STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

SPECTRA ENGINEERING )

AND RESEARCH, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 96-3264BID

)

STATE OF FLORIDA, ) DEPARTMENT OF COMMUNITY AFFAIRS, ) FLORIDA HOUSING FINANCE AGENCY, )

)

Respondent. )

)

RECOMMENDED ORDER

Notice was provided and on July 26, 29 and 30, 1996, a formal hearing was held in this case. Authority for conducting the hearing is set forth in Section 120.57(1), Florida Statutes (1995). The hearing location was the Offices of the Division of Administrative Hearings, The DeSoto Building, 1230 Apalachee Parkway, Tallahassee, Florida. The administrative law judge was Charles C. Adams.

APPEARANCES

For Petitioner: Peter Okonkwo, President

Christopher Okonkwo

Spectra Engineering and Research, Inc.

345 South Magnolia Drive, Suite E-25 Tallahassee, Florida 32301

For Respondent: Mark T. Mustian, Esquire

Gregory T. Stewart, Esquire Maureen McCarthy Daughton, Esquire Harry F. Chiles, Esquire

Nabors, Giblin and Nickerson, P.A.

315 South Calhoun Street

Barnett Bank Building, Suite 800 Post Office Box 11008 Tallahassee, Florida 32302

STATEMENT OF ISSUE

Did the Respondent, State of Florida, Department of Community Affairs, Florida Housing Finance Agency (the Agency), act fraudulently, arbitrarily, illegally or dishonestly in exercising review criteria Nos. 3, 4 and 7 to evaluate Petitioner, Spectra Engineering and Research, Inc. (Spectra), in the Agency's Request For Proposal (RFP) entitled Environmental Review Services for Home Investment Partnership Program, FHFA 96/05?

PRELIMINARY STATEMENT

Spectra challenged the scores that it received in its response to the RFP. The challenge was filed on April 18, 1996, when Spectra informed the Agency that it intended to protest the preliminary decision arrived at through a scoring matrix. This was followed by a formal letter of protest dated April 29, 1996, specifically addressing the Agency's scores assigned to Spectra pursuant to criteria Nos. 3, 4 and 7. The parties were unable to resolve their disputes through informal means. Therefore, the case was referred to the Division of Administrative Hearings on July 11, 1996, for purposes of conducting a formal hearing. The hearing took place on the aforementioned dates.

Spectra's motion to continue the hearing scheduled for July 26, 1996, was denied by written order.

At hearing Spectra presented Angela Wiggins, Audrey Byrne, Shane Acevedo, Angela Hatcher, Christopher Okonkwo and Wanda Marie Toote as witnesses.

Spectra's exhibits 1 through 14, 16 through 18 and 20 through 22 were admitted. Exhibit 22 was not admitted for fact-finding purposes standing alone. Spectra's exhibit 15 was denied admission. The Agency presented the testimony of Robert

A. Ippolito and Thomas G. Tinsley. The Agency's exhibits 1, 2, 5, 6 through 10 and 22 through 25 were admitted. The Agency's exhibit 26 was denied admission.

A hearing transcript was filed on September 17, 1996. On September 27, 1996, the Agency filed a proposed recommended order. On October 1, 1996, Spectra filed a proposed recommended order. The proposed recommended orders have been considered. The previous obligation to comment on the fact proposals found within the proposed recommended orders through inclusion of an appendix to the recommended order was repealed on October 1, 1996, when Chapter 120, Florida Statutes, was amended by Chapter 96-159, Laws of Florida. Therefore, the recommended order has been entered without an appendix.

FINDINGS OF FACT

The RFP

1. On February 26, 1996, the Agency mailed the RFP to prospective vendors.

2. The services it sought from the vendors were as follows: SERVICES SOUGHT: Environmental Assessment

   Review services to be provided on each HOME project shall provide environmental reviews of projects and applicable activities and assist the Agency HOME staff in the identification and evaluation of the likely impacts of the projects on the environment and vice versa. The Environmental Assess- ment Review Agency shall also ensure that requirements of the Florida Statutes, Florida Administrative Code, and the Florida Housing Finance Agency Act are met by all reviews; submitting periodic status reports to the Agency; inspecting the development site; advising the Agency as to the environmental feasibility of development;

   documentation of required HUD forms submitted

   and generally providing such assistance and services to the Agency as are generally provided by an Environmental Assessment Review Agent. Reviews shall be completed on HUD Environmental Assessment Format II (see attached Exhibit B).

