The Issue The issues in dispute are those associated with the invitation to bid in Project No. 565 by the Respondent as responded to by Petitioner and Intervenor. Among the specific questions to be answered are those concerning Petitioner's allegation that the Respondent allowed the Intervenor to materially alter its bid response to clarify the line item associated with tear down and return delivery for the relocatable classrooms that were being leased under the terms of the bid invitation and that alteration was allowed for the provision of canopies or awnings associated with the entrances to the relocatable classrooms. Questions are raised, first whether the Intervenor's bid response is in compliance with the provisions of Chapter 6A-2, Florida Administrative Code and, second whether the bid response of the Intervenor provides sufficient detail to allow the Respondent to understand the nature of the item, in this instance, the relocatable classroom, which the Intervenor proposed to provide in response to the invitation to bid. Finally, the general question is raised whether the Petitioner or Intervenor is the lowest responsible qualified bidder.
Findings Of Fact On April 28, 1989, Respondent sent out an invitation to bid in Project No. 565. It sought responses from a number of vendors and asked that those vendors on or before July 1, 1989, be prepared to deliver 49 portable classroom units. The arrangement which Respondent contemplated in the invitation was rental of the portable classrooms under a lease for a period of one year. It was intended that the portable classroom units would be delivered to various locations throughout Lake County, Florida. The bid opening was to occur on May 8, 1989, at 2:30 p.m. The request for bids included a lead sheet and in the second paragraph of the instructions on that lead sheet it was stated: All terms and conditions below are a part of this bid request and no bids will be accepted unless all conditions have been complied with. Rights are reserved to reject any and all bids and to waive all technicalities. It was further stated: DIRECTIONS FOR SUBMITTING BIDS ARE AS FOLLOWS: * * * 5. Samples must be submitted with bid where required. On other items descriptive literature with complete manufacturer's specifications in sufficient detail to indicate clearly the item bidder proposes to furnish must accompany the bid. NO BID will be considered without this data. Equipment offered as equivalent to the specific brand must be equivalent in quality of materials, workmanship, effect and corresponding in function and performance When the requirements set out in the preceding paragraph to the Recommended Order are read in the context of all other requirements set forth in the bid invitation, they are found to be consistent with those additional requirements. On the second page of the instructions for the Invitation to Project No. 565 was found a section entitled "Lease/Rental of Portable Classrooms" which stated: The Lake County School Board is requesting bids for Lease/Rental of Portable Classroom units meeting 6A-2 requirements at various locations. Units must meet Florida Code, SBCC Code and 6A-2 Department of Education code for structures of this type. We are requesting prices for 49 units for one-year rental, to be set-up at various locations. Steps, ramps, electrical, water or sewer hooks are not required. This work will be done in- house by Lake County School Board staff. A minimum of three 4' x 8' melaminc marker boards, two 4' x 4' tackboards, one 8 lb. fire extinguisher (2A40 BC) and junction box with stub-out for F/A and pullbox must be installed in each unit. Other provisions within the bid invitation describe the nature of the bid performance security that was incumbent upon each bidder, the need for insurance, nature of the insurance coverage expected and information related to lease provisions, purchase provisions, parts warranties and prices. The bid invitation pointed out that each bid packet furnished by the vendors should provide proof of insurance, a sample lease/rental contract, brochures and specifications of construction materials and contents and a 5 percent bid bond in a separate sealed envelope attached to the outside of the bid. Four vendors offered their responses to this invitation, among them Petitioner and Intervenor. The additional bidders were Diamond Engineered Space and Williams Mobile Offices. The bid opening occurred on May 8, 1989, as advertised. That bid opening was under the auspices, Provisions 6.05(7) and 6.87, Lake County School Board Policies Manual, which describe school construction bid procedures and contemplate awarding contracts to the lowest responsible qualified bidder meeting specifications with regard for the quality of the product being offered by the bidder, its suitability for the needs of the school system, delivery terms, service and past performance of the vendor. Some consideration is given to local vendors, under the provisions, but this has no role to play in this dispute. Rule 6A-2.016, Florida Administrative Code, also speaks to the procedures to be followed by the Respondent in this bid invitation process. The bids were opened, announced and tabulated. It was revealed, in turn that Diamond Engineered Space's price quote was $299,292.92; Petitioner's was $246,563; Intervenor's was $236,166 and Williams Mobile Offices' was $367,420. All vendors had made a timely response to the invitation to bid. In the course of the examination of the bid materials, the price sheet of the Intervenor came into question. This price sheet may be found as part of the Petitioner's Exhibit No. 1 admitted into evidence. In particular, item 3 on the price sheet was debated. In that section, the Intervenor's response stated: 4(b) Tear Down, and Return Delivery $350.00 (50 mile average at $1.50 per side) 4(c) Other ($200.00 Mat'l & Labor)$ NONE Given the parenthetical remarks found within the response, Norma Hale who was the Purchasing Agent for the School Board and in charge of the bid opening asked of Mike Connolly, who was attending the bid opening for the Intervenor, whether the quoted price was a firm price. Herman Kicklighter, the Director of Facilities and Maintenance who attended the bid opening for Respondent also made inquiry concerning whether the tear down charge was a variable or fixed price. These questions were raised against a background circumstance in which some sites may have been further away than is contemplated by the 50 mile average set out in the parenthesis. It was not the intention of the Intervenor to leave the parenthetical information on the bid response and Connolly was caught off guard by this revelation. He had not prepared the bid submission by the Intervenor. Nonetheless, he informed the persons assembled that the price quotation of $350 was a firm price. This information was revealed after the Petitioner's bid had been opened. After some discussion, school officials at the bid opening were convinced that the $350 price was a firm price. Having considered the evidence, the $350 price is found to be a firm price. Moreover, this finding is made recognizing that the Intervenor was never allowed to remove the parenthetical remark from the bid response. That removal would have constituted an alteration of the bid response. If one examines the bid response and multiplies the 50 mile average times $1.50 per side, the amount is $150 plus $200 for material and labor for a total of $350 as reflected in the cost per unit designation. This is not considered to be a variable price quotation. Another topic that was brought up during the course of the bid opening concerned the question of whether the portable classroom units that were to be supplied by Intervenor included awnings or canopies over the door entrances. Petitioner was and is of the opinion that the awnings and canopies are required. It is not clear from a review of Petitioner's Exhibit No. 4 admitted into evidence, which is the Petitioner's bid material, whether Petitioner intended to supply awnings or not. It is clear that the bid material of the Intervenor did not include awnings. Kicklighter asked Connolly if the Intervenor's bid included awnings and the essence of Connolly's response would indicate that the bids did not include awnings. Connolly was allowed to leave the room to make a telephone call to his office to further inquire concerning the response of the Intervenor as it related to awnings. While he was gone, the School Board checked with the Department of Education in Tallahassee on the topic of whether Chapter 6A-2, Florida Administrative Code required awnings in this application. In a conversation with William Moncreath, a certified architect with the Department of Education, Kicklighter was lead to believe that awnings were not needed. Connolly then made this known to the persons in the bid room. Connolly was not present at that time. Connolly then returned and told Kicklighter that the Intervenor would furnish awnings. This comment was met by a remark by Mr. Kicklighter to the effect that it looked like that the Intervenor and the School Board would be doing business. To allow the Intervenor to alter its bid response to include awnings that were not shown in the bid response, would be a material alteration if awnings were required. They are not. Therefore, this discussion concerning the awnings is a moot point. On May 9, 1989, the School Board determined to award the contract to the Intervenor. This met with a timely notice of protest from the Petitioner on May 12, 1989, and in a Formal Written Protest on May 22, 1989. Having been unable to resolve the matter amicably, the case was forwarded to the Division of Administrative Hearings for resolution of the dispute. Notwithstanding the pendency of the case before the Division of Administrative Hearings, based upon a claim of emergency, the lease agreement was entered into between the Respondent and Intervenor on June 15, 1989. In addition to the assertions by the Petitioner concerning whether the quotation for tear down and return delivery was a firm price and whether awnings are required, Petitioner calls into question whether the Intervenor has complied with paragraph 5 on the lead page concerning directions for submitting bids and the third paragraph on the next to the last page of the bid invitation concerning the things that the bid packet must include. Petitioner also questions whether Intervenor has adequately established that it will meet applicable requirements of Chapter 6A-2, Florida Administrative Code. Contrary to the opinion held by the Respondent and Intervenor, paragraph 5 on the lead page to the invitation to bid is a requirement that must be complied with. It is not an item to be ignored, nor it is considered to be superceded by any of the more specific references to requirements that are announced in the subsequent pages to the invitation to bid. The bidders had to make proof of insurance and to offer a sample lease/rental contract and provide a 5 percent bid bond. All bidders complied with those requirements. Petitioner complied with all other requirements as announced in the bid invitation as well. The question is whether Intervenor as a general matter has provided descriptive literature with the complete manufacturer's specifications in sufficient detail to clearly point out what item the bidder is proposing to furnish and whether indeed the item does comply. This is also described as brochures and specifications of construction materials and contents. Additional items that must be provided by Intervenor are those contemplated under Chapter 6A-2, Florida Administrative Code associated with relocatable classroom space and related construction codes made mention in the instructions to bidders under that portion referred to as "Lease/Rental of Portable Classrooms" and the last paragraph of that set of instructions associated with melaminc markerboards. Instead of relying upon clearly delineated information within the response of the Intervenor by way of literature with complete manufacturer's specifications to merely show the nature of the product or item that the Intervenor was proposing to furnish, Respondent, and in particular its principal advisor, Mr. Kicklighter, chose to rely upon certain self-serving statements made by the Intervenor in the course of its bid materials. This refers to an attachment to the sample lease agreement which is a fourth page in that set of materials stating: FLORIDA CODED BUILDING; Built to Comply with the Florida Department of Education's 6" A" .2 Specifications. With prints certified as a Classroom Building which can be located anywhere in Florida. (Zoning permitting). To Kicklighter this means Intervenor'S promises to build the classroom space in accordance with Chapter 6A-2, Florida Administrative Code and to provide certified prints and that provision would overcome any infirmities or paucity of information about the product in his mind. Kicklighter took further solace from correspondence of October 17, 1988, from David Toner, Director of Facilities Planning/Operation of St. Johns County, school Board in Florida which praises the Intervenor's performance in the lease of 28 relocatable classrooms in that county and states that plans and specifications were sent to Tallahassee for approval and installation met Chapter 6A-2, Florida Administrative Code. This is hearsay information and does not establish anything relevant in the matter of whether Intervenor will do as well for the Respondent as it appears to have done for St. Johns County School Board, if Intervenor doesn't first show that it has complied with this invitation to bid. It has not. It is not so much that Kicklighter attached no significance to the substantive information provided by the Intervenor in its response to the invitation, it is the fact that a clear understanding of the impression of Kicklighter concerning that substantiative information is overshadowed by his reliance upon the promise to provide certified prints and the remarks of his counterpart in the St. Johns County School Board as a principal reason for believing that the Intervenor's response was sufficient. That reliance was ill advised. It would be different if certified plans had been provided. They were not. The promise to provide them is outside the bid experience and is unacceptable as a means of compliance with the bid invitation. Looking at what was provided, there is a single sheet entitled Proposed Classroom which gives basic dimensions and information about frame and floor, walls, windows and doors, exterior covering, roof, electrical, A/C and heat, and restrooms. Within this document are found references to a 2600 rpm fan which could well mean 2600 cfm fan, the latter of which would meet requirements and the former which would not. Correction of this item would not be a material alteration. Likewise, correction of the reference of 1" x 4" top plate to 2" x 4" top plate to meet specifications would not be a material correction. in that this 1" x 4" reference as opposed to 2" x 4" reference could well be a typographical error. Within the bid documents by Intervenor there is a sheet referred to as Typical H.C. Toilet Rooms. Toilet Room A relating to Florida and Toilet Room B relating to Georgia. The outside dimensions of the Florida toilet room do not coincide with the Proposed Classroom sheet that has been mentioned. While the outside dimensions of the Georgia toilet room on this document appears the same as in the Proposed Classroom sheet that has been referred to, the configuration in the proposed classroom sheet and