The Issue Whether Respondent, a certified general contractor, violated the construction industry licensing law, by: (1) acting in the capacity of a contractor under a name other than as set forth on his certificate; (2) diverting construction funds resulting in his unwillingness or inability to perform pursuant to a construction contract; and (3) abandoning three construction projects, and if Respondent is guilty of such violations, the appropriate disciplinary penalty which should be imposed by the Construction Industry Licensing Board. Conclusions and Recommendation Conclusions: Respondent is guilty of the charges that he (1) acted in the capacity of a contractor under a name other than as set forth on his certificate, and (2) abandoned a single construction project; he is not guilty of the charges that he abandoned two other projects, and diverted construction funds which resulted in his unwillingness, or inability to perform pursuant to a construction contract. Recommendation: That Respondent's certified general contractor's license be SUSPENDED until such time as Respondent furnishes to the Board satisfactory evidence of having made restitution to purchasers entitled to the return of their deposits made pursuant to Hands High Ranchettes and Bass Creek of Boynton residential purchase agreements.
Findings Of Fact Respondent Fuller holds a currently active certified general contractor's license, no. CG C009750. Fuller is authorized by his certification to perform contracting only under his proper name, or the name of Bass Creek Corporation. (Testimony of Kehr, Fuller) At all times material hereto, Fuller was a general partner in two Florida limited partnerships: Bass Creek of Boynton Associates, Ltd. and Hands High Ranchettes, Ltd. These partnerships attempted to develop and construct two residential subdivisions in Palm Beach County -- Hands High Ranchettes and Bass Creek. In furtherance of this undertaking Fuller, or his agents, executed written contracts to sell lots within the developments and construct residences thereon. The Board alleged, and presented evidence at hearing for the purpose of establishing, that Fuller violated Chapter 468, Florida Statutes (1978) by his actions relating to contracts executed with three individuals -- Muriel F. Mason, Rozeanne E. White, and George C. Mitchell. (Testimony of Mason, White, Fuller, Petitioner's Exhibits 1 - 6). [AS TO MURIEL F. MASON] On September 10, 1978, Hands High Ranchettes, Ltd. entered into an Agreement of Purchase of Sale with Muriel F. Mason. By this agreement, Mason agreed to purchase a lot, with residence to be constructed thereon, in the Hands High Ranchettes residential development. The contract purchase price was $75,930.00. By January, 1979, Mason had paid into the Hands High Escrow Account, pursuant to the contract, an initial deposit of $3,915.00. (Testimony of Mason, Fuller, Petitioner's Exhibits 5, 6) Early in 1979, the bank rejected her application for a mortgage loan to finance purchase of the property. Consequently, under the contract, Fuller was not required to commence construction on the property. Moreover, Mason subsequently notified Hands High Ranchettes that she no longer wished to proceed with the contract, and requested return of her initial deposit. Under such circumstances, the purchase contract requires, and Fuller admits, that Mason is entitled to the full return of her $3,515.00 deposit. (Testimony of Mason, Fuller, Petitioner's Exhibit 5). During early July, 1979, Fuller notified Mason that 1e intended to return her $3,815.00 deposit, and that he would send her a letter to that effect. Fuller has recently earned substantial monies by selling land and completing a construction project which should enable him to return Mason's deposit no later than October, 1980. (Testimony of Mason, Fuller) [AS TO ROZEANNE WHITE] On August 19, 1975, Hands High Ranchettes, Ltd. entered into a similar Agreement of Purchase of Sale with Rozeanne White, aid her husband. By the agreement, White agreed to purchase a lot, with residence to be constructed thereon, in the Hands High Ranchettes subdivision. The purchase price was $75,000.00. By March, 1979, pursuant to the agreement, White had paid into the Hands High Ranchettes Escrow Account a $7,500.00 initial deposit. (Testimony of White, Fuller, Petitioner's Exhibit 1) In March, 1979, White obtained the necessary mortgage loan to finance purchase of the lot and construction of the residence. Hands High Ranchettes, however, except for clearing the lot and constructing foundation forms, never constructed the residence specified in the Purchase Agreement. (Testimony of White, Fuller). In July, 1979, Fuller told White that due to severe financial problems associated with the development, he would be unable to construct her residence, and would refund her deposit within thirty days. Fuller's failure to timely construct the residence imposed a severe burden on White and her family. In anticipation of her new home being built, she had sold her existing residence. When the new residence was not constructed, she had to move her family into an 18' travel trailer for seven weeks during the summer. At the time she was pregnant, and was accompanied by her husband and two children. After Fuller failed to return her deposit, she filed a suit for damages and obtained a civil judgment against Hands High Ranchettes, Fuller, and Bass Creek Corporation for $43,000.00. In satisfaction of the judgment she ultimately accepted a settlement offer of $10,000.00 plus attorney fees. (Testimony of White) [AS TO GEORGE MITCHELL] On April 28, 1979, George Mitchell and his wife entered a similar Agreement of Purchase of Sale with Fuller's other limited partnership -- Bass Creek of Boynton Associates, Ltd. The agreement covered the purchase of a lot and construction of a new residence in the Bass Creek subdivision. The purchase price was $68,301.00 and, pursuant to the contract, Mitchell paid an initial deposit of $1,001.00 (Testimony of Fuller, Petitioner's Exhibit 2). Due to no fault of Mitchell's, the residence specified in their agreement was never constructed. Fuller admits that he defaulted on his obligation under the Agreement of Purchase and that Mitchell is entitled to the refund of his $1,001.00 initial deposit. (Testimony of Fuller, Petitioner's Exhibits 3, 4) [ACTIONS OF GEORGE FULLER] Fuller, d/b/a Hands High Ranchettes, Ltd. and Bass Creek of Boynton Associates, Ltd. used the initial deposits received under the Purchase Agreements with Mason, White, and Mitchell to pay for clearing the lots, constructing foundation forms, and associated engineering and architectural fees. (Testimony of Fuller) Fuller, by his own admission, failed to perform his contractual obligation to return the initial deposits to Mason, White, and Mitchell. He promises to refund, by the end of October, 1980, any deposit monies due Mason, White, Mitchell, and other persons who entered into agreements to purchase land and construct residences within the two subdivisions. Fuller's failure to perform his contractual obligation to convey lots and construct the promised residences is not due to unwillingness or bad faith on his part, or a motive to avoid his contractual responsibilities. Rather, it is due to serious and complex financial difficulties he encountered in developing the two residential subdivisions. The two events primarily responsible for these financial difficulties were: (1) another party's breach of its contractual obligation to construct road improvements within the subdivisions; and (2) failure of the limited partner in these two ventures, Housing Capital Corporation of Washington, D.C., to furnish, as promised, $650,000.00 in interim development funds. In an effort to complete the developments, Fuller expended virtually all of his personal assets. (Testimony of Fuller) Fuller has engaged in general contracting for over forty years; charges have never before been brought against him in connection with his construction activities. For approximately twelve years he constructed numerous buildings for the Catholic Diocese of Brooklyn, N.Y. and has a wide range of experience in constructing schools, commercial buildings, residences, and apartment buildings. Since obtaining his Florida license, he undertook and successfully completed a 153-home residential development in Delrey Beach, Florida. His professional livelihood and economic well-being are dependent on his continued ability to engage in general contracting. (Testimony of Fuller).
The Issue The issue in this case is whether, in making an award of a lease for office space, the Respondent acted according to the requirements of law.
