STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MIC DEVELOPMENT, LLC,

Petitioner,

vs.

DEPARTMENT OF TRANSPORTATION,

Respondent.

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) Case No. 05-3815BID

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RECOMMENDED ORDER

This case came before Administrative Law Judge John G. Van Laningham for final hearing by video teleconference on January 30, 2006, at sites in Tallahassee and Miami, Florida.

APPEARANCES

For Petitioner: Joseph M. Goldstein, Esquire

Shutts & Bowen, LLP Wachovia Center, Suite 2100

200 East Broward Boulevard

Fort Lauderdale, Florida 33301

For Respondent: C. Denise Johnson, Esquire

Department of Transportation Haydon Burns Building

605 Suwannee Street, Mail Station 58

Tallahassee, Florida 32399-0450 STATEMENT OF THE ISSUE

The issue in this case is whether Petitioner, a disappointed bidder, waived its right to pursue administrative remedies by failing timely to file a notice of intent to protest.

PRELIMINARY STATEMENT

On June 14, 2005, Petitioner MIC Development, LLC filed a notice of intent to protest Respondent's decision, which had been communicated via letters dated May 31, 2005, to reject all offers received in response to a request for proposals to develop a transportation facility at the Miami International Airport. On June 23, 2006, Petitioner filed its formal written protest. Respondent Department of Transportation initially made a referral to the Division of Administrative Hearings ("DOAH") on August 11, 2005, but jurisdiction was relinquished to Respondent shortly thereafter, at the parties' joint request, to facilitate an attempt to resolve the dispute through mediation. The mediation was unsuccessful, and Respondent returned this file to DOAH on October 14, 2005.

(Interestingly, Respondent's referral to DOAH was made for the sole purpose of litigating the issue of whether Petitioner's notice of intent to protest had been timely filed. Petitioner never challenged the propriety of this limited referral, which effectively severed Respondent's affirmative defense (waiver) from Petitioner's protest of the agency's decision to reject all bids. Given Petitioner's acquiescence to Respondent's framing of the issue, the undersigned conducted the hearing on Respondent's terms. The undersigned expresses no opinion, however, as to whether Respondent's referral complied with,

among other statutes, Section 120.57(3)(d)3., Florida Statutes, which provides that "if there is a disputed issue of material fact, the agency shall refer the protest to [DOAH] for [further] proceedings.")

The final hearing took place as scheduled on January 30, 2006. Respondent, which had the burden of proof, called four witnesses: Salvador Ramos, Hiriana Fujita, Nick Serianni, and Lesyani (Leslie) Garcia. Respondent also presented the deposition testimony of Leticia Suarez, Margaret Higgins, and Donna Wright. Respondent's Exhibits 1, 2, 3, and 12 were offered and received in evidence.

During its case, Petitioner called Jose Hevia, Rafael Rodon, and (by deposition) Harvey Shone. Additionally, Petitioner's Exhibits 3-5, 10, 11, 16, 18, 20, 22, 23, 27, and

28 were admitted.

The final hearing transcript was filed on March 6, 2006.

Thereafter, on March 20, 2006, the parties timely filed proposed recommended orders, which have been considered.

Unless otherwise indicated, citations to the Florida Statutes refer to the 2005 Florida Statutes.

FINDINGS OF FACT

1. On November 26, 2002, Respondent Department of Transportation ("Department") issued a request for proposals on a contract for the development of a transportation facility,

   which was to be located adjacent to the Miami International Airport. On March 3, 2002, Petitioner MIC Development, LLC ("MIC") submitted the only proposal that the Department received in response to this solicitation.

2. The next activity of relevance to this case occurred three years later, on May 20, 2005, when a selection committee decided to reject all proposals (as mentioned, there was just one) and discontinue the procurement.

3. By two letters dated May 31, 2005, each of which was addressed to a principal of MIC and marked "certified mail," "return receipt requested," the Department notified MIC of its decision. It is undisputed that the Department did not post its decision on the internet.

4. There is, however, a genuine and spirited dispute concerning the date on which MIC received the Department's decision-letters; as a result, the evidence is in conflict regarding whether MIC received the Department's notice of rejection on June 3, 2005, as the Department contends, or on June 10, 2005, as MIC maintains. It is not necessary to resolve this particular dispute because——for reasons that will soon become apparent——the contested fact is immaterial.

5. On June 14, 2005, MIC filed a notice of intent to protest the Department's decision to reject its proposal. Nine days later, on June 23, MIC filed its formal written protest.

6. The Department insists that MIC's initial protest- notice, having been filed more than 72 hours after MIC's receipt of the notice of rejection, was untimely, thereby constituting a waiver of the right to a hearing. The Department urges that this case be dismissed on that basis. MIC asserts that its notice was filed within 72 hours after receiving the Department's letters——which it claims were defective in any event and hence legally insufficient to trigger the 72-hour filing period——and that, even its protest-notice were untimely, equitable principles should be invoked to allow this case to go forward notwithstanding the filing delay.

