. For any other agency decision, notice of a decision or intended decision shall be given either by posting the bid tabulation at the location where bids were opened or by certified United States mail or other express delivery service, return receipt requested.
The notice required by this paragraph shall contain the following statement: "Failure to file a protest within the time prescribed in s. 120.53(5), Florida Statutes, shall constitute a waiver of proceedings under chapter 120, Florida Statutes."
Any person who is adversely affected 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 notice of the
project plans and specifications or intended project plans and specifications in an invitation to bid or a 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.
* * *
The agency, on its own initiative or upon the request of a protestor, shall provide an opportunity to resolve the protest by mutual agreement between the parties within 7 days, excluding Saturdays, Sundays, and legal holidays, of receipt of a formal written protest.
If the subject of a protest is not resolved by mutual agreement within 7 days, excluding Saturdays, Sundays, and legal holidays, of receipt of the formal written protest, and if there is no disputed issue of material fact, an informal proceeding shall be conducted pursuant to s. 120.57(2) and applicable agency rules before
a person whose qualifications have been pre- scribed by the rules of the agency.
If the subject of a protest is not resolved by mutual agreement within 7 days, excluding Saturdays, Sundays, and legal holidays, of receipt of the formal written protest, and if there is a disputed issue of material fact, the agency shall refer the protest to the [D]ivision [of Adminis-
trative Hearings] for proceedings under s. 120.57(1).
Upon receipt of a formal written protest referred pursuant to this subsection, the division director shall expedite the hearing and assign a hearing officer within 15 days of the receipt of the formal written protest by the division and render a recommended order within 30 days after the hearing or within 30 days after receipt of
the hearing transcript by the hearing officer, whichever is later. The provisions of this paragraph may be waived upon stipulation of all parties.
In accordance with the provisions of Section 120.53(5), Florida Statutes, the Department has adopted Rule 10-13.008, Florida Administrative Code, which prescribes "protest procedures for contractual services." Subsection (3) of the rule describes the procedures to be followed in resolving a formal protest. It provides as follows:
(3) Resolution of the Protest
Upon receipt of the formal written notice of protest or intent to protest, the Contract manager shall attempt to resolve the protest
on an informal basis. The Contract manager shall have 7 days, excluding Saturdays, Sundays, and legal holidays, after receipt of the formal written protest to resolve it through mutual agreement.
If the protest is not resolved by mutual agreement within 7 days, excluding Saturdays, Sundays, and legal holidays, of receipt of the formal written protest, and if there is no disputed issue of material fact, a Hearing Officer shall conduct an informal proceeding pursuant to Section 120.57(2), Florida Statutes.
If the protest is not resolved by mutual agreement within 7 days, excluding Saturdays, Sundays, and legal holidays, of receipt of the formal written protest, and if there is a disputed issue of material fact, the formal written protest shall be referred to the Division of Administrative Hearings for further proceedings.
In a Section 120.57 bid protest proceeding, "the scope of inquiry is limited to whether the purpose of competitive bidding has been subverted." "[T]he hearing officer's sole responsibility is to ascertain whether the agency acted fraudulently, arbitrarily, 16/ illegally, or dishonestly." D.O.T. v. Groves-Watkins Constructors, 530 So.2d 912, 914 (Fla. 1988); Fort Howard Company v. Department of Management Services, 624 So.2d 783, 784 (Fla. 1st DCA 1993). See also Moore v. Department of Health and Rehabilitative Services, 596 So.2d 759, 761 (Fla. 1st DCA 1992)(inappropriate "for the hearing officer [in a bid protest proceeding] to make a de novo evaluation of the bids;" "[d]e novo consideration is ordinarily appropriate in a section 120.57(1) hearing, as the proceeding is used to formulate, rather than to review, agency action;" "[h]owever, in Groves-Watkins the supreme court established a different procedure for a competitive bidding dispute").
"The Hearing Officer need not, in effect, second guess the members of the evaluation committee to determine whether he and/or other reasonable and well-informed persons might have reached a contrary result. Rather, a 'public body has wide discretion' in the bidding process and 'its decision, when based on an honest exercise' of the discretion, should not be overturned 'even if it may appear erroneous and even if reasonable persons may disagree.'" Scientific Games, Inc. v. Dittler Brothers, Inc., 586 So.2d 1128, 1131 (Fla. 1st DCA 1991); see also City of Cape Coral v. Water Services of America, Inc., 567 So.2d 510,
513 (Fla. 2d DCA 1990)("[e]ven where a public entity makes an erroneous decision over which reasonable persons may disagree, the exercise of its discretion in soliciting and accepting bids should not be interfered with absent a showing of dishonesty, illegality, fraud, oppression or misconduct").
Under Groves- Watkins, the burden is on the protestant to prove by a preponderance of the record evidence that the agency's decision should be overturned. Cf. Board of Trustees of the Internal Improvement Trust Fund v. Levy, 656 So.2d 1359, 1363 (Fla. 1st DCA 1995)("[t]he burden of proving abuse of agency discretion is upon the challenger of the rule, who must meet that burden with a preponderance of the evidence").
Petitioner has met this burden in the instant case.
