STATE OF FLORIDA DIVISION OF ADMINISTRATIVE HEARINGS CUSHMAN AND WAKEFIELD OF FLORIDA, INC., Petitioner, vs. Case Nos. 13 3894BID 13 3895BID DEPARTMENT OF MANAGEMENT SERVICES, Respondent, a nd CBRE, INC., AND VERTICAL INTEGRATION, INC., Intervenors. / RECOMMENDED ORDER Pursuant to notice, a formal hearing was held in this case on November 12 and 13, 2013, in Tallahassee, Florida, before W. David Watkins, the duly designated Administrati ve Law Judge of the Division of Administrative Hearings. APPEARANCES For Petitioner : Donna E. Blanton, Esq uire Radey Law Firm 301 South Bronough, Suite 200 Tallahassee, Florida 32301 For Respondent: Matthew F. Minno, Esq uire Katie Privett, Esq uire Department of Management Services 4050 Esplanade Way Tallahassee, F lorida 32399 For Intervenor CBRE, Inc.: Robert H. Hosay, Esq uire James A. McKee, Esq uire Foley and Lardner, LLP 106 East College Avenue, Suite 900 Tallahassee, Florida 32301 For Intervenor Vertical Integration, Inc.: Frederick J. Springer, Esq uire Ryan B. Hobbs, Esq uire Bryant Miller Olive, P.A. 101 North Monroe Street, Suite 900 Tallahassee, Florida 32301 STATEMENT OF THE ISSUE Pursuant to c hapter 287, Florida Statutes, and section 255.25, Florida Statutes, 1 / the Depa rtment of Management Services ( DMS) released an Invitation to Negotiate for a contract to provide tenant broker and real estate consulting services to the S tate of Florida under Invitation t o Negotiate No. DMS 12/13 007 ( ITN). After evaluating the replies, negotiating with five vendors, and holding public meetings, DMS posted a notice of intent to a ward a contract to CBRE, Inc. ( CBRE) and Vertical Integration, Inc. (Vertical ). A t issue in this proceeding is whether DMSÓs intended decision to award a contract for tenant broker and real estate consulting services to CBRE and Vertical is contrary to DMSÓs governing statutes, its rules or policies, or the ITNÓs specifications , or was otherwise clearly erroneous, contrary to competition, arbitrary, or capricious . PRELIMINARY STATEMENT On March 18, 2013, the Department issued ITN DMS 12/13 007 2 / seeking vendors to provide tenant broker and real estate consulting services to the s tate of Florida. Thirteen vendors submitte d r eplies to the ITN, including Cushman and Wakefield of Florida, Inc. ( Cushman ), Jones Lang LaSalle Americas, Inc. ( JLL ) , Vertical, and CBRE. DMS subsequently issued a notice of its intent to negotiate with JLL, Vertica l, CBRE, and one other vendor . A fter completion of the negotiations, DMS published its request for best and final offers ("RBAFOs") from each vendor. The vendors then submitted their best and final offers ("BAFOs"). The Department thereafter posted a No tice of Agency Decision stating its intent to award contracts to Vertical and CBRE. Cushman and JLL protested the Department's Notice of Agency Decision and intended awards. The protests were assigned DOAH C ase Nos. 13 3894BID and 13 3895BID, and were con solidated pursuant to Florida Administrative Code Rule 28 106.108. Cushman and JLL filed Amended Protest Petitions on November 12, 2013. Vertical and CBRE were granted leave to intervene in the consolidated proceedings. On November 7, 2013, Cushman filed a motion to a mend its petition . The amended petition raised two new issues: CBRE was not responsive to the ITN because CBRE included a charge for acquisitions and dispositions in its BAFO , which was co ntrary to the RBAFO and the ITN. The amended petitio n also alleged that the ITN and the contract resulting from the ITN violate section 255.25, Florida Statutes; thus, DMS does not have the authority to award the contract. CBRE, Vertical, and DMS objected to the amended petition, and CBRE filed a motion in limine to exclude evidence and arguments contesting the specifications of the ITN . 3 / The motion to file the amended petition was granted at the outset of the hearing, and the motion in limine was denied. On November 12, 2013, JLL filed a m otion in l imine to exclude evidence and argument regarding JLL's responsiveness and standing to maintain its protest. A fter hearing argument of counsel, this motion was denied . On November 12, 2013, CBRE filed a m otion to c ompel the production of certain documents relat ed to JLL's responsiveness and standing. The mot ion was granted, and responsive documents were ordered to be produced by JLL by the end of the first day of hearing. Also on November 12, 2013, CBRE filed a m otion for o fficial r ecognition of the fact that c ertain JLL representatives do not hold Florida real estate licenses. Ruling on the motion was reserved pending confirmation by JLL's counsel of the accuracy of the licensing documents. The parties filed a Joint Pre Hearing Statement, which stipulated to c ertain facts and the admission of a number of joint exhibits. The final hearing was held on November 12 and 13, 2013, as noticed. After opening statements on the first day of hearing, JLL made an ore tenus motion for leave to dismiss its Amended Protest Petition. The motion was granted and JLL was dismissed from the proceeding, leaving only Cushman's Amended Protest Petition pending. 4 / The parties stipulated to the introduction of 32 joint exhibits into evidence, including the transcripts of the depositi ons of Beth Sparkman and Bryan Bradner, two members of the evaluation and negotiation teams for the ITN. The following witnesses testified: Beth Sparkman, Bureau Chief of Leasing of DMS, and DMSÓs designated agency representative; Larry D. Richey, Senior M anaging Director of Cushman; and Janice Ellison, Section Lead in the Land Asset Management Section of the Department of Environmental Protection (ÐDEPÑ). Joint Exhibits 1 32 were received into evidence. CBRE Exhibits 1 3, 7 9, 13 and 14, were admitted wi thout o bjection. VerticalÓs Exhibits 1 A and 1 C were admitted without objection. The three volume T ranscript of the final hearing was filed with the Division of Administrati ve Hearings on December 2, 2013, and all remaining parties filed P roposed R ecomme nded O rders on December 12, 2013. The evidence presented at the hearing and the submissions from the parties have been carefully considered in the preparation of this Recommended Order. FINDINGS OF FACT Based on the demeanor and credibility of the witnes ses and other evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made: Background 5 / 1 . DMS released Invitation to Negotiate No . DMS 12/13 007 on March 18, 2013, and released a revised v ersion of the ITN on May 14, 2013, for the selection of a company to provide tenant broker and real estate consulting services to the S tate of Florida. 2 . Thirteen vendors responded to the ITN. The replies were evaluated by five people: Bryan Bradner, De puty Director of REDM of DMS; Beth Sparkman, Bureau Chief of Leasing of DMS; Rosalyn (ÐRozÑ) Ingram, Chief of Procurement, Land and Leasing of the Department of Corrections; Clark Rogers, Purchasing and Facilities Manager of the Department of Revenue; and Janice Ellison, Section Lead in the Land Asset Management Section of the Department of Environmental Protection. 3 . Five vendors advanced to the negotiation stage: Cushman (score of 87), JLL (score of 87), CBRE (score of 87), Vertical (score of 89), and DTZ (score of 86). DTZ is not a party to this proceeding. The negotiation team consisted of Beth Sparkman, Bryan Bradner, and Roz Ingram. Janice Ellison participated as a subject matter expert. 4 . DMS held a first round of negotiations and then held a public meeting on July 16, 2013. 5 . DMS held a second round of negotiations and then held a second public meeting on August 1, 2013. A recording of this meeting is not available, but minutes were taken. Also on August 1, 2013, DMS posted Addendum 8, th e Request for Best and Final Offers . This Addendum contained the notice that ÐFailure to file a protest within the time prescribed in s ection 120.57(3) . . . shall constitute a waiver of proceedings under chapter 120 of the Florida Statutes.Ñ 6 . The ven dors each submitted a BAFO. DMS held a final public meeting on August 14, 2013, at which the negotiation team discussed the recommendation of award. All three members of the negotiation team recommended Vertical as one of the two vendors to receive the a ward. For the second company, two of the three negotiation team members recommended CBRE and one negotiation team member recommended JLL. 7 . DMS prepared a memorandum, dated August 14, 2013, describing the negotiation teamÓs recommendation of award. Th e memorandum comprises the following sections: Introduction; The Services; Procurement Process (subsections for Evaluations and Negotiations ); Best value (subsections for Selection Criteria, Technical Analysis, Price Analysis, and Negotiation TeamÓs Recomm endation); and Conclusion. Attached to the memorandum as Attachment A was a memorandum dated April 30, 2013, appointing the evaluation and negotiation committees, and attached as Attachment B was a spreadsheet comparing the vendorsÓ BAFOs. 8 . DMS posted the N otice of I ntent to A ward to CBRE and Vertical on August 16, 2013. 9 . Cushman and JLL timely filed notices of intent to protest the Intent to Award. 10 . On August 29, 2013, JLL timely filed a formal protest to the Intent to Award. 11 . On August 30, 2013, Cushman timely filed a formal protest to the Intent to Award. 12 . An opportunity to resolve the protests was held on September 9, 2013, and an impasse was eventually reached. 