STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

INTERCONTINENTAL PROPERTIES, INC )

)

Petitioner, )

)

vs. ) CASE NO. 96-1311BID

)

DEPARTMENT OF LABOR AND )

EMPLOYMENT SECURITY, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Susan B. Kirkland, held a formal hearing in this case on March 22, 1996, in Tallahassee, Florida.

APPEARANCES

For Petitioner: Robert A. Sweetapple, Esquire

Sweetapple, Broeker and Varkas

465 East Palmetto Park Road Boca Raton, Florida 33432

For Respondent: Edward A. Dion, Esquire

Department of Labor and Employment Security 2012 Capital Circle Southeast

Suite 307, Hartman Building Tallahassee, Florida 32399-2189

STATEMENT OF THE ISSUES

Whether Respondent acted fraudulently, arbitrarily, illegally, or dishonestly in determining the geographical boundaries for the competitive procurement of Lease No. 540:1071.

PRELIMINARY STATEMENT

On March 5, 1996, Petitioner, Intercontinental Properties, Inc., filed a formal protest of the procurement document for the lease of space for Respondent's Job and Benefits office No. 6574, contesting the geographical boundaries. The case was forwarded to the Division of Administrative Hearings for assignment to a hearing officer.

At the final hearing Petitioner called Kim Jacobs as an adverse witness and introduced the testimony of Dennis J. Fernandez and Nathaniel Bruce by deposition. Petitioner's Exhibits 1-8 were admitted in evidence. Respondent called Kim Jacobs as its witness. Respondent's Exhibit 1 was admitted in evidence.

The parties filed a Prehearing Stipulation at the final hearing and agreed to the facts contained in Section E, as amended by Petitioner.

At the final hearing the parties agreed to file proposed recommended orders within fifteen days of the filing of the transcript. The transcript was filed on April 1, 1996. The deposition transcript of Nathaniel Bruce was filed on April 8, 1996, and the deposition transcript of Dennis Fernandez was filed on April 17, 1996. The parties timely filed their proposed recommended orders.

The parties' proposed findings of fact are addressed in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. Approximately nine years ago, Respondent, Department of Labor and Employment Security (Department), entered into a lease with Petitioner, Intercontinental Properties, Inc. (Intercontinental), for a Jobs and Benefits Office at 701 S.W. 27th Avenue, Miami, Florida (Office No. 6574). The lease expires May 31, 1996.

   
   

2. Office No. 6574 serves a large area: Flagler on the north side; south to Sunset, 72nd Avenue; east to Biscayne Bay; and west to the Everglades. The current office is located in the northeast corner of the service area.

   
   

3. The Department currently maintains another Jobs and Benefits Office in the State-owned Rhode Building, which is approximately 3.1 miles from the subject office. Applicants for the Department's services may apply at either location.

   
   

4. In May, 1995, the Department began the process of issuing a Request for Proposals (RFP) for leased space for the Jobs and Benefits Office at issue. Dennis Fernandez, the office manager of the Jobs and Benefits Office, sent a memorandum to Nathaniel Bruce with the Department's leasing office in Tallahassee, requesting that the proposed boundaries for the RFP be Flager Street to the north; Bird Road (S.W. 40th Street) to the south; Red Road (S.W. 57th Avenue) to the east; and S.W. 107th Avenue to the west. Part of his job responsibilities was to determine the boundaries.

   
   

5. Mr. Fernandez recommended that the office be moved from the present location for the following reasons:

   
   

   1. Close proximity to another full-service office. We are currently 3.1 miles from the Miami Downtown Jobs [and] Benefits Center.

   2. Being located in Little Havana, this office is primarily serving non-English speaking applicants. We need to increase our applicant base and move further South and West in order

      to better serve the community we represent in accordance with our administrative area.

   3. Current location has this office split in two different floors, which has proven to

      be very difficult to staff, manage, and operate on a day-to-day basis. Also, with the advent of "migration," it has been difficult to adhere to a true "No Wrong Door" policy, to the

      detriment of our customers. An office on one level only would eliminate a lot of the problems we have faced during the last eight years.

      
      

6. Mr. Fernandez based his recommendation to move the office further south and west on his eight years of experience as the office manager. The office's marketing report showed that the marketing team was going more to the west and south than the east in order to reach employers. A lot of the employers are located on Bird Road and on Coral Way west of the Palmetto. Based on his experience, review of applications, and discussions with his employees, he felt that more applicants were located west of the present location than east. At the time that Mr. Fernandez wrote his May 15 memorandum, there had been no statistical data run to support his recommendations.

   
   

7. In September, 1995, the Department issued a RFP for leased space for Office No. 6574 with the following geographical boundaries:

   
   

   Beginning at a point where SW 107th Avenue intersects with SW 40th Street; Proceed East on SW 40th Street to the corner of SW 57th Avenue; Proceed North on SW 57th Avenue to the corner of West Flagler Street; Proceed West on West Flagler Street to the corner of SW 107th Avenue; Proceed South on SW 107th Avenue to the corner of SW 40th Street, the point of Beginning.