The preponderance of the record evidence establishes that, as Petitioner claimed in its formal protest, the Department acted illegally, in violation of the procedural requirements mandated by Section 120.53(5)(d), Florida Statutes, and incorporated in Rule 10-13.008(3), Florida Administrative Code, in overturning its initial decision to award Petitioner the contract advertised in the ITB and awarding the contract instead to Intervenor. The
Department took such action in response to a formal protest that Intervenor had filed challenging the Department's initial determination to award the contract to Petitioner as the lowest responsive bidder. Intervenor's formal protest was not "resolved by mutual agreement between the parties within 7 days, excluding Saturdays, Sundays, and legal holidays," of the Department's receipt of the formal protest. Consequently, in accordance with Rule 10-13.008(3), Florida Administrative Code, the Department was obligated to proceed pursuant to Section 120.57, Florida Statutes. The Department, however, in derogation of the provisions of the rule, sustained Intervenor's protest without first either referring the matter to the Division of Administrative Hearings for a formal proceeding pursuant to Section 120.57(1), Florida Statutes, or conducting an informal proceeding pursuant to Section 120.57(2), Florida Statutes.
The Department's failure to have complied with Rule 10-13.008(3), Florida Administrative Code, in resolving Intervenor's formal protest cannot be said to have been harmless. 17/ It appears, based upon the record evidence in this case, that had an administrative proceeding on Intervenor's formal protest been conducted as required by the rule, and the decision challenged in the protest (to wit: the determination initially made by the Department, through its evaluation team, that Petitioner's bid submission was responsive to the ITB) been subjected to review under the Groves- Watkins standard (as opposed to having been the subject of Hill's de novo consideration), the Department, if it had faithfully followed the principles announced in Groves- Watkins and its progeny, would not have sustained the protest and overturned its initial determination to award the contract advertised in the ITB to Petitioner as the lowest responsive bidder. A careful review of all of the component parts of the ITB and of Petitioner's bid submission, as well as the remainder of the record evidence, reveals that the Department's evaluation team acted within the bounds of reason and logic, and not fraudulently, arbitrarily, illegally, or dishonestly, in finding that Petitioner's bid submission was responsive to the ITB, including the provisions of Special Condition XII which required each bidder to "furnish the department with justification supportive of [its] ability to meet th[e contractual] obligation[s]" prescribed in the ITB by "briefly identify[ing] the company's personnel and equipment resources" and providing information concerning its "management experience." By all appearances, the evaluation team was simply engaging in an honest exercise of its discretion, in accordance with a reasonable interpretation of the provisions of the ITB, 18/ when it made this finding.
Inasmuch as it has been shown, as alleged by Petitioner, that the Department's decision to sustain Intervenor's protest and to award the contract advertised in the ITB to Intervenor instead of Petitioner was the product of a material and harmful violation of the procedural requirements prescribed by Rule 10-13.008(3), Florida Administrative Code, the Department should now take action to rescind that decision, return the parties to the positions they occupied before such decision was made and proceed once again to resolve Intervenor's protest, but this time in accordance with Rule 10-13.008(3), Florida Administrative Code, and the principles announced in Groves- Watkins and its progeny. See Moore v. Department of Health and Rehabilitative Services, 596 So.2d 759, 761 (Fla. 1st DCA 1992).
Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby
RECOMMENDED that the Department of Health and Rehabilitative Services enter a final order sustaining Petitioner's protest of the decision to award the contract advertised in ITB Number 11-95-001 to Intervenor.
DONE AND ENTERED in Tallahassee, Leon County, Florida, this 12th day of March, 1996.
STUART M. LERNER, 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 12th day of March, 1996.
ENDNOTES
1/ Petitioner did not serve a similar Request for Admissions on Intervenor. It therefore did not request that these matters be deemed to have been admitted by Intervenor. It merely requested that the Department be barred from "refut[ing] the[se] facts."
2/ The Department, on December 18, 1995, after the expiration of the response deadline, had served on Petitioner, by hand-delivery, the following response to Petitioner's Request for Admissions:
Respondent, Department of Health and Rehabilitative Services, files this response to Petitioner's Request for Admissions.
Admitted.
Denied.
Denied.
Without knowledge.
Without knowledge.
Admitted.
Insufficient information to formulate a response.
Denied because such information was not requested.
Denied because such information was not requested.
Denied because such information was not requested.
Denied because such information was not requested.
Admitted.
Denied.
Denied.
Insufficient information to formulate a response.
3/ As it turned out, the Department presented no evidence of its own. (It merely joined, with Petitioner and Intervenor, in the offering into evidence of Joint Exhibits 1 through 18.)
4/ Oladunni is currently taking management courses at Florida International University.
5/ Neither the certificates of insurance, nor the copy of its security agency license, that Petitioner provided were items that were specifically required by the ITB to be submitted to the Department as part of a bidder's bid submission.
6/ Petitioner still provides such service.
7/ As noted above, Petitioner had a "current relationship" with the Department in that it was providing the Department, at its CYF North Service Center in Miami, with armed security guard services.
8/ As Petitioner represented, it already had security guards in its employ at the time it submitted its bid. While it did not reveal in its bid submission the number of guards it had in its employ, the ITB did not specifically request such information.
