STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

VANGUARD COMMERCIAL REALTY, INC., )

)

Petitioner, )

)

vs. ) Case No. 99-1106BID

) DEPARTMENT OF JUVENILE JUSTICE ) and ROBERT C. AND SARA E. COOK, )

)

Respondents. )

)

RECOMMENDED ORDER

An administrative hearing was conducted on April 12, 1999, in Tallahassee, Florida, by Daniel Manry, Administrative Law Judge of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: James C. Hauser, Esquire

Warren H. Husband, Esquire Skelding, Labasky, Corry, Eastman,

Hauser & Jolly, P.A.

318 North Monroe Street Tallahassee, Florida 32302

For Respondent Scott Wright, Esquire Department of Department of Juvenile Justice Juvenile 2737 Centerview Drive

Justice: Tallahassee, Florida 32399-3100

For Respondent: Robert C. Cook, pro se

1950 Murrell Road

Tallahassee, Florida 32955

STATEMENT OF THE ISSUE

The issue in this case is whether the agency's proposed award of a lease for commercial office space to Respondents, Robert C. and Sara E. Cook (the "Cooks"), is contrary to the agency's governing statutes, the agency's rules or policies, or the bid proposal specifications pursuant to Section 120.57(3)(f),

Florida Statutes (1997). (All chapter and section references are to Florida Statutes (1997) unless otherwise stated).

PRELIMINARY STATEMENT

On February 18, 1999, the Department of Juvenile Justice (the "Department") posted its decision and notice of intended award to the Cooks. Petitioner timely filed a Notice of Protest and Petition for Formal Hearing on March 11, 1999.

An administrative hearing was scheduled for April 7, 1999.

On March 24, 1999, Petitioner filed a Motion for Continuance. The parties waived their right to the expedited time provisions in Section 120.57(3)(e). During a telephone conference with the parties, the hearing was rescheduled for April 12, 1999.

At the hearing, Petitioner presented the testimony of one witness and submitted six exhibits for admission in evidence. Respondent presented the testimony of two witnesses and submitted no exhibits for admission in evidence.

The identity of the witnesses and exhibits, and any attendant rulings, are set forth in the Transcript of the hearing filed on April 20, 1999. The parties timely filed their respective proposed recommended orders ("PROs") on April 30, 1999.

FINDINGS OF FACT

1. On November 30, 1998, the Department issued its request for proposals ("RFP") for the lease of commercial office space for the City of Cocoa, Florida. Four proposals were submitted in response to the RFP.

2. On February 18, 1999, the Department posted its decision and notice of intended award. The Department determined that two of the proposals were non-responsive and that two proposals were responsive. The Department determined that the proposals submitted by the Cooks (the "Cook proposal") and Petitioner were responsive to the RFP and that the Cook proposal scored higher.

3. Petitioner timely filed its Notice of Protest and Petition for Formal Hearing and challenged the notice of intent to award to the Cooks. Petitioner named the Cooks as party- respondents.

4. Section A of the RFP is entitled, "Requirements for Proposers to Submit Proposals." Paragraph 2 of Section A, entitled "Control of Property," provides:

   . . . To submit a responsive proposal, a prospective lessor must provide evidence of one of the following qualifications with the proposal. (emphasis not supplied)

   * * *

   1. The person(s) executing the proposal should be the one responsible for ensuring fulfillment of the requirements of the RFP execute the RFP submittal form and any resulting lease agreement. However:

      
      

      1. If an agent executes the proposal, a written Power of Attorney from the owner of record or other party with control over property must (emphasis supplied) accompany the proposal granting this authority and certifying that such proposal is binding onthe owner of record. A letter from the owner is not acceptable. (emphasis not supplied)

         RFP, Section A, paragraph 2(e)1, at 3.

5. The owner of the building to be rented in the Cook proposal is more than one person. Only one person signed the power of attorney. The owner of the building did not sign the power of attorney. The purpose of the "Control of Property" requirement is to ensure that owners are bound by the proposals they submit to state agencies and that state agencies can enforce proposals against the owners of property.