that of the sheet related to toilet rooms most recently under discussion are different. Under the circumstances, it is difficult to know what the Intervenor intends by way of toilet room facilities and the response is inadequate to meet the requirements of the bid invitation. This is a material deviation. There are some partial sheets within the bid materials which appear to be the first half of the Classroom Sheet that has been referred to and being duplicates of that information no particular significance is seen in those matters. There is material referred to U.S.G Acoustical Finish. There are further materials related to interior fixture finishes. There is a brochure with pictures showing the outside of a building and the interior of a portable classroom building. This document does not give any specific information as to types of materials, dimensions, etc. There is a document of May 5, 1989, from Descom directed to Mr. Connolly promising to make available replacement parts for 49 classrooms if Descom manufacturers them. There is information provided on the fourth page which is the attachment to the Lease Agreement which makes reference to frames being provided "per code." This page gives certain dimensions and design information related to the floors, walls and petitions and roofs. There is another two page document that shows miscellaneous equipment such as exit signs, melaminc marker boards, tack boards, emergency light with battery and backup and fire extinguisher. These items do not show manufacturer's name. There are references to various provisions within Chapter 6A-2, Florida Administrative Code where Intervenor claims that these items will correspond to. There are comments made on this page about the foundation of the portable classroom that are unclear. On the second page of these materials are found references to plumbing to include plumbing, related to the bathroom dealing with vinyl covered gypsum wall covering, the commode, wall mounted lavoratory, 90 cfm ceiling vent fan and mirrors and accessories. Again, the manufacturer's names are not given. A reference is made under the ceiling vent fan to a rule provision of Chapter 6A-2, Florida Administrative Code. There is reference under electric to two 100 amp load centers with mains and 12/2 copper romex. There is a reference there to 15-440 fluorescent light fixtures. Again, there is the reference to the 2600 rpm through the wall ventilation fan and 2 adequate wall receptacles. HVAC references a three ton Bard wall mount with heat strips and a ceiling supply duct system with STD return air system and a timer for the air conditioner. There is a reference to exterior materials, windows and doors and insulation factors. Again, some of these items under the bathroom, electric and HVAC reference sections within Chapter 6A-2, Florida Administrative Code. Other than the fluorescent light fixtures and HVAC Bard unit, manufacturers names cannot be discerned from this information submitted. The bid invitation calls for buildings of 24' x 36'. The response by Intervenor provides for a building which is 23' x 36', a material deviation from the requirements of the specifications. The light fixture is a Metalux Manufacturing Company surface mounted fixture of four forty watt bulbs. According to Gareuth Eich, an architectural expert whose opinion testimony is accepted, this light fixture does not comply with Rule 6A-2.064, Florida Administrative Code. This is a material deviation. The statement of plans do not show compliance with Rule 6A-2.059, Florida Administrative Code, as to exterior lighting. This is a material deviation from the specifications. The electrical specifications information provided by the Intervenor in the Proposed Classroom sheet shows two 100 amp panels that are separated, whereas specifications shown on the two-page printed informational sheet under electric speak in terms of a 100 amp load center with main disconnect. Regardless, requirements of Lake County are such that a main disconnect panel is required on the exterior of the portable classroom, the installation of which would be the responsibility of the school board. Thus, if two panels were employed inside they would become subpanels and not in conflict with the national electric code as spoken to in Rule 6A-2.065, Florida Administrative Code. On the other hand, it is not clear which alternative in panel design and service Intervenor intends to offer and this is a material deviation from the bid requirements. The information provided concerning the nature of the foundation for the portable classroom units is inadequate. This is a material defect in the response to the bid specifications. Gareuth Eich, Hugh Stump, President of Southern Structure, a company that manufactures portable classroom units and a person who is familiar with bidding procedures associated with those units and Paul Crum, an architect testified on behalf of the Respondent. All questioned the quality of information submitted by the Intervenor in terms of specificity, to meet paragraph 5 on page one of the invitation to bid and particulars that relate to certain requirements of Chapter 6A-2, Florida Administrative Code to this bid invitation. Having considered the remarks and the testimony of others and the exhibits, the Intervenor's response cannot be seen as providing manufacturer's specifications in the necessary detail to indicate clearly the item that bidder proposes to furnish as called for in paragraph 5 of the lead page of the invitation to bid. The response has also failed to meet certain provisions of Chapter 6A-2, Florida Administrative Code in the manner described. The quoted size of the portable building is too small in overall dimension. These are material shortcomings sufficient to cause the rejection of the Intervenor's bid response. Therefore, the Petitioner is in fact the lowest responsible bidder. Although Respondent and Intervenor have contracted for the delivery of the portable classroom units and they are located at the various sites within Lake County, Florida called for in the contract, Petitioner is theoretically prepared to provide classroom units in accordance with the requirements of the specifications.
Recommendation Under authority of Section 120.57(1), Florida Statutes, a formal hearing was held in this case on July 10-11, 1989 in Tavares, Florida. Charles C. Adams was the Hearing Officer.
Findings Of Fact Based upon the documentary evidence received and the entire record compiled herein, I hereby note the following findings of fact: Notice and Invitation to Bid on State Project Number 72001-3448 (the project) was extended to various contractors by the Respondent, Department of Transportation, on August 1, 1985. Sealed bids on the project were opened August 28, 1985. The scope of the project involved cleaning and painting the structural steel of the Buckman Bridge over the St. Johns River in Jacksonville, Florida. (State Bridge Numbers 720249 and 720343). The bids were opened and Petitioner was the apparent low bidder on the project with a bid amount of $193,000. The Department of Transportation, on October 2, 1985, rejected all bids "due to error in quantities in plans." According to the contract plans and specifications utilized by the Department of Transportation for the project, the beams, girders, bracing and trusses were composed of 2,540 tons of structural steel. The plans were in error and the tonnage of structural steel was less than 2,540 tons. Petitioner, upon visiting the job site as required, immediately recognized that there was less steel in the bridge than shown in the plans. In submitting and formulating his bid, the Petitioner considered the amount of work and materials which would actually be required to complete the project. 6 Prior to the bids being posted on the project, the Department of Transportation discovered that the amount of structural steel noted in the plans was grossly overestimated. On October 2, 1985, the Department of Transportation notified bidders in writing that all bids submitted on the project were rejected and that the plans would be revised and the project relet.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is, RECOMMENDED that the petition of Industrial Enterprise Sandblast and Painting, Inc., protesting the rejection of all bids on State Project No. 72001- 3448, be dismissed. DONE AND ORDERED this 11th day of December 1985 in Tallahassee, Florida. W. MATTHEW STEVENSON Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 11th day of December 1985. APPENDIX Respondent's Findings of Fact FINDING RULING Accepted; see Recommended Order paragraph 1. Accepted; see Recommended Order paragraph 2. Accepted, but not included because subordinate. Accepted; see Recommended Order paragraph 4. Accepted; see Recommended Order paragraphs 3 and 6. Accepted; see Recommended Order paragraphs 3 and 6. Accepted; see Recommended Order paragraph 6. COPIES FURNISHED: HONORABLE THOMAS E. DRAWDY, SECRETARY DEPARTMENT OF TRANSPORTATION HAYDON BURNS BUILDING TALLAHASSEE, FLORIDA 32301 A. J. SPALLA, ESQUIRE GENERAL COUNSEL DEPARTMENT OF TRANSPORTATION 562 HAYDON BURNS BUILDING TALLAHASSEE, FLORIDA 32301 LARRY D. SCOTT, ESQUIRE DEPARTMENT OF TRANSPORTATION HAYDON BURNS BUILDING, M.S. 58 TALLAHASSEE, FLORIDA 32301-8064 INDUSTRIAL ENTERPRISE SANDBLAST & PAINTING, INC. P. O. BOX 1547 1502 FOX RUN DRIVE TARPON SPRINGS, FLORIDA 32486-1547
The Issue Whether the Department of Health and Services acted fraudulently, arbitrarily, capriciously, illegally or dishonestly in issuing an award of bid or HRS Lease No. 590:2069 to Harpaul S. Ohri.
Findings Of Fact Sometime before March, 1989, the Department of Health and Rehabilitative Services (HRS) requested and received approval from the Department of General Services (DGS) for additional office space to provide social services in the western portion of Orlando, Orange County, Florida, including a food stamp distribution office. HRS was authorized to procure, through competitive bidding, a lease for 17,250 net rentable square feet of existing office space, plus or minus 3 percent. The said lease was to provide for a full service period of seven years and two options to renew for three years each at specified rates, with occupancy no later than December 1, 1989 or 175 days after the bid award is finalized. The geographic area designated in the bid package for the office space was limited to the following area of Orange County, Florida: Beginning at the intersection of Colonial Drive and Kirkman Road to the intersection of L.B. McLeod Road, then east on L.B. McLeod Road to the, intersection of Rio Grande Avenue then north on Rio Grande Avenue to the, intersection of Colombia Street,, then east on Colombia Street to Interstate 4, then north on Interstate 4 to the intersection of Colonial Drive, then west on Colonial Drive to the point of Beginning. Public notice that HRS was seeking competitive bids was given and HRS prepared a document entitled Invitation to Bid for Existing Office Space (ITB), which set forth in detail all of HRS requirements. The purpose of the ITB was to inform all potential bidders of the minimum requirements for submitting a responsive bid, and the specific criteria by which the bids would be evaluated. Specific areas of importance to Respondent as reflected in the ITB and addressed by the evidence herein were as follows: 17,250 net rentable square feet (plus or minus 3 percent) of existing office space. General office use for use, as a client service center. Seven year term with two options to renew of three years each. 120 off-street, on-site, full size parking spots designated exclusively for use of Department employees and clients, suitably paved and lined, with a minimum of two for the handicapped. Availability of public transportation within reasonable proximity. Availability to adequate dining facilities within two miles. Photographs of the exterior front of the facility, along with documentation of present facility configuration and parking areas including access and egress to public roadways. Availability of elevator for multi-story use. i). Space requirement criteria: Minimum telephone requirements. Back-up interior emergency lighting. Three separate sets of rest rooms, male and female, one meeting the needs of the handicapped General security requirements. Specific security requirements for food stamp distribution center. Window covering over exterior widows to allow both sunlight and energy control; if bidded space without existing windows, then all rooms comprising the exterior of the building would require windows measuring approximately 24 x 36, all secured and inoperable. Full Service including all utilities and janitorial. The evaluation factors and their relative weights were stated in the ITB as follows: Evaluation Criteria The successful bid will be that one determined to be the lowest and best. All bids will be evaluated on the award factors enumerated below: Associated Fiscal Costs Rental rates for basic term of lease Evaluated using present value methodology by application of the present value discount rate of 8.69 percent. (Weighting: 25) Rental rates for optional renewal of terms of lease. Rates proposed are within projected budgeting restraints of the department. (Weighting: 10) Associated moving costs, i.e., furniture, equipment, telephone systems, etc,. (Weighting: 5) Location Proximity of offered space in central or preferred area of map boundaries. (Weighting: 10) Frequency and availability of satisfactory public transportation within proximity of the offered space. (Weighting: 10) 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. (Weighting: 10) Facility Susceptibility of design of the space offered to efficient layout and good utilization. (Weighting 15) Provision of the aggregate square footage in a single building. Proposals will be con- sidered, but fewer points given, which offer the aggregate square footage in not more than two locations provided the facilities are immediately adjacent to or within 100 yards of each other. (Weighting: 10) TOTAL POSSIBLE 100 percent The bid package contained various bid specifications, bid evaluation criteria and the numerical weight assigned to each of those criteria. Sealed bids were submitted by three bidders, Petitioner, Harpaul S. Ohri and Kensington Gardens Builders Corp. The bids were opened on April 25, 1989, and Ernie Wilson, HRS District 7 Facilities Services Manager, determined that all three bids were responsive, and within the mandatory geographical area designated in the bid package. The District Administrator appointed a bid evaluation committee to review and grade, the responsive bids under the criteria established in the bid package, and to recommend to him the committees choice of the lowest and best bid. Four individuals who were familiar with the type of work to be done in the proposed space and familiar with the bid process were appointed to the Committee. On or about May 1, 1990 the bid evaluation committee determined that the bid of Harpaul S. Ohri was the "lowest and best bid" and submitted its determination, in writing, to the District Administrator who, subsequently approved the selection. On or about June 26, 1989, on behalf of the Department, Ernie Wilson, Facilities Services Manager, notified the bidders of the Departments intent to award the bid to Harpaul S. Ohri, as being in the best interest of the Department. The bid evaluation committee consisted of four representatives of the Department who visited two of the three bidders sites and questioned the bidders representatives. The members of the committee were