Findings Of Fact In February, 1993, the Department of Labor and Employment Security ("Department") issued a Request for Proposal and Bid Submittal No. 540:0969 ("RFP") seeking to lease approximately 18,684 square feet of office space in Jacksonville, Florida, for a period of six years. The space was to house the Office of Disability Determinations ("ODD"), which processes disability claims and determines whether claimants are eligible for Social Security and Supplemental Income benefits. The office has minimal contact with the general public. The RFP provided that all bids were subject to conditions stated within the RFP. Bids not in compliance with RFP conditions were subject to rejection. RFP Article D, General Provisions, Paragraph 8 provides as follows: The Department reserves the right to reject any and all bid proposals for reasons which shall include but not be limited to the agency's budgetary constraints; waive any minor informality or technicality in bids' to accept that bid deemed to be the lowest and in the best interest of the state, and if necessary, to reinstate procedures for soliciting competitive proposals. A pre-bid conference was conducted by the Department on February 16, 1993. Representatives from the vendors involved in this proceeding attended the conference. Bids were opened on March 5, 1993. The Department received five responses, three of which were deemed to be responsive and which were evaluated. The remaining two responses were determined to be nonresponsive and were not evaluated. On or about March 10, 1993, based on the evaluations, the Department proposed to award the bid to Koger Properties, Inc. On or about March 17, 1993, the Department notified the vendors of the intended award. The Petitioners filed timely notices protesting the intended award. TOWNCENTRE PROPOSAL Paragraph 13 sets forth conditions to which a bidder must agree in order to be awarded a bid. Subsection "a" of the paragraph states, "[i]f successful, bidder agrees to enter into a lease agreement on the Department of General Services Standard Lease Agreement Form BCM 4054 (Attachment F - Do not complete)." The copy of the Department of General Services Standard Lease Agreement Form which was included in the RFP was a poorly reproduced copy. Article III of the Lease Agreement Form provides as follows: III HEATING, AIR CONDITIONING AND JANITOR SERVICES 1.a. The Lessor agrees to furnish to the Lessee heating and air conditioning equipment and maint(illegible) in satisfactory operating condition at all times for the leased premises during the term of the lease at the (illegible) of the Lessor. b. The Lessor agrees to maintain thermostats in the demised premises at 68 degrees Fahrenhe(illegible) the heating season and 78 degrees Fahrenheit during the cooling season; and certifies that boilers the(illegible) been calibrated to permit the most efficient operation. The Lessor agrees to furnish janitorial services and all necessary janitorial supplies for the leased (illegible) during the term of the lease at the expense of the Lessor. All services required above shall be provided during the Lessee's normal working hours, whic(illegible)marily from 7:30 a.m. to 5:30 p.m., Monday through Friday excluding state holidays. Also attached to the RFP was a copy of an addendum to the lease, also poorly reproduced. The addendum provides as follows: Article III, Paragraph III Addendum for Full Service Lease The lessor and lessee mutually agree that the described prem(illegible) leased in this lease agreement shall be available to the department (lessee) for its exclusive use twenty four (24) (illegible) per day, seven (7) days per week during the lease term. T(illegible) space to be leased by the department will be fully occupied during normal working hours from 7:30 a.m. to 5:30 p.m., Mo(illegible) through Friday, excluding holidays, Saturdays and Sundays, (illegible) may be fully or partially occupied during all other periods (illegible) time as necessary and required at the full discretion of th(illegible) department. Accordingly, services to be provided by the le(illegible) under the terms of the lease agreement, including electrici(illegible) other utilities, will be provided during all hours of occup(illegible) at no additional cost to the department (lessee). Although the copy of the lease agreement and addendum included in the RFP were poorly reproduced, it is clear that the addendum modifies the paragraph of the lease agreement related to provision of heating, air conditioning and janitorial services to require that HVAC services be provided throughout the premises during all hours of occupancy at no additional cost to the Department. The proposal submitted by Towncentre included an "Attachment Z" which states as follows: The following represent exceptions and/or clarifications to the terms of the Request for Proposal and Bid Submittal Form ("RFP") for the referenced Lease. Except as noted herein, Bidder shall comply fully with the terms of the RFP..." Item #7 of Attachment Z states as follows: The Building in which the space is offered is serviced by central heating, ventilating and air conditioning; therefore, no separate thermostats will be provided in the space other than in the computer room. However, the required temperature standards will be maintained and satisfied. The computer room HVAC shall be available 24 hours a day. Otherwise, after-hours HVAC is billed at $80 per hour. Attachment Z also included additional exceptions to the provisions of the RFP. Contrary to the requirements set forth in the addendum attached to the lease form included in the RFP, the Towncentre proposal included additional charges for after hours uses. The Department determined that the Towncentre proposal was nonresponsive and disqualified the proposal from further consideration. Because the Towncentre proposal includes HVAC charges which are specifically prohibited under the terms of the RFP, the Towncentre proposal is nonresponsive to the RFP. Towncentre asserts that other sections of the RFP indicate that, within the leased premises, only the computer room is required to be heated or cooled on a continuous basis. Vendors had an adequate opportunity to direct questions regarding the RFP to Department officials. There is no evidence that Towncentre sought clarification from the Department related to this matter prior to submitting the bid proposal. In the notification to Towncentre that the bid had been determined to be nonresponsive to the RFP, the Department identified the other exceptions as additional reasons for the determination of nonresponsiveness. At hearing Towncentre introduced no evidence related to the remaining items included within Attachment Z. BRYAN SIMPSON JR. FOR P.V. ASSOCIATES The Simpson bid was deemed to be responsive and was evaluated. The evaluations were performed by three Department employees, Dorea Sowinski, Albert Cherry, and Tom Mahar. On March 9, 1993, the evaluators visited the physical locations of the three responsive bids. (Although the bid had been declared nonresponsive, they also visited the Towncentre site, apparently as a courtesy.) The Simpson space is located in downtown Jacksonville. After completion of the site visits, the evaluators separately and independently completed their evaluation sheets. The evaluators awarded a total of 262 points to Koger Properties and 248 points to Simpson. Page 7 of the RFP sets forth the evaluation criteria which were considered in awarding evaluation points. The RFP stated as follows: The successful bid will be the one determined to be the lowest and best. All bids will be evaluated based on the award factors enumerated below: Rental, using Present Value methodology for basic term of lease (See D, General Provisions Items 3 and 4) applying the present value discount rate of 5.6 per cent. (Weighing: 35) Conformance of and susceptibility of the design of the space offered to efficient layout and good utilization and to the specific requirements contained in the Invitation to Bid. (Weighing: 20) The effect of environmental factors, including the physical characteristics of the building and the area surrounding it on the efficient and economical conduct of the Departmental operations planned for the requested space. (Weighing: 20) Offers providing contiguous space within preferred boundaries. (Weighing 5) Frequency and availability of satisfactory public transportation within one block of the offered space. (Weighing 15) Availability of adequate dining facilities within one mile of the offered space. (Weighing: 2) Proximity of offered space to the clients served by the Department at this facility. (Weighing: 3) Proximity of offered space to other Department activities as well as other public services. (Weighing: 0) TOTAL POINTS: 100 Simpson asserts that the evaluators acted improperly in awarding points in categories 3, 5, 6 and 7. Category 3 relates to the effect of environmental factors, including the physical characteristics of the building and the area surrounding it on the efficient and economical conduct of the Departmental operations planned for the requested space. Although Simpson asserts that category 3 is vague and ambiguous, there was no objection to the category prior to the submission of the bid responses and the announcement of the proposed lease award. Each evaluator could award up to 20 points in this category for a total of 60 available points. Koger was awarded 55 points. Simpson received 27 points. As to individual evaluators awards, Tom Mahar awarded Simpson five points, Albert Cherry awarded Simpson ten points, and Dorea Sowinski awarded Simpson 12 points. Based on the written memo dated March 10, 1993, identifying the reasons for the recommended bid award, two of the three evaluators considered the Koger space to be located in a safer area than the Simpson facility, and, at least in part, based their point awards on this factor. The two evaluators cite minimal anecdotal information in support of their opinions. The evaluators undertook no investigation related to safety issues and there are no facts to support their opinions. Their award of points for "environmental factors" is arbitrary. Category 5 relates to the frequency and availability of public transportation within one block of the offered space. Each evaluator could award up to 15 points in this category for a total of 45 available points. Both Koger and Simpson received the maximum 45 points. RFP Page Two, question 8 provides as follows: Public Transportation availability: BIDDER RESPONSE: (Check appropriate box) Taxi , Bus , Frequency of service closest bus stop . Both Koger and Simpson indicate service by taxi and bus. The Koger proposal indicates a frequency of service as "8 BUSES" and the closest bus stop as "IN FRONT OF BUILDING ON WOODCOCK DRIVE." Simpson indicates a frequency of service as "15 minutes" and the closest bus stop as "front of building." The Department asserts that the Koger level of transportation access, albeit less than that serving the Simpson