6. Paragraph P in the RFP is entitled, "Required Documentation Submitted With Proposal." Paragraph P provides:

   In order for a proposal to be responsive, all items below must be included in the proposal, if applicable.

   RFP, Paragraph P, at 11.

7. Paragraph P enumerates 17 specific documents. Document

   13 is the, "Power of Attorney authorizing an agent to submit a proposal binding the owner, if applicable."

8. The requirement for a power of attorney is reiterated on the Department's check list used for reviewing proposals. The top of page one of the check list provides:

   In order for a proposal to be accepted, all items (1-20) must be included in the proposal.

   Documentation Check List, at 2.

   The power of attorney is indicated as the third required document on page 2.

9. The "Control of Property" requirement is a long-standing requirement in the competitive bidding process for state agencies. The requirement was developed several years ago by the

   Department of General Services ("DGS"). DGS later became the Department of Management Services ("DMS").

10. The "Control of Property" requirement was developed in response to problems caused by agents submitting proposals to state agencies when the agents did not have authority to bind the property owners. In concert with the Florida Attorney General, DGS and DMS developed the power of attorney form used in the RFP at issue in this proceeding to ensure the enforceability of submitted proposals. The power of attorney enables state agencies to achieve their objective of binding property owners to their proposals.

11. The power of attorney requirement is included in the DMS Leasing Manual and has been included in numerous versions of the Manual over the span of several years. The RFP at issue in this proceeding reiterates, verbatim, the Control of Property requirement in the DMS Leasing Manual.

12. The Cook proposal is non-responsive to the RFP. Not all property owners executed the power of attorney included in the Cook proposal.

13. The Cook proposal was not submitted directly by the Cooks. Rather, the Cook proposal was submitted by Mr. Alan Taylor as agent for the Cooks.

14. The building proposed for lease in the Cook proposal is owned by Robert Cook and Sara Cook as tenants in common. The warranty deed included in the Cook proposal shows that the Cooks own the property as husband and wife. However, the Cooks were

    divorced in February 1994. The Marital Settlement Agreement shows that the Cooks continue to own the building as tenants in common.

15. There are two owners of record for the building submitted for lease in the Cook proposal. Each tenant owns a 50 percent interest in the property.

16. The Cooks collect the rental income from the building, pay the expenses, and divide the net income from the building in proportion with their respective 50 percent interest in the building. Ms. Cook maintains the books and accounts for the business venture.

17. The power of attorney submitted in the Cook proposal was signed only by Mr. Robert Cook. Ms. Cook, the other owner of the building, did not sign the power of attorney and did not submit a separate power of attorney. The power of attorney failed to satisfy the "Control of Property" requirement.

18. The owner of record for the building proposed for lease in the Cook proposal is Mr. Robert Cook and Ms. Sara Cook. The owner of record did not sign the power of attorney. The power of attorney did not bind the owner of record.

19. The Cook proposal was not responsive. It failed to comply with a material requirement. It failed to satisfy the "Control of Property" requirement by which state agencies bind the owner of property to their proposals.

20. Even if the "Control of Property" requirement did not require the signature of Ms. Cook, the evidence failed to show

    that Ms. Cook authorized Mr. Taylor to bind her to the submitted proposal. There is no evidence of such authority in either written or verbal form.

21. A non-responsive response for lack of a sufficient power of attorney is not unique or unusual. Many proposals to lease space over the years have been deemed non-responsive for failure to show "control of property." Often, the specific failure is an insufficient power of attorney.

22. More often than not, multiple owners hold title to property submitted for lease to the state. If the "Control of Property" requirement were satisfied by binding only one owner, the requirement would be inadequate and expose state agencies to the risk that owners would be free to avoid the obligations included in their proposals.

23. The objective of the requirement for a sufficient power of attorney is to provide enforceability to the competitive bid process by binding owners to their proposals. An agent without a power of attorney signed by all owners does not have the authority to bind all of the owners.

24. The Department rejected two of the four proposals submitted to the Department as non-responsive. The Department rejected one of those proposals, in part, because the proposal failed to comply with the power of attorney requirement.