familiar with the Petitioners site from previous experience. They choose not to make an on-site visit prior to completing the bid evaluation sheet, although instructed to do so on the Evaluation Committee Duties and Responsibilities/Real Property, Leasing instruction sheet. Each committee member completed an evaluation sheet and gave a higher total score to Mr. Ohri. The three major bid evaluation criteria were Fiscal Cost, Location and Facility. Under the Fiscal Cost criterion were three sub-categories: Rental Rates, Renewal Rates, and Moving Costs. For Rental Rates, Petitioner received an average of 22.7 points out of 30 possible,, while Ohri received 21.7, and Kensington Gardens received 23.7 points. The points were individually assessed by the evaluation committee, after the rental rates were compared by Ernie Wilson based on the present value analysis of bidders proposed rates. For Renewal Rates, each of the bidders, including Petitioner, received 5 points out of 10 possible. The present value analysis was not applied, as was noted in the ITB. However, even a cursory examination of the renewal rates submitted by the bidders shows that there is a 15 percent to 33 percent yearly differential in the rates, with the Petitioners rates as the lowest and Kensington Gardens as the highest. Although the committee assigned all three bidders an equal rating, the renewal rates submitted by the bidders were not equal should the Department wish to exercise its options, the rates submitted by Petitioner were substantially lower than the other two bidders and would result in a cost savings to the Department of several hundred thousand of dollars. The award factor points should not have been awarded equally. For Moving Costs, Petitioner received 5 points on each of the committee members sheets, while Ohri received 4 points and Kensington Gardens received, an average of 3.7 points. The maximum points possible was 5 points. Petitioner was awarded the maximum points because HRS is presently in the same building and no moving costs would be experienced. The other two bidders were awarded 4 points each by committee members. That determination was based on each members personal experiences. No cost or time lost data was provided or requested. The LOCATION criterion also had three sub-categories: Proximity to other governmental agencies - 10 points - with all three bidders receiving the same rating; Public Transportation -10 points - with all three ,bidders, receiving the same rating; and Environmental Factors - 10 points - out of which Petitioner received an average of 5.7 points; Ohri - 9.7 points and Kensington Gardens - 6.5 points. In considering the proximity to other governmental agencies of each of the facilities being considered, the committee relied on their own knowledge of the area. They determined that since each was within the geographical area designated in the ITB, each was equally distant from the most frequently visited government agencies in the vicinity. However, Petitioners facility is the most centrally located of the three facilities offered, while the two other facilities were considerably distant from other government agencies. The award factor points should not have been awarded equally. For Public Transportation, the committee determined that local bus service went near each of the three facilities. They were neither provided, nor did they request, route maps, schedules or passenger capacity for buses servicing each facility. Petitioners facility is centralized in the area served within the bid district, and serviced by, numerous bus lines which pass near the facility ten times per hour. The bus service to the other two facilities are limited to four buses per hour, with buses having a smaller capacity. In addition, most clients would be required to travel to the central bus terminal and transfer to a different route in order, to reach the Ohri or Kensington Gardens facilities, making bus transportation a very time-consuming process. No other form of transportation is available, except for taxi service. In addition, in order for a client to walk from the nearest bus stop to the Ohri facility, a person would cross two heavily traveled six lane streets and then walk across an open shopping center parking lot. This would require approximately a fifteen minute walk. In order to reach Petitioners facility, a client would require approximately a five minute walk utilizing public sidewalks. The committee did not consider these facts in its evaluation. The award factor points should not have been awarded equally. (c)(1). For Environmental Factors, the committee considered each buildings physical characteristics and the surrounding area. The committee, in their letter to the District Administrator, dated May 1, 1989, identified this category as "a very critical area for the new lease." The letter also stated: "The committee took the following into account when evaluating this section: Cleanliness of the building aid surrounding areas. Lack of traffic congestion by motorized vehicles close to the facility. Easiness of getting to and from the facility by vehicle. Safety for clients and staff walking to and from the facility. Upkeep of the surrounding buildings or other sections of the bidders building." The following was also taken into account when evaluating this section, but was not so stated in the letter. At least one committee member believed the lack of window space in Petitioners facility was disabling to his bid, and that the willingness of the Ohri representative to install windows on exterior walls was a significant factor in her determination of award. At least one committee member indicated that future expansion was a substantial factor in her favoring the Ohri bid, and that there was janitorial and security problems at Petitioners facility. The committee received no other information other than the committee members opinion regarding the same. The committee as a whole erroneously believed that the extra square footage visible at the Ohri facility at the time of their inspection would necessarily be available to HRS if and when it might expand its offices. Future expansion was specifically removed from the ITB at the pre-bid conference and it was clearly erroneous for them to have included this factor in their bid evaluation. The ITB specifically calls for the installation of exterior windows by the winning bid prior to occupancy. However, none of the committee members reviewed the ITB or the actual bids submitted. They relied primarily on the synopsis of the bids prepared by Ernie Wilson. The ITB states substantial general and specific security requirements in detail; however, the evaluation criteria forms do not provide a category for evaluating security other than generally under the sub-category of environmental factors. The ITB, under General Specifications and Requirements, called for the availability of adequate dining facilities within two miles of the proposed facility. The evaluation criteria did not provide a category for the committee to rate dining facility availability. In consideration of the environmental factors, the committee overlooked or failed to consider a hazardous unfenced high voltage transmission station adjacent to the Ohri facility. In addition, the photographs submitted by Ohri as the front of the building (as required by the ITB) are in fact the rear of the building which was not offered as part of the proposed leased facility. Of the three sub-categories under FACILITY, out of 15 possible points, Petitioner received an average rating of 9.5, Ohri received an average of 13.7 and Kensington Gardens received 11.2 for Layout/Utilization. Ohri received the most points because his building configuration was a, shell and was more flexible and could be reconfigured for more efficient layout to suit the Departments needs. All three bidders submitted proposals wherein the total square footage of rentable space was to be contained in a Single Building. Therefore, all three bidders received the maximum 10 points. A maximum 5 points was provided for facilities with Street-level space. All three bidders were awarded the maximum 5 points. However, a portion of Petitioners space was offered on the second floor, a fact which the committee overlooked. The Petitioner should not have received the full 5 points for having street-level space. The unanimous recommendation of the evaluation was to award the lease to Ohri. In reaching that conclusion, the committee did not properly utilize the weighted bid criteria and, in addition, included improper bid considerations in their evaluation of the three facilities. Some of the reasons given by the committee for distinguishing and preferring one bid over another were rational and reasonable considerations and were covered by the bid evaluation criteria. However, others were erroneous and improper.
Recommendation Based on the foregoing findings of fact and conclusions of law, the Hearing Officer recommends that the Secretary of the Department of Health and Rehabilitative Services enter a Final Order rejecting all bids for lease number 590:2069 and issue a new invitation to bid. DONE AND ENTERED this 12th day of February, 1990, in Tallahassee, Leon County, Florida. DANIEL M. KILBRIDE 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 12th day of February, 1990. APPENDIX The following constitutes my specific rulings, in accordance with section 120.59, Florida Statutes, on findings of fact submitted by the parties. Proposed Findings of Fact submitted by the Petitioner: Accepted: paragraphs 1, 2, 3, 5, 6, 7, 9 (in substance, except for subparagraphs f, g, j and k which are not relevant), 10 (in substance), 12(a), (b), (f-in substance), (g-in substance), (h-in substance), (j), (k-in substance), (l-in substance), (p-in substance). Rejected: Not relevant: paragraphs 4, 12(c), (d), (e), (m), (n), (o), (p- the proposed future location of the Greyhound Station; insure wooded area nearby), (q), (r). Argument: paragraphs 11 and 13. Procedural matters, covered in the preliminary statement: paragraphs 8 and 14. Respondent did not submit proposed findings of fact. COPIES FURNISHED: Terrence W. Ackert, Esquire 201 East Pine Street Suite 1402 Orlando, Florida James Sawyer, Jr., Esquire District 7 Legal Counsel Department of Health and Rehabilitative Services 400 West Robinson Street Orlando, Florida Sam Power Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700 John Miller General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700
Findings Of Fact On March 16, 1989, Respondent sent invitations to bid to actuaries who had been listed by the State of Florida, Department of General Services and with whom Respondent had some familiarity. These invitations pertained to two projects. The first project was one in which Respondent sought the services of qualified actuaries for the rendering of expert services in the area of rating requirements and procedures and the review of rate filings for health maintenance organizations and long term care insurance, Bid 119. The second invitation to bid was associated with the attempt to gain services from qualified actuaries pertaining to the review of health insurance filings, Bid 120. Respondent also gave public notice of the invitations to bid in the two projects that have been described. This notice was given in the Florida Administrative Weekly in its publication of March 17, 1989. On March 17, 1989, Petitioner obtained a copy of the bid materials in Bid 119. On March 20, 1989, he obtained a copy of the bid materials associated with Bid 120. In both Bid 119 and Bid 120 there are set out general conditions which are the same for both invitations. Within the general conditions is found paragraph 5 which states: INTERPRETATIONS/DISPUTES: Any questions concerning conditions and specifications shall be directed in writing to this office for receipt no later than ten (10) days prior to the bid opening. Inquiries must reference the date of bid opening and bid number. No interpretation shall be considered binding unless provided in writing by the State of Florida in response to requests in full compliance with this provision. Any actual or prospective bidder who disputes the reasonableness, necessity or competitiveness of the terms and conditions of the Invitation to Bid, bid selection or contract award recommendation shall file such protest in form of a petition in compliance with Rule 13A-1.006, Florida Administrative Code. Failure to file a protest within the time prescribed in Section 120.53(5), Florida Statutes shall constitute a waiver of proceedings under Chapter 120, Florida Statutes. In furtherance of the opportunity to ask questions concerning the conditions and specifications set forth in the two bid instruments Petitioner, by correspondence received by Respondent on March 20, 1989, submitted a separate list of questions for the two projects, Bid 119 and Bid 120. On March 21, 1989, Respondent offered its answers to the Petitioner. Copies of these questions and answers may be found as Petitioner's composite Exhibit No. 5, pertaining to Bid 120 and Petitioner's composite Exhibit No. 6, pertaining to Bid 119, admitted into evidence. No one took advantage of the opportunity set out in paragraph 5 to the general conditions in each invitation to bid, to dispute the reasonableness, necessity or competitiveness of the terms and conditions of the invitations to bid within the prescribed time frame which is set out in Section 120.53(5), Florida Statutes. That time requirement is to make known objections within 72 hours of becoming apprised of the terms and conditions in the invitation to bid. It was only at the point in time at which Petitioner had been found unresponsive in the two bid circumstances and offered his formal written protest on April 11, 1989, that he attempted to advance claims associated with the reasonableness, necessity or competitiveness of the terms and conditions of the invitation to bid. He made further attempts to criticize those terms within the invitation to bid through presentation at hearing and in the course of the proposed recommended orders. All these efforts were untimely. The significance of Petitioner's failure to timely challenge the terms within the invitations to bid, that is the conditions and specifications, means that the facts in dispute are considered on the basis of whether the Petitioner and others who offered their responses to the invitations to bid have complied with those conditions and specifications as written, not as Petitioner would have them be. Bid 119 was responded to by the Petitioner and Touche Ross & Company. Petitioner's response was timely. By committee review of the responses to the invitation to bid performed by the Respondent and approved by the Assistant Director of Administration, Department of Insurance and Treasurer, one Bruce Brown, a decision was reached to reject all bids. Petitioner and Touche Ross were made aware of this rejection. Petitioner made a timely challenge to the rejection of his bid in accordance with Section 120.53(5), Florida Statutes, leading to the present hearing. Touche Ross did not challenge that decision and did not seek to participate in this hearing, although it was noticed of the pendency of these proceedings. Petitioner and Wakely timely responded to the invitation in Bid 120. The review committee with the concurrence of Mr. Brown found Wakely to be responsive and Petitioner to be unresponsive to the terms of the invitation. Petitioner made a timely request to be heard on this decision by the agency leading to the present hearing. Wakely was noticed