STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

PALM BEACH COUNTY YOUTH COALITION, )

)

Petitioner, )

)

vs. ) Case No. 00-1527BID

)

PALM BEACH COUNTY WORKFORCE ) DEVELOPMENT BOARD, INC., WAGES ) COALITION, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a final hearing was conducted in this case on June 6, 2000, at West Palm Beach, Florida, before Administrative Law Judge Michael M. Parrish, of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Frank R. Brady, Esquire

Brady & Brady, P.A.

370 West Camino Gardens Boulevard Suites 336 and 337

Boca Raton, Florida 33432

For Respondent: David L. Feingold, Esquire

Feingold & Kam

3300 PGA Boulevard, Suite 410

Palm Beach Gardens, Florida 33410 STATEMENT OF THE ISSUE

This is a proceeding in which the Petitioner seeks to challenge the Respondent's determination that the Petitioner's

proposal submitted in response to a request for proposals was disqualified for failure to comply with all requirements of the specifications in the request for proposals or, alternatively, to require the Respondent to reject all proposals and issue a new request for proposals with improved specifications.

PRELIMINARY STATEMENT

On or about January 10, 2000, the Respondent issued a document titled Request for Proposals for Year-Round Youth Programs for Program Year 2000-2001. The deadline for submitting proposals was February 25, 2000. The Petitioner, and numerous others, submitted timely proposals. Following a technical review of the proposals, the proposal submitted by the Petitioner, and two other proposals, were deemed to be disqualified for failure to comply with all of the requirements of the specifications in the request for proposals. On March 9, 2000, the Petitioner wrote to the Respondent seeking to protest and appeal the disqualification decision and asserting a right to a hearing pursuant to Section 120.57, Florida Statutes. On March 10, 2000, the Respondent wrote to the Petitioner, agreed that the Petitioner was entitled to file a protest pursuant to Section 120.57(3)(c), Florida Statutes, and allowed the Petitioner ten days within which to file a Formal Written Protest. The Petitioner's Formal Written Protest was filed on March 16, 2000. On March 17 and 24, 2000, meetings were held in an effort to

reach an informal resolution of the issues raised in the Formal Written Protest.

The efforts at informal resolution were unsuccessful, and by means of a written decision mailed on March 30, 2000, the Petitioner was advised that the Respondent continued to be of the view that the Petitioner's proposal was disqualified, and that the disqualification would become final unless the Petitioner requested a hearing before the Division of Administrative Hearings within 72 hours. On March 31, 2000, the Petitioner requested such a hearing, and by letter dated April 6, 2000 (received on April 7), the Respondent requested that the Division of Administrative Hearings conduct a hearing to resolve the issues raised in the Petitioner's Formal Written Protest.

Following discussions with counsel regarding their preferred dates for the final hearing, by Notice of Hearing issued on April 27, 2000, the final hearing was originally scheduled for May 23 and 24, 2000. By Order of Pre-hearing Instructions also issued on April 27, 2000, the Respondent was ordered to notify all other entities that had submitted proposals of their opportunity to participate in the hearing in this case.

Thereafter it was necessary to change the hearing date to June 6 and 7, 2000, because of the Respondent's failure to timely provide such notice to others who had submitted proposals.

Prior to the final hearing on June 6, 2000, the undersigned advised counsel for all parties that he had doubts as to whether the Respondent was a state agency and as to whether the Division of Administrative Hearings had jurisdiction over the parties or the subject matter of this proceeding. In order to resolve such doubts the undersigned requested that he be provided with various materials bearing on the status of the Respondent.1

At the final hearing on June 6, 2000, the Petitioner presented the testimony of four witnesses and also offered five exhibits, all of which were received into evidence. The Respondent presented the testimony of three witnesses. At the conclusion of the final hearing, the parties advised the undersigned that they intended to order and file a transcript of the hearing. They also agreed that they would file their respective proposed recommended orders two weeks from the date on which the transcript was filed with the Division of Administrative Hearings. The transcript of the hearing has yet to be filed with the Division of Administrative Hearings.