   CONCLUSIONS OF LAW

   
   

7. DOAH has personal and subject matter jurisdiction in this proceeding pursuant to Sections 120.569, and 120.57(1), Florida Statutes.

8. It is well settled that when, as here, an agency seeks to establish a waiver of the right to Chapter 120 proceedings "based upon the passage of time following actions claimed as final," it is the agency's burden to "show that the party affected by such action has received notice sufficient to commence the running of the time period within which review must be sought." Florida League of Cities, Inc. v. Administration

   Com., 586 So. 2d 397, 415 (Fla. 1st DCA 1991); see also, e.g., McIntyre v. Seminole County Sch. Bd., 779 So. 2d 639, 641-42

   (Fla. 5th DCA 2001)("For an agency to establish that a person has waived his right to an administrative hearing, the agency must demonstrate that the person has been advised of the action to be taken and the basis thereof, the right to an administrative hearing, a clear point of entry into the administrative process, and a deadline by which a hearing must be requested.")

9. Thus, the threshold question presented in this case is whether the Department properly gave MIC a clear point of entry into an administrative proceeding to challenge the intended decision to reject all bids. If, as MIC contends, the Department failed to give a legally sufficient clear point of entry, then the (un)timeliness of MIC's notice of intent to protest would be a moot issue, for a disappointed bidder cannot be deemed to have waived administrative remedies unless the letting authority properly provided notice of its intended procurement decision more than 72 hours before the affected party finally requested a hearing. See Northrop & Northrop

   Bldg. Partnership v. State, Dep't of Corrections, 528 So. 2d 1249, 1249-50 (Fla. 1st DCA 1988)(agency failed to provide notice of its bid decision in compliance with statute; therefore, delay in filing protest was not a waiver of administrative proceedings); Capital Copy, Inc. v. University of Florida, 526 So. 2d 988, 988-89 (Fla. 1st DCA 1988)(posted bid

   tabulation lacked statutorily required notice and thus failed to afford protester a clear point of entry, mooting the question whether the protest had been timely filed).

10. The legislature has given explicit instructions regarding the notice that must be provided when a decision is made concerning a procurement. Section 120.57(3), Florida Statutes, provides in pertinent part as follows:

    1. ADDITIONAL PROCEDURES APPLICABLE TO PROTESTS TO CONTRACT SOLICITATION OR AWARD.-- Agencies subject to this chapter shall use the uniform rules of procedure, which provide procedures for the resolution of protests arising from the contract solicitation or award process. Such rules shall at least provide that:

       1. The agency shall provide notice of a decision or intended decision concerning a solicitation, contract award, or exceptional purchase by electronic posting. This notice shall contain the following statement: "Failure to file a protest within the time prescribed in section 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 notice of decision or intended decision. . . . 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. Saturdays, Sundays, and state holidays shall be excluded in the computation of the 72-hour time periods provided by this paragraph.

          
          

          (Emphasis added.)

          
          

11. The term "electronic posting" means "the posting of solicitations, agency decisions or intended decisions, or other matters relating to procurement on a centralized Internet website designated by the [D]epartment [of Management Services ("DMS")] for this purpose." § 287.012(11), Fla. Stat. In response to this statutory mandate, DMS has directed, by rule, that

    [a]ll [protestable] agency decisions or intended decisions [involving procurement] shall be electronically posted on the myflorida.com website.

    
    

    Fla. Admin. Code R. 60A-1.021.

    
    

12. No interpretation of Section 120.57(3)(a), Florida Statutes, is required to understand the clear and unambiguous directive that agency decisions respecting procurement must at

    least be electronically published on the internet, pursuant to uniform rules of procedure that shall provide for no less.

    While the statute does not necessarily prohibit agencies from giving notice of such decisions by other means in addition to

    electronic posting, it clearly does not authorize the exclusive use of any method(s) of giving notice except electronic posting.

13. Similarly, no interpretation of Section 120.57(3)(b) is required to understand the clear and unambiguous language concerning the 72-hour period within which a notice of protest must be filed to preserve the right to a hearing. According to the plain meaning of the first sentence of paragraph (b), this 72-hour period commences only upon "the posting of the notice of decision or intended decision." It is obvious that the "posting" to which paragraph (b) refers is the "electronic posting" that paragraph (a) requires.

14. Relying on the plain language of Section 120.57(3), Florida Statutes, the undersigned finds and concludes that the 72-hour period for initiating a bid protest does not begin until the agency electronically posts notice of its intended decision. Based on the plain language of Section 287.012(11) and Rule 60A- 1.021, the undersigned finds and concludes that the act of electronic posting is not perfected until notice of the intended decision is published on the myflorida.com website.