   
   

   It has been determined by the Agency that the services herein cannot be more specifi- cally defined and, in fact, the Agency contemplates the offerors providing a description of the services that can be rendered as a part of their competitive process.

   
   

3. The Agency received responses to the RFP from Spectra; the Florida Planning Group, Inc.; Post, Buckley, Schuh and Jernigan, Inc.; Genesis Group, Inc.; Jim Stidham and Associates; William H. Bishop Engineers, Inc.; and Anderson Columbia Environmental, Inc.

   
   

4. The RFP set forth criteria for selection as:

   
   

   1. The ability of the offeror to provide the services described herein in all relevant parts of the state.

   2. The demonstrated technical competence, expertise, innovative ability and experience of the offeror in providing the services described herein.

   3. The effect of the selection of the offeror on the Agency's ability to administer its HOME program.

   4. The offer or offers that is/are the most advantageous to the Agency and the public, taking into consideration the criteria set forth herein.

   5. The availability and ability of a minority-owned business.

   6. Qualification of individuals assigned to this account. The individuals who Shall be assigned to this account shall be designated in writing.

   7. The Agency's prior experience with the offeror.

   8. Any costs to the Agency or the borrower which will be incurred as the result of the offeror's selection.

   9. Whenever identical bids are received, preference shall be given to a certified Minority Business Enterprise in the event that its proposal is scored equal to the otherwise highest scoring proposal pursuant to Section 287.057(10), Florida Statutes.

      
      

5. The vendors were also provided some insight into the purpose of the program that they would serve in a category in the RFP entitled "Background Information" which stated:

   The Agency makes mortgage loans to developers of rental and single family housing from funds out of the State of Florida's HOME Investment Partnership Program ("HOME"). The loans are make [sic] at below market interest rates and are secured by mortgages on the properties

   financed. As required by receiving a federal HOME allocation, the Program requires a HUD Environmental Assessment Review pursuant to guidelines outlined in 24 CFR Part 58 (Environmental Review Procedures for Title

   I Community Development Block Grant Programs).

   
   

6. The vendors were reminded that the contract award would be based upon the following:

   
   

   This contract shall be awarded to the offeror(s) who is (are) determined in writing to be the most advantageous to the State taking into consideration the criteria set forth in this Request for Proposals.

   Notification shall be in the form of a written Notice of Award. The Agency reserves the right to reject any and all proposals, to negotiate price and to make such awards as are necessary to best serve the public's interest.

   
   

7. To further assist the Agency in deciding the outcome in its competitive bidding process, it established a scoring matrix which set forth the following selection criteria, each criterion having a maximum score of 10 points:

   
   

   CRITERIA FOR SELECTION

   (10 POINTS MAXIMUM EACH) POINTS

   
   

   1. Is there a breakdown of support services and assistance to be provided

      to the Agency? Is it detailed?

      
      

   2. Does the offeror have experience

      performing HUD Environmental Assessments?

      
      

   3. Is Work Schedule reasonable for

      services sought?

      
      

   4. Can the offeror provide the services

      in all relevant parts of the state?

      
      

   5. Are there copies of Resume's included describing personal qualifications?

   6. Is there a list of three previous clients with contact name and telephone numbers used as references? There must be a description of the similar work by the offeror. Is the work similar to that

      which is requested in the RFP?

      
      

   7. Does the offeror have prior experience with the Agency? If yes, evaluate the

   experience.

   
   

   ADDITIONAL POINTS (20 POINTS)

   
   

   Is the offeror a certified Minority Business Enterprise with certification

   included in RFP?