13 . On October 10, 2013, DMS forwarded the formal protest petitions to D OAH. 14 . An Order consolidating JLLÓs protest and CushmanÓs protest was entered on October 15, 2013. Scope of Real Estate Services in the ITN 15 . Prior to the statutory authority of DMS to procure real estate brokerage services, agencies used their ow n staff to negotiate private property leases. Section 255.25(h), Flor ida Statutes, arose out of the l egislatureÓs desire for trained real estate professionals to assist the S tate of Florida with its private leasing needs. The statutorily mandated use of tenant brokers by agencies has saved the state an estimated $46 million dollars. 16 . The primary purpose of the ITN was to re procure the expiring tenant broker contracts to assist state agencies in private sector leasing transactions. Once under contra ct, the selected vendors compete with each other for the opportunity to act on behalf of individual agencies as their tenant broker, but there is no guarantee particular vendors will get any business. The core of the services sought in th e ITN was lease t ransactions. The ITN also sought to provide a contract vehicle to allow vendors to provide real estate consulting services, including strategies for long and short term leases, space planning, and space management as part of the negotiation for private le ases. 17 . As part of providing real estate consulting services, vendors would also perform independent market analyses (IMAs) and broker opinions of value (BOVs ) or broker price opinions (B PO s ). In almost all instances, this would be provided at no char ge as part of the other work performed for a commissionable transaction under the resulting contract. However, the resulting contract was designed to allow agencies to ask for an IMA or BOV to be performed independently from a commissionable transaction. 18 . In addition to the primary leasing transactions, the contract would also allow state agencies to use the vendors for other services such as the acquisition and disposition of land and/or buildings. These services would be performed according to a Sc ope of Work prepared by the individual agency, with compensation at either the hourly rat es (set as ceiling rates in the ITN), set fees for the service/project, or at the percentage commission rate negotiated between the vendor and the individual agency. However, these services were ancillary to the main purpose of the contract, which was private leasing. 19 . In Florida, m ost state agencies are not authorized to hold title to land. However, the Department of Environmental Protection (DEP ) serves as staff for the Board of Trustees of the Internal Improvement Trust Fund (ÐBoardÑ), which holds title to land owned by the S tate of Florida. In that capacity, DEP buys and sells land and other properties on behalf of the Board. DEP recently began using the current DMS tenant broker contract for acquisitions and dispositions. The process was cumbersome under the current contract, so DEP asked to participate in the ITN in order to make the contract more suitable for their purposes. The ITN was revised to in clude DEPÓs proposed changes, and DMS had Ms. Ellison serve first as an evaluator and later as a subject matter expert. At hearing, Ms. Ellison testified that she was able to participate fully, that her input was taken seriously, and that the proposed con tract adequately addressed DEPÓs concerns. 20 . While DEP anticipated that under the proposed contract it would use more BOVs than it had previously, there was no guarantee that DEP would use the proposed contract. DEP is not obligated to use the contrac t and maintains the ability to procure its own tenant brokers. Additionally, administration and leadership changes may cause a switch of using in house agency employees instead of tenant brokers to perform real estate acquisition and disposition services. Specifics of the ITN 21 . The ITN directed vendors to submit a reply with the following sections: a cover letter; completed attachments; pass/fail requirements; Reply Evaluation Criteria; and a price sheet. The Reply Evaluation Criteria included Part A (Qualif ications) and Part B (Business P lan). Qualifications were worth 40 points, the Business Plan was worth 50 points, and the pr oposed pricing was worth 10 points. For the Business Plan, the ITN requested a detailed narrative description of how the ve ndors planned to meet DMSÓs needs as set forth in section 3.01, Scope of Work. The ITN requested that vendors describe and identify the current and planned resources and employees to be assigned to the project and how the resources would be deployed. 22 . Section 3.01, Scope of Work, states that the primary objective of the ITN is to Ðidentify brokers to assist and represent the Department and other state agencies in private sector leasing transactions.Ñ The ITN states that the contractor will provide st ate agencies and other eligible users with real estate transaction and management services, which include Ðdocument creation and management, lease negotiation and renegotiation, facility planning, construction oversight, and lease closeout, agency real est ate business strategies, pricing models related to relocation services, project management services, acquisition services, and strategic consulting.Ñ Id. The ITN also specifie s: Other real estate consulting services such as property acquisitions, disposi tions, general property consulting, property analysis and promotions, property marketing, property negotiation, competitive bidding or property, property auctions and direct sales or those identified in the reply or negotiation process and made part of the Contract (e.g., financial services, facilities management services, lease v. buy analys e s). 23 . The ITN lists the following duties the contractor will perform: 1. Act as the stateÓs tenant broker, to competitively solicit, negotiate and develop priv ate sector lease agreements; 2. Monitor landlord build out on behalf of state agencies; 3. Provide space management services, using required space utilization standards; 4. Provide tenant representation services for state agencies and other eligible users during the term of a lease; 5. Identify and evaluate as directed strategic opportunities for reducing occupancy costs through consolidation, relocation, reconfiguration, capital investment, selling and/or the building or acquisition of s pace; 6. Assist with property acquisitions, dispositions, general property consulting, property analysis and promotions, property marketing, property negotiation, competitive bidding property, property auctions and direct sales ; and 7. Provide requested related real estate consulting s ervices. 24 . The ITN set the commission percentage for new leases at 4 percent for years 1 10 and 2 percent for each year over 10 years; 2 percent for lease renewals, extensions, or modifications; and 2 percent for warehouse or storage space leases. Id. For Ðother services,Ñ the ITN states: With respect to all other services (e.g., space management services, general real estate consulting services, property acquisitions, dispositions, general property consult ing, property analysis and promotions, property marketing, property negotiation, competitive bidding or property, property auctions and direct sales), compensation will be as outlined in an agency prepared Scope of Work and will be quoted based on hourly r ates (set as ceiling rates in this ITN), set fees for the service/project or by percentage commission rate as offered and negotiated by the broker and the using agency. 25 . The ITN also requir ed that vendors specify the number of credit hours to be give n annually to DMS. Each vendor gives a certain number of credit hours at the start of each year under the contract. The state earns additional credit hours as the vendors perform transactions. DMS manages the pool of accumulated credit hours and gives t hem to individu al agencies to use on a case by case basis as payment for individual projects. These credit hours are commonly allocated to pay for IMAs and BOVs that are not part of commissionable transactions. With the exception of one legislatively man da ted project, DMS has never exhaust ed its pool of credit hours. 26 . The ITN further specified that IMAs and BOVs must be offered at no cost when performed as part of a commissionable transaction. Historically , most IMAs and BOVs are performed as part of a commissionable transaction. They have only been performed separately from a commissionable transaction a handful of times under the current contract, and many of these were still provided at no cost through the allocation of free credit hours available to the agencies. Therefore, most IMAs and BOVs to be performed under the proposed contract will likely be at no cost. 27 . The ITN states that p oints to be awarded under the price criterion will be awarded based on the number of annual credit hours offer ed and the commission rate paid per transaction per hour of commission received. 