site, is satisfactory and therefore entitled to an award of all points available. Simpson asserts that the greater availability of public transportation to the Simpson site should result, under the terms of the evaluation criteria, in Simpson receiving more points than the Koger site for this category. The evaluation criteria clearly requires consideration of both the frequency and availability of satisfactory public transportation. Simpson asserts that in considering the transportation category, the evaluators should have reviewed local public transportation schedules. Review of such schedules establishes that the Simpson site is served more frequently by public bus transportation than is the Koger site, and further establishes that the number of bus routes directly serving the Simpson property far exceeds the routes serving the Koger site. Simpson did not include the schedules in the RFP response. The Simpson site is also located nearby the downtown public transportation transfer station at which point many, perhaps all, local bus routes connect. Simpson did not denote the location of the transfer station in the RFP response While the evaluation committee is not required to consider the bus schedules in reviewing bid proposals, the evaluation committee failed to consider the substantially greater frequency and availability of public transportation to the Simpson site relative to the Koger site, as set forth in the respective RFPs. The Department's position is contrary to the specific criteria identified in the RFP. The award of equivalent points for transportation access to both Simpson and Koger is unsupported by fact or logic and is arbitrary. Category 6 relates to the availability of adequate dining facilities within one mile of the offered space. Each evaluator could award up to two points in this category for a total of six available. Koger was awarded six points. Simpson received one point. When the evaluators rated the adequacy of dining facilities, they considered only those dining facilities which were located within two blocks of the offered space. Such is contrary to the clear terms of the RFP. The Department offered no rationale for the decision to amend the RFP criteria after submission of the proposals. The Simpson RFP response states only that there are adequate dining facilities within walking distance of the offered facility. The Koger response states that there are "three (3) sandwich shops within walking distance in the Koger center and other numerous restaurants within one (1) mile." As to individual evaluators awards, Tom Mahar awarded Simpson one point, while both Albert Cherry and Dorea Sowinski awarded Simpson zero points. Mahar's award was based on his opinion, again based on alleged safety concerns, that employees would be hesitant to walk to nearby restaurants and that driving and parking presented a problem in the downtown location. Cherry voiced a similar opinion. As to alleged safety concerns, Mahar and Cherry again based their opinions on minimal anecdotal information, supported by neither fact nor logic. Neither evaluator undertook any factual analysis of the safety issues relative to the proposed site. Their award of points for this category is arbitrary. On the other hand, Sowinski did not see any restaurants close to the Simpson site during the site visit. In excess of 40 restaurants are located within one mile of the Simpson site. The restaurants provide a variety of dining options both as to expense and fare. Sowinski's failure to observe restaurants located across the street from the Simpson site is, although difficult to understand, apparently a simple mistake on her part. Category 7 relates to the proximity of offered space to the clients served by the Department at this facility. Each evaluator could award up to three points in this category for a total of nine available. Simpson offered no evidence that the determination of points awarded for category 7 was inappropriate.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the Department of Labor and Employment Security enter a Final Order DISMISSING the protest filed by Towncentre Venture, and WITHDRAWING the proposed award of lease contract based on the Request for Proposal and Bid Submittal No. 540:0969. DONE and RECOMMENDED this 28th day of June, 1993, in Tallahassee, Florida. WILLIAM F. QUATTLEBAUM Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 28th day of June, 1993. APPENDIX TO CASES NO. 93-2015BID and 93-2106BID The following constitute rulings on proposed findings of facts submitted by the parties. Petitioner Towncentre Venture Towncentre Venture's proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 4. Rejected, second sentence is irrelevant. 5-7. Rejected, irrelevant. Taken as a whole, the RFP indicates that HVAC services are to be provided throughout the leased premises during all hours of occupancy at no additional cost to the Department. The evidence fails to establish that the vendors were confused about the terms of the RFP. There were apparently no related questions addressed to Department personnel during the pre-bid conference or at any time subsequent to the conference and prior to the bid opening. 10. Rejected. Not supported by the document cited which does not identify the attachment by letter. 13. Rejected, irrelevant. The standard form lease included in the RFP was a sample document. None of the blank spaces were completed. 16. Rejected, irrelevant. The attendees at the conference were provided an opportunity to inquire as to all matters. There were apparently no questions asked related to the RFP's requirement that HVAC services be provided throughout the facility during all hours of occupancy at no additional cost to the Department. 17-18, 20-21. Rejected, irrelevant. The terms of the RFP are clear. 19. Rejected, irrelevant. The terms of the addendum for full service lease clearly indicate that such HVAC services were to be provided at no additional charge, not just in the computer room, but throughout the entire leased facility. 22. Rejected. The Towncentre bid was nonresponsive to the terms of the RFP. Petitioner Bryan Simpson, Jr., for P. V. Associates P. V. Associates' proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 3. Rejected, not supported by the greater weight of the evidence which establishes that the RFP was issued seeking space for the Jacksonville Office of Disability Determinations. 4, 23, 24. Rejected, unnecessary. Respondent Department of Labor and Employment Security The Respondent's proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 17. Rejected. The decision to award equivalent points for public transportation access fails to reflect the substantially greater access provided to the Simpson site and is arbitrary. 20-21. Rejected, not supported by greater weight of evidence which establishes no evidence that safety concerns were based on a reasonable evaluation of facts. There are no facts to support the conclusion that the Simpson location if less safe than the Koger site. COPIES FURNISHED: Shirley Gooding, Acting Secretary Suite 303, Hartman Building 2012 Capital Circle S.E. Tallahassee, Florida 32399-2152 Cecilia Renn Chief Legal Counsel Suite 307, Hartman Building 2012 Capital Circle, S.E. Tallahassee, Florida 32399-2152 Thomas M. Jenks, Esquire Pappas and Metcalf, P.A. 1 Independent Drive, Suite 3301 Jacksonville, Florida 32202 Nathan D. Goldman, Esquire Marcia Maria Morales, Esquire 200 Laura Street Post Office Box 240 Jacksonville, Florida 33202 Edward Dion, Esquire Assistant General Counsel Suite 307, Hartman Building 2012 Capital Circle S.E. Tallahassee, Florida 32399-2189
The Issue The central issue in this case is whether Respondent's yacht and ship salesman's license should be disciplined for the reasons set forth in the notice of intent to revoke license dated June 14, 1994.
Findings Of Fact The Department is the state agency charged with the responsibility to regulate persons pursuant to Chapter 326, Florida Statutes. On April 30, 1993, the Department received an application for a yacht and ship broker or salesman license (the application) submitted by Respondent, Thomas I. Davis, Jr. The application provided, in pertinent part: LICENSES AND CERTIFICATES: Have you now or have you ever been licensed or certified in any other profession such as real estate, insurance, or securities in Florida or any other state? Yes No If you answered yes, please describe: Profession License # First Obtained Status of License (a)Has any license, certification, registration or permit to practice any regulated profession or occupation been revoked, annulled or suspended in this or any other state, or is any proceeding now pending? Yes No (b) Have you ever resigned or withdrawn from, or surrendered any license, registration or permit to practice any regulated profession, occupation or vocation which such charges were pending? Yes No If your answer to questions (a) or (b) is Yes, attach a complete, signed statement giving the name and address of the officer, board, commission, court or governmental agency or department before whom the matter was, or is now, pending and give the nature of the charges and relate the facts. In response to the application questions identified above, Respondent entered the following answers: "No" as to questions 11, 12(a), and 12(b). As a result of the foregoing, Respondent was issued a yacht and ship salesman's license on May 10, 1993. Thereafter, the Department learned that Respondent had been censured by the NASD. In a decision entered by that body accepting Respondent's offer of settlement, Respondent was given a censure, a fine of $20,000.00, and a suspension in all capacities from association with any member for a period of two (2) years with the requirement that at the conclusion of such suspension that he requalify by examination for any and all licenses with the Association. The censure also provided a specific payment plan for the $20,000 fine which was assessed. To date, Respondent has not complied with that provision of the settlement. From 1973 through 1991, Respondent was registered with several different firms pursuant to Chapter 517, Florida Statutes. Additionally, Respondent has been licensed to sell securities in the following states: California, Colorado, Connecticut, Delaware, Idaho, Illinois, Louisiana, Maine, Maryland, Nevada, and New York. Respondent has also been licensed in Washington, D.C. and Puerto Rico. Respondent has been a licensed stock broker with the Securities and Exchange Commission since 1971. Respondent answered questions 11 and 12 (a) and (b) falsely. Respondent knew he was licensed to sell securities and knew of the sanction from the NASD at all times material to the entry of the answers. Pursuant to Rule 61B-60.003, when the Department receives an application for licensure which is in the acceptable form, it is required to issue a temporary license. Had the Respondent correctly answered questions 11 and 12 on the application, the Department would not have issued Respondent's license.