of the pendency of this hearing as well as the agency's choice to change from a position of accepting the Wakely bid to one of rejecting all bids and has not participated in the process. The reason why the Respondent has chosen to reject the Wakely bid is based upon its belief that to do so would expedite the process of gaining the actuarial services which it seeks under Bid 120 and based upon some concern that if it sought to contract with Wakely, whom it believes to be the only responsive bidder in Bid 120, it would be met with disapproval by the State of Florida, Department of General Services. This resistance by the sister agency is premised upon the opinion that to contract with Wakely would constitute the use of a sole source contract in a setting in which there are numerous choices of actuaries who might be able to perform the work, and General Services who controls sole source purchases would not allow this. Within Bid 119 are various special conditions. Among those is the stated purpose found in paragraph 1.0 and it says: The Division of Insurance Rating (hereinafter "Division") within the State of Florida's Department of Insurance (hereinafter "Department") is seeking one qualified actuary for the rendering of expert services in the area of rating requirements and procedures and review of the rate filings for Health Maintenance Organizations (hereinafter "HMO") and Long Term Care Insurance (hereinafter "LTC"). It is anticipated that the contract will be effective from April 1, 1989 to September 30, 1989, although the precise dates will be dependent upon the date the contract is signed and the schedules of department personnel. By this Invitation to Bid (hereinafter "ITB"), the Division is requesting interested actuaries (hereinafter "respondent") to review the general and specific criteria outlined in this ITB and to present a bid. Other instructions in Bid 119 at paragraph 3.0 state: Emphasis on each bid must be completeness and clarity of content. In order to expedite the evaluation of proposals, it is essential that bidders follow the instructions contained herein. * * * Bidder shall complete the attached Bid Sheet in its entirety. By affixing manual signature on this bid sheet the bidder states that he/she read all bid specifications and conditions and agree to all terms, conditions, provisions, and specifications. Respondent's Credentials and Capabilities Proposals must include substantial evidence of the ability of the respondent to undertake the work required within the parameters and time frames referenced in this ITB. The respondent must be a member of both the American Academy of Actuaries and the Society of Actuaries. Furthermore, the respondent must convincingly demonstrate his or her expertise in both the HMO and LTC areas. Such demonstration must include at least the following: HMO Significant consulting assignment or other work responsibility involving HMO ratemaking in 1988 or 1989. Particulars must be provided, including the specific work product requested, hours spent on the job, the results of the job, and the respondent's precise role. Convincing evidence of familiarity with the Health Maintenance Organization Amendments of 1988 to the Federal Health Maintenance Organization Act. Such evidence might include a completed or ongoing consulting assignment in which knowledge of the new legislation was critical, an article published on the new legislation, or a speech to a professional organization. Public demonstrations of the respondent's expertise in the HMO area, such as speeches, published articles, positions held in HMO professional organizations, or prior full-time employment by an HMO. Assistance in the preparation of HMO rate filings for review by the Department. Assistance in the preparation of rates for federally qualified HMOs. LTC Significant consulting assignments or other work responsibility involving LTC ratemaking in 1988 or 1989. Particulars must be provided, including the specific work product requested, hours spent on the job, the results of the job, and the respondent's precise role. Public demonstrations of the respondent's expertise, such as speeches, published articles, or positions held in professional organizations relative to LTC (i.e., committee assignments) OTHER The respondent should also include a description of prior work assignments involving consulting or other services to state insurance departments. This prior work need not be restricted to HMO or LTC. Note: Evidence of the respondent's expertise must be verifiable. Referenced consulting assignments must include the name, address, and telephone number of an employee of the client who can verify the nature of the assignment. Copies of published articles must be provided, along with the name and date of the periodical in which it was published. Also, copies of speeches must be provided, along with the name of the organization to which the speech was given, a contract person, and the date of the speech. * * * (f) Respondent's Bid In preparing a bid, the respondent should make sure that he or she has submitted at least the following information: A demonstration that all requirements in the "Respondent's Credentials and Capabilities" section are met; An explicit statement as to the proposed hourly rate; A clear statement that the respondent is able to perform the required tasks in the prescribed time frames, as described in "Specific Work Product Required". Such information must be provided together with the bid sheet provided in Section 11. A suggested format is shown in Section 10. In both bid invitations, at paragraph 4.0 of the special conditions, bidders are reminded that bids which do not meet the mandatory technical requirements set out in 3.0 and its sub-parts will not be considered for selection and that the bids that are deemed responsive will be evaluated on the basis of cost and the award made to the lowest responsive bidder at an hourly rate of charges. Both invitations at Paragraph 4.1 indicate that the state has reserved its opportunities to reject all bids if that is felt to be in its best interest. Paragraph 5.2 of the invitation is a further reminder to bidders that any bidder desiring to file a protest arising out of the invitation to bid shall do so in a setting in which Section 120.53(5), Florida Statutes controls. Another specification found in both invitations at paragraph 10.0 entitled, "Respondent's (referring to the bid respondents) Credentials and Capabilities." Under that category it is stated that it is recommended that the format found on that page in the bid specifications be used in supplying the information needed to respond to paragraph 3.0 of the bid specifications for both invitations. Under that paragraph 10.0 there is a place for the respondent's name, the name of his employer, membership year in the AAA, membership designation in the 50A: FSA and ASA and year the 50A designation was awarded. In Bid 119, beyond paragraph 10.0 are found paragraphs 10.1, 10.2 and 10.3, these paragraphs recapitulate those items and the various sub-parts to paragraph 3.0 and provide space for answers to be given to those inquires concerning the Petitioner's credentials and capabilities. There is a paragraph 11.0 in both invitations entitled "Bid Sheet." It has lines related to the hourly rate, vendor name, name of actuary to render services, mailing address, city, state and zip code, authorized signature both manual and typed, telephone number, and the date of submission. This particular paragraph reminds the bidder that by affixing the signature, this is a verification that all bid specifications and conditions have been read and that the terms and conditions, provisions and specifications are agreed to and that certification is made that the services will be provided at the hourly rates stated. Otherwise the basic format for Bid 120 in terms of special conditions is the same as described for the pertinent paragraphs in Bid 119 that have been set out before with the exception of Paragraphs 1.0, and 3.0 (c). They state the following: 1.0 PURPOSE: The Division of Insurance Rating (hereinafter "Division") within the State of Florida's Department of Insurance (hereinafter "Department") is seeking one qualified actuary for the rendering of expert services pertaining to review of Health Insurance rate filings. It is anticipated that the contract will be effective from April 1, 1989 to September 30, 1989, although the precise dates will be dependent upon the date the contract is signed and the schedules of department personnel. * * * 3.0 (c) RESPONDENTS CREDENTIALS AND CAPABILITIES. Proposals must include substantial evidence of the ability of the respondent to undertake the work required within the parameters and time frames referenced in this ITB. The respondent must be a member of both the American Academy of Actuaries and the Society of Actuaries. Furthermore, the respondent must convincingly demonstrate his or her expertise in rating the filing with the Department the following products: Individual Major Medical Medicare Supplement Long Term care Other types of coverage depending upon the needs of the Department and skills of the respondent. Such demonstration must include at least the following: A high degree of familiarity with Chapter 4-58 of the Regulations of the Florida Department of Insurance. Such familiarity should be demonstrated by the respondent providing evidence that he or she submitted at least twenty- five Health Insurance rate filings to the Department which were approved between January 1, 1988 and February 28, 1989. The consultant should demonstrate familiarity with Individual Major Medical, Medicare Supplement, and Long Term Care policies. Such familiarity should be demonstrated by the consultant providing evidence that he or she submitted at least three filings to the Department in each of those areas which were approved between January 1, 1988 and February 28, 1989. NOTE: Only those filings actually certified by the actuary, as provided in 4-58, may be counted in meeting the above requirements. Bid 120 has paragraph 10.1 that refers back to sub-parts within paragraph 3.0(c) and provides space for answering the request for information concerning credentials and capabilities. In both bids Respondent is critical of the Petitioner for not using the format suggested in the various portions of paragraph 10, in essence filling out the specification sheet in the space provided for the answers which the petitioner would give. Having reviewed these materials associated with each bid invitation, the format idea is not a mandatory requirement, it is a suggested requirement. What is incumbent upon the Petitioner is to comply in substance with the requirements set out in the invitations to bid. In that respect the Petitioner is deficient in a material manner. A copy of the requirements Bid 119 may be found in Respondent's exhibit No. 1 admitted into evidence. Petitioner's response to the invitation to bid in Bid 119 is found within Respondent's No. 4 admitted into evidence. In his statement of credentials and capabilities, Petitioner has not utilized the spaces provided in paragraphs 10.1 through 10.3. Instead he has enclosed a letter that includes a statement of work history and professional experience. Under the category of health maintenance organization, the special conditions of paragraph 3.0(c), there is no statement of a consulting assignment or other work responsibility that would involve HMO rate making in the years 1988 or 1989. Furthermore, there is no convincing evidence of familiarity with the health maintenance organization amendments of 1988 to the Federal Health Maintenance Organization Act. There is no reference to public demonstrations of the Petitioner's expertise in the HMO area to include speeches, published articles, positions held in an HMO professional organization or prior full-time employment by an HMO. While there is an indication of experience in rate review from the regulatory point of view in Florida and Massachusetts, there is no indication as required by the specifications and conditions of the preparation of rate filings to be reviewed by a regulator. Finally, under the category of HMO there is no indication of assistance in the preparation of rates for federally qualified HMOs. In the long term care component of the credentials and capabilities portion of Bid 119, Petitioner has offered no explanation of his background. Under the category "other" Respondent has included a description of prior work assignments involving consulting or other services to state insurance departments. On the other hand he has failed to evidence in more specific terms as the note to paragraph 3.0(c) requires, names, addresses and telephone numbers. A copy of the requirements of Bid 120 may be found in Respondent's Exhibit No. 2 admitted into evidence. A copy of Respondent's reply to the invitation to bid may be found in Respondent's Exhibit No. 5 admitted into evidence. As with the previous Bid 119, in Bid 120 Petitioner did not utilize the space available in writing his answers in paragraph 10.1 which relates back to the requirements for credentials and capabilities as announced in paragraph 3.0(c). Instead Petitioner attached a letter in which he attempts to state his compliance with the requirements of the bid. He sets out comments about his work history and professional experience which do not pertain to rating and filing with the Respondent the products of individual major medical, Medicare Supplement, long term care and other types of coverage depending upon needs of the Respondent and skills of the Petitioner. Within Bid 120 in the requirement for familiarity with Chapter 4-58 Florida Administrative Code Petitioner has indicated some involvement with that regulation. However, he has not shown where he had submitted at least twenty- five health insurance rate filings to the Respondent which were approved between the January 1, 1988 and February 28, 1989. In Bid 120 on the topic of demonstration of familiarity with individual major medical, Medicare Supplement and long-term care policies, Petitioner did not demonstrate that he had submitted at least three filings with the Department in each of those areas which were approved between January 1, 1988, and February 28, 1989. By contrast the Wakely response to the invitation to bid, a copy of which is found in Respondent's Exhibit No. 9 admitted into evidence, has adequately responded to the requirements of the Bid 120 in the areas where the Petitioner has been deficient, as well as other areas. As alluded to before Petitioner has failed to make timely challenge to the conditions and specifications associated with the two invitations to bid. Moreover, while allegations in the formal written protest of April 11, 1989 and further remarks of April 20, 1989 addressed to the Insurance Commissioner, together with the proposed recommended order suggest problems with the conditions and specifications associated with the two invitations to bid, proof at hearing submitted by Petitioner did not confirm these allegations. Except in those areas preferred to in the factual discussion above Petitioner's bid responses are adequate to meet the terms of the invitations to bid.
The Issue Whether Petitioner has established, by a preponderance of the evidence, that Respondent improperly evaluated the bids submitted in response to an Invitation to Bid (ITB) on Lease No. 590:2251. Whether Petitioner has established, by a preponderance of the evidence, that under the facts and circumstances of this case, Lease No. 590:2251 should be awarded to Petitioner.