Under a cover letter dated July 13, 2000 (received on

July 18), the Respondent filed a document titled Final Order of Administrative Law Judge.2 The cover letter advised as follows, in pertinent part:

Enclosed please find the Respondent's proposed final [sic] order regarding the hearing you conducted on June 6, 2000. We

are providing you a copy of our proposed order without a copy of the hearing transcript because it has been six weeks since the hearing that you conducted and we still have not received a copy of the transcript. Since this matter involves issues of funding which is urgently needed by my client and since you took copious notes and heard all testimony during the hearing, it is our request that you would issue your order as soon as possible.

On July 17, 2000, the Petitioner filed a proposed recommended order along with a cover letter reading as follows, in pertinent part:

Enclosed is Petitioner's proposed Findings of Fact and Conclusions of Law, per your request at the June 6, 2000 hearing. The transcript of the hearing has not been received, nor have we received any notice that it has been filed. However, since more than one month has lapsed since the date of the hearing, we thought it prudent to provide you with the enclosed proposed final [sic] order.

Neither of the proposed recommended orders contained any argument or citation of authority addressed to the issue of whether the Respondent is a state agency or whether the Division of Administrative Hearings has jurisdiction over the parties to or the subject matter of this case.

On August 22, 2000, a status conference was held by telephone, at which time counsel for the parties were advised that they had not provided the undersigned with sufficient information upon which to reach an informed conclusion as to whether the Division of Administrative Hearings has jurisdiction

over the Respondent. Following that conference, an order was issued which included the following:

1. That by no later than August 29, 2000, the Respondent shall file with the Division of Administrative Hearings a copy of all documents the Respondent believes are relevant to the determination of whether the Division of Administrative Hearings has jurisdiction over this matter. Such documents shall include at least the charter or Articles of Incorporation of the Board, the Board by-laws, any rules and regulations adopted by the Board, and all state and federal statutes and rules that authorize or regulate the activities of the Board.

   
   

2. That by no later than September 5, 2000, the Petitioner may file a memorandum of law addressing the jurisdictional issue in this case. The Petitioner may include with that memorandum a copy of any additional documents the Petitioner believes are relevant to the jurisdictional issue.

   
   

3. That by no later than September 12, 2000, the Respondent may file a responsive memorandum of law addressed to the jurisdictional issue.

On August 30, 2000, the Respondent filed a large collection of documents it believed to be relevant to the jurisdictional issue. On September 5, 2000, the Petitioner filed a brief on the jurisdictional issue, accompanied by copies of additional federal statutory and regulatory provisions. On September 11, 2000, the Respondent filed a jurisdictional brief in which it contends for the first time that the Division of Administrative Hearings does not have jurisdiction because the Respondent no longer believes

it is an agency. On September 15, 2000, the Petitioner filed a reply to the Respondent's jurisdictional brief.3

FINDINGS OF FACT

1. The Palm Beach County Workforce Development Board, Inc., Wages Coalition ("Respondent") is a Florida corporation not-for- profit organized under the laws of the State of Florida on or about August 14, 1996. The Respondent's articles of incorporation contain a statement of the purposes for which the corporation was formed. Those purposes include the following:

   1. To provide direction and oversight for initiatives related to the development of a workforce which will meet the needs of business, industry and the government to enable Palm Beach County to compete in all economic markets. . . .

      
      

   2. To promote and enhance productive employment of individuals in Palm Beach County, Florida, through the development, promotion, and implementation of programs to prepare youth and adults for successful entry into and retention in the labor force, to afford job training to economically disadvantaged and other individuals in need of such training, and to develop jobs and match all eligible individuals with job openings, through industry-specific training programs supportive of industrial and economic development, through employment- generating activities to increase job opportunities, and through other related activities.