15. As seen above, Section 120.57(3) regulates bid protests indirectly by requiring that uniform rules be adopted to govern such proceedings, which rules must, at a minimum, contain certain provisions, including those just discussed relating to electronic posting and the 72-hour filing period. The uniform procedural rules for bid protests, which agencies must use according to Section 120.57(3), are found in Florida

    Administrative Code Chapter 28-110. Regarding the purpose and scope of this chapter, Rule 28-110.001 states:

    1. This chapter supplements the statutes on protests that arise from the contract procurement process under Chapters 24, 255, 287, 334 through 349, Sections 282.303 through 282.313, F.S., and other statutes applicable to agencies as defined in Section 120.52(1), F.S.

    2. Policies and procedures are established primarily by Section 120.57(3), F.S. Interested persons must follow the requirements of those statutes as well as these rules. Other statutes may apply to specific circumstances.

    (Emphasis added.)

    
    

16. It is a matter of undisputed fact that the Department failed electronically to post, on the myflorida.com website, its decision to reject all bids. Thus, the Department did not, the undersigned finds and concludes, "follow the requirements of" Section 120.57(3), Florida Statutes, as required by Florida Administrative Code Rule 28-110.001(2).

17. The Department contends that it was not required to comply with a clear and unambiguous statutory requirement (namely, that notice of its decision be posted electronically on a centralized website) because of Florida Administrative Code Rule 28-110.003(3). This Rule provides as follows:

    A notice of protest should not be filed before the 72-hour period [for filing a notice of intent to protest] begins. The 72-hour period [prescribed in Section 120.57(3)(b), Florida Statutes,] begins upon

    receipt of a copy of the ITB or RFP; when notice of a single source approval or disapproval or negotiation approval or disapproval is posted, or otherwise received if not posted; when a bid or proposal tabulation is posted; or when notice is otherwise received if not posted.

    
    

    (Emphasis added.) The Department reasons that since, under Rule 28-110.003(3), the 72-hour period commences when a notice "not posted" is "received" by the affected party, the Rule implicitly authorizes an agency to provide notice exclusively by means other than electronic posting (e.g. by certified mail).

18. The Department's argument is unpersuasive. To begin, Rule 28-110.003(3) does not purport to prescribe the acceptable method(s) by which notice may be given. Rather, it proscribes (or at least tries to discourage) the premature filing of a notice of intent to protest. The Rule thus tells when the 72- hour period starts to run, not in the context of describing what an agency must do to provide a legally sufficient point of entry (that is, one which closes if not timely exploited, resulting in a waiver of administrative remedies), but in the context of explaining that the notice of intent to protest should be filed after that commencement point, not before.

19. Being primarily concerned with the notice of protest, the Rule presupposes that the agency's notice of decision has conformed to the dictates of Section 120.57(3), which statute, as Rule 28-110.001(2) reminds and instructs, everyone "must

    follow" as the "primar[y]" source of procedural guidance. In keeping with its focus on the protest-notice, Rule 28-110.003(3) does not require that the agency's decision-notice contain a warning that the failure to timely initiate a protest shall constitute a waiver of Chapter 120 proceedings; it assumes the notice's compliance with Section 120.57(3)(a) in this regard.

    Nor does the Rule require that the agency give notice in any particular manner; it assumes that the agency has given notice in a statutorily compliant manner. Consequently, it is concluded that the term "notice," as used in Rule 28-110.003(3) in reference to the agency's notice of decision, is properly understood as meaning a statutorily compliant notice.

20. That said, it is true that the Rule assumes an agency can give a statutorily compliant notice, or a legally sufficient one at any rate, by some method other than posting. It is nevertheless incorrect to conclude, as the Department does, that the Rule therefore by implication (a) authorizes such other methods to be used instead of the one statutorily required method, i.e. electronic posting, and (b) gives legal effect to notices that fail to comply with Section 120.57(3). This is because when the Rule was adopted in April 1997 (and it has not since been amended), Section 120.57(3)(a) authorized the giving of notice by several different means, including (depending on the type of decision) U.S. mail, hand delivery, certified mail,

    "other express delivery," and physically posting notice at a designated location.1 See § 120.57(3)(a), Fla. Stat. (2001). The Rule merely acknowledges the several methods of providing notice that were statutorily permissible at the time of the Rule's adoption.