9/ The ITB did not specifically require a bidder to provide such "declarations" as part of its bid submission.
10/ Intervenor did not indicate, given its existing contractual obligations, how many, if any, of these currently employed armed security officers would be available to serve the Department if Intervenor was awarded the contract advertised in the ITB.
11/ The contract advertised in the ITB is such a contract.
12/ He reviewed no other materials, nor did he seek, or receive, "any outside input" before making his determination.
13/ Hill viewed the identification of existing personnel and equipment resources and the description of management experience, along with the customer reference list and financial reports that were also referenced in Special Condition XII of the ITB, as bid submittal requirements (as opposed to operating requirements), which bidders had to meet in order for their bid submissions to be considered responsive to the ITB.
14/ In making this determination, Hill relied, in part, on his previous experience in the private sector responding, on behalf of his employer, to bid and proposal solicitations.
15/ A "minor irregularity," as that term is used in Rule 60A-1.002(12), Florida Administrative Code, is defined in Rule 60A-1.001(16), Florida Administrative Code, as follows:
A variation from the invitation to bid/request for proposal terms and conditions which does not affect the price of the bid/proposal, or give the bidder or offeror an advantage or benefit not enjoyed by other bidders or offerors, or does not adversely impact the interests of the agency.
16/ "An arbitrary decision is one not supported by facts or logic, or despotic." Agrico Chemical Company v. Department of Environmental Regulation,
365 So.2d 759, 763 (Fla. 1st DCA 1978). "If an administrative decision is justifiable under any analysis that a reasonable person would use to reach a decision of similar importance, it would seem that the decision is [not]
arbitrary." Dravo Basic Materials Company, Inc., v. Department of Transportation, 602 So.2d 632, 634 n.3 (Fla. 2d DCA 1992).
17/ Section 120.68(8), Florida Statutes, provides that "[f]ailure of any agency to comply with s. 120.53 shall be presumed to be a material error in procedure." This presumption created by Section 120.68(8), Florida Statutes, however, is not conclusive and it may be overcome under certain circumstances. See Caber Systems v. Department of General Services, 530 So.2d 325, 336 (Fla. 1st DCA 1988); Cortese v. School Board of Palm Beach County, 425 So.2d 554, 556-57 (Fla. 4th DCA 1982).
18/ That this may not have been the only, or even the most reasonable interpretation of these provisions, is not a basis upon which the evaluation team's decision could have been overturned. See Air Support Services International, Inc. v. Metropolitan Dade County, 614 So.2d 583, 584 (Fla. 3d DCA 1993); Scientific Games, Inc. v. Dittler Brothers, Inc., 586 So.2d 1128, 1131 (Fla. 1st DCA 1991); City of Cape Coral v. Water Services of America, Inc., 567 So.2d 510, 513 (Fla. 2d DCA 1990).
APPENDIX TO RECOMMENDED ORDER IN CASE NO. 95-4830BID
The following are the Hearing Officer's specific rulings on the "findings of facts" proposed by the parties in their proposed recommended orders:
Petitioner's Proposed Findings
1-7. Accepted and incorporated in substance, although not necessarily repeated verbatim, in this Recommended Order.
8-10. Rejected as findings of fact because they are more in the nature of summaries of testimony adduced at hearing than findings of fact. See T.S. v.
Department of Health and Rehabilitative Services, 654 So.2d 1028, 1030 (Fla. 1st DCA 1995)(hearing officer's factual findings which "merely summarize[d] the testimony of witnesses" were "insufficient").
Accepted and incorporated in substance.
First sentence: Rejected as a finding of fact because it is more in the nature of a summary of testimony adduced at hearing than a finding of fact; Second sentence: Not incorporated in this Recommended Order because it would add only unnecessary detail to the factual findings made by the Hearing Officer.
Accepted and incorporated in substance.
First sentence: Rejected because it lacks sufficient evidentiary/record support; Second and third sentences: Accepted and incorporated in substance.
Rejected as a finding of fact because it is more in the nature of legal argument than a finding of fact.
Accepted and incorporated in substance.
Not incorporated in this Recommended Order because it would add only unnecessary detail to the factual findings made by the Hearing Officer.
Accepted and incorporated in substance.
Not incorporated in this Recommended Order because it would add only unnecessary detail to the factual findings made by the Hearing Officer.
Accepted and incorporated in substance.
Rejected as a finding of fact because it is more in the nature of a summary of testimony adduced at hearing than a finding of fact.
Not incorporated in this Recommended Order because, even if entirely true, it would add only unnecessary detail to the factual findings made by the Hearing Officer.
First sentence: Rejected as a finding of fact because it is more in the nature of a summary of testimony adduced at hearing than a finding of fact; Second sentence: Accepted and incorporated in substance.
Accepted and incorporated in substance.
Rejected as a finding of fact because it is more in the nature of legal argument than a finding of fact.
26-28. Not incorporated in this Recommended Order because they would add only unnecessary detail to the factual findings made by the Hearing Officer.
Accepted and incorporated in substance.