   
   

8. To review the proposals the Agency formed a committee.

   
   

9. Shane Acevedo was the Community Assistance Consultant for the HOME program and he coordinated the issuance, receipt and review of the responses to the RFP and served on the committee. Other committee members were Angela Hatcher, HOME Program Administrator; Tom Tinsley, Guarantee Program Administrator within the Agency; Audrey Byrne, Planning Manager; and Wanda Anderson, now Wanda Marie Toote, Planner IV. With the exception of Tom Tinsley, the committee members had immediate familiarity with the HOME program.

   
   

10. Each committee member was granted an ample opportunity to review the responses to the RFP. That review process was separately conducted by individual committee members. In that process they were allowed to make notes concerning their impressions about the vendor's responses to the RFP.

    
    

11. Following the review performed by the individual committee members, the committee assembled and discussed the responses by the vendors and assigned scores to the individual vendors by using the scoring matrix. In this process the committee arrived at a consensus for scoring, rather than taking the individual impressions by the committee members and arriving at an aggregate score for the respective criteria in the scoring matrix.

    
    

12. The outcome of their deliberations awarded the Florida Planning Group

    70 points, Post Buckley 65 points, Genesis Group 60 points, Jim Stidham 50 points, William Bishop Engineers 50 points, Spectra 40 points, and Anderson Columbia 35 points.

    
    

13. The agency decided to use the three highest scorers as its consultants for the environmental assessments.

    
    

14. Through its formal protest on April 29, 1996, Spectra challenges the scores assigned to it under criteria Nos. 3, 4 and 7. It contends that it should have received the maximum 30 points for the criteria.

    
    

15. In comparing the respective scores received for criterion No. 3, "Is work schedule reasonable for services sought?", Genesis Group received 10 points, Jim Stidham received 0 points, William Bishop received 10 points, Anderson Columbia received 0 points, Spectra received 0 points, Florida Planning Group received 10 points and Post Buckley received 10 points.

16. In comparing the respective scores received for criterion No. 4, "Can the offeror provide the services in all relevant parts of the state?", Genesis Group received 10 points, Jim Stidham received 10 points, William Bishop received 5 points, Anderson Columbia received 5 points, Spectra received 0 points, Florida Planning Group received 10 points and Post Buckley received 10 points.

    
    

17. In comparing the respective scores received for criterion No. 7, "Does the offeror have prior experience with the Agency? If yes, evaluate the experience", Genesis Group received 10 points, Jim Stidham received 0 points, William Bishop received 0 points, Anderson Columbia received 0 points, Spectra received 0 points, Florida Planning Group received 10 points and Post Buckley received 5 points. In this category a vendor need not have had specific prior experience in the State of Florida's Home Investment Partnership Program. The vendor could be credited for prior experience with the Agency in its administration of other programs.

    
    

18. In the informal discussions between the parties, through correspondence dated June 12, 1996, the Agency offered to award additional points to Spectra for criteria Nos. 4 and 7. In each instance the Agency offered 5 additional points for a total of 10 points bringing the overall score to 50 points. The basis for this overture was to "give Spectra the benefit of the doubt." At hearing the Agency continued to express its commitment to awarding the 10 additional points without further explanation beyond the fact that the agency made this gesture after consulting its counsel. The Agency has arbitrarily assigned the 10 additional points. Nonetheless, Spectra should be credited with those points and allowed to advance its claim that the Agency acted inappropriately in not awarding the balance of available points for those two criteria.

    
    

19. To resolve Spectra's claims, a more critical discussion of the Agency's actions in performing the evaluation of Spectra's response to the RFP in the assignment of scores for criteria Nos. 3, 4 and 7 follows.

    
    

    Criterion No. 3 Is work scheduled reasonable for services sought?

    
    

20. The basis for determining whether the proposed work schedule by the vendor was a reasonable estimate considering the services to be provided was premised upon the need to meet the requirements of the Florida Statutes, Florida Administrative Code and the Florida Housing Finance Agency Act and the need for the vendor to generally provide assistance and services to the Agency that are generally contemplated as being provided by Environmental Assessment Review Agents. With this in mind, the committee reasonably concluded that estimates for conducting environmental review assessments should be no less than 60 days. Any vendor whose estimate was less than 60 days received no points. As reported, a number of vendors, including Spectra, did not receive points for this criterion.