28 . The ITN further provides that DMS will evaluate and rank replies in order to establish a competitive range of replies reasonably susceptible to award, and then the team wi ll proceed to negotiations. Regarding negotiations, the ITN states: E. The focus of the negotiations will be on achieving the solution that provides the best value to the state based upon the selection criteria and the requirements of this solicitatio n. The selection criteria include, but are not limited to, the RespondentÓs demonstrated ability to effectively provide the services, technical proposal and price. The Department reserves the right to utilize subject matter experts, subject matter adviso rs and multi agency or legislative advisors to assist the negotia tion team with finalizing the section criteria. The negotiation process will also include negotiation of the terms and conditions of the Contract. The ITN also states: H. At the conclus ion of negotiations, the Department will issue a written request for best and final offer(s) (BAFOs) to one or more of the Respondents with which the negotiation team has conducted negotiations. At a minimum, based upon the negotiation process, the BAFOs must contain: ¤ A revised Statement of Work; ¤ All negotiated terms and conditions to be included in Contract; and ¤ A final cost offer. The RespondentÓs BAFO will be delivered to the negotiation team for review. Thereafter , the negotiation tea m will meet in a public meeting to determine which offer constitutes the best value to the state based upon the selection criteria. I. The Department does not anticipate reopening negotiations after receiving BAFOs, but reserves the right to do so if it bel ieves doing so will be in the best interests of the State. 29 . The ITN and draft co ntract permit subcontractors to perform under the contract and provide an avenue for a contractor to add subcontractors by submitting a written request to DMSÓs contract manager with particular information. Best and Final Offers 30 . After the conclusion of negotiations, the negotiation team requested each vendor to submit a BAFO, to be filled out in accordance with the RBAFO format. The RBAFO noted that each vendor wou ld get a set percentage commission for leasing transactions, but asked vendors to submit their prices for IMAs, BOVs, and BPOs performed outside a commissionable transaction and to submit the number of annual credit hours vendors would give DMS at the star t of the new contract. 31 . In an effort to increase potential savings to the state, DMS lowered the percentage rates of the commissions for lease transactions in the RBAFO below the rates initially set in the ITN. By selecting only two vendors instead o f three, the additional potential volume for each vendor on the contract could support the lower commission rates being requested of tenant brokers. The s tate would ultimately save money due to the impact of the reduced commissions on the overall economic structure of each lease. Beth Sparkman, Bureau Chief of Leasing of DMS, expounded on the rationale for reducing the number of vendors under the new contract to two: The Court: To me, itÓs counterintuitive that having fewer vendors would result in more f avorable pricing for the state of Florida; and yet you said that was the anticipated result of reducing the number of vendors from three to two Î The Witness: Correct. The Court: for the new contract. IÓm unclear. Tell me the basis for the teamÓs anticipation that having fewer vendors would result in better pricing. The Witness : When the original ITN was released, it had the same percentages in there that are under the current contract. And IÓll talk, for context, new leases, which right now is at 4 percent. So the discussion was Î and 4 percent is typical of the industry. ThatÓs typical for what the industry pays across the board. So the desire was to reduce the commission, to reduce those commission amounts to drive that percentage down . So we went out with the first BAFO that had a range that said for leases that cost between zero Î and I canÓt remember Î zero and a half million, what would your percentage be? Thinking that when we had a tiered arrangement, those percentages would com e down. They really didnÓt. So when we sat down as a team and discussed: Well, why didnÓt they Î and you know, because typical is 4 percent. So we came back and said: Well, if we reduce the percentage on new leases to 3.25 but restrict the reward to two vendors, each vendor has the potential to make as much money as they would have made at 4 percent, but the savings would be rolled back into the state. 32 . Each of the five vendors invited to negotiate submitted a BAFO, agreeing as part of their submissions to comply with the terms and conditions of the draft of the proposed contract and agreeing to the lowered set percentage commission rates in the RBAFO. 33 . The RBAFO listed selection criteria by which the vendors would be chosen, to further refine the broad criteria listed in the ITN. The RBAFO listed the following nine items as selection criteria: performance measures (if necessary), sliding scale/cap, IMA set fee, brokerÓs opinion of value, balance of line (can be quoted per hour or lump s um), contract concerns, credit hours (both annual and per deal hour), hourly rates, and vendor experience and capability. 34 . CBREÓs BAFO submission followed the format indicated in the RBAFO, but CBRE included an additional section giving its proposed c ommission rates for acquisitions and dispositions of land. These rates were also submitted by other vendors at other parts of the procurement process, but CBRE was the only vendor to include such rates as part of its BAFO submission. DMS considered this addition a minor irregularity that it waived. 35 . In its BAFO submission, Cushman offered a three tiered approach to its pricing for IMAs and BOVs. For the first tier, Cushman offered to perform IMAs and BOVs for free as part of a commissionable transac tion. This is redundant, as the ITN require d all vendors to perform IMAs and BOVs at no cost when part of a commissionable transaction. For the second tier, Cushman offered to perform IMAs and BOVs at no cost when the user agency has previously hired Cus hman on tenant rep resentative work. Ms. Sparkman testified that this provision was unclear, as Cushman did not define the scope of this provision or what amount of work qualified the agency for free services. For the third tier, Cushman offered to perfor m IMAs and BOVs for $240 when not part of a commissionable transaction for an agency with which it had never done business. Best Value Determination 36 . The five BAFOs were sent to the negotiation team for review on August 8, 2013, and on August 14, 2013 , the team met in a public meeting to discuss the BAFOs, consider the selection criteria, discuss the teamÓs award recommendation, and draft a written award recommendation memorandum. 37 . During the August 14, 2013 , meeting the team determined that CBRE and Vertical rep resented the best value to the state , by a majority vote for CBRE and by a unanimous vote for Vertical. Ms. Sparkman stated at the meeting that , from her perspective, CBRE and Vertical represented a better value than the other vendors beca use they were more forward thinking in their long term business strategies for managing FloridaÓs po rtfolio. 38 . Also at this meeting, Ms. Sparkman noted that CBREÓs prices for IMAs and BOVs were somewhat high but that she would attempt to convince CBRE to lower its prices during the contract execution phase. This was part of an attempt to equalize costs to ensure user agencies selected vendors based on individual needs rather than cost. However, CBRE rep resented the best value to the s tate regardless o f whether its pricing changed. At hearing, Ms. Sparkman testified that if CBRE had refused to lower its pricing, DMS would still have signed a contract with them based on the pricing submitted in its BAFO. 39 . Ms. Sparkman also stated at the public meet ing that if she were unable to come to contract with both CBRE and Vertical , she would arrange for another public meeting to select a third vendor with whom to proceed to the contract execution phase. This statement did not refer to DMS selecting a third vendor to replace CBRE should CBRE refuse to lower its price , but rather reflected the possibility that during the contract execution phase, DMS and either one of the vendors could potentially be unable to sign a contract because the vendor was unwilling t o execute the written terms and conditions. The Ðcontract negotiationsÑ referenced during the public meeting are the remaining processes to be worked out during the contract execution phase and are distinct and separate from the negotiation phase. At hea ring, Ms. Sparkman testified that in the past, vendors have refused to sign a contract because their legal counsel was unwilling to sign off on what the business representatives agreed to. Thus, i f either CBRE or Vertical refused to sign the contract alto gether, DMS would potentially have select ed a third place vendor in order to have a second vendor on the contract , according to Ms. Sparkman . 40 . I nternational experience weighed in favor of CBRE and Vertical , according to team member comments made at th e public meeting . Although the phrase Ðinternational experienceÑ was not specifically listed in the selection criteria of the ITN or RBAFO, many vendors highlighted their international experience as part of the general category of vendor experience. Vend or experience and capability is specified in both the ITN and RBAFO as part of the selection criteria. Ms. Sparkman testified that international experience is indicative of high quality general vendor experience because international real estate market tr ends change more rapidly than domestic market trends. 