Findings Of Fact Background HRS advertised an Invitation to Bid (ITB) on Lease Number 590:2251 on September 24, 1990 and October 1, 1990. The ITB was for approximately 37,888 square feet of existing office space for the HRS Office of Disability Determinations (ODD). The lease is for a term of five years, commencing on April 1, 1991. The ODD is presently, and was at the time of the bid submittal, housed in Petitioner's facility, the City Centre Building (City Centre) at 227 North Bronough Street, Tallahassee, Florida. The current agreement between HRS and the Petitioner involves two separate leases due to expire on March 31, 1991. The ODD has been housed in City Centre for approximately four and one-half years. HRS is combining the space now under two leases into one lease. Lease NO. 590:2251 is to house three program offices for the ODD: Central Area I, Central Area III, and the Tallahassee area. Prior to the bid being advertised, Charles Phillips, Director of the ODD, did not want to exercise the option to renew the HRS leases for space in City Centre. The Evaluation Committee HRS formed an Evaluation Committee to evaluate bids received in response to the ITB. Members of the committee were Bill Odom, Lucretia Young, Karen Gunter, and Dorea Sowinski. Ms. Sowinski served as the chairperson of the committee. All members of the Evaluation Committee were aware of concerns Mr. Phillips had with the City Centre prior to beginning the process evaluating the bids at issue in this case. Bill Odom, Lucretia Young and Karen Gunter are ODD area program administrators for the Tallahassee Area, Central Area I, and Central Area III, respectively. Dorea Sowinski is the Operations Management Consultant for the ODD and, as such, she handles purchasing and leasing for ODD. HRS held a pre-bid conference on October 5, 1990. Before the pre-bid conference, Linda Treml, the bid officer, and Dorea Sowinski discussed who would be on the Evaluation Committee. At the pre-bid conference, Ms. Treml identified the members of the Evaluation Committee. Voting was not discussed at the pre-bid conference. The ITB After the pre-bid conference, Linda Treml and Dorea Sowinski made changes to the ITB and issued the ITB to prospective bidders. The HRS manual on procurement of leased space, HRSM 70- 1, lists bid evaluation criteria that can be used. The evaluation criteria which can be used includes relocation costs. Relocation costs were not included among the criteria in the ITB. The failure to include relocation costs in the criteria for the evaluations of this bid in no way prejudiced the interests of the Intervenor. Any competitive advantage which may have been conferred as a result of this omission benefits the Intervenor. The Bid Opening HRS received two bids in response to the ITB. The Petitioner's bid offered space in City Centre. The only other bid was from Intervenor (Devoe Moore). Devoe Moore's bid offered space at the Fort Knox Center, 2729 Fort Knox Road, Tallahassee, Florida. The bids were opened on November 2, 1990. Petitioner's bid offered space at a lower rental rate for each of the five years of the lease term. Petitioner's bid was the low bid. Both bids were responsive. The bid officer, Linda Treml, was not present at the bid opening due to a family emergency. In Ms. Treml's absence, her supervisor, Ken McLane, conducted the bid opening. Mr. McLane does not normally attend bid openings. Instructions to the Evaluation Committee Before the Evaluation Committee met to evaluate the bids, Mr. McLane gave the committee instructions. Mr. McLane specifically instructed the Evaluation Committee that the chairperson would not evaluate the bids and would not vote. Ms. Sowinski questioned Mr. McLane regarding his instruction that the chairperson not vote at the time his instructions were given. Ms. Sowinski objected to not voting on the basis that, as committee chairperson on prior evaluation committees, she had always voted. In reply to Ms. Sowinski's questions, Mr. McLane indicated that in case of a tie in the number of points awarded each bidder, the chairperson would be the deciding vote. At the final hearing in this case, Mr. McLane testified that this was the only time he had instructed an evaluation committee chairperson not to evaluate bids and that the instructions he gave this Evaluation Committee in this regard were a mistake on his part. Mr. McLane testified that he was aware of no authority on which he based his decision that the chairperson would not participate in the evaluation. The other three members of the Evaluation Committee understood throughout the process that Ms. Sowinski would not vote unless there was a tie. The Original Bid Evaluations On November 15, 1990, three members of the Evaluation Committee filled out an evaluation sheet on each of the bids, assigning certain points to each of the evaluation criteria. As part of the evaluation process, the three members of the committee who had been instructed to evaluate the bids did so secretly and without consultation with other committee members regarding points assigned. The three voting members gave their evaluations to Ms. Sowinski, the committee chairperson. Ms. Sowinski saw the points that all the other Evaluation Committee members assigned to the various criteria for each building reflected in the bids. On November 15, 1990, Ms. Sowinski totalled the points assigned on each evaluation sheet and announced that the City Centre Building had received the most points. When the evaluation sheets of each of the three committee members who voted on November 15, 1990 were tallied, City Centre had 252 points and the Devoe Moore property (Fort Knox Center) had 245.6 points. More points meant a better bid. The Evaluation Committee was never reconvened. No testimony in the final hearing in this case indicates that any irregularity which may have occurred during the evaluation of the bids and assignment of points by Odom, Young, and Gunter had any material affect on the outcome or resulted in any prejudice to HRS or the Intervenor.1 The Phillips Memorandum Dorea Sowinski advised Charles Phillips, Director of ODD, of the result of the three member committee evaluation. Ms. Sowinski also showed Mr. Phillips a draft of her memorandum which stated that the Evaluation Committee recommended that the lease be awarded to the City Centre Building. After consulting HRS staff in facilities services, Ms. Sowinski suggested that Charles Phillips write a memo. Mr. Phillips wrote a memorandum to Ms. Sowinski dated November 16, 1990. This memo expressed Mr. Phillips' thoughts and comments regarding the City Centre Building and expressed his wishes that the memo be included in the recommendation. Details of the substance of Mr. Phillips' memo are further discussed (infra). The Submission of the Original Recommendation Ms. Sowinski wrote a memorandum dated November 19, 1990, to Ken McLane, recommending that the bid be awarded to Petitioner and that the ODD offices of HRS remain in the City Centre Building. Ms. Sowinski attached Mr. Phillips' November 16, 1990 memorandum and the evaluation sheets of the three other members of the Evaluation Committee to her memo. This accomplished the forwarding of the Evaluation Committee recommendation. The Change in Evaluation Procedure Ms. Treml returned to work on November 19, 1990, and reviewed the bid package for the lease at issue. Ms. Treml testified that she noted that only three members of the committee evaluated the bids and called Dorea Sowinski. Ms. Sowinski informed Ms. Treml that Mr. McLane had instructed her not to vote. Ms. Treml then set up a meeting with Mr. McLane. It was Ms. Treml's view that not allowing the chairperson of the Evaluation Committee to vote contradicted the HRS lease manual. Ms. Treml's view regarding the contradiction stems from her reading of HRS Manual 70-1 on page 5-18, which states: When all committee members have individually evaluated each proposal the entire evaluation committee will meet to review the individual evaluations and jointly develop a committee recommendation of the lowest and best bid based on the overall scores. The provision of HRS Manual 70-1 in question does not contain the word "vote" (although under the evaluation procedure in this case, the application of evaluation criteria and assignment of points amounts to a "vote"). The provision does not mention chairperson or the role of such a person. A specific finding is made that the material aspects of this provision of HRS Manual 70-1 which are important to resolving the disputed facts in this case are that committee members independently evaluate prior to the meeting of the entire committee and prior to the development of a committee recommendation. During her meeting with Mr. McLane, Ms. Treml expressed concern to Mr. McLane that evaluation committee chairpersons consistently voted and that she needed the evaluations of all committee members in order to complete the process. During this meeting, Mr. McLane and Ms. Treml decided to send the evaluations back and to request that Ms. Sowinski conduct an evaluation. The Second Evaluation On November 27, 1990, Dorea Sowinski filled out an evaluation sheet like the ones the other members of the Evaluation Committee filled out on November 15, 1990. Ms. Sowinski filled out her evaluation sheet after having seen how many points each previous evaluator had assigned to each bidder for each of the criteria. Ms. Sowinski testified that she left the evaluations of the other committee members at her office while she conducted her evaluations at her home. She testified that she had not looked at the other evaluations since the date she tallied them and that she did not remember what the totals those evaluations were. Ms. Sowinski also testified that she did not know the difference between the points already assigned and did not know what it would take to shift the vote from City Centre to Fort Knox. To the extent that the testimony regarding Ms. Sowinski's recollection of the original bid evaluations is offered to establish Ms. Sowinski's independence in conducting this evaluation, the testimony is not convincing. Careful consideration of the facts and circumstances established in this case results in a specific finding that Ms. Sowinski's evaluation of the bids was not independent. Ms. Sowinski prepared an evaluation total cover sheet for the original three evaluations when she forwarded the evaluation favoring City Centre. She testified that she no longer has the evaluation sheet from the first (three person) evaluation and believes she "put it in the recycle bin." The evaluations cover sheet which Ms. Sowinski recycled contained a specific listing of the points given each criteria based on the evaluations of the other three committee members. At the time she prepared her evaluation sheet, Ms. Sowinski was aware of the November 16th Phillips' memo and was aware that Mr. Phillips did not want to stay in City Centre. In substance, the Phillips memorandum expresses his concerns regarding the high crime rate and problems with transients in the area of the City Centre Building. In addition, the memo outlines problems with the past history of building management at City Centre and states that, since "the owners of the City Centre have filed Chapter 11 bankruptcy," Mr. Phillips does not believe there will be an improvement in maintenance. The memo also mentions Mr. Phillips' concerns regarding structural problems with the building and its parking garage. Ms. Sowinski's evaluation of the City Centre Building is the only evaluation in this case which mentions "Chapter 11 bankruptcy." The evaluation sheet that Ms. Sowinski filled out changed the total points for each building to 327 for City Centre and 329.8 points for Fort Knox. A memorandum from Dorea Sowinski to Linda Treml dated November 30, 1990, recommended the Fort Knox property for the lease award. Ms. Sowinski did not reconvene the Evaluation Committee to consider anything further regarding the bids before issuing the November 30, 1990 memorandum with the recommendation reversing the prior recommendation submitted on November 19, 1990. On December 13, 1990, Ken McLane signed letters for Linda Treml to both bidders advising that HRS intended to award Lease No. 590:2251 to Devoe Moore for the Fort Knox property. In consideration of all the facts and circumstances in this case, the actions of HRS in changing the original bid evaluations by instructing Ms. Sowinski to conduct an after the fact evaluation amounts to a failure to adhere to the evaluation criteria that it created thereby undermining the integrity of the bid process. The actions of HRS in this regard were arbitrary and capricious. The actions of HRS in allowing the original bid recommendation to be reversed based upon the tainted evaluations conducted by Ms. Sowinski amounts to a discriminatory standard of review of the bids. The action of HRS in this regard was also arbitrary and capricious. The Testimony of Petitioner's Expert At the final hearing in this case, Petitioner offered the testimony of Mary Goodman, Chief of the Bureau of Property Management of the Florida Department of General Services (DGS). DGS is responsible for promulgating rules for evaluating bids for leases such as the one at issue in this proceeding. Section 255.249(2)(b), Florida Statutes (1990 Supp.). Ms. Goodman has been the Bureau Chief of the DGS Bureau of Property for over nineteen years and has been involved in State property management for over thirty years. Ms. Goodman is the only witness in this proceeding offered as qualified to provide opinions regarding State procurement of leased space and the appropriate procedures to be followed in such procurement. Based upon her qualifications, Ms. Goodman was accepted as an expert witness and her testimony is relied upon as helpful in making findings of fact 44 through 62 in this Recommended Order. When evaluating bids in the public procurement process, agencies should form an evaluation committee, and members of that committee should evaluate proposals received independently. The term "individually," as used in the HRS Manual 70- 