      
      

2. The Respondent is a "regional workforce board" within the meaning of Section 445.007, Florida Statutes.

3. On or about January 10, 2000, the Respondent issued a Request for Proposals for Year-Round Youth Programs for Program Year 2000-2001 ("RFP"). The Petitioner timely submitted its proposal in response to the RFP, and the Respondent disqualified the Petitioner's proposal by letter dated March 2, 2000, accompanied by a document entitled "technical review sheet" signed by the Respondent's employee, Mr. Delwin Finch, and the Respondent's legal counsel, Chandler Finley, Esquire. Thereafter, by letter dated March 8, 2000, the Petitioner notified the Respondent that it wished to protest and/or appeal the disqualification of its proposal.

4. By mutual agreement, the parties attempted to resolve the Petitioner's protest/appeal in accordance with the provisions of Section 120.57(3)(d), Florida Statutes; however, the matter was not resolved, and this administrative action followed.

5. According to the Respondent's technical review sheet for the Petitioner's proposal, the Respondent disqualified the Petitioner's proposal based on the following items alleged to be missing from the proposal:

   Item 3 - Signatures for two of Petitioner's collaborating partners (Westech

   and Pahokee Middle schools) were missing.

   Item 5 - No audit, financial statement or tax return for two of Petitioner's collaborating partners (Westech and Pahokee Middle Schools).

   Item 6 - A detailed line item budget was not included.

   Item 7 - The current organizational status, current licenses and certifications, proof of insurance, proof of current financial status, employment policies, and most recent audit were not furnished for two of Petitioner's collaborating partners (Westech and Pahokee Middle Schools), no occupational license was furnished for Petitioner's collaborating partner CILO, and an adequate explanation was not furnished for the absence of these documents.

   Item 8 - The certifications regarding Lobbying, Debarment, Drug-Free Workplace, and Clean Air Act were not provided for two of Petitioner's collaborating partners (Westech and Pahokee Middle Schools).

   Item 9 - Proposal was not signed by three of Petitioner's collaborating partners (Urban league, and Westech and Pahokee Middle Schools).

   
   

6. Evidence at the hearing establishes that three of the above described bases for disqualification were erroneous; i.e., the detailed line item budget (item 6 of the technical review sheet) was not missing, an occupational license for CILO was not required because it is a non-profit organization, and the signature of collaborating partner, Urban League, was not missing.

7. Mr. Delwin Finch, was the representative of the Respondent who performed the technical review of all proposals received by the Respondent in response to the RFP. He disqualified the Petitioner's proposal because it stated that portions of the services referred to in the proposal would be subcontracted to West Tech School and Pahokee Middle School, but

   the proposal was not signed by the principals of West Tech School or Pahokee Middle School, nor was it signed by the Palm Beach County School District, and because there were no financial statements or certifications regarding Lobbying, Debarment, Drug- Free Workplace, or Clean Air Act from West Tech School, Pahokee Middle School, or the Palm Beach County School District.

8. The Petitioner's proposal has an adequate explanation for the absence of each item of information, signature, or certification that was cited in Respondent's technical review sheet as missing.

9. Of the eight proposals that were not disqualified, at least two other proposals omitted documents, financial statements, signatures, or certifications from collaborating partners named in such proposals, or from parties that were referred to as "subcontractor(s)." The approved proposals with such omissions were the proposals submitted by a coalition consisting of The Paxon Group, Inc., Palm Beach Community College, the 5060 Group, Street Beet, and The United Way ("the Power Coalition") and the proposal submitted by Gulfstream Goodwill Industries, Inc.

10. The Power Coalition proposal states that it will be "subcontracting" portions of the services referred to in the proposal. However, the proposal is signed only by The Paxon Group, Inc., and Palm Beach Community College. It is not signed

    by any subcontractor, nor does the Power Coalition's proposal include financial statements or certifications regarding Lobbying, Debarment, Drug-Free Workplace, or Clean Air Act from any of its coalition members except for The Paxon Group.