41 . None of the n egotiation t eam member s recommended Cushman for a contract award, and in fact, Cushman's name was not even discussed at the award meeting. The Award Memorandum 42 . Also during the A ugust 14, 2013 , public meeting the negotiation team prepared a memorandum setting forth the negotiation teamÓs best value recommendation of CBRE and Vertical , and many of its reasons for the recommendation. There was no requirement that the memorandum lis t every single reason that went into the decision. For example, the memorandum did not state that the team found CBRE and VerticalÓs focus on long term strategies more impressive than CushmanÓs focus on past performance under the current contract. 43 . T he award memorandum included a ÐSelection CriteriaÑ section which simply repeat ed the nine selection criteria that had been previously identified in the RB AFO. The memorandum then went on to include a section labeled ÐB. Technical AnalysisÑ that stated : A nalysis of pricing is provided in section C below. As to the remaining selection criteria items, the Team identified the following key elements for the service to be provided: ¤ Long term strategies ¤ Key performance indicators ¤ Management of the por tfolio ¤ Top ranked vendors had comprehensive business plans ¤ Pricing on the BOV and IMAs. The selection criteria provided above were used by the Team to make its best value recommendation. 44 . Ms. Sparkman testifi ed that while the choice of word ing may have been imprecise, the items listed in th e Technical Analysis section were simply elaborations of the selection criteria in the ITN and RBAFO , and not new criteria. The first four are subsumed within vendor experience and capability, and the fift h was specifically listed in the RBAFO. Indeed, CushmanÓs Senior Managing Director testified at hearing that Cushman had addressed the first four items in their presentation to DMS during the negotiation phase to demo nstrate why Cushman should be chosen fo r the contract. 45 . The memorandum failed to note that CBRE had included non solicited information in its BAFO regarding proposed rates for the acquisition and disposition of land. However, the negotiation team considered CBREÓs inclusion of these propos ed rates a minor irregularity that could be waived in accordance with the ITN and addressed in the contr act execution phase, since those rates were for ancillary services , and there was no guaranteed work to be done for DEP under that fee structure. 46 . The memorandum included a chart , identified as Attachment B , that compared the proposed number of credit hours and some of the pricing for IMAs and BOVs submitted by the vendors in their BAFOs. The chart listed CushmanÓs price for IMAs and BOVs as $240 a nd failed to include all the information regarding the three tiered approach to IMAs and BOVs Cushman listed in its BAFO. However, Ms. Sparkman testified that the chart was meant to be a side by side basic summary that compared similar information, not an exhaustive listing. The Cushman Protest A. Negotiations After Award of the Contract 47 . Cushman alleges that DMSÓs selection of CBRE violates the ITN specifications because DMS selected CBRE with the intent of conducting further negotiations regarding pric e, which provided CBRE with an unfair advantage. Cushman further argues that the procedure of awarding to one vendor and then possibly adding another vendor if contract negotiations fail violates FloridaÓs statutes and the ITN. Amended Pet. ¶¶ 23, 28 & 3 1. 48 . Section 2.14 of the ITN spec ifically reserved DMS 's right to reopen negotiations after receipt of BAFOs if it believed such was in the best interests of the s tate. Specifically, section 2.14 A. provides: The highest ranked Respondent(s) will be in vited to negotiate a Contract. Respondents are cautioned to propose their best possible offers in their initial Reply as failing to do so may result in not being selected to proceed to negotiations. If necessary, the Department will request revisions to the approach submitted by the top rated Respondent(s) until it is satisfied that the contract model will serve the s tateÓs needs and is determined to provide the best value to the s tate. 49 . T he statements made by Ms. Sparkman at the August 14, 2013, pu blic meeting and in the award memorandum , that DMS would attempt to reduce CBRE's prices for ancillary services during the contract execution process were not contrary to the ITN or unfair to the other vendors. Both Ms. Sparkman and Mr. Br adner, the two n egotiation t eam members who voted to award to CBRE, testified that they recommended CBRE as providing the best value even considering its arguably higher prices for ancillary services. Ms. Sparkman further confirmed that even if CBRE refused to lower its prices during the contract execution phase, DMS would still sign the contract, as CBRE's proposal would still r epresent the best value to the s tate. The anticipated efforts to obtain lower prices from CBRE were simply an attempt to obtain an even better b est value for the s tate. 50 . Ms. Sparkman also testified that section 2.14 F. allowed continued negotiations , even though it was silent as to t imeframe. Paragraph F states: In submitting a Reply a Respondent agrees to be bound to the terms of Section 5 Î General Contract Conditions (PUR 1000) and Section 4 Î Special Contract Conditions. Respondents should assume those terms will apply to the final contract, but the Department reserves the right to negotiate different terms and related price adjustments if the Department determines that it provides the best value to the s tate. 51 . Ms. Sparkman also cited section 2.14 I. as authority for reopening negotiations following receipt of the BAFOÓs. That section provides: The Department does not anticipate re opening negotiations after receiving the BAFOs, but reserves the right to do so if it believes doing so will be in the best interests of the s tate. 52 . Ms. Sparkman Ós statement that if DMS failed, for any reason, to successfully contract with either of t he two vendors selected, it would consider pulling in another vendor , is not inconsistent with the clear language of the ITN . B. Selection Criteria 53 . Cushman alleges that DMS used criteria to determine the awards that were not listed in the ITN or the RBAFO. Amended Pet. ¶ 25. 54 . Section 2.14 E of the ITN established broad selection c riteria, stating: The focus of the negotiations will be on achieving the solution that provides the best value to the state based upon the selection criteria and the req uirements of this solicitation. The selection criteria include, but are not limited to, the Respondent's demonstrated ability to effectively provide the services, technical proposal and price. The Department reserves the right to utilize subject matter e xperts, subject matter advisors and multi agency or legislative advisors to assist the negotiation team with finalizing the selection criteria. The negotiation process will also include negotiation of the terms and cond itions of the Contract. ( e mphasis a dded). 55 . Following the negotiations, and with the assistance of its subject matter expert, the n egotiation t eam provided in the RBAFO additional clarity as to the selection criteria, and identified the "Basis of Award/Selection Criteria" as follows: Pe rformance Measures (if necessary) Sliding scale/cap IMA set fee Broker's opinion of value Balance of line (can be quoted per hour or lump sum) Contract concerns Credit hours (both annual and per deal hour) Hourly rates Vendor experience and capability 5 6 . The foregoing selection criteria, as well as the selection criteria stated initially in the ITN, make clear that pricing was only one of the criteria upon which the award was to be made. Indeed, Cushman's representative, Larry Richey, acknowledged dur ing his testimony that criteria such as "Performance Measures," "Contract Concerns," and "Vendor Experience and Capability" did not refer to pricing, but rather to the expected quality of the vendor's performance if awarded the contract . 57 . As the princ ipal draftsman of the ITN and DMS 's lead negotiator, Ms. Sparkman explained that the RBAFO's statement of the selection criteria was intended to provide greater detail to the broad selection criteria identified in the ITN, and was used by the negotiation t eam in making its best value determination. Ms. Sparkman further testified that the best value d etermination resulted from the n egotiation t eam's lengthy and extensive evaluation o f the vendors' initial written r eplies to the ITN, review of the vendors' qu alifications and comprehensive business plans, participation in approximately two and a half hours of oral presentations by each vendor (including a question and answer session with regard to the proposed implementation and management of the contracts), and a review of the vendors' BAFOs. 58 . Applying the selection criteria contained in the ITN and the RBAFO, the n egotiation t eam selected Vertical for several reasons, including its performance indicators, employees with ADA certification, computer progr ams and employee training not offered by other vendors, its presence in Fl orida, and the strength of its business plan and presentation. 