Recommendation Based on the foregoing, it is, hereby, RECOMMENDED: That the Department of Business and Professional Regulation, Division of Florida Land Sales, Condominiums, and Mobile Homes, enter a final order dismissing Respondent's challenge to the notice of intent and revoking his license. DONE AND RECOMMENDED this 13th day of March, 1995, in Tallahassee, Leon County, Florida. JOYOUS D. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 13th day of March, 1995. APPENDIX TO RECOMMENDED ORDER, CASE NO. 94-4258 Rulings on the proposed findings of fact submitted by the Petitioner: Paragraphs 1 through 9, 11, 13, and 15 through 17 are accepted. Paragraph 10 is rejected as repetitive. Except as to findings reached above, paragraphs 12 and 14 are rejected as irrelevant. It is found that Respondent falsely answered question 11. Rulings on the proposed findings of fact submitted by the Respondent: Respondent's proposed findings of fact are rejected as they do not comply with Rule 60Q-2.031(3), Florida Administrative Code. However, to the extent findings do not conflict with the findings of fact above, they have been accepted. Such proposed findings of fact are paragraphs: 1, 7 and 8. The remaining paragraphs are rejected as they are not supported by the record cited (none), irrelevant, argument, or contrary to the weight of the credible evidence. COPIES FURNISHED: Lynda L. Goodgame General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 E. Harper Field Senior Attorney Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-1007 David M. Goldstein LAW OFFICE OF DAVID M. GOLDSTEIN 100 S.E. 2nd Street Suite 2750 International Place Miami, Florida 33131
The Issue Whether disciplinary action should be taken against Respondent’s license to practice contracting, license number CGC 060878, based on violations of Subsection 489.129(1), Florida Statutes (2005)1, as charged in the three-count Administrative Complaint filed against Respondent in this proceeding. Whether Respondent violated Subsection 489.129(1)(g)2., Florida Statutes (Count I) by committing mismanagement or misconduct in the practice of contracting that causes financial harm to a customer; Subsection 489.129(1)(j), Florida Statutes (Count II) by abandoning a construction project in which the contractor is engaged or under contract as a contractor, and Subsection 489.129(1)(m), Florida Statutes (Count III) by committing incompetency or misconduct in the practice of contracting. And, if so, what discipline should be imposed, pursuant to Section 489.129, Florida Statutes, and Florida Administrative Code Rule 61G4-17.002.
Findings Of Fact Based on the evidence and testimony of the witnesses presented and the entire record in this proceeding, the following facts are determined: At all times material, Respondent was a certified general contractor, having been issued license number CGC 060878 by the Florida Construction Industry Licensing Board (CILB). At all times material, Respondent was the qualifier of Epic Building and Development Corporation, a Florida Corporation, with its principal place of business in the Fort Myers area. On February 22, 2005, Respondent entered into a contract with Edward Dueboay to rebuild a house owned by Dueboay and his wife, located at 22299 Laramorre Avenue, Port Charlotte, Florida, which had been distroyed some months earlier by Hurricane Charlie. The price of the contract was $150,000.00. On or about March 24, 2005, Dueboay gave Respondent a check in the amount of $3,500 payable to Contractors Marketing America, Inc. (CMA, Inc.), for the engineering plans. On May 6, 2005, Dueboay paid Respondent $5,000, as an advance on the contract. Respondent did not obtain the building permit from the Charlotte County Building Department until December 12, 2005, and work on the project did not start until January 2006. Because of the enormous damage caused by the hurricane, contractors in the area were flooded with jobs, and significant shortages in building materials also occurred. On January 13, 2006, Respondent billed Dueboay $11,000.00 for land clearing and filling, $750.00 for permit fees, and $3,200.00 for a temporary electric pole. The bill gave credit for the $5,000.00 Dueboay paid on May 6, 2005, and showed a balance due of $10,000.00. On January 20, 2006, Dueboay paid the above-mentioned invoice, by check to Respondent, in the amount of $10,000.00. Respondent paid $4,600.00 to the sub-contractor who performed the lot clearing and filling, but billed Dueboay $11,000.00. However, the contract provided for a $2,500.00 allowance for clearing and filling, and a $750.00 allowance for permit fees. Section 11.c of the contract also provided that Respondent shall provide and pay for all materials and utilities and all other facilities and services necessary for the proper completion of the work on the project in accordance with the contract documents. To pay for the remainder of the contract, Dueboay negotiated and obtained a loan in the total amount of $153,000.00 from Suncoast Schools Federal Credit Union (Credit Union). On March 21, 2006, Dueboay and the Credit Union signed the construction loan agreement. On March 21, 2006, Respondent was paid $18,235.00 by the Credit Union for the pre-cast walls used in the erection of the structure. On May 11, 2006, Respondent finished Phase I of the project. On May 15, 2006, Respondent received $11,350.00 as the first draw by the Credit Union. On June 20, 2006, Respondent finished Phase II of the project. On June 20, 2006, Respondent was paid $26,335.00 as the second draw by the Credit Union. From June 2006 to November 2006, Respondent performed no work on the house under the Dueboay contract. Because the roof was not completed, mold appeared on and in the house. On August 21, 2006, Dueboay paid $109.95 to America’s Best Cleaning and Restoration, Inc., for mold removal. On or before September 13, 2006, Dueboay hired an attorney to clarify billing charges related to lot filling, permit fees and the temporary electric pole, and to prompt Respondent to resume work abandoned since June 2006. Under the Credit Union Loan Agreement, after several extensions, the completion of the Dueboay home should have taken place on or before October 17, 2006. On October 18, 2006, the Loan Agreement extension expired, and Dueboay was required to pay mortgage and interest on the loan, even though construction of the house was not completed. On November 10, 2006, Dueboay’s attorney sent Respondent a third letter advising him that the project was stagnating; that after eighteen months since the signing of the contract, the roof of the house was not yet completed; and that, under the contract, Respondent was obligated to substantially complete all work in a reasonable time after construction had started. On or about December 1, 2006, the building permit expired and had to be renewed. At some point after November 10, 2006, Respondent resumed work and finished Phase III on March 8, 2007, with the exception that some doors were not installed, including the garage door. Respondent submitted a sworn Contractor’s Affidavit stating that all subcontractors had been paid, and that there are no liens against Dueboay’s property. However, Dueboay had to pay Charlotte County Utilities $224.93 on October 29, 2007, and $240.00 to Pest Bear, Inc., on May 7, 2008, to avoid two liens being recorded against his property. From March 8, 2007, until July 2007, Respondent performed no work under the contract. David Allgood, another general contractor, was hired by Respondent to complete some of Respondent’s projects in the Port Charlotte area, including the Dueboay house. However, Dueboay was not informed of this arrangement. There was no contract directly between Dueboay and Allgood. On September 4, 2007, relying on advice from his attorney, Dueboay changed the locks to the house, with the intent to keep Respondent and his employees off his property. Shortly thereafter, employees of general contractor David Allgood broke the front lock and entered the property in September 2007, without Dueboay’s permission. Dueboay, again, following advice from this attorney, called law enforcement to eject Allgood’s employees from his property. Allgood attempted to invoice Dueboay for installing some doors on the house that Respondent had previously paid for, and which Respondent should have installed. However, following advice from his attorney, Dueboay resisted Allgood’s request to pay him for the doors. Respondent was paid a total of $122,246.03 for the Dueboay project, before the contract was cancelled. Respondent did not complete work from Phases IV and V, with the following exceptions: he did some work on the driveway, painted the interior, did some cabinet work, exterior trim and soffit, siding, stucco, and some interior trim. Therefore, Respondent completed, at best, three out of seven operations from Phase IV (interior and exterior paint, interior trim and doors, and exterior trim and soffits) and worked on, but did not complete, stucco and some cabinets. From Phase V, Respondent only worked on the driveway and sidewalks, which had to subsequently be repaired. Dueboay hired Storybook Homes, Inc. (Storybook), to complete work abandoned by Respondent from Phases IV and V. Storybook was hired to complete work as follows: install cabinets and vanities, install ceramic tiles, repair stucco, install custom tub, all electrical and plumbing per code, complete exterior paint, install hardware, sinks and faucets in the baths and showers, complete floors, install all appliances, complete air conditioning and heat, and obtain the certificate of occupancy. The amount of $122,246.03 paid to Respondent at the time when Respondent abandoned the Dueboay project represents 81 percent of the total contract price of $150,000.00. Respondent completed, at best, 75 percent of the job by completing only three out of seven operations of Phase IV and working on some additional operations that needed to be redone, like the driveway, sidewalks and stucco. Due to Respondent’s failure to perform work on time, Dueboay incurred $5,116.42 in additional expenses, as follows: $109.95 on August 21, 2006 (mold removal), $360.00 on November 23, 2006 (legal fees), $175.00 on June 4, 2007 (legal fees), $375.00 on September 4, 2007 (legal fees), $224.93 on October 29, 2007 (to satisfy lien), $668.34 on November 3, 2007 (legal fees), $200.00 on April 4, 2008 (legal fees), $1,151.05 on May 7, 2008 (to correct work performed deficiently by Respondent), $390.00 on May 7, 2008 (to repair driveway), $240.00 on May 7, 2008 (to avoid lien), and $412.00 on May 12, 2008 (to install safe room door that Respondent failed to install). The total investigative costs of this case to Petitioner, excluding costs associated with any attorney’s time, for Petitioner’s case no. 2005-028129 was $276.18.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Board render a Final Order as follows: Finding Respondent guilty of having violated Subsection 489.129(1)(g)2., Florida Statutes, as alleged in Count I of the Administrative Complaint, and imposing as a penalty an administrative fine in the amount of $1,500. Finding Respondent guilty of having violated Subsection 489.129(1)(j), Florida Statutes, as alleged in Count II of the Administrative Complaint, and imposing as a penalty an administrative fine in the amount of $2,500. Finding Respondent guilty of having violated Subsection 489.129(1)(m), Florida Statutes, as alleged in Count III of the Administrative Complaint, and imposing as a penalty an administrative fine in the amount of $1,500. Respondent’s license to practice contracting (CGC 060878) be suspended for a period of three months, followed by a period of probation for two years, upon such conditions as the Board may impose, including the payment of costs and restitution. Requiring Respondent to pay financial restitution to the consumer, Edward Dueboay, in the amount of $5,116.42 for consumer harm suffered due to payment of additional expenses. Requiring Respondent to pay Petitioner’s costs of investigation and prosecution, excluding costs associated with an attorney’s time, in the amount of $276.18. DONE AND ENTERED this 21st day of July, 2009, in Tallahassee, Leon County, Florida. S DANIEL M. KILBRIDE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 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 21st day of July, 2009.