11. Notwithstanding the specific reference in the Power Coalition's proposal to certain services being subcontracted, and the absence from Power Coalition's proposal of signatures, financial statements, or certifications regarding Lobbying, Debarment, Drug-Free Workplace, or Clean Air Act, no deficiencies in this Paxon Group proposal were noted in the Respondent's technical review of that proposal.

12. The proposal submitted by Gulfstream Goodwill Industries, Inc., states that it is "subcontracting" with the Palm Beach County School District. However, this proposal did not include the signature, financial statements, or certifications regarding Lobbying, Debarment, Drug-Free Workplace, or Clean Air Act from the School District.

13. Notwithstanding the specific reference in Gulfstream Goodwill Industries, Inc.'s proposal to subcontracting with the School District, and the absence from Gulfstream Goodwill Industries, Inc.'s proposal of signatures, financial statements or certifications regarding Lobbying, Debarment, Drug-Free Workplace, or Clean Air Act from the School District, no

    deficiencies in the Gulfstream Goodwill Industries, Inc. proposal were noted in the Respondent's technical review of that proposal.

14. The specifications in the subject RFP include language pursuant to which the Respondent "reserves the right to waive informalities and minor irregularities in offers received."

    Those specifications also provide that "[i]f a required certification or document is unavailable at the time of proposal, this must be stated and an explanation provided. Before a contract is offered, the proposer must submit the required certifications provided later in this packet."

15. The specifications in the subject RFP also contain an appeal process which affords all proposers "the right to protest the award decision." The grounds upon which protests will be considered are itemized in the specifications. The itemized grounds for protesting the award decision are different from the grounds available in a proceeding pursuant to Section 120.57(3), Florida Statutes. The procedures for resolving protests under the subject RFP are also set forth in the specifications. Such procedures are different from the procedures provided in Section 120.57(3), Florida Statutes. The specifications in the subject RFP contain no mention of Section 120.57(3), Florida Statutes, nor has the Respondent adopted the rules required by Section 120.57(3)(a), Florida Statutes.

16. The Respondent has had protests of award decisions under previous requests for proposals that contained the same protest resolution language as the instant RFP. All of the prior protests were resolved using the procedures set forth in the specifications. The Respondent has never previously used the procedures set forth in Section 120.57(3), Florida Statutes, to resolve a protest of one of its award decisions.

    CONCLUSIONS OF LAW

    
    

17. The first legal issue that requires attention in this case is whether the Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of this case. For the reasons which follow, it is concluded that it does.

18. The statutory provisions regulating the activities of entities such as the Respondent underwent major revisions during the most recent session of the Florida Legislature. Effective July 1, 2000, Section 445.007, Florida Statutes, contains numerous provisions regarding regional workforce boards such as the Respondent. Most pertinent to the jurisdictional issue in this case is the language of Section 445.007(11), Florida Statutes, which reads as follows:4

    (11) For purposes of procurement, regional workforce boards and their administrative entities are not state agencies, but the boards and their administrative entities must comply with state procurement laws and

    procedures until Workforce Florida, Inc., adopts the provisions or alternative procurement procedures that meet the requirements of federal law. All contracts executed by regional workforce boards must include specific performance expectations and deliverables.

    
    

19. The "state procurement laws and procedures" include the provisions of Section 120.57(3), Florida Statutes, which, among other things, provide that bid protest proceedings involving disputed issues of material fact must be referred to the Division of Administrative Hearings for proceedings under Section 120.57(1), Florida Statutes. Thus, even though the Respondent is not a state agency, by operation of Section 445.007(11), Florida Statutes, it must comply with Section 120.57(3), Florida Statutes. Accordingly, the Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to this proceeding.