59 . Similarly, the n egotiation t eam selected CBRE for an award based on the strength of its ITN Reply, its broad look at long term strategies, its key performance indicators, the experience and knowledge of its staff, the comprehensiveness of its proposal and business plan, size of its firm, and creative ideas such as use of a scorecard in transactions. 60 . Ms. Sparkman observed that both Vertical and CBRE specifically identified the CBRE staff who would manage the s tate's business and daily transactions, while it was not clear from Cushman's ITN r eply and related submissions who would actually be working on the account. Cushman likewise did not discuss out of state leases and how such leases were going to be handled, which was a significant concern because DMS considered out of state leases to be particularly complex. 61 . Ms. Sparkman also noted that with respect to t he vendors' business plans, both Vertical and CBRE focused primarily on strategic realignment and plans for the future, whereas Cushman discussed their current transactions at length, but did not demonstrate forward thinking to the negotiation t eam. 62 . C ushman's r eply to the ITN also included various discrepancies noted at the final hearing. While Cushman's ITN r eply identifies a Tallahassee office, Cushman does not in fact have a Tallahassee office, but instead listed its subcontractorÓs office. 6 / Addi tionally, two of the business referen ces presented in Cushman's ITN R eply appear not in fact to be for Cushman, but instead for its subcontractor, Daniel Wagnon, as Cushman's name was clearly typed in above Mr. Wagnon's name after the references were writt en. Finally, Cushman failed to provide in its ITN Reply the required subcontractor disclosure information for at least one of its "Project Management Partners," Ajax Construction. 63 . Based on all of the above, DMS 's decision to award contracts to Vertic al and CBRE as providing the best value to the s tate was not arbitrary, capricious, clearly erroneous, or contrary to competition. Simply stated, and as the n egotiation t eam determined, the submissions by Vertical and CBRE were more comprehensive and reas onably found to offer better value to the s tate than Cushman's submission. Indeed the n egotiation t eam did not even mention Cushman as a potential contract awardee, but instead identified only Vertical, CBRE and JLL in their deliberations as to best value . 64 . Cushman's argument that DMS a ward m emorandum improperly relies on the following as "key elements" related to services does not alter this analysis: Long term strategies Key performance indicators Management of the portfolio Top ranked vendors had co mprehensive business plans Pricing on the BOV and IMAs. While Ms. Sparkman acknowledged that the choice of language in the m emorandum could have been better, it is clear that the foregoing are indeed "elements" of the selection criteria stated in the IT N and RBAFO, as the first four elements plainly relate to the vendors' ability to effectively provide the services, their technical proposal, performance measures, and vendor experience and capability, while the last element relates to the pricing portion of the criteria. 65 . Cushman also argues that the award memorandum failed to inform the final decision maker that Cushman offered IMAs and BOVs at no charge when Cushman was engaged in a commissionable transaction or was performing other work for an agen cy under the contract. As a result, Cushman asserts, the Deputy Secretary was provided with inaccurate information relating to price. 66 . Cushman's argument that the award process was flawed because the pricing chart attached to the a ward m emorandum did not accurately reflect Cushman's proposed pricing is without merit. As Ms. Sparkman testified, th e chart was prepared by the negotiation t eam to provide f or the decision maker an apples to apples broad summary comparison of the vendor's proposed pricing for the proposed ancillary services. The chart was not intended to identify all variations or conditions for potential different pricing as proposed by Cushman. 7 / C. Best Value Determination 67 . Cushman contends that the negotiation teamÓs decision to awar d a contract to CBRE did not result in the best value to the state. Amended Pet. ¶¶ 26, 28 & 29. Cushman further argue s that DMS did not meaningfully consider differences in proposed pricing. T he failure to consider price for potential ancillary service s , Cushman argues , was contrary to competition as it gave an unfair advantage to CBRE whose prices were higher than CushmanÓs prices in all but one category. 68 . Although pricing for the potential ancillary services was relevant, the ITN's initial scorin g cr iteria made clear that DMS was primarily focused on evaluating the experience and capability of the vendors to provide the proposed services. For this reason, the ITN's initial scoring criteria awarded 90 percent of the points based upon the qualifica tions and business plan of the vendors, and only 10 percent of the points based on the pricing for potential ancillary services. The n egotiation t eam members testified that this same focus on qualifications and the vendors' business plan continued during the negotiation phase and award decision, although without reliance on the mathematical scoring process utilized during the initial evaluation phase. Nothing in the ITN specifications altered this focus, and the negotiations were directed to gaining a gre ater understanding of the vendors' proposed services, the qualifications and bios of individuals who would actually do the work, vendors' approach to the work and parameters the vendors would use to evaluate their performance. 69 . Pricing remained of rel atively minor significance primarily because the RBAFO established a uniform lease commission rate for all vendors, effectively removing pricing as a means to differentiate between the vendors. As a result, vendors were required to quote pricing only for certain potential ancillary services, including IMAs and BOVs, and the number of free credit hours to be provided to the s tate. 70 . Pricing for these potential ancillary services was not considered particularly important , since historically these service s were seldom used, and the ITN required all vendors to provide IMAs and BOVs free of charge when related to a commissionable transaction (thereby greatly reducing the impact of any "free" IMA or BOV services). For these reasons, the n egotiation t eam cons idered the potential ancillary services and pricing for these services not to be significant in the award decision and only incidental to the core purpose and mission of the intended contract, to wit, leasing and leasing commissions. As a result, the n egot iation t eam referred to these potential ancillary services as "balance of line" items which were n ominal and added little value to the contract. 71 . Notwithstanding Cushman's argument that it should have been awarded the c ontract because it offered the lo west pricing for these ancillary services, its prices were not in fact the lowest offered by the vendors. Indeed JLL offered to provide all IMA and BO V services ( with no preconditions ) at no cost. Cushman's pricing for the ancillary services also was not materially different than CBRE's pricing. CBRE's consulting services rates are comparable, if not lower, than Cushman's rates, and the difference between Cushman's and CBRE's p roposed charges for IMAs and BOV s is only a few hundred dollars . 72 . W hen con sidered in terms of the anticipated number of times the ancillary services will be requested (rarely, based on the prior contract), the total "extra" amount to be spent for CBRE's services would be at most a few thousand dollars. The n egotiation t eam reas onably considered this to be insignificant in comparison to the multimillion dollar leasing work which was the core purpose of the intended contract . 8 / 73 . Because pricing for the potential ancillary services was of lesser significance to DMS 's award dec ision, Cushman's posi tion that DMS should have awarded Cushman a contract based up on its pricing for ancillary services is not consistent with the ITN and does not render DMS 's intended awards to Vertical and CBRE arbitrary, capricious, clearly erroneous o r contrary to competition. To the contrary, DMS articulated a rational, reasonable and logical explanation for the award. D. CBREÓ s Proposal Non Responsive to ITN and RBAFO? 74 . Cushman alleges that CBRE Ós BAFO was not responsive to the ITN and the RBAFO b ecause CBRE included a set rate for acquisitions and dispositions in its proposal . Amended Pet. 30. Since CBRE's BAFO materially deviated fr om the ITN's specifications, CBRE Ós proposal should have been deemed non responsive and therefore rejected, Cushma n argues. 75 . The ITN originally requested pricing related only to credit hours as the ITN set the rates for leases. The ITN stated that Ðother servicesÑ would be determined on a case by case basis as negotiated by the agencies. However, a s part of the ITN process, DMS discussed with the vendors the potential for them to assist the s tate in the sale and acquisition of property, and what commission rates might be charged for this work. For this reason, CBRE included proposed commission rates for acquisit ion and disposition services in its BAFO. 76 . DMS considered the inclusion of potential rates for acquisitions and dispositions to be a minor irregularity which did not render CBRE's BAFO non responsive. This determination is consistent with the terms of the ITN, which at s ection 2.14(g) states "[t]he Department reserves the right to waive minor irregularities in replies." 