Rejected as a finding of fact because it is more in the nature of legal argument than a finding of fact.
31-32. Accepted and incorporated in substance.
Not incorporated in this Recommended Order because it would add only unnecessary detail to the factual findings made by the Hearing Officer.
Rejected as a finding of fact because it is more in the nature of a summary of testimony adduced at hearing than a finding of fact.
Not incorporated in this Recommended Order because it would add only unnecessary detail to the factual findings made by the Hearing Officer.
Accepted and incorporated in substance.
Rejected as a finding of fact because it is more in the nature of a summary of testimony adduced at hearing than a finding of fact.
Accepted and incorporated in substance.
Not incorporated in this Recommended Order because it would add only unnecessary detail to the factual findings made by the Hearing Officer.
Accepted and incorporated in substance.
First sentence: Not incorporated in this Recommended Order because it would add only unnecessary detail to the factual findings made by the Hearing Officer; Second sentence: Accepted and incorporated in substance.
The Department's Proposed Findings
1-9. Accepted and incorporated in substance.
10-11. Rejected as findings of fact because they are more in the nature of legal argument than findings of fact.
12-19. Accepted and incorporated in substance.
20. Not incorporated in this Recommended Order because it would add only unnecessary detail to the factual findings made by the Hearing Officer.
21-23. Accepted and incorporated in substance.
Rejected because it lacks sufficient evidentiary/record support.
To the extent that this proposed finding states that Section XII of the ITB required the bidder to "briefly identify the company's personnel . . . resources," it has been accepted and incorporated in substance. To the extent that it states that Section XII of the ITB may not be reasonably construed as having permitted a bidder to meet this requirement by providing a "management plan" that "identifi[ed] the company's personnel . . . resources," it has been rejected because it lacks sufficient evidentiary/record support.
26-29. Accepted and incorporated in substance.
30. To the extent that this proposed finding states that Hill determined that the listed items had to be provided in order for a bid submission to be responsive to the ITB, it has been accepted and incorporated in substance. To the extent that it states that Hill determined that the listed items were the only items that had to be provided in order for a bid submission to be responsive to the ITB, it has been rejected because it lacks sufficient evidentiary/record support.
31-32. Not incorporated in this Recommended Order because they would add only unnecessary detail to the factual findings made by the Hearing Officer.
Accepted and incorporated in substance.
To the extent that this proposed finding states that, in Hill's opinion, Petitioner did not provide sufficient information in its bid submission for him to determine whether Petitioner "was capable of meeting the requirement of the ITB," it has been accepted and incorporated in substance.
35-37. Accepted and incorporated in substance.
38. To the extent that this proposed finding states that, in Hill's opinion, Petitioner's "listing of HRS as one of its customers was insufficient information for [him] to determine whether [Petitioner] could perform the requirements of the contract," it has been accepted and incorporated in substance.
39-44. Accepted and incorporated in substance.
45-49. Rejected as findings of fact because they are more in the nature of summaries of testimony adduced at hearing than findings of fact.
50-54. Accepted and incorporated in substance.
Not incorporated in this Recommended Order because it would add only unnecessary detail to the factual findings made by the Hearing Officer.
Accepted and incorporated in substance.
Not incorporated in this Recommended Order because it would add only unnecessary detail to the factual findings made by the Hearing Officer.
58-60. Accepted and incorporated in substance.
61. Rejected as a finding of fact because it is more in the nature of a summary of testimony adduced at hearing than a finding of fact.
62-71. Accepted and incorporated in substance.
72. Not incorporated in this Recommended Order because, even if true in all instances, it would have no bearing on the outcome of the instant case.
73-74. Not incorporated in this Recommended Order because they would add only unnecessary detail to the factual findings made by the Hearing Officer.
Rejected as a finding of fact because it is more in the nature of a summary of testimony adduced at hearing than a finding of fact.
To the extent that this proposed finding states that the ITB must be interpreted as having required that a bid submission contain the information indicated in order to be responsive to the ITB and that the ITB is not reasonably susceptible to any other interpretation, it has been rejected because it lacks sufficient evidentiary/record support.
Not incorporated in this Recommended Order because it would add only unnecessary detail to the factual findings made by the Hearing Officer.
78-81. Accepted and incorporated in substance.
82-83. Rejected as findings of fact because they are more in the nature of legal argument than findings of fact.
84-86. Accepted and incorporated in substance.
Intervenor's Proposed Findings
To the extent that this proposed finding states that the posting was "in accordance with state requirements," it has been rejected as a finding of fact because it is more in the nature of legal argument than a finding of fact. Otherwise, it has been accepted and incorporated in substance.
Accepted and incorporated in substance.
To the extent that this proposed finding states that Petitioner and Intervenor are "both Florida-licensed security guard agencies," it has been rejected because it lacks sufficient evidentiary/record support. Otherwise, it has been accepted and incorporated in substance.
Accepted and incorporated in substance.
First and third sentences: Rejected as findings of fact because they are more in the nature of summaries of testimony adduced at hearing than findings of fact; Second sentence: Accepted and incorporated in substance.
First sentence: Accepted and incorporated in substance; Second and third sentences: Rejected as findings of fact because they are more in the nature of summaries of testimony adduced at hearing than findings of fact.