1 at pages 5-18, is synonymous with "independently." In the public procurement process, the requirement that evaluations of bids be performed independently means that the committee chair or a bid officer instructs the committee as to their responsibilities and provides the committee with evaluation criteria and with instructions as to assignment of points. Each committee member then assigns points as set forth in the criteria without consulting with other members. In this manner each committee member obtains the total points assigned each responsive bid. Ms. Goodman knows of nothing that would authorize the chairperson or any member of an evaluation committee to fill out an evaluation form after seeing the evaluation forms filled out by other members. To do so would not amount to an "independent evaluation" and would violate State policy because the requirement of independence would not be met. Ms. Goodman is aware of no policy manual, rule, or statute that would prohibit the chairperson of an evaluation committee from acting as bid officer and refraining from voting when other members vote. Typically in the public procurement process, an evaluation committee consists of three members with a committee chair as a nonvoter and guider. If three members of an evaluation committee make an evaluation, and a fourth member is asked to also make an evaluation, if the fourth member has previously had access to the other three evaluations and knows what such evaluations contain, the fourth member cannot make an independent, unbiased and unprejudiced evaluation. The results of an evaluation committee's voting is called a recommendation because of the organizational structure within a department. In most state agencies, there is an oversight person who looks at the committee recommendation to determine that the committee did in fact make an independent evaluation and that the recommendation complies with applicable statutes and rules. Even though a reviewing authority may override the committee recommendation, such authority must stay within the bid criteria. Once instructions have been given to an evaluation committee and action has been taken pursuant to such instructions, a change or rescission of previous instructions should be based on just cause; reasons that are not arbitrary, capricious, prejudiced or biased. Based upon the assumption that "the chairperson has always voted," no sufficient good reason or justification exists to warrant a change in instructions to allow a committee chairperson to vote after the committee has been instructed that the chair would not vote, and the committee has done its job and forwarded its recommendation based upon the prior instructions. The purpose in providing in the rules that an evaluation committee be formed to evaluate bids is to make evaluations impartial, unbiased, and to provide integrity in the process of public procurement of leased space. Normally, the evaluation committee recommendation is followed by the agency head. Under the facts proved in this proceeding, the change in instructions previously given the Evaluation Committee occurred after the committee had completed its evaluation and submitted its recommendation based on the prior instructions. The rescission of the prior instruction on voting by the chairperson resulted in the fourth committee member evaluating the bids and scoring_ criteria points after that member had reviewed the other evaluations, tallied the original evaluations points and prepared the original recommendation. The resulting second and different recommendation changed the results of the process such that the low bidder, originally awarded the most points by the committee, lost the bid recommendation because the scoring change resulted in a different point total. The procedure thus applied in this case was arbitrary and capricious. In the bid evaluation process in this case, relocation costs, the financial condition of the bidders, and structural engineering analysis were not included in the criteria for evaluating responsive bids. None of the evaluation criteria in the ITB for this bid pertain to or encompass past performance by a bidder. Typically, State agencies do not include past performance in bid evaluation criteria and, if such criteria was included, the ITB should require every bidder to provide documentation of past performance in any leased space offered and some criteria should be established by which the submission could be evaluated.2 None of the evaluation criteria in the ITB for this bid would allow an evaluation committee to consider Chapter 11 status in a bankruptcy proceeding. The State of Florida has had a number of leases where lessors have gone into bankruptcy, mortgage foreclosures and some instances where Savings and Loans have taken over and then gone defunct. The State has leased from receivers, including receivers in-bankruptcy. Absent a specific statement in the ITB that no bid would be received or considered from a property owner involved in reorganization proceedings, the agency should not take such matters into consideration in evaluating bids. Structural condition of the building may be considered under "physical characteristics" in the evaluation criteria but where, as in this case, the lease agreement requires any facility being offered to be kept in compliance with all existing building codes, it should be assumed that all bids declared responsive meet that requirement. Under the evaluation criteria established by HRS in this case, it is not permissible to consider the area of town the building is in as long as the building is within geographic boundaries established in the ITB. The Sowinski Evaluation of the City Centre Building Ms. Sowinski attached a typed sheet to the evaluation sheet which she filled out for her evaluation of City Centre. This attachment explains her evaluation and assignment of points. The written instructions to the Evaluation Committee require such an explanation of points in two areas of Item 2 in the evaluation criteria, both relating to the location of the space bid. (Pet. Composite Dep. Ex. 20) The Evaluation Criteria score sheet was used by all committee members including Ms. Sowinski. The portions of the score sheet at issue in this proceeding are under item 2(a) and (c). Item 2(a) calls for an evaluation of "The effect of environmental factors, including the physical characteristics of the building and the area surrounding it, on operations planned for the requested space." Ms. Sowinski deducted six of a possible twelve points under item 2(a). Ms. Sowinski indicates in her explanation under Item 2(a) that she deducted points for building location for the following reasons: City Centre is located in one of the highest rated crime areas of Tallahassee. (Ms. Sowinski also outlines problems with harassment by transients, car burglary and vandalism in and around the building.) The past performance of building management. (Problems listed include poor response to tenant needs in the past.) As part of her Item 2(a) explanation, Ms. Sowinski also states that the building owners are in "Chapter 11 bankruptcy" and that she questions the owners' financial resources to maintain the building. Ms. Sowinski testified that she did not deduct points for this; however, on the basis of the evaluation sheet there is no way to make an objective distinction in this regard. Ms. Sowinski attaches an engineering report from April 1990 to her explanation. This report addresses structural problems. As part of her Item 2(a) explanation, Ms. Sowinski also notes such problems are being corrected. Item 2(c) on the Evaluation Criteria score sheets calls for an evaluation of the "Character of adjacent properties compatible with office use." Ms. Sowinski deducted four out of eight possible points under Item 2(c). In her explanation of points deducted under Item 2(c), Ms. Sowinski states that the deductions are based on the fact that the bus station is located across the street, there is a Salvation Army housing unit nearby and that these factors contribute to the transient problems in the area. The written instructions to the Evaluation Committee note that scoring pursuant to Item 2, "Location," is subjective. Therefore, evaluators are instructed to provide an explanation less than the maximum points are given for each weighting factor in that category. In assigning evaluation criteria points under Item 2(a), the evaluator's consideration of "physical characteristics of the building and area surrounding it" is limited to factors which have an effect on the operations planned for the requested space. If an evaluator assigned less than the maximum available points under Item 2(a) to a building based upon "crime rate" and/or "problems with transients" in the area of the building, then the evaluator, pursuant to the written instructions, must explain how such factors have or would have a negative effect on the operation of the ODD. Ms. Sowinski's explanation under Item 2 (a) fails to provide sufficient information in this regard to reasonably justify the deduction of six out of a possible twelve points that were available to City Centre in this category. Under the facts and circumstances of this case, such action was unreasonable.3 Pursuant to the wording of Item 2(c), evaluators are limited to considerations of how the "character of adjacent properties" might not be "compatible with office use" when assigning less than the maximum points allowable in this category. If an evaluator assigned less than the maximum available points under Item 2(c) to a building based upon such factors as the proximity of a bus station and/or a "Salvation Army housing unit," then, based upon the written instructions given, the evaluator must explain how such factors are incompatible with office use. Ms. Sowinski's explanation, which states that the bus station and housing units "account for a large portion of the transient population, which is a direct cause for many of the problems in the area" does not sufficiently explain how the character of these adjacent properties are so incompatible with ODD "office use" as to warrant the deduction of four out of a possible eight points that were available to City Centre. Under the facts and circumstances of this case, such action was unreasonable. Ms. Sowinski's evaluation of the City Centre bid was not reasonably based on the evaluation criteria HRS established. Therefore, even if Ms. Sowinski's evaluation of these bids was not tainted, her evaluation of the City Centre bid was materially improper. De novo Application of Evaluation Criteria to These Bids Item 1 (Associated Fiscal Costs) is, as noted in the written instructions to the Evaluation Committee, objectively based upon present value methodology computations. All bid evaluations in the record are consistent. In each evaluation, City Centre, the low bidder, receives the maximum of 40 points and Fort Knox receives 36.2. Points awarded pursuant to Item 1 on the Evaluation Sheet are not at issue. Therefore, in a de novo evaluation, City Centre is awarded 40 points and Fort Knox receives 36.2 points under Item 1. The Evaluation Criteria Score Sheet lists Item 3(a) as "Facility, Susceptibility of the design of the space offered to efficient layout and good utilization, which will be determined by evaluation committee." As noted in the written instructions to the committee, this item is subjective and an explanation of the assignment of fewer than allowed points is required. Item 3(a) is not at issue, and the maximum 13 points are awarded each building for the purpose of the de novo evaluation. The remainder of Item 3 is not in issue and is objective. All evaluations in the record award 6 points to City Centre and 8 points to Fort Knox. In the de novo evaluations, the same approach is taken. The application criteria in dispute in this case are those listed on the Evaluation Criteria Score Sheets under Item 2, Location, specifically 2(a) "The effect of environmental factors, including the physical characteristics of the building and the area surrounding it, on operations planned for the requested space" and 2(c) "Character of adjacent properties compatible with office use." Based upon the facts proved in this case, an independent review of the evaluation criteria and other appropriate exhibits, both the City Centre and Fort Knox buildings should receive the maximum allowed points in Items 2(a) and 2 (c). Therefore, each building is awarded twelve points in Item 2(a) and eight points in Item 2(c). The application of a de novo evaluation of the bids in this case, as described above, results in total scores of 87 for City Centre and 85.2 for Fort Knox. No party in this case, to and including the final hearing has contended that the votes of Mr. Odom, Ms. Young or Ms. Gunter were affected by any irregularity or argued that these evaluations should be discarded or ignored. None of the parties make such a contention in their proposed recommended orders and made no proposed findings of fact in this regard.4 Petitioner has proved, by a preponderance of the evidence, that the original recommendation, based upon the evaluation by Mr. Odom, Ms. Young and Ms. Gunter was in material compliance with the ITB as well as applicable statutes and rules. Petitioner is therefore entitled to the award of Lease NO. 590:2251 as provided in the original Evaluation Committee Recommendation. A de novo evaluation of the bids in this case proves, by a preponderance of the evidence, that Petitioner submitted the lowest and best bid. Petitioner is entitled to the award of Lease No. 590:2251 as provided in the original Evaluation Committee order.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, and the evidence of record, it is RECOMMENDED: That Respondent HRS enter a Final Order awarding Lease No. 590:2251 to Petitioner. It is further RECOMMENDED that Respondent return the cash bond posted by Petitioner pursuant to Section 255.25(3)(c), Florida Statutes. DONE and ORDERED this 21st day of March, 1991, in Tallahassee, Florida. JAMES W. YORK, 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 21st day of March, 1991.