77 . The form PUR 1001 incorporated by reference in to the ITN likewise reserves to DMS the right to waive minor irregularities and sta tes: 16. Minor Irregularities/Right to Reject . The Buyer reserves the right to accept or reject any and all bids, or separable portions thereof, and to waive any minor irregularity, technicality, or omission if the Buyer determines that doing so will ser ve the s tate's best interests. The Buyer may reject any response not submitted in the manner specified by the solicitation documents. 78 . Consistent with the above cited provisions, the n egotiation t eam noted at its August 14, 2013, meeting that CBRE's inclusion of the proposed rates was not material, and that during the contr act execution process, DMS would either exclude the proposed rates from the contract, or possibly include such as a cap for these services. Both of these alternatives were availabl e to DMS given CBRE's commitment to follow the terms of the draft contract, which specifically stated that fees for acquisitions and dispositions would be negotiated on a case by case basis. 79 . Finally, CBRE's inclusion of proposed commission rates for a cquisitions and dispositions did not give CBRE an advantage over the other vendors, or impair the competition, because Cushman and JLL also submitted, as part of their ITN responses, proposed commission rates for the acquisition and disposition of property . E. Do the ITN Specifications Violate Section 255.25 ? 80 . Cushman's final argument is that the ITN specifications, and the proposed contract, violate section 255.25(3)(h)5 . , Florida Statutes, which states that " [a] ll terms relating to the compensation of t he real estate consultant or tenant broker shall be specified in the term contract and may not be supplemented or modified by the state agency using the contract." Cushman's argument has two components. 81 . First, Cushman argues that the specifications included at Tab 5, page 13 of the ITN violate the statute by providing: "With respect to all other [ancillary] services, . . . , compensation shall be as outlined in an agency prepared Scope of Work and will be quoted based on an hourly rate (set as ceilin g rates in this ITN), set fees for the service/project or by a percentage commission rate as offered and negotiated by the using agency. Ñ 82 . Cushman also argues that the language in the award memorandum stating that the BOV rates are "caps" and "may be negotiated down by agencies prior to individual transactions," violates the statute. This latter reference to "caps" correlates to the "ceiling rates" stated in the above quoted ITN specification. 83 . Section 120.57(3)(b), Florida Statutes, requires ven dors to file a protest to an ITNÓs terms, conditions, or specifications within 72 hours of the release of the ITN or amendment; failure to protest constitutes a waiver of such arguments. DMS included this language with the release of the ITN and each amen dment, so Cushman was on notice of its protest rights. 84 . Cushman's challenge to the ITN specifications as violating section 255.25 is untimely and has been waived. Having been fully informed of this specification since May 14, 2013, when the revised I TN was published, Cushman could not wait until the ITN process was completed some four months later, and then argue that the ITN specification s do not comply with section 255.25 and must be changed. Such argument plainly constitutes a specifications chall enge, and such a challenge is now time barred. 85 . Even were CushmanÓ s challenge not time barred, it would still fail. S ection 255.25 requires only that " [a] ll terms relating to the compensation of the real estate consultant or tenant broker shall be s pecified in the term contract," and not that all terms identifying the compensation be specified. 86 . Th e challenged ITN specification, actually added via Adden dum 2 at the request of DEP and its subject matter expert, does specify the approved methods b y which the s tate could compensate the vendor, which DMS determined wou ld best be determined on a case by case basis. By stating the approved methods which can be used by the state agencies, the ITN specifications and term contract did specify the terms " relating to" the compensation of the vendor, i.e., an hourly rate (set as ceiling rates in the ITN), set fees for the service/project , or a percentage commission rate. DMS established these terms because the exact compensation would best be determined b y the state agency on a case by case basis in a Statement of Work utilizing one of the specified compensation methods. 9 / CONCLUSIONS OF LAW 87 . DOAH has jurisdiction over the subject matter of and parties to this proceeding in accordance with sections 120. 569, 120.57(1) and (3), Florida Statutes. 88 . Cushman has standing to file this protest by virtue of responding to the ITN and being selected for negotiations. See Fairbanks, Inc. v. DepÓt of Transp. , 635 So. 2d 58, 59 (Fla. 1st DCA 1986). DMS selected two vendors for award, but the negotiation team did not rank the vendors. Thus, Cushman, as one of the vendors who negotiated, has a stake in the award and the requisite substantial interest. Cf. Cap e letti Bros., Inc. v. State DepÓt of Gen . Servs. , 432 So. 2d 1359, 1360 n.1 (Fla. 1st DCA 1983). 89 . Section 120.57( 3)(f) provides that: T he 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, proposals, o r replies, the administrative law judge shall conduct a de novo proceeding to determine whether the agencyÓs proposed action is contrary to the agencyÓs governing statutes, the agencyÓs rules or policies, or the solicitation specifications. The standard o f proof for such proceedings shall be whether the proposed agency action was clearly erroneous, contrary to competition, arbitrary, or capricious. 90 . The nature of the de novo review in a bid protest proceeding has been established as follows: [T]he phrase 'de novo hearing' is used to describe a form of intra agency review. The judge may receive evidence, as with any formal hearing under section 120.57(1), but the object of the proceeding is to evaluate the action taken by the agency. See Intercont inental Properties, Inc. v. State Department of Health and Rehabilitative Services , 606 So. 2d 380 (Fla. 3d DCA 1992). State Contracting and EngÓg Corp. v. DepÓt of Transp. , 709 So. 2d, 607, 609 (Fla. 1st DCA 1998). 91 . The standard of review of the agencyÓs proposed action in a bid protest proceeding has been generally described as follows: [A] Ð public body has wide discretion Ñ in the bidding process and Ð its decision, when based on an honest exercise Ñ of the discretion, should not be overturned Ð e ven if it may appear erroneous and even if reasonable persons may disagree. Ñ Dep Ó t of Transp . v. Groves Watkins Constructors , 530 So. 2d 912, 913 (Fla. 1988) (quoting Liberty County v. Baxter's Asphalt & Concrete, Inc. , 421 So. 2d 505 (Fla. 1982)) (emphas is in original). Ð The hearing officer's sole responsibility is to ascertain whether the agency acted fraudulently, arbitrarily, illegally, or dishonestly. Ñ Groves Watkins , 530 So. 2d at 914. Scientific Games, Inc. v. Dittler Bros. , 586 So. 2d 1128, 113 1 (Fla. 1st DCA 1991). 92 . A decision is clearly erroneous when, although there is evidence to support it, after review of the entire record the tribunal is left with the definite and firm conviction that a mistake has been committed. United States v. U. S. Gypsum Co. , 333 U.S. 364, 395 (1948). See also Floridian Constr. & Dev. Co. v. DepÓt of Envtl. Prot. , Case No. 0 9 0858BID ( Fla. DOAH May 1, 2009 ; Fla. DEP June 1, 2009 ) (ÐA decision is clearly erroneous when unsupported by substantial evidence or contr ary to the clear weight of the evidence or is induced by an erroneous view of the law.Ñ). An agency action is capricious if the agency takes the action without thought or reason or irrationally, and agency action is arbitrary if is not supported by facts or logic. Agrico Chemical Co. v. State DepÓt of Envtl. Reg. , 365 So. 2d 759, 763 (Fla. 1st DCA 1978). See also § 120.57(1)(e)2.d., Fla. Stat. An agency decision is contrary to competition if it unreasonably interferes with the objectives of competitive bidding. See Wester v. Belote , 138 So. 2d 721, 723 24 ( Fla. 1931). 93 . An act is "contrary to competition" if it runs contrary to the objectives of competitive bidding, which have been long held as follows: . . . to protect the public against collusive contracts; to secure fair competition upon equal terms to all bidders; to remove not only collusion but temptation for collusion and opportunity for gain at public expense; to close all avenues to favoritism and fraud in various forms; to secure the best v alues for the [public] at the lowest possible expense Wester v. Belote , 138 So. 2d 721, 723 24 (Fla. 1931); see also Harry Pepper & Assoc., Inc. v. City of Cape Coral , 352 So. 2d 1190, 1192 (Fla. 2d DCA 1977). 