The Issue Pursuant to chapter 287, Florida Statutes, and section 255.25, Florida Statutes,1/ the Department of Management Services (DMS) released an Invitation to Negotiate for a contract to provide tenant broker and real estate consulting services to the State of Florida under Invitation to 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 award a contract to CBRE, Inc. (CBRE) and Vertical Integration, Inc. (Vertical). At issue in this proceeding is whether DMS’s intended decision to award a contract for tenant broker and real estate consulting services to CBRE and Vertical is contrary to DMS’s governing statutes, its rules or policies, or the ITN’s specifications, or was otherwise clearly erroneous, contrary to competition, arbitrary, or capricious.
Findings Of Fact Based on the demeanor and credibility of the witnesses and other evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made: Background5/ DMS released Invitation to Negotiate No. DMS-12/13-007 on March 18, 2013, and released a revised version of the ITN on May 14, 2013, for the selection of a company to provide tenant broker and real estate consulting services to the State of Florida. Thirteen vendors responded to the ITN. The replies were evaluated by five people: Bryan Bradner, Deputy Director of REDM of DMS; Beth Sparkman, Bureau Chief of Leasing of DMS; Rosalyn (“Roz”) 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. 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. DMS held a first round of negotiations and then held a public meeting on July 16, 2013. 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, the Request for Best and Final Offers. This Addendum contained the notice that “Failure to file a protest within the time prescribed in section 120.57(3) . . . shall constitute a waiver of proceedings under chapter 120 of the Florida Statutes.” The vendors 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 award. For the second company, two of the three negotiation team members recommended CBRE and one negotiation team member recommended JLL. DMS prepared a memorandum, dated August 14, 2013, describing the negotiation team’s recommendation of award. The 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 Team’s Recommendation); 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 vendors’ BAFOs. DMS posted the Notice of Intent to Award to CBRE and Vertical on August 16, 2013. Cushman and JLL timely filed notices of intent to protest the Intent to Award. On August 29, 2013, JLL timely filed a formal protest to the Intent to Award. On August 30, 2013, Cushman timely filed a formal protest to the Intent to Award. An opportunity to resolve the protests was held on September 9, 2013, and an impasse was eventually reached. On October 10, 2013, DMS forwarded the formal protest petitions to DOAH. An Order consolidating JLL’s protest and Cushman’s protest was entered on October 15, 2013. Scope of Real Estate Services in the ITN Prior to the statutory authority of DMS to procure real estate brokerage services, agencies used their own staff to negotiate private property leases. Section 255.25(h), Florida Statutes, arose out of the legislature’s desire for trained real estate professionals to assist the State 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. 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 contract, 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 the ITN was lease transactions. 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 leases. 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 (BPOs). In almost all instances, this would be provided at no charge 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. 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 Scope of Work prepared by the individual agency, with compensation at either the hourly rates (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. In Florida, most 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 (“Board”), which holds title to land owned by the State 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 include DEP’s 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 contract adequately addressed DEP’s concerns. 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 contract 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 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 (Qualifications) and Part B (Business Plan). Qualifications were worth 40 points, the Business Plan was worth 50 points, and the proposed pricing was worth 10 points. For the Business Plan, the ITN requested a detailed narrative description of how the vendors planned to meet DMS’s 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. Section 3.01, Scope of Work, states that the primary objective of the ITN is to “identify brokers to assist and represent the Department and other state agencies in private sector leasing transactions.” The ITN states that the contractor will provide state agencies and other eligible users with real estate transaction and management services, which include “document creation and management, lease negotiation and renegotiation, facility planning, construction oversight, and lease closeout, agency real estate business strategies, pricing models related to relocation services, project management services, acquisition services, and strategic consulting.” Id. The ITN also specifies: Other real estate consulting services such as property acquisitions, dispositions, 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 analyses). The ITN lists the following duties the contractor will perform: Act as the state’s tenant broker, to competitively solicit, negotiate and develop private sector lease agreements; Monitor landlord build-out on behalf of state agencies; Provide space management services, using required space utilization standards; Provide tenant representation services for state agencies and other eligible users during the term of a lease; 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 space; 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 Provide requested related real estate consulting services. 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 “other services,” the ITN states: With respect to all other services (e.g., space management services, general real estate consulting services, property acquisitions, dispositions, general property consulting, 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 rates (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. The ITN also required that vendors specify the number of credit hours to be given 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 them to individual 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 mandated project, DMS has never exhausted its pool of credit hours. 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. The ITN states that points to be awarded under the price criterion will be awarded based on the number of annual credit hours offered and the commission rate paid per transaction per hour of commission received. 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 will proceed to negotiations. Regarding negotiations, the ITN states: 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 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 experts, subject matter advisors and multi-agency or legislative advisors to assist the negotiation 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: At the conclusion 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 Respondent’s BAFO will be delivered to the negotiation team for review. Thereafter, the negotiation team will meet in a public meeting to determine which offer constitutes the best value to the state based upon the selection criteria. The Department does not anticipate reopening negotiations after receiving BAFOs, but reserves the right to do so if it believes doing so will be in the best interests of the State. The ITN and draft contract permit subcontractors to perform under the contract and provide an avenue for a contractor to add subcontractors by submitting a written request to DMS’s contract manager with particular information. Best and Final Offers 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 would 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 start of the new contract. 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 of three, the additional potential volume for each vendor on the contract could support the lower commission rates being requested of tenant brokers. The state 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, it’s counterintuitive that having fewer vendors would result in more favorable 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 – The Witness: Correct. The Court: -- for the new contract. I’m unclear. Tell me the basis for the team’s 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 I’ll talk, for context, new leases, which right now is at 4 percent. So the discussion was – and 4 percent is typical of the industry. That’s 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 – and I can’t remember – zero and a half million, what would your percentage be? Thinking that when we had a tiered arrangement, those percentages would come down. They really didn’t. So when we sat down as a team and discussed: Well, why didn’t they – 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. 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. 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, 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, and vendor experience and capability. CBRE’s BAFO submission followed the format indicated in the RBAFO, but CBRE included an additional section giving its proposed commission 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. 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 transaction. This is redundant, as the ITN required 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 Cushman on tenant representative 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 perform 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 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 team’s award recommendation, and draft a written award recommendation memorandum. During the August 14, 2013, meeting the team determined that CBRE and Vertical represented 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 because they were more forward thinking in their long term business strategies for managing Florida’s portfolio. Also at this meeting, Ms. Sparkman noted that CBRE’s 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 represented the best value to the state regardless of 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. Ms. Sparkman also stated at the public meeting 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 to execute the written terms and conditions. The “contract negotiations” 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 hearing, 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, if either CBRE or Vertical refused to sign the contract altogether, DMS would potentially have selected a third-place vendor in order to have a second vendor on the contract, according to Ms. Sparkman. International experience weighed in favor of CBRE and Vertical, according to team member comments made at the public meeting. Although the phrase “international experience” 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. Vendor 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 trends change more rapidly than domestic market trends. None of the negotiation team members recommended Cushman for a contract award, and in fact, Cushman's name was not even discussed at the award meeting. The Award Memorandum Also during the August 14, 2013, public meeting the negotiation team prepared a memorandum setting forth the negotiation team’s best value recommendation of CBRE and Vertical, and many of its reasons for the recommendation. There was no requirement that the memorandum list every single reason that went into the decision. For example, the memorandum did not state that the team found CBRE and Vertical’s focus on long term strategies more impressive than Cushman’s focus on past performance under the current contract. The award memorandum included a “Selection Criteria” section which simply repeated the nine selection criteria that had been previously identified in the RBAFO. The memorandum then went on to include a section labeled “B. Technical Analysis” that stated: Analysis 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 portfolio 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. Ms. Sparkman testified that while the choice of wording may have been imprecise, the items listed in the 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 fifth was specifically listed in the RBAFO. Indeed, Cushman’s Senior Managing Director testified at hearing that Cushman had addressed the first four items in their presentation to DMS during the negotiation phase to demonstrate why Cushman should be chosen for the contract. 