   
   

8. Intercontinental filed a Notice of Intent to Protest and a Formal Written Protest, contesting the boundaries of the September, 1995 RFP. The Department received one bid in response to the RFP, which the bidder later withdrew.

   
   

9. Kim Jacobs, the Leasing Manager for the Department, began her employment in September, 1995. When she became aware of the Formal Written Protest, she requested further justification for the boundaries contained in the RFP. On October 5, 1995, Kenneth Holmes, the Director of the Division of Unemployment Compensation, forwarded a memorandum to Lynn Mobley, who was Ms. Jacob's supervisor, setting forth the number of unemployment compensation claimants served from January 1, 1994, through October 1, 1995, for the zip codes located in the service area for Office No. 6574.

   
   

10. Based on the information in Mr. Holmes' memorandum, there were 7,661 claims east of 57th Avenue and 11,170 claims west of 57th Avenue. There were 12,867 claims west of the current location as opposed to 5,964 claims eastward.

    
    

11. Sometime between the time the protest was filed and November 17, 1995, Mr. Fernandez discussed the location of the boundaries with his boss, Dr. Willie Robinson, who indicated that perhaps they should include the present location of the office within the boundaries. Dr. Robinson did not share his rationale for such a suggestion with Mr. Fernandez, and no statistical data was gathered to support moving the boundary to include S.W. 27th Avenue. Mr. Fernandez was still of the opinion that the boundary should be moved as stated in the September, 1995 RFP.

    
    

12. On November 17, 1995, Mr. Fernandez transmitted two facsimiles to Mr. Bruce setting forth the changes suggested by Dr. Robinson.

13. On November 21, 1995, Mr. Bruce sent a computer message to Dr. Robinson's assistant, requesting written justification and demographics for the proposed change to the boundaries set forth in Mr. Fernandez's facsimiles of November 17, 1995; however, no additional justification or demographic information was supplied to Mr. Bruce.

    
    

14. The Department decided to extend the boundaries further to the west and to the south in an effort to obtain more responses. Mr.Fernandez had ridden in the extended area to see if there were possible locations there. In December, 1995, the Department issued another RFP, with the following boundaries:

    
    

    Beginning at a point where SW 117th Avenue intersects with SW 56th Street; Proceed East on SW 56th Street to the corner of SW 57th Avenue; Proceed North on SW 57th Avenue to the corner of West Flagler Street; Proceed West on West Flagler Street to the corner of SW 117th Avenue to the corner of SW 56th Street, the Point of Beginning.

    
    

15. The current location of Office No. 6574, is not within the geographical boundaries set forth in the December, 1995, RFP.

    
    

16. On December 22, 1995, Intercontinental filed a Notice of Intent to Protest the boundaries in the December RFP, but did not file a formal protest or bid protest bond thereafter. The Department received one bid, which was nonresponsive.

    
    

17. On February 22, 1996, the Department issued another RFP with the same boundaries contained in the December, 1995 RFP. On February 28, 1996, the Department received Intercontinental's Notice of Intent to Protest. On March 5, 1996, Intercontinental filed its Formal Written Protest and Bid Protest Bond with the Department.

    
    

    CONCLUSIONS OF LAW

    
    

18. The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of this proceeding. Sections 120.53(5) and 120.57, Florida Statutes.

    
    

19. The Florida Supreme Court in Department of Transportation v. Groves- Watkins, 530 So.2d 912 (Fla. 1988) set forth the role of the hearing officer in the review of an agency's decision concerning competitive procurements.

    
    

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

    In short, the hearing officer's sole responsi- bility is to ascertain whether the agency acted fraudulently arbitrarily, illegally, or dishonestly.

    
    

    Id. at 914.

20. In Liberty County v. Baxter's Asphalt and Concrete, 421 So.2d 505, 507 (Fla. 1982), the court noted the strong judicial deference accorded an agency's decision in competitive bidding situations:

    
    

    [A] public body has wide discretion in soliciting and accepting bids for public improvements and its decision, when based on an honest exercise

    of this discretion, will not be overturned by a court even if it may appear erroneous and even if reasonable persons may disagree.

    
    

21. Petitioner has failed to establish by a preponderance of the evidence that the Department's decision to exclude 27th Avenue in it geographical boundaries was arbitrary, fraudulent, illegal, or dishonest. Mr. Fernandez had over eight years of experience in the Jobs and Benefits Office, and he was aware where his client base, both employees and employers, were located. He knew that his marketing team was traveling to the south and west in trying to locate employers. He also knew that more claims were coming from west of the current location than east. The demographics bears out his intuitive knowledge; 12,867 claims came from west of the current location as opposed to 5,964 claims which came from east of the office.