First and second sentences: Accepted and incorporated in substance; Third and fourth sentences: Rejected as findings of fact because they are more in the nature of summaries of testimony adduced at hearing than findings of fact.
Rejected as a finding of fact because it is more in the nature of legal argument than a finding of fact.
First sentence: To the extent that this proposed finding states that the ITB specified that "documentation of current personnel" of bidders (as opposed to documentation of personnel resources that bidders would have available to meet the requirements of the contract) needed to be submitted in order for a bid to be deemed responsive to the ITB, it has been rejected because it lacks sufficient evidentiary/record support. Otherwise, it has been accepted and incorporated in substance; Second sentence: Accepted and incorporated in substance; Third sentence: Rejected because it lacks sufficient evidentiary/record support.
Rejected because it lacks sufficient evidentiary/record support.
11-13. Rejected as findings of fact because they are more in the nature of summaries of testimony adduced at hearing than findings of fact.
Rejected because it inaccurately describes the action taken by the Hearing Officer. The Hearing Officer actually reserved ruling on the matter.
Accepted and incorporated in substance.
16-18. Rejected as findings of fact because they are more in the nature of summaries of testimony adduced at hearing than findings of fact.
COPIES FURNISHED:
Reginald J. Clyne, Esquire Clyne and Associates, P.A. 2600 Douglas Road Penthouse Two
Coral Gables, Florida 33134
Meryl S. Gold-Levy, Esquire Department of Health and
Rehabilitative Services District Eleven Legal Office
401 Northwest Second Avenue, N-1014 Miami, Florida 33128
W. Douglas Moody, Esquire Bateman Graham, P.A.
300 East Park Avenue Tallahassee, Florida 32301
Joseph C. Frechette, Jr., Esquire 11900 Biscayne Boulevard
Suite 780
North Miami, Florida 33181
Kim Tucker, General Counsel Department of Health and
Rehabilitative Services 1323 Winewood Boulevard
Tallahassee, Florida 32399-0700
Sandy Coulter, Acting Agency 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 of time 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
DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES
DELAD SECURITY, INC.
Petitioner,
vs. CASE NO. 95-483OBID
RENDITION NO. HRS-96-297-
DEPARTMENT OF HEALTH AND FOF-BID REHABILITATIVE SERVICES
Respondent,
and
50 STATE SECURITY SERVICES, INC. Intervenor.
/
FINAL ORDER
THIS CAUSE is before me for entry of a Final Order.
Delad Security, Inc. (Delad), the petitioner, challenges the department's decision to deem Delad's bid on Invitation to Bid No. 11-95-001 non-responsive, and to withdraw the initial contract award to Delad after a protest was filed by
50 State Security Service, Inc. (50 State), the intervenor. Delad maintains that its bid was responsive to the invitation to bid and that it should have been awarded the contract. Delad also contends that the department violated section D Florida Statutes (1995), and rule 10-13.008, Florida Administrative Code, by failing to refer 50 State's bid protest to the Division of Administrative Hearings for formal proceedings under section 120.5 (1), Florida Statutes (1995)
Delad argued successfully before the hearing officer that section 120.53(5)(d), and the department's associated rule, required the department to solicit Delad's input in the attempt to resolve 50 State's bid protest, and that, unless Delad agreed with the resolution proposed by the department, chapter 120 proceedings were mandated. The hearing officer concluded that this purported error was harmful on the basis that, had the department solicited Delad's input during the 50 State formal protest, the department would have rejected that protest and sustained the award of the contract to Delad. I respectfully disagree and reject the hearing officer's legal conclusion that Delad was entitled to a hearing on 50 State's bid protest. I also conclude that the department acted within the broad discretion accorded to it by law in determining that Delad's bid was non-responsive.
FINDINGS OF FACT
The department, through Invitation to Bid No. 11-95-001, solicited bids from prospective providers interested in supplying the department with armed security guard services at its Dade County food stamp offices. The department made an initial determination to award the contract to Delad as the lowest responsive bidder. 50 State timely protested the award on the basis that Delad's submission did not respond to the invitation to bid's requirement that proposals describe she company's management experience, personnel and equipment.
50 State's protest was referred to the department's Deputy District Administrator for District 11, Lloyd Henry Hill, who determined that 50 State's submission was responsive to the invitation to bid, but that Delad's submission was not.
The Bid Data Sheet on page 11 of the invitation to bid specified that there were 16 locations where armed security guard services (a total of 22 guards) were needed. The Specifications portion of the invitation to bid required that each guard possess three to five years of experience as an "Armed Security Officer," and that the provider supply essential equipment and logistical support, including radio communications, a central dispatcher, and uniforms.
The Special Conditions of the invitation to bid included section XII, References, which provided:
The ability of bidders to meet the requirements of this bid is of prime concern to the department. In this regard, it is required that each bidder furnish the department with justification supportive of
his ability to meet this obligation. This information should briefly identify the company's personnel and equipment resources and include a minimum of three representative customers as references. This documentation must accompany bid, along with financial reports and management experience.