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 CBRE’s inclusion of these proposed rates a minor irregularity that could be waived in accordance with the ITN and addressed in the contract execution phase, since those rates were for ancillary services, and there was no guaranteed work to be done for DEP under that fee structure. 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 Cushman’s price for IMAs and BOVs as $240 and 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 Negotiations After Award of the Contract Cushman alleges that DMS’s selection of CBRE violates the ITN specifications because DMS selected CBRE with the intent of conducting further negotiations regarding price, 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 Florida’s statutes and the ITN. Amended Pet. ¶¶ 23, 28 & 31. Section 2.14 of the ITN specifically reserved DMS's right to reopen negotiations after receipt of BAFOs if it believed such was in the best interests of the state. Specifically, section 2.14 A. provides: The highest ranked Respondent(s) will be invited 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 state’s needs and is determined to provide the best value to the state. The statements made by Ms. Sparkman at the August 14, 2013, public 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. Bradner, the two negotiation team 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 represent the best value to the state. The anticipated efforts to obtain lower prices from CBRE were simply an attempt to obtain an even better best value for the state. Ms. Sparkman also testified that section 2.14 F. allowed continued negotiations, even though it was silent as to timeframe. Paragraph F states: In submitting a Reply a Respondent agrees to be bound to the terms of Section 5 – General Contract Conditions (PUR 1000) and Section 4 – 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 state. Ms. Sparkman also cited section 2.14 I. as authority for reopening negotiations following receipt of the BAFO’s. That section provides: The Department does not anticipate reopening 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 state. Ms. Sparkman’s statement that if DMS failed, for any reason, to successfully contract with either of the two vendors selected, it would consider pulling in another vendor, is not inconsistent with the clear language of the ITN. Selection Criteria Cushman alleges that DMS used criteria to determine the awards that were not listed in the ITN or the RBAFO. Amended Pet. ¶ 25. Section 2.14 E of the ITN established broad selection criteria, 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 requirements 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 experts, 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 conditions of the Contract. (emphasis added). Following the negotiations, and with the assistance of its subject matter expert, the negotiation team provided in the RBAFO additional clarity as to the selection criteria, and identified the "Basis of Award/Selection Criteria" as follows: Performance 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 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 during 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. As the principal 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 team in making its best value determination. Ms. Sparkman further testified that the best value determination resulted from the negotiation team's lengthy and extensive evaluation of the vendors' initial written replies to the ITN, review of the vendors' qualifications 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. Applying the selection criteria contained in the ITN and the RBAFO, the negotiation team selected Vertical for several reasons, including its performance indicators, employees with ADA certification, computer programs and employee training not offered by other vendors, its presence in Florida, and the strength of its business plan and presentation. Similarly, the negotiation team 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. Ms. Sparkman observed that both Vertical and CBRE specifically identified the CBRE staff who would manage the state's business and daily transactions, while it was not clear from Cushman's ITN reply 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. Ms. Sparkman also noted that with respect to the 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 team. Cushman's reply to the ITN also included various discrepancies noted at the final hearing. While Cushman's ITN reply identifies a Tallahassee office, Cushman does not in fact have a Tallahassee office, but instead listed its subcontractor’s office.6/ Additionally, two of the business references presented in Cushman's ITN Reply 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 written. 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. Based on all of the above, DMS's decision to award contracts to Vertical and CBRE as providing the best value to the state was not arbitrary, capricious, clearly erroneous, or contrary to competition. Simply stated, and as the negotiation team determined, the submissions by Vertical and CBRE were more comprehensive and reasonably found to offer better value to the state than Cushman's submission. Indeed the negotiation team 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. Cushman's argument that DMS award memorandum 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 comprehensive business plans Pricing on the BOV and IMAs. While Ms. Sparkman acknowledged that the choice of language in the memorandum could have been better, it is clear that the foregoing are indeed "elements" of the selection criteria stated in the ITN 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. 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 agency under the contract. As a result, Cushman asserts, the Deputy Secretary was provided with inaccurate information relating to price. Cushman's argument that the award process was flawed because the pricing chart attached to the award memorandum did not accurately reflect Cushman's proposed pricing is without merit. As Ms. Sparkman testified, the chart was prepared by the negotiation team to provide for 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/ Best Value Determination Cushman contends that the negotiation team’s decision to award a contract to CBRE did not result in the best value to the state. Amended Pet. ¶¶ 26, 28 & 29. Cushman further argues that DMS did not meaningfully consider differences in proposed pricing. The failure to consider price for potential ancillary services, Cushman argues, was contrary to competition as it gave an unfair advantage to CBRE whose prices were higher than Cushman’s prices in all but one category. Although pricing for the potential ancillary services was relevant, the ITN's initial scoring criteria 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 qualifications and business plan of the vendors, and only 10 percent of the points based on the pricing for potential ancillary services. The negotiation team 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 greater 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. Pricing remained of relatively 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 state. Pricing for these potential ancillary services was not considered particularly important, since historically these services 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 negotiation team considered 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 negotiation team referred to these potential ancillary services as "balance of line" items which were nominal and added little value to the contract. Notwithstanding Cushman's argument that it should have been awarded the contract because it offered the lowest 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 BOV 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 proposed charges for IMAs and BOVs is only a few hundred dollars. When considered 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 negotiation team reasonably considered this to be insignificant in comparison to the multimillion dollar leasing work which was the core purpose of the intended contract.8/ Because pricing for the potential ancillary services was of lesser significance to DMS's award decision, Cushman's position that DMS should have awarded Cushman a contract based upon 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 or contrary to competition. To the contrary, DMS articulated a rational, reasonable and logical explanation for the award. CBRE’s Proposal Non-Responsive to ITN and RBAFO? Cushman alleges that CBRE’s BAFO was not responsive to the ITN and the RBAFO because CBRE included a set rate for acquisitions and dispositions in its proposal. Amended Pet. 30. Since CBRE's BAFO materially deviated from the ITN's specifications, CBRE’s proposal should have been deemed non- responsive and therefore rejected, Cushman argues. The ITN originally requested pricing related only to credit hours as the ITN set the rates for leases. The ITN stated that “other services” would be determined on a case-by- case basis as negotiated by the agencies. However, as part of the ITN process, DMS discussed with the vendors the potential for them to assist the state 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 acquisition and disposition services in its BAFO. 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 section 2.14(g) states "[t]he Department reserves the right to waive minor irregularities in replies." The form PUR 1001 incorporated by reference into the ITN likewise reserves to DMS the right to waive minor irregularities and states: 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 serve the state's best interests. The Buyer may reject any response not submitted in the manner specified by the solicitation documents. Consistent with the above-cited provisions, the negotiation team noted at its August 14, 2013, meeting that CBRE's inclusion of the proposed rates was not material, and that during the contract 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 available 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. Finally, CBRE's inclusion of proposed commission rates for acquisitions 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. Do the ITN Specifications Violate Section 255.25? 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 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." Cushman's argument has two components. 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 ceiling rates in this ITN), set fees for the service/project or by a percentage commission rate as offered and negotiated by the using agency.” 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. Section 120.57(3)(b), Florida Statutes, requires vendors to file a protest to an ITN’s 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. 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 ITN was published, Cushman could not wait until the ITN process was completed some four months later, and then argue that the ITN specifications do not comply with section 255.25 and must be changed. Such argument plainly constitutes a specifications challenge, and such a challenge is now time-barred. Even were Cushman’s challenge not time-barred, it would still fail. Section 255.25 requires only that "[a]ll terms relating to the compensation of the real estate consultant or tenant broker shall be specified in the term contract," and not that all terms identifying the compensation be specified. The challenged ITN specification, actually added via Addendum 2 at the request of DEP and its subject matter expert, does specify the approved methods by which the state could compensate the vendor, which DMS determined would 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 by the state agency on a case-by-case basis in a Statement of Work utilizing one of the specified compensation methods.9/
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That 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. DONE 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, Florida 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.