25. Mr. Cook mistakenly believed that a signature by one owner is sufficient. A misunderstanding of the law is no defense against non-responsiveness and does not cure a material defect.

    Paragraph B on page 4 of the RFP is entitled, "Familiarity With Laws." Paragraph B states:

    The proposer is required to be familiar with all Federal, State, and Local laws, ordinances, rules and regulations, that in any manner affect this project. Lack of knowledge by the proposer will in no way afford relief from this responsibility. All costs associated with compliance shall be borne by the proposer.

    RFP, paragraph B, page 4.

26. If there were any uncertainty, the obligation was on the Cooks or Mr. Taylor to seek clarification. The RFP specifically provided a window of opportunity for interested persons to ask questions through the procedures prescribed in paragraph E entitled, "Interpretation of Proposal Documents."

    CONCLUSIONS OF LAW

27. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter. Section 120.57(1).

28. The burden of proof is on Petitioner. Section 120.57(3)(f); Florida Department of Transportation vs. J.W.C. Company, Inc., 396 So. 2d 778 (Fla. 1st DCA 1981); Balino vs. Department of Health and Rehabilitative Services, 348 So. 2d 349 (Fla. 1st DCA 1977). Petitioner must prove that the proposed agency action:

    . . . is contrary to the agency's governing statutes, the agency's rules or policies, or the bid proposal specifications. . . .

    Section 120.57(3)(f).

29. Petitioner must satisfy its burden of proof with evidence other than a preponderance of evidence generally required in Section 120.57(1)(h) for proceedings conducted pursuant to Section 120.57(1). In a proceeding conducted pursuant to Section 120.57(3) other than a rejection of all bids:

    The standard of proof . . . shall be whether the proposed agency action was clearly erroneous, contrary to competition, arbitrary, or capricious.

    Section 120.57(3)(f). (Compare, the standard of review prescribed in Section 120.57(3)(f) for a rejection of all bids. The statute does not explain the difference, if any, between a standard of proof and a standard of review. If there is a difference, then the preponderance of evidence standard prescribed in Section 120.57(1)(h), by its terms, applies to the standard of review prescribed in Section 120.57(3)(f) because the standard of proof is not otherwise provided by statute within the meaning of Section 120.57(1)(h).)

30. The Department's determination that the Cook proposal was responsive is clearly erroneous and contrary to the RFP specifications. The specification requiring a power of attorney signed by the owner of property when a proposal is submitted by an agent was not challenged by any party.

31. A sufficient power of attorney is a mandatory requirement in the RFP. Failure to submit a sufficient power of attorney is a material defect.

32. Petitioner presented expert testimony explaining the role of the power of attorney requirement in the competitive bid process, its purpose, and the materiality of the requirement. That testimony was credible and persuasive. Respondents presented no evidence to dispute or rebut the expert testimony submitted by Petitioner.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is

RECOMMENDED that the Department enter a final order finding that the Cook proposal was non-responsive and awarding the lease to Petitioner.

DONE AND ENTERED this 4th day of June, 1999, in Tallahassee, Leon County, Florida.

DANIEL MANRY

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6847

Filed with the Clerk of the Division of Administrative Hearings this 4th day of June, 1999.

COPIES FURNISHED:

James C. Hauser, Esquire Warren H. Husband, Esquire

Skelding, Labasky, Corry, Eastman, Hauser & Jolly, P.A.

318 North Monroe Street Tallahassee, Florida 32302

Scott Wright, Esquire Department of Juvenile Justice 2737 Centerview Drive

Tallahassee, Florida 32399-3100

Robert C. Cook, pro se 1950 Murrell Road

Tallahassee, Florida 32955

William G. "Bill" Bankhead, Secretary Department of Juvenile Justice

2737 Centerview Drive

Tallahassee, Florida 32399-3100

Jennifer Parker, Acting General Counsel Department of Juvenile Justice

2737 Centerview Drive

Tallahassee, Florida 32399-3100

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within 10 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: 99-001106BID

Orders for Case No: 99-001106BID