The Recommended Order, in paragraphs 4 through 61, cites sections of Delad's proposal that relate to the invitation to bid's requirement that proposals furnish the department with justification of [their] ability to meet [the contract specifications] by briefly identifying the company's personnel and equipment resources and by documenting management experience.
Although Delad's proposal repeatedly states that the company would be able to acquire adequate personnel and equipment to meet the department's specifications, and maintains that its management is experienced, nowhere does Delad actually describe its personnel and equipment or document the experience of its management in concrete terms that would justify the department's reliance on the bid's assertions. Delad's proposal indicates only that Delad could advertise for, interview, contract with, train, provide uniforms for, and equip the guards required by the department within four weeks of being awarded the contract.
Hill notified Delad that the department had determined its bid to be non- responsive and had awarded the contract to 50 State. Delad timely filed the instant protest.
CONCLUSIONS OF LAW
I reject the hearing officer's conclusions of law, paragraphs 98 through 101, which posit that the department acted illegally by finding Delad's proposal nonresponsive and awarding the contract to 50 State without first submitting the matter to the Division of Administrative Hearings. In paragraph 100, the Recommended Order provides:
It appears, based upon the record evidence in this case, that had an administrative proceeding on Intervenor's formal protest been conducted as required by the rule, and the decision challenged in the protest . . . been subjected to review under the Groves- Watkins standard . . . the Department, if it had faithfully followed the principles announced in Groves-Watkins and its progeny, would not have sustained the protest and
overturned its initial determination to award the contract . . . to Petitioner as the lowest responsive bidder. A careful review of all of the component parts of the ITB and of Petitioner's bid submission, as well as the remainder of the record evidence, reveals that the Department's evaluation team acted within the bounds of reason and logic, and not fraudulently, arbitrarily, illegally, or dishonestly, in finding that Petitioner's bid submission was responsive to the ITB.
The Recommended Order misconstrues section 120.53(5)(d), Florida Statutes (1995), and rule 10-13.008, Florida Administrative Code, and misapplies Department of Transportation v. Groves-Watkins Constructors, 530 So.2d 912 (Fla. 1988). The department was not required to refer 50 State's formal bid protest to the Division of Administrative Hearings, and acted within its discretion when it determined that Delad's proposal was nonresponsive and awarded the contract to 50 State.
Section 120.53(5)(d), Florida Statutes (1995), requires that a protest be referred for section 120.5, Florida Statutes, proceedings only where it is not resolved by mutual agreement between the parties within seven days . . . of the Department's receipt of the formal protest. Rule 10-13.008(3), Florida Administrative Code, establishes the same procedure within the department. In the instant case, the department informally resolved 50 State's bid protest, which obviated the need to refer the matter for proceedings under section
120.57. The department was not required to include Delad in the resolution of
50 State's protest. Delad was not a party to 50 State's formal bid protest, and never attempted to intervene in that proceeding. See generally, Intercontinental Properties, Inc. v. Dept. of Health and Rehabilitative Services, 606 So.2d 380 (Fla. 3d DCA 1992) (low bidder awarded contract; high bidder protested award; low bidder intervened in protest proceedings); Caber Systems, Inc. v. Dept. of General Services, 530 So.2d 325 (Fla. 1st DCA 1988) (evidence did not indicate that either the protesting bidder or the department negotiated in bad faith, but only that the parties were unable to agree to a resolution . . and that there were hard feelings on both sides). The department's letter to Delad informing it of the decision to award the contract to 50 State included notification of the right to formally protest. Delad exercised that right, and the matter was referred for the instant hearing when it could not be informally resolved.
The Recommended Order also concludes that the department's alleged violation of section 120.53(5) and rule 10-13.008 was material and harmful in that, had the department solicited Delad's input into 50 State's formal protest, the department would not have sustained that protest and the contract would have remained with Delad. Section 120.68(8), Florida Statutes (1995), addresses error in agency proceedings and provides:
The court shall remand the case for further agency action if it finds that either the fairness of the proceedings or the correctness of the action may have been impaired by a material error in procedure or a failure to follow prescribed procedure.
Failure of any agency to comply with section
120.53 shall be presumed to be a material error in procedure.
Assuming arguendo that the department's failure to refer 50 State's protest for section 120.5 proceedings violated section 120.53(5)(d), the error was harmless. Although section 120.68(8) presumes that failure to follow procedures mandated by section 120.53 constitutes a material error, this presumption may be overcome. Caber Systems, Inc. v. Dept. of General Services, 530 So.2d 325 (Fla. 1st DCA 1988). In this case, the error, if any, was not material, because the department fully considered Delad's arguments within Delad's own formal protest.
Assuming the existence of material error, it must still be established that the fairness of the proceedings or the correctness of the action were impaired by the error. There has been no such showing in this case. Section 120.53(5), Florida Statutes, is clearly intended to provide a mechanism through which aggrieved competitors in the public contracting process may seek reconsideration from the soliciting agency. Here, the issue raised in 50 State's formal protest was substantively identical to that presented Delad's formal protest: whether Delad or 50 State was the lowest responsive bidder. Delad had full opportunity to argue this issue to the department, and was accorded the instant formal administrative hearing when the department rejected the protest. Delad received the complete measure of section 120.53(5) and rule 10-13.008 protections.