94 . Where the agency action does not follo w the stated bid procedures or the agency acts contrary to the procedures or bid documents, the agency action is arbitrary and capricious, and clearly erroneous. See Emerald Correctional Mgmt. v. Bay Cnty . Bd. of Cnty . Comm Ó rs , 955 So. 2d 647, 653 (Fla. 1 st DCA 2007) ("[A] public body is not entitled to omit or alter material provisions required by the RFP because in doing so the public body fails to inspire public confidence in the fairness of the [RFP] process.") (quoting Dep't of Lottery v. Gtech Corp . , 816 So. 2d 648 (Fla. 1st DCA 2001)); Coin Laundry Equip. v. Univ. of W. Fla. , Case No. 96 0962BID, (Fla. DOAH July 5, 1996 ; Fla. UWF Oct . 1, 1996 ) ("The failure of a public entity to follow its own bid specifications is an arbitrary and capricious act and undermines the integrity of the bid process."). Governing Statutes , Regulations and Policies 95 . DM S procurements are governed by c hapter 287, F lorida Statutes. Additionally, c hapter 255 governs public property and publicly owned buildings. An agency Ós interpretation of its own rules and statutes that the agency is required to implement is entitled to deference. Such interpretations are not to be disregarded unless clearly erroneous. See Sullivan v. Fla. DepÓt of Envtl. Prot. , 890 So. 2d 417 (Fla. 1 st DCA 2004); Bd. Of Podiatric Med. v . Fla. Med. AssÓn. , 779 So. 2d 658 (Fla. 1st DCA 2001). A. Chapter 255, Florida Statutes 96 . Section 25 5.25(3)(h)1 . states that the tenant broker Ðcontract may be made with up to three tenant brokersÑ but does not give a minimum. Petitioner failed to prove that DMSÓs decision to award the contract to two vendors instead of the maximum of three was arbitrary or capricious . DMSÓs decision was rational ly bas ed on the goal of driv ing down the set commission costs for leasin g transactions, w ith resultant savings to the state due to the reduced commissions on the overall economic structure of each lease. Additionally, the possibility that DMS might select a third vendor if either CBRE or Vertical refused to sign the contract is consistent with section 255.25(3)(h) 1., which allows DMS to decide whether to put one, two, or three tenant brokers onto the contract in order to serve the state Ós needs in the marketplace. 97 . CushmanÓs amended protest petition argues that DMS vio lated section 255.25(3)(h)5 .1 , which provid es that Ðall terms relating to the compensation of the real estate consultant or tenant broker shall be specified in the term contract and may not be supplemented or modified by the state agency using the contract .Ñ However, t his provision pertains to leasing transactions, not acquisitions and dispositions of land. The ITN and RBAFO adequately identify the terms relating to compensation of the tenant brokers for private leasing transactions. 98 . Se ction 255.25 does not restrict DMSÓs ability to negotiate land acquisition and disposition services via individual Statements of Work. This statutory provision was enacted in 2007, when the l egislature directed in section 255.249(6) that DMS Ðshall develop and impleme nt a strategic leasing planÑ and in 255.249(11) that DMS Ðmay contract for real estate consulting or tenant brokerage services in order to carry out its duties relating to the strategic leasing plan under subsection (6).Ñ Section 255.25 outlines implement ation requirements for these leasing services, not for acquisition and disposition services. 99 . Even assuming, arguendo, that section 255 .25(3)(h)5 ., did pertain to land acquisitions and dispositions, Petitioner failed to prove that DMS violated its pro visions. The statute requires that Ðall terms relating to the compensationÑ of tenant brokers be specified. As noted in the Findings of Fact, the ITN states that the user agency will prepare an individual Scope of W ork utilizing one of the three specifie d compensation methods an hourly rate (set as ceiling rates in the ITN), set fees for the service/project, or a percentage commission rate. The acquisition and disposition portions of the ITN were added at the request of and with the expertise of DEP, whi ch determined that this individualized method of compensation met DEPÓs needs. This ITN specification satisfies section 255.25(3)(h)5 . , because tenant brokers were required to use one of the specified methods of compensation and could not use any other des ired form of payment. The statute does not require that the contract identify the specific compensation the state agency would pay for each transaction; it simply requires that all terms relating to compensation be specified. B. Chapter 287, Florida Statute s 100 . Section 287.057(3), states that agencies must specify the criteria for determining the acceptability of invitation to negotiate responses and the selection of vendors. Section 287.057(1)(c)4 . , requires agencies to award the contract to the respons ive and responsible vendors representing the best value to the state based on the selection criteria after negotiations are conducted. The statute does not specify how much weight agencies must give to pricing in determining the best value of an invitatio n to negotiate. This is in contrast to an invitation to bid pursuant to section 287.057(1)(a)4 . , which requires agencies to award to the lowest responsive bidder. While price is a consideration, the applicable statutes do not require that price be given paramount importance in determining best value. 101 . Cushman maintains that asking CBRE to lower its prices after the negotiation phase has ended is improper. Under this interpretation, agencies would never be allowed to ask vendors on a contract for a l ower price once a BAFO has been submitted. This argument is not supported by the applicable statutes, or logic . There is no prohibition on an agency attempting to maximize best value for the state by ask ing a selected vendor to lower its pricing, even wh en they cannot force a vendor to do so. 10 / 102 . In its Proposed Recommended Order, Cushman cites Dep artmen t of Lottery v. Gtech Corp oration , 816 So. 2d 648 (Fla. 1st DCA 2001) as authority for its argument that an agency cannot freely negotiate material te rms of a contract once the competitors had been eliminated from the solicitation. However, the facts of the case sub judice are clearly distinguishable from those in Gtech . In Gtech , the court ruled that it was impermissible for the Department of Lottery to negotiate a contract with a vendor after the N otice of I ntent to A ward was announced with terms and conditions materially different than the vendor had initially proposed. However, the solicitation in Gtech wa s a Request for Proposals (RFP ) rather tha n an Invitation to Negotiate. The ITN process offers agencies much more discretion in negotiating with vendors than do es the RFP process circumscribed by section 287.057 (b) . Additionally, the request that CBRE lower its prices would not have made the res ulting contract materially different from CBREÓs submissions because the prices pertained to ancillary services under the contract, not the main private leasing transactions. 103 . Competent evidence of record established that the team determined CBRE and Vertical rep resented the best value to the s tate, regardless of whether CBRE agreed to lower i ts prices for IMAs and BOVs. DMS was simply trying to make the price even better for the state. Petitioner failed to prove DMS illegally extended the negotiatio n phase beyond the Notice of Intent to Award or that the best value determination was dependent on post award negotiations. 104 . There was no competent evidence presented that DMS acted contrary to its administrative rules or policies. Therefore, Petitio ner has failed to meet its burden of proof that DMS acted contrary to its rules or policies. The ITN Specifications 105 . The unsolicited information CBRE i ncluded in its BAFO was a minor irregularity that DMS had the authority to waive. CBREÓs BAFO other wise conformed to the RBAFO format DMS provided. The inclusion of extra information was not fatal and simply included information other vendors (including Cushman) had included in their earlier submittals. CBREÓs inclusion of proposed acquisition and dis position rates did not give it a substantial advantage over other vendors or otherwise restrict or stifle competition, so the deviation is not material . 106 . "Although a bid containing a material variance is unacceptable, not every deviation from the inv itation is material." Robinson Elec. Co. v. Dade Cnty . , 417 So. 2d 1032, 1034 (Fla. 3d DCA 1982); Tropabest Foods, Inc. v. State, Dep't of Gen. Servs. , 493 So. 2d 50, 52 (Fla. 1st DCA 1986); Glatstein v. Miami , 399 So. 2d 1005 (Fla. 3d DCA 1981 ) , rev . den ied , 407 So. 2d 1102 (Fla. 1981). "It is only material if it gives the bidder a substantial advantage over the other bidders and thereby restricts or stifles competition." Tropabest , 493 So. 2d at 52; Harry Pepper & Assocs. v. City of Cape Coral , 352 So. 2d 1190, 1193 (Fla. 2d DCA 1977); Procacci Commercial Realty v. Dep't of HRS , 690 So. 2d 603, 606 (Fla. 1st DCA 1997). 107 . CBRE's inclusion of proposed commission rates for acquisitions and dispositions did not give CBRE an advantage over the other vend ors, and did not impair competition. These potential services were ancillary to the contract, and Cushman and JLL also provided their proposed rates as part of the ITN process. Finally, CBRE's commitment to adhere to the terms of the draft contract, whic h specifically stated that fees for acquisitions and dispositions would be negotiated on a case by case basis, rendered the inclusion of the proposed rates of little significance as found by the negotiation t eam. 108 . DMS 's decision to waive the minor i rregularity in CBRE's BAFO was not arbitrary, capricious, clearly erroneous or contrary to competition. 