The Issue Whether Respondent acted contrary to the agency's governing statutes, rules or policies, or the bid specifications in its proposed decision to award a contract to Intervenor Xerox Corporation pursuant to Request for Proposal ("RFP") No. 07-015- 040-RFP.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing and on the entire record of the proceeding, the following findings of fact are made: On December 15, 2006, PCS issued the 2007 RFP, entitled "Copier Program--Request for Proposals." The 2007 RFP was intended to provide a comprehensive copier program for the entire Pinellas County School District from the award date of the bid, then anticipated to be February 20, 2007, through June 30, 2012. The purpose of the 2007 RFP was stated as follows in Section 3.1 of the General Information section: [PCS] requests proposals from experienced and qualified vendors to provide a comprehensive copier program countywide which fulfills the priorities and needs expressed by district focus groups. PCS wishes to partner with a qualified vendor who will continue to improve information sharing, right size number of assets, and reduce the number of device types while lowering the district's cost. Vendors may propose whatever program they feel best meets the district's needs and are not restricted in any way other than to meet the basic equipment specifications, terms and conditions outlined in this bid. . . . (Emphasis added) A statement of the 2007 RFP's "scope" set forth in the Special Conditions similarly provided: [PCS] requests proposals from experienced and qualified vendors to provide a comprehensive copier program countywide which fulfills the priorities and needs expressed by district focus groups. Vendors may propose whatever program they feel best meets these needs and a district evaluation committee made up of participants from the focus groups will evaluate proposals and make the selection it feels best meets these needs based upon a set of criteria published in this document. . . . [Emphasis added] The 2007 RFP provided for proposals to be received no later than January 18, 2007, at 3:00 p.m. The 2007 RFP contained General Terms and Conditions, setting forth the standard boilerplate terms common to all PCS procurements, and Section 1 of "Special Conditions" particular to this contract.1 These were followed by: Section 2, "Personnel Matrix"; Section 3, "General Information"; Section 4, "Program Specifications"; Section 5, "Equipment Specifications"; Section 6, "Cost Proposal"; and Section 7, "Contractor Response." PCS has adopted the General Terms and Conditions as rules, codified in Part A of the PCS Purchasing Handbook. Paragraph 1(g) of the General Terms and Conditions, "Freight Terms," provided: All items are to be bid FOB destination with all transportation charges prepaid and included in the bid prices and title transferring to the district at the time of delivery, unless otherwise stated in bid invitation. Any exceptions to these freight terms taken by the bidder must be clearly stated in the bidder's proposal. The purchasing department will evaluate any such exceptions and determine if the exception constitutes grounds for rejection of the bidder's proposal. [Emphasis added] Paragraph 3 of the General Terms and Conditions, "Acceptance and Withdrawal of Bids," provided: A bid (or amendment thereto) will not be accepted by the purchasing department after the time and date specified for the bid opening, nor may a bid (or amendment thereto) which has already been opened in public be withdrawn by the bidder for a period of sixty (60) calendar days after the bid opening date and time, unless authorized by the purchasing department. By written request to the purchasing department, the bidder may withdraw from the bid process and ask to have their sealed bid proposal returned at any time prior to the closing date and time for the receipt of bid proposals. Paragraph 14 of the General Terms and Conditions, "Variance to Bid Documents," provided: For the purpose of bid evaluation, bidders must clearly stipulate any or all variances to the bid documents or specifications, no matter how slight. If variations are not stated in the bidder's proposal, it shall be construed that the bid proposal submitted fully complies in every respect with our bid documents. Paragraph 30 of the General Terms and Conditions, "Errors and Omissions," provided: In the event an error or obvious omission is discovered in a bidder's proposal, either by the purchasing department or the bidder, the bidder may have the opportunity of withdrawing their bid, provided they can produce sufficient evidence to document that the error or omission was clerical in nature and unintentional . . . This privilege shall not extend to allowing a bidder to change any information contained in their bid proposal; however, in the event of a minor omission or oversight on the part of the bidder, the purchasing department (or designee) may request written clarification from a bidder in order to confirm the evaluator's interpretation of the bidder's response and to preclude the rejection of their bid, either in part or in whole. The purchasing department will have the authority to weigh the severity of the infraction and determine its acceptability. Paragraph 31 of the General Terms and Conditions, "Basis of Award of Bids," provides: "A Bidder who substitutes its standard terms and conditions for the district's, or who qualifies its bid in such a manner as to nullify or limit its liability to the district will be considered nonresponsive." The standard form cover sheet to both the 2006 and 2007 RFPs contained a "Note to Bidder" that stated: "A signed bid submitted to the School Board obligates the bidder to all terms, conditions and specifications stated in this bid document, unless exceptions are taken and clearly stated in the bidder's proposal." (Emphasis added) The Special Conditions of the 2007 RFP included a provision titled "Acceptance of Vendor Responses," which stated: "The purchasing department reserves the right to accept proposals from multiple vendors, and to accept or reject portions of a proposal based upon the information requested. Vendors may be excluded from further consideration for failure to fully comply with the requirements of this RFP solely at the purchasing department's discretion." (Emphasis added) The Special Conditions of the 2007 RFP also included a provision entitled "Integrity of Bid Documents," which stated: Bidders shall use the original Bid Proposal Forms provided by the Purchasing Department and enter information only in the spaces where a response is requested. Bidders may use an attachment as an addendum to the Bid Proposal form if sufficient space is not available on the original form for the bidder to enter a complete response. Any modifications or alterations to the original bid documents by the bidder, whether intentional or otherwise, will constitute grounds for rejection of a bid. Any such modifications or alterations that a bidder wishes to propose must be clearly stated in the bidder's proposal response and presented in the form of an addendum to the original bid documents. Both Xerox and IKON timely submitted proposals in response to the 2007 RFP. Evaluations of the responses to the RFP were based on a two-step procedure. First, a focus group of individuals from the Pinellas County School District would analyze the bids and award points based on the specifications and the Proposal Evaluation Form set forth in the RFP. The maximum award was 100 points, with 80 points constituting the threshold for further consideration. Second, those vendors which met the 80-point threshold would compete solely on price. Those bidders who did not score 80 points in the first stage would not have their price bids opened. By January 24, 2007, the focus group had finalized its evaluations, and the cost proposals were to be opened on January 26, 2007. Both IKON and Xerox scored above the 80 point level. IKON received a score of 87 points from the focus group and Xerox received a score of 81 points. Xerox's proposal included, among 15 unnumbered appendices, an appendix titled "Xerox Clarification Addendum to the RFP." This Addendum contained four "clarifications" of portions of the General Terms and Conditions, seven "clarifications" regarding the Program Specifications portion of the Special Conditions, and 12 items under the heading "Other Xerox Service Terms" that purported to set forth contractual provisions regarding service, personnel, risk of loss, limitations on liability, payment schedules, and other standard contract terms. PCS's purchasing department conducted a responsiveness review of the proposals prior to sending them to the focus group for substantive evaluation, but did not notice the Xerox Addendum. Mark Lindemann, the director of purchasing for PCS, testified that it is not customary for bidders to submit such an addendum, and, therefore, his staff was not looking for it when conducting their responsiveness review. On January 30, 2007, after the focus group had performed its evaluation of all the bids, and the cost proposals had been opened and the bid tabulations had been posted on the PCS website, Colin Castle of IKON brought to the attention of the PCS purchasing department the presence of the Xerox Addendum. Geri Pomerantz is the Xerox employee responsible for public sector solicitations in the Southeast United States. She is responsible for understanding the terms and conditions of a solicitation, for pricing the solution based on the customer's requirements, and for ensuring that Xerox submits a responsive proposal. Ms. Pomerantz signed and submitted Xerox's proposal in response to the 2007 RFP. Ms. Pomerantz believed that the Xerox Addendum complied with the "Integrity of Bid Documents" provision of the Special Conditions, quoted above. By submitting the Addendum, Xerox sought to clarify areas of the RFP, to explain how Xerox was meeting the requirements of the RFP, and to propose new items where Ms. Pomerantz believed the RFP was silent on important terms. Ms. Pomerantz testified that, to comply with the "Integrity of Bid Documents" provision, Xerox included the proposed clarifications in the body of its proposal, where that was possible, then further called them to the attention of PCS by placing them in the Addendum. Though unnumbered, the Xerox Addendum is clearly identified in the Table of Contents at the front of the Xerox proposal and on a separate tab on the side of the proposal. Xerox incorporated its clarifications in the body of its proposal in those places where the 2007 RFP requested a response from the vendor, i.e., Section 4, the Program Specifications portion and Section 5, the Equipment Specifications portion. Xerox incorporated clarifications to the following Program and Equipment Specifications: Section 4.3.1-–Equipment Build Status; Sections 4.3.4, 5.3.2 and 5.3.13 –-Price Offering; Sections 4.7.4 and 4.7.5-–Inspection and Acceptance; Section 4.10.2-–Response Time; Section 4.10.3-– Uptime; Section 4.10.4--Electronic Meter Reads; and Section 4.17–-Insurance Specifications for Contractors. The General Terms and Conditions did not call for a vendor response, and Xerox's clarifications or proposed modifications to those were made only in the Addendum. The introduction to the Xerox Addendum provides as follows: We have reviewed your Invitation to Bid ("Bid")[2] for a Copier Program, and have prepared a proposal that we believe addresses your requirements. However, some of the Board's requirements require that we make some limited clarifications to the terms and conditions included in your Bid. These clarifications are set forth below and are part of our Proposal. In addition, we have included some additional terms and conditions, which are also included as part of our Proposal. Should there be a conflict between the terms and conditions of the various documents the order of precedence will be this Addendum, followed by your Bid. Please note that if any of the terms or clarifications are inconsistent with Florida law or otherwise unacceptable to you, Xerox agrees to negotiate a reasonable alternative that is acceptable to both parties. Our team is also prepared to discuss the Xerox Proposal in greater detail and, if required, adjust our offering based on your final requirements, which may include a modification to our proposed equipment, support services, terms and conditions, and/or price offering. The Xerox Addendum expressly proposed clarifications or modifications to four provisions of the General Terms and Conditions. Paragraph 1(g), set forth in full above, contains PCS's standard freight terms and describes the process by which a vendor may take exception to those terms: exceptions must be clearly stated in the proposal, and the purchasing department will determine whether the exceptions constitute grounds for rejecting the vendor's proposal. The Xerox Addendum proposed to transfer to PCS the cost of any "non-standard delivery or removal expenses, such as additional costs where additional time or resources are required to disassemble equipment due to lack of adequate facility access, or the need to use stair creepers or cranes to deliver equipment to upper floors of buildings.3 Ms. Pomerantz justified this variance by asserting that the 2007 RFP was silent regarding the issue of "non- standard delivery", and that Xerox was merely offering a clarifying solution to this problem. Mr. Lindemann believed this clarification to be salutary, based on disputes PCS has had with its current vendor, IKON, regarding unusual delivery issues. Paragraph 1(g) of the General Terms and Conditions specifically allowed the vendor to propose exceptions to the standard freight terms, provided those exceptions were clearly stated and the vendor understood that its exceptions could be grounds for rejection of its proposal. Thus, it is found that the Xerox Addendum did not materially deviate from the provisions of the RFP as to this variance. The Xerox Addendum also proposed modification of paragraph 11 of the General Terms and Conditions, which states that PCS has "sole and exclusive property" rights to any discovery, invention or work product produced under the contract. Xerox proposed that any work developed under this contract would be of a generic nature and would remain the sole property of Xerox. Mr. Lindemann reasonably opined that this was not a material deviation because there was no intellectual property involved in this RFP. The Xerox Addendum did not materially deviate from the provisions of the RFP as to this variance. The Xerox Addendum proposed modification of paragraph 41 of the General Terms and Conditions. Paragraph 41 provided that unless otherwise specified in the Special Conditions, all items requested "must be new, the latest model manufactured, first quality, carry the manufacturer's standard warranty and be equal to or exceed the specifications" listed in the RFP. In this instance, the Special Conditions did provide otherwise. Section 4.3.1 of the Program Specifications provided, in relevant part, that vendors "may propose all used, all new or a combination of new and used equipment, but all equipment must meet the minimum standards outlined later in this section. To assure ease of operation for end users, if used equipment is proposed it should all be of the same brand and model within any given Group of copiers, within any given facility." The Xerox Addendum simply provided clarification regarding the company's terminology for its equipment. The equipment provided by Xerox would be either "Newly Manufactured," "Factory Produced New Models," or "Remanufactured," internal Xerox distinctions regarding the use of new, reconditioned or recycled components, and Xerox disclaimed any intent to use reconditioned, recycled, refurbished or used equipment as defined by industry standard. In this instance, Xerox submitted a clarification that did not deviate from or attempt to modify the Program Specifications. The Xerox Addendum proposed modification of paragraph 44 of the General Terms and Conditions, the limitation of liability provision, which provided: The bidder guarantees to save [PCS], its agents and employees, harmless from liability of any nature or kind for use of any copyrighted or non-copyrighted materials, secret process, patented or unpatented inventions, articles or appliances, furnished or used in performance of the contract for which the contractor is not the patentee, assignee or licensee. The Xerox Addendum to paragraph 44 provided as follows: Xerox agrees that it will indemnify the Board from all copyright and