    
    

21. In its response at 2.4.9, Detailed Work Schedule, Spectra stated:

    
    

    We estimate to complete each environmental assessment project within 10 working days from Notice-to-Proceed. However, depending on unforeseeable circumstances and on project complexity, some assessments may take a longer time to complete. The following is our project schedule.

22. Spectra then included a chart with bar graphs. In that chart project tasks were identified as data collection and review, telephone/fax request for additional project information, site visits and site photographs, completion of HUD checklist and report preparation and recommendation. The bar graph portion of the chart for those projects was described as "targeted completion time (in days)". The numbers under the completion times were from 1 to 14. Some of Spectra's estimates for categories of project tasks overlapped. For that reason the data collection and review was described as being involved with the first 3 days. The telephone/fax requests for additional project information took place between day 1 and day 5. The site visits and site photographs took place between day 6 and day 8. The completion of HUD checklist took place from day 3 to day 6 and report preparation and recommendations took place from day 3 to day

1. Alternatively, if the chart was read to describe individual tasks that were separate and apart, the total number of days reflected is approximately 24. Either version of the chart and considering the narrative in the proposal would reasonably lead the committee members to conclude that the estimate for completing the work was less than 60 days. Consequently, it was not inappropriate for the committee to assign 0 points to Spectra for criterion No. 3.

   
   

   1. Those vendors who received points for criterion No. 3 offered estimates to complete the work between 77 and 115 days. Those vendors received

      10 points for their estimates. The other vendors who did not receive points either offered no estimate of days needed to complete the work or between 14 and

      21 days to complete the work.

      
      

      Criterion No. 4. Can the offeror provide the services in all relevant parts of the State?

      
      

   2. The RFP does not describe what is meant by "all relevant parts of the state."

      
      

   3. In response to criterion No. 3 at 2.2 in its proposal, entitled "Ability of Firm to Provide Required Services in Relevant Part of the State," Spectra indicated:

      
      

      We did, in our past contract with the Agency, demonstrate our ability to provide the required services in relevant parts of the state. Project locations included: Dade County, the Town of Century, Holmes County, Hillsborough County, City of Leesburg, Okaloosa County, Leon County, Walton County, Gadsden County, and the City of Palmetto. In implementing the projects, we gathered pertinent project information and also interacted with relevant, environmental regulatory and other offices. We have established practical channels of communi- cation with appropriate regulatory-agency personnel. Therefore, we know feasible approaches to fast information-gathering which will quicken project completion.

      Moreover, proper planning and effective task-coordination will enable us to prudently allocate our resources and to

      assign our staff. Our location close to the Agency's Tallahassee office will enable

      us to promptly attend meetings or to respond to project matters. This will maintain smooth project flow.

      In addition, we have performed related services for other clients in several Florida counties, including Duval County, Franklin County, Bay County, Liberty County, Citrus County, Washington County, among other areas. These projects are described in detail in Section 2.5: Related Project Experience.

      
      

   4. Spectra had a HOME contract with the Agency in 1993, as renewed in 1994, and had provided services in projects that are listed in Spectra's response to criterion No. 3. On the face of the response information is provided which would seem to comply with the most expansive reading of the term "in all relevant parts of the State."

      
      

   5. Rather than credit Spectra for its ability to provide services as described in its response to criterion No. 3, the committee concluded that Spectra should not receive points based upon two considerations. First, the Agency had received complaints from project managers for whom Spectra was responsible to perform environmental assessments under their 1993 and 1994 contract with the Agency at the various locations. The project managers complained that Spectra expected the project managers to take form letters from Spectra seeking information necessary for the environmental assessments. Spectra would then anticipate that the project managers would decide who to contact to get the necessary information to perform the environmental assessments and transmit the form letters from Spectra to the appropriate persons for those persons who had been contacted to provide Spectra the necessary information requested in the form letters. The project managers in Hillsborough County, Gadsden County and Osceola County complained about this practice. They expressed the feeling that Spectra should know the appropriate

      contact persons to assist Spectra in conducting the environmental assessments or should go to the individual locations and find out who should be contacted.