20. Addressing attention now to the issues raised in the Written Formal Protest, it is first noted that there are numerous requirements in Section 120.57(3), Florida Statutes, which appear to have been overlooked or disregarded in the course of the history of the subject request for proposals. Section 120.57(3), Florida Statutes, reads as follows:

    1. ADDITIONAL PROCEDURES APPLICABLE TO PROTESTS TO CONTRACT BIDDING OR AWARD. An agency which enters into a contract pursuant to the provisions of ss. 282.303-282.313, chapter 255, chapter 287, or chapters 334-349

       shall adopt rules specifying procedures for the resolution of protests arising from the contract bidding process. Such rules shall at least provide that:

       
       

       1. The agency shall provide notice of its decision or intended decision concerning a bid solicitation or a 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. 2. For any decision of the Division of Purchasing of the Department of Management Services concerning a request by an agency for approval of an exceptional purchase under part I of chapter 287 and the rules of the Division of Purchasing, notice of a decision or intended decision shall be given by posting such notice in the office of the Division of Purchasing. 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 the 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. 120.57(3), Florida Statutes, shall constitute a waiver of proceedings under chapter 120, Florida Statutes."

          
          

       2. 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 filing 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 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.

          
          

       3. Upon receipt of the formal written protest which has been timely filed, the agency shall stop the bid solicitation process or the contract award process until the subject of the protest is resolved by final agency action, unless the agency head sets forth in writing particular facts and circumstances which require the continuance of the bid solicitation process or the contract award process without delay in order to avoid an immediate and serious danger to the public health, safety, or welfare.

          
          

       4. 1. The agency shall provide an opportunity to resolve the protest by mutual agreement between the parties within 7 days, excluding Saturdays, Sundays, and legal holidays, after receipt of a formal written protest. 2. If the subject of a protest is not resolved by mutual agreement within 7 days, excluding Saturdays, Sundays, and legal holidays, after receipt of the formal written protest, and if there is no disputed issue of material fact, an informal proceeding shall be conducted pursuant to subsection (2) and applicable agency rules before a person whose qualifications have been prescribed by rules of the agency. 3. If the subject of a protest is not resolved by mutual agreement within 7 days, excluding Saturdays, Sundays, and legal holidays, after receipt of the formal written protest, and if there is a disputed issue of material fact, the agency

          shall refer the protest to the division for proceedings under subsection (1).

          
          

       5. Upon receipt of a formal written protest referred pursuant to this subsection, the director of the division shall expedite the hearing and assign an administrative law judge who shall commence a hearing within 30 days after the receipt of the formal written protest by the division and enter a recommended order within 30 days after the hearing or within 30 days after receipt of the hearing transcript by the administrative law judge, whichever is later. Each party shall be allowed 10 days in which to submit written exceptions to the recommended order. A final order shall be entered by the agency within 30 days of the entry of a recommended order. The provisions of this paragraph may be waived upon stipulation by all parties.

          
          

       6. In a competitive-procurement protest, no submissions made after the bid or proposal opening amending or supplementing the bid or proposal shall be considered. Unless otherwise provided by statute, the burden of proof shall rest with the party protesting the proposed agency action. In a

    competitive-procurement protest, other than a rejection of all bids, the administrative law judge shall conduct a de novo proceeding to determine whether the agency's proposed action is contrary to the agency's governing statutes, the agency's rules or policies, or the bid or proposal specifications. The standard of proof for such proceedings shall be whether the proposed agency action was clearly erroneous, contrary to competition, arbitrary, or capricious. In any bid-protest proceeding contesting an intended agency action to reject all bids, the standard of review by an administrative law judge shall be whether the agency's intended action is illegal, arbitrary, dishonest, or fraudulent.

21. The dispute resolution language at pages 10 and 11 of the RFP is inconsistent in several respects with the procedures set forth in the language quoted immediately above. Similarly, the dispute resolution language at pages 10 and 11 of the RFP is inconsistent with the standard of proof set forth in the language quoted immediately above.