109 . Petitio ner failed to present persuasive evidence that the positive comments made in the public meeting (and later referenced in the award memoran dum) about CBREÓs international experience indicate the negotiation team based their best value determination on improper selection criteria. I nternational experience is reasonably included as part of general vendor experience and capability category, whi ch is noted in the ITN and RBAFO. Ms. SparkmanÓs testimony explaining that tenant brokers with international experience are generally quicker at adapting to real estate trends and market shifts indicates that such international experience was noted for ho w it related to vendor experience and capability and not for how tenant brokers would specifically handle international transactions. 110 . Competent evidence of record established that t he section within the award memorandum labeled as ÐB. Technical Anal ysisÑ did not constitute separate selection criteria the team relied on in determining best value, apart from the criteria listed in the ITN and RBAFO. While the exact terminology in this section appears slightly modified, it is clear that the items liste d in this section are reworded elaborations of existing selection criteria in the ITN and RBAFO. The word choice of Ðremaining selection criteriaÑ is factually inaccurate, as the section actually consists of highlights of the ways the winning vendors exem plified the already existing selection criteria. Petitioner has failed to prove that these Ðremaining selection criteriaÑ were improper selection criteria. 111 . Petitioner has also failed to prove that the BAFO comparison chart included in the award mem orandum kept the DMS Deputy Secretary from making an informed decision, even though it did not contain the entirety of CushmanÓs approach to IMA and BOV pricing. Persuasive evidence establish ed that the chart was meant to be a summary, not an exhaustive l ist of all pricing information submitted by the vendors. As all vendors would have to perform IMAs and B OVs for free on most engagements , giving the side by side approach of showing what each vendor would charge , if they charged at all , was an appropriate way to organize the information. Additionally, the Deputy Secretary has the option to reject the negotiation teamÓs recommendation. See Caber Systems, Inc. v. DepÓt of Gen . Svcs . , 530 So. 2d 325 (Fla. 1st DCA 1988); Gulf Real Props., Inc. v. DepÓt of HRS , 687 So. 2d 1336 (Fla. 1st DCA 1997). 112 . Finally, s ectio n 120.57(3)(b) , requires vendors to file a protest to an ITNÓs terms, conditions, or specifications within 72 hours of the release of the ITN or amendment; failure to protest constitutes a waiver of such arguments. DMS included this language with the release of the ITN and each amendment, so Cushman was on notice of its protest rights. 113 . Once vendors have waived a protest to the specifications of the ITN, they cannot later challenge these spec ifications after the notice of intent to award has been announced. See , e.g. , Consultech of Jacksonville, Inc., v. DepÓt of Health , 876 So. 2d 731, 734 (Fla. 1st DCA 2004); Capeletti Bros. v. DepÓt of Transp. , 499 So. 2d 855, 857 (Fla. 1st DCA 1986); Opti plan, Inc. v. Sch . Bd. of Broward Cnty . , 710 So. 2d 569, 572 (Fla. 4th DCA 1998). 114 . Vendors cannot challenge specifications once they have waived their protest rights even where they claim that such specifications violate Florida Statutes. In CCA of Tenn essee , LLC v. Dep artmen t of M ana g e m ent S er v i c e s , DOAH Case No. 13 0880BID at ¶160 (Fla. DOAH July 12, 2013) rejected in part , Case No. 13 0079 (Fla. DMS Aug . 14, 2013) , it was held that by failing to protest within 72 hours of the release of the ITN, t he vendor waived its objection to the agencyÓs use of an invitation to negotiate. 115 . Petitioner has failed to prove by a preponderance of the evidence that DMS violated its governing statutes, its rules and policies, or the ITN in awarding the contract to CBRE and Vertical. Under the facts found herein, DMSÓs intended award decision is not clearly erroneous, contrary to competition, arbitrary or capricious. Therefore, the Notice of Intent to Award should not be disturbed. RECOMMENDATION Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: T hat a final order be entered denying the petition of Cushman & Wakefield of Florida, Inc., and affirming the Notice of Intent to Award to CBRE, Inc., and Vertical Integration, Inc. DON E AND ENTERED this 24th day of January , 2014 , in Tallahassee, Leon County, Florida. S W. DAVID WATKINS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, F lorida 32399 3060 (850) 488 9675 Fax Filing (850) 921 6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 24th day of January , 2014 . ENDNOTES 1 / All references to th e Florida Statutes are to the 2013 version unless otherwise stated. 2 / T he "ITN" was later amended by Addendum Two on May 14, 2013 . All references to the "ITN" refer to the ITN as amended. 3 / In its Proposed Recommended Order, Cushman clarified its p osition on the issue as follows: C ushman is not challenging the ITNÓs specifications. Cushman is challenging the authority of DMS to award the contract under section 255.25, Florida Statutes. As in B&L Service, Inc. v. Department of Health and Rehabilit ative Services , 624 So. 2d 805, 805 06 (Fla. 1st DCA 1993), Cushman is challenging Ðthe agencyÓs ultimate authority to award [the] contract.Ñ (Cushman Proposed Recommended Order, p. 3) 4 / JLLÓs dismissal mooted the pending m otion for o fficial r e cognition filed by CBRE. 5 / All Findings of Fact set forth in this section are from the partiesÓ Joint Pre Hearing Stipulation, pgs. 14 16. 6 / Cushman's ITN Reply also represented that it had a Fort Myers office. However, Mr. Richey acknowledged at he aring this was not entirely accurate , as the office is actually a subcontractor's office. 7 / Unlike the other vendors, Cushman's proposed pricing for the IMAs and BOVs involved a three tiered approach. The first tier involved no charge for IMAs and BOVs when they were related to a commissionable transaction. B ut as noted previously, all vendors were required to provide these same services at no charge and Cushman's proposal therefore did not offer any additional benefit. Cushman's second tier provided that such services would be at no cost "when an Agency/User has hired [Cushman] on other work under the contract." Ms. Sparkman testified it was not clear what exactly was meant by this proposal. Cushman's third tier provided unconditioned pricing for th e services, and it i s this pricing the negotiation t eam included in its summary chart to allow for the apples to apples pricing comparison they sought. 8 / While Ms. Ellison testified that DEP intended to use BO V s a great deal more than they had in the pa st, DMS had no assurance that DEP , the primary agency that might utilize such ancil lary offerings, would in fact procure any servi ces under the contract. Moreover , Ms. Ellison testified that she felt the n egotiation t eam did a good job in analyzin g the is sues she was concerned with , and that the resulting contracts could be utilized by DEP. She also noted that DEP had the authority to procure and negotiate its own contr act for ancillary services (such as IMAs and BOV s) and need not use the awarded contrac ts if it so chose . 9 / This practice is also consistent with the ITN and the term contract's concept of continuing competition between the awarded vendors to this contract, who must still compete with each other before they are "hired" by agencies for spec ific scopes of work related to the ancillary services. 10 / This is consistent with the general intent of c hapter 287, which contemplates that agencies should always attempt to negotiate lower pricing. For example, section 287.057(13), states that for act ive contract renewals, Ðthe price of the commodity or contractual services to be renewed must be specified in the bid, proposal, or reply, except that an agency may negotiate lower pricing.Ñ COPIES FURNISHED : Donna Elizabeth Blanton, Esquire Radey, Th omas, Yon and Clark, P.A. Suite 200 301 South Bronough Tallahassee, Florida 32301 Matthew Fraher Minno, Esquire Department of Management Services 4050 Esplanade Way Tallahassee, Florida 32399 Frederick John Springer, Esquire Bryant Miller Olive PA Suit e 900 101 North Monroe Street Tallahassee, Florida 32301 Robert H. Hosay, Esquire Foley and Lardner, LLP Suite 900 106 East College Avenue Tallahassee, Florida 32301 James A. McKee, Esquire Foley and Lardner, LLP Suite 900 106 East College Avenue Ta llahassee, Florida 32301 Ryan B. Hobbs, Esquire Bryant Miller Olive, P.A. 101 North Monroe Street Tallahassee, Florida 32301 John A. Tucker, Esquire Foley and Lardner, LLP Suite 1300 1 Independent Drive Jacksonville, Florida 32202 Craig Nichols, Secr etary Department of Management Services 4050 Esplanade Way Tallahassee, Florida 32399 Josefina M. Tamayo, General Counsel Office of the General Counsel Department of Management Services 4050 Esplanade Way , Suite 160 Tallahassee, Florida 32399 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: 13-003894BID

Orders for Case No: 13-003894BID