      Project managers felt that the task of identifying appropriate persons to assist in carrying out the environmental assessments was as anticipated in the contract between the Agency and Spectra for the years 1993 and 1994. These practices by Spectra were seen by the committee as evidence of the possible inability to make site visits in projects contemplated under the RFP and considered in criterion No. 4. The committee was also concerned that in carrying out the duties under the 1993 and 1994 contracts for environmental assessments Spectra had not always performed site visits required in the projects that they were assigned.

      
      

   6. On one occasion principals within Spectra, Peter and Christopher Okonkwo, conceded to Robert Ippolito, HOME Program Administrator, that Spectra had not always made the necessary site visits for the projects that it was assigned under the 1993 and 1994 contract with the Agency.

      
      

   7. By contrast, the Florida Planning Group, another vendor under the 1993 and 1994 HOME contract, in seeking the assistance of others in performing environmental assessments, identified the necessary contacts to provide input concerning the environmental assessments and transmitted form letters to the specific contacts soliciting the needed information.

   8. On the other hand, 2.3.5 to the Spectra response to the RFP which graphically represents the persons that would be assigned to conduct the consulting work for the Agency identifies what would appear to be sufficient numbers of employees to conduct the task in places to be served throughout the state.

      
      

   9. The issue is raised as to whether the prior experience as described between the Agency and Spectra overcomes what on the face of the response to the RFP seems an adequate response to the requirements in criterion No. 3. The prior experience is more persuasive in determining the Agency did not act arbitrarily in assigning 0 points when it made its assessment. Again, Spectra should be allowed to take advantage of the 5 additional points that were assigned to it through the informal process for unspecified reasons.

      
      

      Criterion No. 7 Does the Offeror Have Prior Experience with the Agency? If yes, evaluate the experience.

      
      

   10. As explained, Spectra had prior experience with the Agency and identified that experience in response to the RFP.

       
       

   11. The committee determined to award no points for this criterion. Among the reasons for awarding no points was the attempt by Spectra to enroll project managers in the process of gaining necessary information for the environmental assessments that has been discussed in relation to criterion No. 4.

       
       

   12. As with the circumstance in criterion No. 4, Mr. Ippolito explained that it was common and acceptable to gather information from local project managers or officials related to names and phone numbers of potential contact persons that could assist in performing the environmental assessment. However, according to Mr. Ippolito, that practice should not extend to sending project managers blank form letters and requesting that the project manager identify the persons whom the blank letters should be sent to, have the project managers fill in the names and forward the letters to the contact person for Spectra's benefit. This was the problem the committee saw in its criticisms associated with Spectra's response to criteria Nos. 4 and 7.

       
       

   13. In association with criterion No. 7, the committee also expressed concern about the past willingness of Spectra to perform functions known as State Clearinghouse Acceptance and legal adds in newspapers, as part of the environmental assessments. This was in association with the 1993 and 1994 contracts. This criticism by the committee was not well-founded. Whether under the terms in the 1993 and 1994 contract to perform environmental assessments for the HOME program Spectra was obligated to provide services related to the State Clearing House Acceptance and legal adds in newspapers was debatable. The Agency eventually convinced Spectra that it should perform those tasks associated with the State Clearing House Acceptance and legal adds in newspapers. To some extent the Agency forgave that requirement to perform. To characterize the nature of the discussions between the Agency and Spectra which led Spectra to perform State Clearing House Acceptance and provide for legal adds in newspapers as an indication that Spectra was reluctant to meet the mandates for performing environmental assessments, or that Spectra could not be counted on or was unwilling to do the two tasks, constitutes an arbitrary act by the Agency. Nonetheless, its other reason for awarding Spectra 0 points for criterion No. 7 when performing the evaluation was sufficient justification. As with criterion No. 4, Spectra is entitled to the five additional points which it was granted through informal settlement discussions.

       CONCLUSIONS OF LAW

       
       

   14. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter to this proceeding in accordance with Sections 120.53(5) and 120.57(1), Florida Statutes (1995). The hearing was conducted prior to October 1, 1996. Consequently, the recommended decision on the merits does not rely on Chapter 96-159, Laws of Florida.