The hearing officer erroneously casts the purported procedural violation of section 120.53(5) and rule 10-13.008, as a transgression of Groves-Watkins magnitude requiring the award of the contract to Delad. The determination that Delad was prejudiced by a material and harmful procedural violation necessarily incorporates the conclusion that 50 State's formal protest would ultimately have been rejected and the award to Delad sustained had the department faithfully followed Groves- Watkins. That conclusion misapplies the Groves-Watkins standard.
The department, as the hearing officer acknowledged, has very broad discretion in evaluating proposals received through the competitive bidding process. See Groves-Watkins Constructors, 530 So.2d 912 (Fla. 1988); Fairbanks, Inc. v. Dept. of Transportation, 635 So.2d 58 (Fla. 1st DCA 1994). The hearing officer correctly noted that the scope of a section 120.5 proceeding in the context of a bid protest is limited to whether the purpose of competitive bidding has been subverted, and that the hearing officer's sole responsibility is to ascertain whether the [department] acted fraudulently, arbitrarily, illegally, or dishonestly. Id. The hearing officer must not second guess the department's decision, even if it appears erroneous, in the absence of misconduct. See Scientific Games, Inc. v. Dittler Bros., Inc., 586 So.2d 1128 (Fla. 1st DCA 1991)
Nowhere does the Recommended Order suggest that the Deputy District Administrator subverted the competitive bidding process by sustaining 50 State's protest. Nowhere does the Recommended Order implicate the Deputy in fraudulent, dishonest, illegal, arbitrary, or capricious behavior. There is no finding or conclusion that establishes that awarding the contract to Delad was the only permissible, good-faith determination that could have been reached. There is no evidence to support such a finding or conclusion. The department was entitled to conclude that the information provided by Delad with respect to the personnel, equipment, and management experience was unacceptable and rendered the proposal nonresponsive.
The hearing officer's conclusion that the department violated Groves- Watkins when it reversed its position on the responsiveness of Delad's proposal is derived from his conclusion that the department engag[ed] in an honest exercise of discretion when it initially awarded the contract to Delad. Groves- Watkins and progeny however, do not render an agency's initial contracting decision sacrosanct. They provide only that state agencies must act in good faith in evaluating proposals and awarding public contracts. The hearing officer, in condemning the department's reconsideration of the proposals in this case, stepped outside of the role ascribed to him by Groves-Watkins.
Although the hearing officer, in the department's place, may not have sustained
50 State's formal protest, the determination to do so and to withdraw the contract award to Del ad was well within the department's broad discretion vis- a-vis competitive bidding. Groves-Watkins; Fairbanks; Scientific Games.
For the foregoing reasons, I reject the hearing officer's conclusion that the department violated section 120.53(5), Florida Statutes, and rule 10-13.008, Florida Administrative Code. I reject the conclusion that the department acted dishonestly, illegally, or arbitrarily in sustaining the formal protest of 50 State and withdrawing the award of the contract to Delad. I reject the recommendation that the department sustain Delad's protest of the decision to award the contract to 50 State.
Accordingly, it is ORDERED that petitioner's formal protest of the award of the contract advertised in Invitation to Bid No. 11-95-001 be DENIED.
DONE and ORDERED this 19th day of August, 1996, in Tallahassee, Leon County, Florida.
EDWARD A. FEAVER, Secretary Department of Health and
Rehabilitative Services
By: BUDDY CROFT
Deputy Secretary for Administration
A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO A JUDICIAL REVIEW WHICH SHALL BE INSTITUTED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF HRS, AND A SECOND COPY ALONG WITH FILING FEE AS PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE AGENCY MAINTAINS ITS HEADQUARTERS OR WHERE A PARTY RESIDES. REVIEW PROCEEDINGS SHALL BE CONDUCTED IN ACCORDANCE WITH THE FLORIDA APPELLATE RULES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED.
Copies furnished to:
Stuart M. Lerner, Hearing Officer Division of Administrative Hearings 1230 Apalachee Parkway
Tallahassee, Florida 32399-1550
Meryl S. Gold-Levy, Esquire District 11 Legal Office Department of Health and
Rehabilitative Services
401 Northwest 2nd Avenue, N1014 Miami, Florida 33128
W. Douglas Moody, Esquire Bateman Graham, P.A.
300 East Park Ave. Tallahassee, Florida 32301
Reginald J. Clyne, Esquire Clyne and Associates, P.A. 2600 Douglas Rd.
Penthouse Two
Coral Gables, Florida 33134
Joseph C. Frechette, Jr., Esquire 11900 Biscayne Boulevard, Suite 780 North Miami, Florida 33161
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a true copy of the foregoing FINAL ORDER has been sent by U. S. Mail or hand delivery to each of the above-named persons this 20th, day of August, 1996.