Findings Of Fact At all times material hereto Respondent James M. O'Nan was a licensed real estate broker in the state of Florida having been issued License No. 0222587. At all times material hereto Respondent International Real Estate Consultants, Inc., was a corporation registered as a real estate broker in the state of Florida having been issued License No. 0222586. At all times material hereto Respondent O'Nan was the qualifying broker for and president of Respondent International Real Estate Consultants, Inc. On or about May 29, 1984, Respondents solicited Dr. Murray Heiken to invest in a limited partnership for the purpose of acquiring real property located in Miami at South Dixie Highway and Southwest 67th Avenue to be used as the site for a bank. Respondents represented in that solicitation that all monies would be placed into an interest-bearing escrow account. The minimum investment solicited by Respondents was $28,000. On or about June 6, 1984, Murray and Rosalyn Heiken gave Respondents $28,000 to be placed in Respondents' escrow account. On or about September 25, 1984, Respondents again solicited Dr. Murray Heiken and Rosalyn Heiken regarding the sale of the Nautilus Hotel in Miami Beach. On or about October 1, 1984, Dr. Murray Heiken, Rosalyn Heiken, and Dr. Bruce Heiken paid $14,000 to Respondents toward the Nautilus Hotel purchase. On or about February 25, 1985, Respondents informed Dr. Murray Heiken and Rosalyn Heiken that the Nautilus Hotel transaction had been terminated. Respondents offered a new project and requested an investment of $24,000 from the Heikens. Dr. Murray Heiken paid $24,000 to the Respondents. On or about February 24, 1986, Respondents notified the Heikens that the other transaction did not close. The Respondents stated that all deposits would be refunded. On or about June 23, 1986, Respondents notified Dr. Murray Heiken that they were still liquidating the partnership and that the investors should be patient. Despite repeated demands made, Respondents have failed to return any monies to the Heikens although those monies were required to have been maintained in escrow and even though none of the properties were purchased by the partnership.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is, therefore, RECOMMENDED that a Final Order be entered finding Respondents James M. O'Nan and International Real Estate Consultants, Inc., guilty of the allegations in the Administrative Complaint and revoking their licenses as real estate brokers. DONE and RECOMMENDED this 28th day of January, 1988, at Tallahassee, Florida. LINDA M. RIGOT, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division Administrative Hearings this 28th day of January, 1988. COPIES FURNISHED: Darlene F. Keller, Executive Director Department of Professional Regulation Division of Real Estate Post Office Box 1900 Orlando, Florida 32802 Arthur R. Shell, Jr., Esquire Department of Professional Regulation Division of Real Estate Post Office Box 1900 Orlando, Florida 32802 James M. O'Nan International Real Estate Consultants, Inc. c/o Fort Loudoun Investments, Inc. 11020 Kingston Pike Knoxville, TN 37922 James M. O'Nan International Real Estate Consultants, Inc. c/o Patricia O'Nan Crews 6850 Cassia Place Miami Lakes, Florida 33014 William O'Neil, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750
Findings Of Fact Respondent Donald E. Swagler is now and was at all times material a licensed real estate broker or broker/salesman in the State of Florida, having been issued license number 0139756, in accordance with Chapter 475, Florida Statutes. At all times alleged in the Administrative Complaint, respondent Donald Swagler was licensed and operating as a qualifying broker for and an officer of respondent Swagler Realty, Inc., which is now and was at all times material a corporation licensed as a real estate broker in the State of Florida, having been issued license number 0169035, in accordance with Chapter 475, Florida Statutes. At all times material, Fern Z. Taylor was a licensed real estate broker with an office in Bonita Springs, approximately a twenty-minute drive south from the offices of Swagler Realty Company in Ft. Myers. On April 10, 1980, Andrew W. Kuchmaner was working part-time as a licensed real estate salesman in the employ (as that term is defined in Section 475.01(2), Florida Statutes) of Swagler Realty Company. Kuchmaner was a new salesman and had not yet had occasion to present a buyer's purchase offer to a client seller. During the early months of 1980, Kuchmaner was also working in the employ of, and receiving a salary from, Jim Walter Homes Company. Philip R. and Susan B. Workman first met Kuchmaner in January or February 1980 while visiting a Jim Walter's Homes sales office in Ft. Myers where he was working in his capacity as a Jim Walter Homes salesman. Kuchmaner advised the Workmans to find and purchase a lot for the Jim Walter home they had selected, and then they could purchase the Jim Walter home. Jim Walter Homes Company requires lot ownership prior to building one of their homes. Prior to selecting a lot, the Workmans had already decided on the Jim Walter home they were going to purchase, and Kuchmaner was going to do the paperwork for Jim Walter. Throughout the first quarter of 1980, the Workmans searched for a lot on which to construct their home in the Bonita Springs area of southern Lee County. During their search, the Workmans came upon a vacant lot with a sign saying it was for sale by Fern Z. Taylor. Upon seeing her real estate for sale sign, the Workmans went to Fern Taylor's office to inquire about the property and seek her assistance in their purchase of a lot in the Bonita Springs area. Fern Taylor advised the Workmans that, in addition to the lot they had already seen bearing her sign, she had Dust that morning listed and had for sale another lot in the Bonita Springs area which they would be interested in seeing. Earlier that same morning, Taylor took a long distance telephone call from a Charles A. Bennett, a resident of Arizona. Bennett said he had a lot he wanted to sell and gave Taylor the price ($7,000) and a description--Lot 20, Block E, Rosemary Park No. 2, in Bonita Springs. Bennett had not seen the property in some time and gave no landmarks or street address for Taylor's guidance. Back in 1925, Rosemary Park No. 2 was subdivided into eight blocks of 24 140' x 50' lots each and two larger blocks containing 16 larger 162' x 300' lots each. One of the smaller lots bore the legal description: "Lot 20, Block E of Rosemary Park No. 2 according to the Plat thereof recorded in Plat Book 6 at Page 30, of the Public Records of Lee County. This is the lot Bennett owned and was trying to sell. It is located on First Street. In 1926, Rosemary Park No. 2 was re-subdivided. The two larger blocks of the prior subdivision were re-subdivided into eight blocks of 24 140' x 50' lots each. Unfortunately, in a stroke of singular lack of vision, the new blocks and lots were designated with the same letters and numbers already assigned to the smaller blocks and lots in the original 1925 subdivision. As a result, there is another lot in Rosemary Park No. 2 designated as Lot 20, Block E: Lot 20, Block E, Rosemary Park, resubdivision of the East 1/2 of No. 2, according to the plat thereof, as recorded in Plat Book 8, Page 32, in the Public Records of Lee County, Florida. This other Lot 20, Block E, is owned by the Fyfes of Maine and is on Fifth Street. Taylor, who was quite busy, quickly checked a plat book in her office to locate the lot and the tax rolls to attempt far to verify Bennett's ownership and left to put her sign on the lot she thought Bennett owned and was trying to sell. Through a combination of the confusing legal description, the incomplete description and paucity of information Bennett gave Taylor, and Taylor's admitted negligence, Taylor put her for sale sign on the Fyfes' lot on Fifth Street instead of on Bennett's lot on First Street. Taylor had no listing agreement with the Fyfes, and the Fyfes' property was not for sale. Fern Taylor drew a map for the Workmans providing them with directions to this purportedly newly listed lot on which she had placed her "For Sale" sign. In reliance on Fern Taylor's map and representations as to her listing agreement, the Workmans drove to the Fifth Street lot and viewed the property as well as Fern Taylor's "For Sale" sign. Approximately one week after seeing the Fifth Street lot, the Workmans summoned Andrew Kuchmaner to Bonita Springs to view the lot and give them his opinion as to how the Jim Walter home they had previously selected would sit on the lot. The Workmans had their minds pretty well made up that they wanted to purchase the Fifth Street lot before summoning Kuchmaner. Kuchmaner never took the Workmans to any property but, upon their request, traveled to Bonita Springs to meet them and was thereupon shown the Fifth Street lot. While viewing the Fifth Street lot, Kuchmaner advised the Workmans that the Jim Walter's home they had selected would sit nicely on that lot. He also told the Workmans for the first time that he had a real estate license and would be glad to help them out with placing an offer for the lot on their behalf. The Workmans used Kuchmaner to make their $6,000 offer on the lot to save time because it was late in the afternoon and they lived in North Ft. Myers. When Fern Taylor first met Kuchmaner, he had been represented to her by the Workmans as a Jim Walter salesman. Kuchmaner went to Taylor's office and requested she prepare the contract because he would have to go all the way back to Ft. Myers to write it up. Taylor provided Kuchmaner with the legal description "Lot 20, Block E, Rosemary Park #2" and advised him he would have to write his own contract. Kuchmaner also proposed to Taylor that they not tell Swagler or Swagler Realty about the sale so they could divide Swagler's quarter of the 10 percent commission ($150 of the total $600 commission). Taylor refused and told Swagler what had happened. Swagler had an angry confrontation with Kuchmaner and was about to fire him, but Kuchmaner begged for a second chance and promised not to try to cut Swagler out of