22. By reason of the inconsistencies mentioned above, the only way in which the Respondent can comply with the letter of the requirement in Section 445.007(11), Florida Statutes, that it "must comply with state procurement laws and procedures" is to terminate the current procurement effort and begin anew with specifications and procedures consistent with Section 120.57(3), Florida Statutes, and other state statutes related to procurement.

23. In the event the Respondent should be inclined to go forward with the current procurement effort, then, for the reasons which follow, it should conclude that the Petitioner's proposal is facially sufficient and is not subject to disqualification.

24. In the RFP specifications, the Respondent "reserves the right to waive informalities and minor irregularities." Those specifications also allow a proposer to submit an explanation if "a required certification or document is unavailable at the time of proposal." The omissions in the Petitioner's proposal are

either minor irregularities or have been adequately explained in the proposal. Further, similar omissions were waived in other proposals that were not disqualified. Under these circumstances, whether one proceeds under the dispute resolution process set forth in the RFP or one proceeds under section 120.57(3), Florida Statutes, the result is the same; it would be arbitrary and capricious to disqualify the Petitioner's proposal. Accordingly, if the Respondent elects to go forward with the current procurement effort, the disqualification should be set aside, and the Petitioner's proposal should be considered along with the other successful proposals.

RECOMMENDATION

On the basis of all of the foregoing, it is RECOMMENDED that a final order be issued in this case to the following effect: Concluding that the current procurement process should be terminated and that the procurement should be begun anew with specifications and procedures consistent with the requirements of Section 120.57(3), Florida Statutes, and other state statutes related to procurement. Alternatively, should the Respondent elect to continue to go forward with the instant procurement effort, an order should be issued setting aside the disqualification of the Petitioner's proposal, and the Petitioner's proposal should be considered along with the other successful proposals.

DONE AND ENTERED this 20th day of October, 2000, in

Tallahassee, Leon County, Florida.

MICHAEL M. PARRISH

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 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 20th day of October, 2000.

ENDNOTES

1/ The materials requested were: (a) the charter or certificate of incorporation of the Respondent, (b) the by-laws of the Respondent, (c) any rules or regulations adopted by the Respondent, (d) any state or federal statutes that authorize the creation of the Respondent, (e) and state or federal statutes that regulate or authorize the functions of the Respondent, (f) any state or federal rules or regulation that authorize the creation of the Respondent, (g) any state or federal rules or regulations that regulate or authorize the functions of the Respondent, and (h) any state or federal statutory provisions that support the conclusion that the Respondent is a "state agency."

2/ The Respondent's document titled Final Order of Administrative Law Judge has been treated as the Respondent's proposed recommended order.

3/ Although the Petitioner's reply was not a filing authorized by statute, rule, or order, it has been accepted and considered as appropriate in view of the Respondent's unexpected reversal of position. Had the Petitioner requested leave to file the reply, leave would have been granted.

4/ One cannot help but wonder why counsel for neither party mentioned the provisions of Section 445.007(11), Florida

Statutes, during the course of any of their oral or written arguments on the jurisdictional issue.

COPIES FURNISHED:

Frank R. Brady, Esquire Brady & Brady, P.A.

370 West Camino Gardens Boulevard Suites 336 and 337

Boca Raton, Florida 33432

Chandler R. Finley, Esquire

2051 Martin Luther King, Jr. Boulevard Suite 302

Riviera Beach, Florida 33404

David L. Feingold, Esquire Feingold & Kam

3300 PGA Boulevard, Suite 410

Palm Beach Gardens, Florida 33410

Kenneth E. Montgomery, Executive Director

Palm Beach County Workforce Development Board, Inc. Wages Coalition

2051 Martin Luther King, Jr., Boulevard Suite 302

Riviera Beach, Florida 33404

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: 00-001527BID

Orders for Case No: 00-001527BID