       
       

   15. Spectra has the burden to prove its allegations challenging the decision to award points consistent with the scoring matrix under criteria Nos. 3, 4 and 7. Florida Department of Transportation v. J.W.C., 396 So.2d 778 (Fla. 1st DCA 1981).

       
       

   16. To succeed, Spectra must prove that the agency acted arbitrarily, fraudulently, illegally or dishonestly in assigning the scores for the disputed criteria. Department of Transportation v. Groves-Watkins Construction, 530 So.2d 912 (Fla. 1988).

       
       

   17. To act arbitrarily is to act in a fashion that is not supported by fact or logic and is despotic. Agrico Chemical Co. v. D.E.R., 365 So.2d 759 (Fla. 1st DCA 1979).

       
       

   18. In a limited sense the Agency has acted arbitrarily in attributing the circumstances associated with Spectra's performance of the State Clearinghouse Acceptance process and legal ad placement as part of the environmental assessment to be a negative experience that should work against Spectra in deciding the proper points to be awarded for criterion No. 7. However, there was additional justification to not award Spectra points under criterion No. 7 based upon its attempt to use project managers to perform its duties under the environmental assessments conducted consistent with the contract for 1993 and 1994. Likewise, the Agency was justified in awarding 0 points to Spectra for criterion No. 3, in that the time allotted by Spectra to conduct the work was unreasonable and was recognized by the Agency in its evaluation as being unreasonable. Finally, criterion No. 4 was not adequately addressed by Spectra, given the prior experience which the Agency had with Spectra concerning its attempt to improperly employ project managers in gaining information necessary to perform the environmental assessments and Spectra's failure at times to conduct site visits in the projects for which it was responsible.

       
       

   19. Although unexplained, Spectra should be awarded the 10 additional points in total for criteria Nos. 4 and 7 offered to it by the Agency following the informal discussions to resolve this dispute.

RECOMMENDATION

Upon consideration of the findings of fact and the conclusions of law reached, it is,

RECOMMENDED:

That a final order be entered which awards Spectra 10 additional points in total for criteria Nos. 4 and 7 and otherwise denies Spectra relief.

DONE and ENTERED this 21st day of October, 1996, in Tallahassee, Florida.

CHARLES C. ADAMS

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675 SUNCOM 278-9675

Fax Filing (904) 921-6847

Filed with the Clerk of the Division of Administrative Hearings this 21st day of October, 1996.

COPIES FURNISHED:

Mark T. Mustian, Esquire Gregory T. Stewart, Esquire

Maureen McCarthy Daughton, Esquire Harry F. Chiles, Esquire

Nabors, Giblin and Nickerson, P.A.

315 South Calhoun Street, Barnett Bank Building, Suite 800 Post Office Box 11008 Tallahassee, FL 32302

Angela Hatcher, Administrator Florida Housing Finance Agency

227 North Bronough Street, Suite 5000 Tallahassee, FL 32301-1329

Peter Okonkwo, President

Spectra Engineering & Research, Inc.

345 South Magnolia Drive, Suite E-25 Tallahassee, FL 32301

Stephanie M. Gehres, General Counsel Department of Community Affairs

2555 Shumard Oak Boulevard, Suite 325-A Tallahassee, FL 32399-2100

James F. Murley, Secretary Department of Community Affairs

2555 Shumard Oak Boulevard, Suite 100

Tallahassee, FL 32399-2100 Informational Copies:

Florida Planning Group, Inc. 9471 BayMeadows Road, Suite 401

Jacksonville, FL 32256

Genesis Group, Inc. Building 1, Suite 200 820 East Park Avenue Tallahassee, FL 32301

Post, Buckley, Schuh & Jernigan, Inc. 9432 BayMeadows Road, Suite 250

Jacksonville, FL 32256

William H. Bishop Engineers, Inc. 715 North Calhoun Street Tallahassee, FL 32303

Jim Stidham & Associates, Inc. Post Office Box 3547 Tallahassee, FL 32303

Anderson Columbia Environmental, Inc. Post Office Box 1386

Lake City, FL 32056

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within 15 days from the date of 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: 96-003264BID

Orders for Case No: 96-003264BID