Gregory D. Venz Agency Clerk
Department of Health and Rehabilitative Services
1323 Winewood Boulevard
Tallahassee, Florida 32399-000
(904) 488-2381
| Issue Date | Proceedings |
|---|---|
| Oct. 28, 1996 | Direction to the Clerk filed. |
| Sep. 30, 1996 | Notice of Appeal filed. (filed by: ) |
| Aug. 22, 1996 | Final Order filed. |
| Mar. 25, 1996 | Intervenor`s Exceptions to Hearing Officer`s Recommended Order filed. |
| Mar. 22, 1996 | Respondent HRS`s Exceptions to Recommended Order filed. |
| Mar. 12, 1996 | Recommended Order sent out. CASE CLOSED. Hearing held 12/20/95. |
| Mar. 11, 1996 | Order sent out. (re: Motion to Compel) |
| Feb. 20, 1996 | Intervenor`s Proposed Recommended Order filed. |
| Feb. 20, 1996 | Proposed Findings of Fact, Conclusions of Law From Respondent, Department of Health and Rehabilitative Services filed. |
| Feb. 20, 1996 | (Intervenor) Motion to Compel filed. |
| Feb. 16, 1996 | Order sent out. (Respondent to File Proposed Recommended Order by 2/20/96) |
| Feb. 14, 1996 | HRS`s Motion for Enlargement of Time to File Proposed Order filed. |
| Feb. 13, 1996 | Order sent out. (Intervenor to file Proposed Recommended Order by 2/20/96) |
| Feb. 05, 1996 | (Petitioner) Objection to Agreed Order for Extension of Time filed. |
| Feb. 05, 1996 | (Intervenor) Agreed Motion for Extension of Time to File Proposed Recommended Order filed. |
| Feb. 02, 1996 | (Reginald J. Clyne) Objection to Agreed Order for Extension of Time filed. |
| Jan. 31, 1996 | (Joseph C. Frechette, Jr.) Agreed Motion for Extension of Time to File Proposed Recommended Order filed. |
| Jan. 31, 1996 | Letter to Hearing Officer from Reginald J. Clyne Re: Original Exhibits filed. |
| Jan. 29, 1996 | (Petitioner) Memorandum of Law in Support of Petitioner`s Proposed Order filed. |
| Jan. 26, 1996 | Petitioner Delad Security`s Proposed Recommended Order; Memorandum of Law In Support of Petitioner`s Proposed Order; Cover Letter filed. |
| Jan. 16, 1996 | (2 Volumes) Transcript filed. |
| Dec. 20, 1995 | CASE STATUS: Hearing Held. |
| Dec. 19, 1995 | (Respondent) Response to Request for Admissions; Cover Letter filed. |
| Dec. 19, 1995 | Joint Prehearing Stipulation filed. |
| Dec. 13, 1995 | Subpoena for Hearing Duces Tecum (for Hearing Officer signature); Cover Letter filed. |
| Dec. 11, 1995 | (Joseph C. Frechette, Jr.) Response of 50 State Security Service, Inc. to Formal Protest of Delad Security, Inc. filed. |
| Dec. 06, 1995 | (Joseph C. Frechette, Jr.) Agreed Motion for Extension of Time to File Response filed. |
| Dec. 04, 1995 | Order sent out. (Motion granted) |
| Nov. 29, 1995 | (Intervenor) Agreed Motion for Extension of Time to File Response filed. |
| Nov. 13, 1995 | Notice of Appearance (from Meryl Gold-Levy) filed. |
| Nov. 09, 1995 | Order sent out. (50 State Security Service, Inc. Granted Intervention Status) |
| Nov. 09, 1995 | Letter to Reginald J. Clyne from Meryl S. Gold-Levy (cc: Hearing Officer) Re: Response to records request dated September 26, 1992 and postponing deposition of Selma Speakman and George Gonzalez filed. |
| Nov. 03, 1995 | (Intervenor) Motion for Leave to Intervene and File Formal Response to Petitioners` Formal Written Protest filed. |
| Oct. 30, 1995 | Order sent out. (Motion to Compel denied) |
| Oct. 27, 1995 | (Petitioner) Request for Admissions; Motion to Compel filed. |
| Oct. 25, 1995 | (Petitioner) Motion to Compel; Request for Admissions filed. |
| Oct. 20, 1995 | Notice of Hearing sent out. (hearing set for 12/20/95; 8:45am; Miami) |
| Oct. 19, 1995 | (Joint) Agreed Motion for Continuance filed. |
| Oct. 18, 1995 | Order sent out. (hearing date to be rescheduled by subsequent Order) |
| Oct. 18, 1995 | (Petitioner) Agreed Motion for Continuance w/cover letter filed. |
| Oct. 10, 1995 | CASE STATUS: Hearing Held. |
| Oct. 05, 1995 | Prehearing Order sent out. |
| Oct. 05, 1995 | Notice of Hearing sent out. (hearing set for 10/18/95; 8:45am; Miami) |
| Oct. 03, 1995 | Notice of Referral and Notice to Bidders; Formal Protest, letter form; DMS Procurement Protest Bond (w/exhibit A) filed. |
| Issue Date | Document | Summary |
|---|---|---|
| Aug. 19, 1996 | Agency Final Order | |
| Mar. 12, 1996 | Recommended Order | Since HRS did not follow required procedures in deciding 1st bid protest against 2nd protestant, decision should be rescinded. |