a commission again. Swagler relented and kept Kuchmaner on as a salesman. Kuchmaner filled out a contract on a Swagler Realty form and brought it to Donald Swagler for his review. He advised Swagler that he had gotten the legal description from Fern Taylor and had been to see the property. Swagler generally does not sell property in the Bonita Springs area and is not familiar with the area. He relied on Taylor to provide an accurate legal description of the property being sold. Kuchmaner hand delivered the contract offering to purchase the Bennett parcel to Taylor. Taylor checked the contract before she sent it to Bennett to see that the legal was the same that she had, and it was. She also checked it again when it was sent back from Bennett. Fern Taylor had received and checked the contract, title insurance binder, seller's closing statement and a copy of the warranty deed from Bennett to Workman prior to the closing The Workmans had the property they thought they were purchasing surveyed by William R. Allen, a registered and licensed land surveyor. He received the request to survey the property from Susan Workman. Over the phone, she advised Mr. Allen she had purchased a lot in Rosemary Park, Specifically lot far 20, block E. Mr. Allen informed Mrs. Workman that there are two Block E's in Rosemary Park and that they should be careful. He inquired as to which street she had purchased property on and was told, "We're on Fifth Street." Allen surveyed the Fifth Street lot and certified his survery, using the actual legal description of the Fifth Street (Fyfes') lot. Allen never saw any document with the legal description of the Bennett lot. Fern Taylor did not know that the Workmans had ordered a survey and did not see a copy of the survey until well after the closing. Although she attended the closing, she saw no discrepancies among the documents cursorily reviewed at the closing. Neither did the Workmans or the closing agent. The evidence was not clear whether there was a copy of the survey among the documents at the closing. The lender (Jim Walter Homes) and the title insurance company got a copy of the survey before closing. Neither of their professionals noticed that the legal description on the survey (the Fyfe lot) did not match the legal description on the deed and other documents (the Bennett lot). When a real estate broker has placed his sign ("For Sale") on a parcel of property, it is a reasonable conclusion that he is authorized to sell that parcel. It is customary for a broker to rely on the listing broker to provide a correct legal description for the property they have listed. At no time before the closing did Swagler or Kuchmaner have reason to suspect that the Workmans were purchasing a parcel of property different from the parcel they believed they were purchasing. Neither Swagler nor Kuchmaner were at the closing of the Workmans' purchase. But their presence would not have made any difference. It is not the real estate broker's or salesman's lob to scrutinize the documents being signed to make sure the legal descriptions on all the documents match (unless he has reason to believe the legal descriptions might be wrong.) He has the right to rely on the other professionals--the listing broker (especially since Fern Taylor was familiar with the Bonita Springs area and Swagler was not), the lender's attorney, the title company, the closing agent and, if any, the surveyor and the buyer's attorney. Fern Taylor and perhaps others were culpably negligent. Swagler and Kuchmaner were not. What happened to the Workmans is not their fault.
Recommendation Based on the foregoing Findings Of Fact and Conclusions Of Law, it is recommended that the Florida Real Estate Commission enter a Final Order dismissing the Administrative Complaint against respondents, Donald E. Swagler and Swagler Realty Company, in this case. RECOMMENDED this 9th day of February, 1987 in Tallahassee, Leon County, Florida. J. LAWRENCE JOHNSTON Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9th day of February, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-3502 These rulings on proposed findings of fact are made in compliance with Section 120.59(2), Florida Statutes (1985). Petitioner's Proposed Findings of Fact. 1.-4. Accepted and incorporated. 5. Rejected as contrary to facts found. (Kuchmaner did not "solicit" or "obtain" them.) 6.-14. Accepted and incorporated. 15. Rejected as contrary to facts found. (Taylor's "investigation" or "attempt" to ascertain the legal description was deficiently and negligently performed.) 16.-17. Accepted and incorporated. First sentence, rejected as incomplete ("compare the deed" with what?); second sentence, rejected because it was not proved Taylor had access to a copy of the survey before the closing. Rejected as unnecessary and potentially misleading. (A Final Judgment was entered; Taylor paid the portion against her; the other defendants have not paid the portions against them.) Rejected. Swagler Realty Company was a defendant in the case; Donald E. Swagler was not. 21.-24. Accepted and incorporated. Rejected as not proved whether they "failed," "refused" or "neglected." (The fact is that neither has paid the Workmans any money in satisfaction of the portion of the Final Judgment against Swagler Realty Company.) Accepted but unnecessary. B. Respondents' Proposed Findings Of Fact. 1. Accepted but unnecessary. 2.-10. Accepted and incorporated. 11. Accepted but unnecessary. 12.-23. Accepted and incorporated. 24.-28. Accepted and incorporated. 29. Accepted but unnecessary. 30.-36. Accepted but cumulative. 37.-42. Accepted and incorporated, along with additional findings. 43. Accepted but unnecessary. COPIES FURNISHED: James H. Gillis, Esquire Division of Real Estate Post Office Box 1900 Orlando, Fl 32802 J. Michael Hussey, Esquire 3443 Hancock Bridge Parkway Suite 501 North Ft. Myers, Fl 33903 Van B. Poole Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Fl 32301 Wings S. Benton, Esquire General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Fl 32301 Harold Huff Executive Director Division of Real Estate Post Office Box 1900 Orlando, Fl 32802
The Issue Whether the Department of Transportation's intended action to reject all quotes and re-advertise Lease No. 550:0318 was illegal, arbitrary, fraudulent, or dishonest.
Findings Of Fact In October of 1999, the Department advertised for office space for use as the Toll Data Center - Audit Section, Office of Toll Operations (Toll Office) located in Broward County. The lease was clearly advertised as a negotiated lease. It was not advertised as a competitive bid lease. Under the negotiated lease process before letting any lease, the Department must submit to the Department of Management Services (DMS) a Request for Space Need (RSN) and Letter of Agency Staffing (LAS). From DMS the Department receives the authority to directly negotiate a lease for space under 5,000 square feet with prospective lessors. 1/ Consistent with procedure, the Department received approval of the RSN on October 18, 1999. Pursuant to statute, DMS has strongly suggested that prior to selection of the apparent successful lessor, the Department should obtain a minimum of three documented quotes for a lease that has not been competitively bid. The Department has consistently followed that suggestion in negotiated leases. Under special circumstances, where it is clear it is improbable that three quotes cannot be obtained, the Department may waive its requirement that three documented quotes be received. However, the agency must certify to DMS that attempts to receive the required number of documented quotes were unsuccessful and/or special circumstances exist to negotiate the lease with less than three quotes. In this case, no special circumstances exist. In an effort to obtain more than the minimum three documented quotes, the Department opted to advertise for lease space on the Internet. The Internet is utilized by the DMS, among other state agencies, to disseminate information provided in the RSN to the private sector. Additionally, the Internet site may also be used by the private sector to provide notice of space they have available for review by the agency seeking space. A total of three submittal packages were distributed for Lease No. 550:0318. Despite the Department's advertisement over the Internet, only two requests for quote submittal packages were received. Of the three quote submittal packages distributed, the Department received only one documented quote in response to the advertisement for the Toll Office. Atlantic Investment submitted a Quote Submittal Form to the Department in late October for office space in North Fort Lauderdale. Atlantic Investment became aware of the Department's advertisement for lease space from Sheldon M. Schermer, employed by Atlantic Investment as its real estate agent. Mr. Schermer learned of the Department's need for lease space from an advertisement placed on the Internet. On November 8, 1999, the Department informed Atlantic Investment via Sheldon M. Schermer, Real Estate Agent for Atlantic Investment, of the Department's intent to reject all quotes and re-advertise for Lease No. 550:0318. This decision was not arbitrary, capricious, fraudulent, or dishonest and well within the Department's discretion and procedures for negotiated leases. The basis for the decision was the Department's modification of the lease specifications pursuant to a recommendation by DMS to modify the lease space terms to hopefully generate more interest and more quotes. In a competitive negotiation, DMS was aware of agencies who modified leases and advertised as many as five times before three documented quotes were received. Moreover, the evidence showed that the Broward County commercial real estate market could easily generate three quotes for the space required by the Toll Office.
Recommendation Based upon the findings of fact and conclusions of law, it is RECOMMENDED: That a final order be entered dismissing the Petitioner's protest. DONE AND ENTERED this 14th day of April, 2000, in Tallahassee, Leon County, Florida. DIANE CLEAVINGER 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 14th day of April, 2000.