    
    

22. The suggestion to include the 27th Avenue location came from Dr. Robinson, who did not provide any justification to Mr. Fernandez. Mr. Fernandez, against his own recommendations to Dr. Robinson, transmitted Dr. Robinson's suggestion to Tallahassee. When Dr. Robinson's office was asked for the rationale for including 27th Avenue which had been previously excluded, no explanation was forthcoming.

    
    

23. Petitioner argues that there was no rationale for further extending the boundary to the south and west in the December and February RFP's. Petitioner is not affected by the inclusion of the additional areas since it does not have a location in those areas. However, because the Department did not receive a responsive bid from the December RFP, it is rational to expand the boundaries to the west and south based on Mr. Fernandez's memorandum of May 15, 1991, which suggested that that is the direction the office needed to be heading.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered dismissing Intercontinental

Properties, Inc.'s formal notice of protest.

DONE AND ENTERED this 19th day of April, 1996, in Tallahassee, Leon County, Florida.

SUSAN B. KIRKLAND

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 19th day of April, 1996.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 96-1311BID

To comply with the requirements of Section 120.59(2), Florida Statutes (1995), the following rulings are made on the parties' proposed findings of fact:

Petitioner's Proposed Findings of Fact.

1. Paragraphs 1-6: Accepted.

2. Paragraph 7: The first and last sentences are rejected as unnecessary. The remainder is accepted in substance.

3. Paragraphs 8-9: Accepted in substance.

4. Paragraph 10: The first two sentences are accepted in substance. The last sentence is rejected as subordinate to the facts found.

5. Paragraph 11: The first two sentences are accepted. The third sentence is rejected as subordinate to the facts found.

6. Paragraph 12: The last sentence is rejected as subordinate to the facts found. The remainder is accepted in substance.

7. Paragraph 13: Accepted in substance.

8. Paragraph 14: Rejected as subordinate to the facts found. Mr. Fernandez was considering the client base when he made his recommendation in May.

9. Paragraph 15: Accepted in substance to the extent that Mr. Fernandez was sending his boss' recommendation not Mr. Fernandez's recommendation.

10. Paragraph 16: Rejected as unnecessary.

11. Paragraphs 17-19: Accepted in substance.

12. Paragraph 19: Accepted in substance.

13. Paragraphs 20-21: Rejected as subordinate to the facts found.

14. Paragraph 22: Rejected as constituting argument.

15. Paragraph 23: The first and last sentences are rejected as unnecessary. The remainder is accepted in substance.

16. Paragraph 24: The first two sentences are rejeced as subordinate to the facts found. The remainder is accepted in substance.

17. Paragraph 25: The third and fifth sentences are rejected as subordinate to the facts found. The remainder is accepted in substance.

18. Paragraph 26: The first sentence is accepted in substance. The remainder is rejected as subordinate to the facts found.

19. Paragraph 27: Accepted in substance.

20. Paragraph 28: The first sentence is accepted in substance. The remainder is rejected as subordinate to the facts found.

21. Paragraph 29: Accepted in substance.

22. Paragraph 30: Rejected as subordinate to the facts found.

23. Paragraph 31: Accepted.

24. Paragraph 32: Rejected as subordinate to the facts found.

25. Paragraph 33: The first three sentences are rejected as subordinate to the facts found. The fourth sentence is accepted in substance. The remainder is rejected as subordinate to the facts found.

26. Paragraph 34: Rejected as constituting argument.

27. Paragraph 35: Rejected as subordinate to the facts found.

28. Paragraph 36: The first, fourth, and sixth sentences are rejected as unnecessary. The remainder is accepted in substance.

29. Paragraph 37: The first two sentences are accepted in substance. The remainder is rejected as subordinate to the facts found.

30. Paragraph 38: The first sentence is accepted in substance to the extent that there was no statistical data but rejected to the extent that it implies there was no basis for the changing of the boundary. The second and third sentences are rejected as subordinate to the facts found. The fourth sentence is accepted to the extent that no further demographics were done, but Ms. Jacobs did know that Mr. Fernandez had ridden in the southern and western areas to determine if there were possible space available. The remainder is accepted in substance.

Respondent's Proposed Findings of Fact.

1. Paragraphs 1-8: Accepted in substance.

2. Paragraphs 9-11: Accepted.

COPIES FURNISHED:

Robert A. Sweetapple, Esquire Sweetapple, Broeker and Varkas

465 East Palmetto Park Road Boca Raton, Florida 33432

Edward A. Dion, General Counsel

Department of Labor and Employment Security The Hartman Building, Suite 307

2012 Capital Circle, Southeast Tallahassee, Florida 32399-2189

Douglas L. Jamerson, Secretary

Department of Labor and Employment Security

303 Hartman Building

2012 Capital Circle Southeast Tallahassee, Florida 32399-2152

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 ten days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the final order in this case concerning agency rules on the deadline for filing exceptions to this recommended order. Any exceptions to this recommended order should be filed with the agency that will issue the final order in this case.

Docket for Case No: 96-001311BID

Orders for Case No: 96-001311BID