21. In 2002, the legislature substantially revised Section 120.57(3), prescribing electronic posting as the exclusive required means of publishing an agency's procurement decisions. See 2002 Fla. Laws ch. 207. While the undersigned believes it would have been better for the Administration Commission to conform the uniform rules of procedure to the revised statute, it was not essential that Chapter 28-110 be revised because Rule 28-110.001(2) already made clear the requirement that Section 120.57(3) and other governing statutes must be followed as the primary sources of policies and procedures. Plainly, therefore, the Administration Commission did not intend to adopt——and in the undersigned's opinion has not adopted——any rules of procedure that would enable an agency to disobey a controlling statute such as Section 120.57(3). Rather, it obviously intended that the applicable statutes be followed, first, and thereafter the rules of procedure——which are meant to supplement, not supplant, the statutes; in the event of a conflict, the rules yield, not the reverse.

22. The undersigned therefore rejects the notion that Rule 28-110.003(3) somehow gave the Department a warrant to disregard Section 120.57(3). The Department, in short, was required to follow the uniform rules (see § 120.57(3), Fla. Stat.), which required it to follow Section 120.57(3) (see Fla. Admin. Code R. 28-110.001(2)), which required it to electronically post its notice of rejection, if it desired to trigger the 72-hour filing period. See § 120.57(3)(a), (b), Fla. Stat. Had the Department properly posted its decision-notice in the statutorily required manner, Rule 28-110.003(3) would not have been offended; by proceeding as it did, Section 120.57(3) was.

23. Assuming for argument's sake that Rule 28-110.003(3) can reasonably be construed in the manner the Department posits,

    i.e. as authorizing the provision of a legally sufficient notice exclusively by means other than electronic posting, the undersigned still concludes that the only type of notice which operates to trigger the 72-hour period is that which is statutorily required. In so concluding, the undersigned relies on the principle that

    [a]n administrative rule or regulation is operative and binding on those coming within its terms from its effective date until it is modified or superseded by subsequent legislation or by subsequent[ly adopted] regulations . . . .

    Hulmes v. Division of Retirement, Dept. of Admin., 418 So. 2d 269, 270 (Fla. 1st DCA 1982),rev. denied, 426 So. 2d 26 (Fla. 1983). When a rule is superseded by legislation enacted after the rule's effective date, the rule loses all force and effect immediately upon such legislation's becoming law. Florida Dept. of Revenue v. A. Duda & Sons, Inc., 608 So. 2d 881, 884 (Fla.

    5th DCA 1992), rev. denied, 621 So. 2d 431 (Fla. 1993)(rule relied upon by taxpayer had been superseded by statutory amendment in 1987 and thus was without "force or effect" in 1988 at time of relevant transactions, despite fact that rule was not amended to conform to statute until 1989).

24. Thus, as an alternative basis for deciding this case, the undersigned concludes that, to the extent Rule 28-110.003(3) might seem to allow agencies to circumvent the plain language of Section 120.57(3), it is presently inoperative, having been superseded by the subsequently enacted, 2002 amendments to Section 120.57(3).

25. Because the Department's notice of decision was defective, the 72-hour period never commenced. Consequently, MIC cannot be deemed to have waived its right to a Chapter 120 hearing. See Northrop & Northrop Bldg. Partnership v. State, Dep't of Corrections, 528 So. 2d 1249, 1249-50 (Fla. 1st DCA 1988); Capital Copy, Inc. v. University of Florida, 526 So. 2d 988, 988-89 (Fla. 1st DCA 1988). In light of this conclusion,

it is not necessary to examine the other issues, namely excusable neglect and equitable tolling, that MIC has raised.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department refer this matter to DOAH for a final hearing on the merits of MIC's protest of the rejection of its proposal.

DONE AND ENTERED this 20th day of April, 2006, in Tallahassee, Leon County, Florida.

S

JOHN G. VAN LANINGHAM

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 April, 2006.

ENDNOTE

1/ The references in Rule 28-110.003(3) to "posted" notices, by the way, denote notices that have been literally posted, i.e. affixed to a door or wall, as opposed to notices published on the internet, which are "posted" in a figurative sense.

COPIES FURNISHED:

Joseph M. Goldstein, Esquire Shutts & Bowen, LLP

Wachovia Center, Suite 2100

200 East Broward Boulevard Fort Lauderdale, Florida 33301

C. Denise Johnson, Esquire Department of Transportation

Haydon Burns Building, Mail Station 58 605 Suwannee Street

Tallahassee, Florida 32399-0450

James C. Myers, Clerk of Agency Proceedings Department of Transportation

Hayden Burns Building

605 Suwannee Street, Mail Station 58

Tallahassee, Florida 32399-0450

Pamela Leslie, General Counsel Department of Transportation Hayden Burns Building

605 Suwannee Street, Mail Station 58

Tallahassee, Florida 32399-0450

José Abreu, Secretary Department of Transportation Hayden Burns Building

605 Suwannee Street

Tallahassee, Florida 32399-0450

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: 05-003815BID

Orders for Case No: 05-003815BID