patent information that is included in Xerox- branded equipment/software. However, Xerox will not indemnify the Board, its directors, officers, employees, volunteers, and agent [sic] for any patent infringement caused by complying with the Board's requirement to use, or the Board's use of, the Xerox- branded/supplied equipment with equipment or software not provided by Xerox. Mr. Lindemann testified that this modification of the limitation of liability provision would most likely require PCS to purchase additional contingent liability insurance, which would be a cost essentially passed on from Xerox to PCS. It is found that the Xerox Addendum materially deviated from the provisions of the RFP as to this variance. The Xerox Addendum proposed a second limitation of liability provision in the section titled "Other Xerox Service Terms," which was essentially a list of standard terms and conditions that Xerox proposed to take precedence over similar provisions in the 2007 RFP. This second limitation of liability proposal provided as follows: Excluding personal injury (including death), property damage, and intellectual property indemnification on Xerox branded equipment, Xerox will not be liable to you for any direct damages in excess of $100,000 or the amounts you've paid to Xerox, whichever is greater. Neither party shall be liable to the other for any special, indirect, incidental, consequential or punitive damages arising out of or relating to this Agreement, whether the claim alleges tortious conduct (including negligence) or any other legal theory. Any action you take against Xerox must be commenced within two (2) years after the event that caused it. Ms. Pomerantz testified that when she read the RFP she focused on the indemnification language in paragraph 44 of the General Terms and Conditions regarding copyright and patent issues. She thought the RFP was silent on broader indemnification issues, and she sought to clarify it with this proposed language. Mr. Lindemann testified that the $100,000 limitation of liability could result in costs to PCS in the event of a judgment against PCS and might require the purchase of additional liability insurance. Mr. Lindemann believed this proposed limitation on liability was a material deviation and formed the basis for his request to Xerox to withdraw the Addendum. Paragraph 31 of the Standard Terms and Conditions states: "A Bidder who substitutes its standard terms and conditions for the district's, or who qualifies its bid in such a manner as to nullify or limit its liability to the district will be considered nonresponsive." (Emphasis added) It is found that the Xerox Addendum materially deviated from the provisions of the RFP as to this variance. 34. Sections 4.3.4, 5.3.2, and 5.3.13 of the Program/Equipment Specifications related to the vendors' cost proposals provide: 4.3.4 Whatever type of pricing methodology is proposed, it shall include all costs associated with the administration of the service, including, but not limited to: all imaging devices, any peripheral equipment (file servers, etc.), delivery, removal, installation, training, dedicated technician(s), all supplies needed to operate the imaging devices except paper, delivery of supplies and removal of the equipment upon termination of this contract. * * * 5.3.2 Pricing should include all costs associated with the administration of the service, including, but not limited to all imaging devices, delivery, removal, installation, training, certified technicians and all supplies except paper needed to operate the imaging devices. * * * 5.3.13 Pricing must include all costs associated with the administration of the service, including, but not limited to all copier devices, delivery, removal, installation, training, certified technician(s), all supplies except paper, end-user training and semi-annual customer satisfaction surveys. The three quoted provisions state that price proposals must include all costs associated with the administration of the service in question, except for paper, delivery of supplies, removal of equipment upon contract termination, end user training, and customer satisfaction surveys. The Xerox Addendum sets forth a monthly minimum and cost-per-copy charge that would cover standard equipment, supplies, maintenance, delivery and removal, installation and user training, but would require PCS to pay for "optional accessories," "non-standard operating supplies," "excess rigging" needed due to inadequate site access or the need to use stair creepers or cranes to install or remove equipment,4 overtime service coverage, and expenses associated with site preparation. The Xerox Addendum attempted to vary the quoted Special Conditions that require the vendor's price to include all costs associated with delivery, removal, and installation and, thus, materially deviated from the provisions of the RFP. Sections 4.7.4 and 4.7.5 of the Program Specifications required the vendor to "provide and pay for all material, labor, tools, transportation and handling, and other facilities necessary for the furnishing, delivery, assembly plus inspection before, during and after installation of all items specified herein." The Xerox Addendum to Sections 4.7.4 and 4.7.5 attempted to limit Xerox's obligation to inspect the devices by stating that they are "deemed accepted" upon installation unless PCS specifically requires an inspection. It is found that the Xerox Addendum materially deviated from the provisions of the RFP as to this variance. Section 4.17.1 of the Program Specifications required acceptance testing for each imaging device and accessory, including a period of four consecutive business days, each containing seven hours of operational use time, in which the equipment maintains a 95 percent level of performance. The Xerox Addendum to Section 4.17.1 attempted to limit Xerox's obligation to inspect the devices by stating that they are "deemed accepted" upon installation unless PCS specifically requires an inspection. It is found that the Xerox Addendum materially deviated from the provisions of the RFP as to this variance. Section 4.10.2 of the Program Specifications provided requirements regarding service calls and response times. This condition defines "response time" as the interim between the user's call to the repair office and the appearance of a certified technician on-site who is prepared to effect repairs. Section 4.10.2 provides that the response time cannot exceed four hours. PCS would have the option of charging the contractor $50.00 per failure to meet this four-hour response time requirement. The Xerox Addendum proposed that service response times be averaged quarterly according to a formula by which "target response time" would be divided by "average service response time," which is measured by dividing the sum of all service call response times during the quarter by the total number of service calls. Xerox proposed that the $50.00 charge be imposed based upon Xerox's failure to meet "the 90-day 4 hour average unit response time commitment." IKON also proposed to calculate the response time using a quarterly average, providing for an average response time "of 2 to 6 hours for all customer service calls located within 30 miles of an IKON service center, and 4 to 8 hours for all customer service calls located 30 miles or more from an IKON service center." IKON's proposal did not clearly state how far IKON's nearest service center is located from any Pinellas County school site. Another section of IKON's proposal discusses the company's recent consolidation of its "customer care centers," which "provide direct customer support" and house "the field service call center and inside sales function for a geographical region," into four central locations, the closest to Pinellas County being in Atlanta, Georgia. In this instance, both Xerox and IKON have proposed material deviations from the RFP requirement. Section 4.10.2 of the Special Conditions set forth a simple response time requirement that PCS itself could monitor and enforce without input from the vendor. Both Xerox and IKON attempted to substitute complex formulas arriving at quarterly averages for response time. IKON's proposal further attempted to make its compliance with the four hour response time requirement contingent upon the location of IKON's service centers. Section 4.10.3 of the Special Conditions requires a guaranteed uptime of 95 percent per machine for any 90-day period, and further requires that machines failing to maintain 95 percent uptime must be removed and replaced with an identical or comparable model at no cost to PCS. The Xerox Addendum announced an uptime objective of maintaining an average 95 percent equipment uptime performance based on a three-month rolling average, a variation in the wording of Section 4.10.3 that does not materially change the RFP requirement. Xerox also offered slight variations in the definition of "downtime" that are in the nature of clarifications rather than amendments to Section 4.10.3. The Xerox Addendum also contained 12 "Other Xerox Service Terms," essentially Xerox's standard terms and conditions dealing with service guarantees, personnel, substitution of equipment or software, risk of loss for equipment, treatment of confidential information, compliance with laws, vendor liability for customer-supplied items, the limitation of liability provision discussed above, force majeure, payment upon 45 days of invoice, breach of contract and remedies thereto, and a procedure for amendment of the contract. The 2007 RFP's General Terms and Conditions contain requirements for breach of contract, limitation of liability, standards of conduct for vendor personnel, and equipment substitution. Thus, the Xerox Addendum violated the following language in paragraph 31 of the Standard Terms and Conditions: "A Bidder who substitutes its standard terms and conditions for the district's, or who qualifies its bid in such a manner as to nullify or limit its liability to the district will be considered nonresponsive." In summary, the Xerox Addendum materially deviated from the requirements of the 2007 RFP in the following ways: it varied from the limitation of liability requirements of paragraph 44 of the General Terms and Conditions; it offered a cost proposal that was not all-inclusive, in contravention of Sections 4.3.4, 5.3.2, and 5.3.13 of the Program Specifications; it attempted to limit inspections after installation and acceptance testing, in contravention of Sections 4.7.4, 4.7.5, and 4.17.1 of the Special Conditions; it varied from the response time requirements of Section 4.10.2 of the Special Conditions; and it attempted to substitute several of Xerox's standard terms and conditions for those of PCS, in violation of paragraph 31 of the General Terms and Conditions. After learning of the Xerox Addendum from Mr. Castle on January 30, 2007, PCS reviewed the Addendum and concluded that it included material deviations to the terms and conditions of the RFP solicitation and that either the Addendum or Xerox's bid must be withdrawn. Negotiations commenced between PCS and Xerox. On February 2, 2007, Xerox offered PCS a revised Addendum. PCS rejected the revised Addendum and informed Xerox that the Addendum must be withdrawn in its entirety. On February 5, 2007, Xerox notified PCS by letter that it was withdrawing the Addendum from its proposal. Also on February 5, 2007, PCS posted its notice of intent to award the contract to Xerox. IKON's protest complained that Xerox's letter did not accomplish a complete withdrawal of the deviations included in the Xerox Addendum, because many of those deviations remained in the main body of the Xerox proposal. As noted above, Xerox incorporated its clarifications in the main body of its proposal in those places where the 2007 RFP requested a response from the vendor. These clarifications were included in Section 7.1.4 of the Xerox proposal, "Proposed Work Plan, Transition Plan." When Xerox withdrew its Addendum, it did not also submit a revised proposal that deleted the Addendum provisions from those places where they had been incorporated into the main body of the proposal. Nevertheless, both Xerox and PCS understood that withdrawal of the Addendum accomplished the complete withdrawal of the materials included in the Addendum, including where they were incorporated into the main body of the Xerox proposal. This understanding was reasonable under the circumstances. However, IKON raises a related objection that is more pertinent. Xerox was allowed to withdraw its Addendum, and then was awarded the contract. Thus, the winning proposal is different than the proposal that was reviewed and scored by the PCS focus group. IKON argues that it is very likely that Xerox would not have passed the 80-point threshold without the Addendum provisions that were incorporated into the main body of the proposal. Mr. Lindemann of PCS believed that Xerox's score would probably have been higher without the Addendum provisions. The salient point is that both sides are free to speculate about what the score of the winning bid might have been, because PCS proposes to award a contract on a proposal that was never reviewed or scored in the manner prescribed by the 2007 RFP. PCS argues that the withdrawal of the Xerox Addendum was entirely in keeping with the RFP, citing paragraph 3 of the General Terms and Conditions, quoted in full above and relevant portion of which provides: A bid (or amendment thereto) will not be accepted by the purchasing department after the time and date specified for the bid opening, nor may a bid (or amendment thereto) which has already been opened in public be withdrawn by the bidder for a period of sixty (60) calendar days after the bid opening date and time, unless authorized by the purchasing department. [Emphasis added] PCS contends that the emphasized language grants the purchasing department authority to allow a bidder to withdraw a portion of its bid after the bids have been opened. This is correct, if the portion in question is a timely submitted amendment to the original bid.5 In their arguments, both PCS and Xerox equate the terms "amendment" and "addendum," and assume that the Xerox Addendum could be withdrawn as an "amendment" to the Xerox proposal. However, the Xerox Addendum was not an amendment to the Xerox proposal; it was an integral part of that proposal. The Addendum did not amend anything contained in the Xerox proposal; rather, it attempted to "amend" the terms of the RFP. The underscored portion of paragraph 3 anticipates the late withdrawal of an entire bid or an amendment to a bid, not a wholesale grant of authority to the purchasing department to allow a bidder to save a nonresponsive proposal by withdrawing the objectionable provisions. PCS argues that Xerox was given no economic or competitive advantage in being allowed to submit and then withdraw its Addendum. Ms. Pomerantz testified that none of the items in the Addendum would have affected the price bid by Xerox, because they were essentially items of overhead that Xerox cannot "cost out" to include in a price proposal. However, the testimony by Mr. Lindemann convincingly made the point that some of the variations from RFP terms offered by Xerox would affect PCS's costs regardless of their impact on Xerox's price proposal. Passing on costs to the agency that have been absorbed by IKON and the other vendors in their proposals works to Xerox's economic advantage and to the detriment of PCS. Xerox had an obvious competitive advantage in being granted the opportunity to amend its proposal after the substantive proposals were opened and evaluated and the price proposals had been opened and posted. Xerox was also granted the option, afforded to no other bidder, of simply declining to withdraw its Addendum and thereby walking away from the procurement after submitting a proposal that, under the terms of the RFP, is supposed to bind the vendor for a period of 90 days. Subsection 120.57(3)(f), Florida Statutes, provides, in relevant part: In a protest to an invitation to bid or request for proposals procurement, no submissions made after the bid or proposal opening which amend or supplement the bid or proposal shall be considered. . . . The PCS rules and RFP provisions, correctly understood, do not contravene this statutory requirement. They grant the purchasing department the flexibility to allow a bidder, under special circumstances, to withdraw from a given procurement after submitting a bid, and they allow PCS to waive slight variations or minor irregularities in a bid. To the extent that PCS interprets its rules and RFP to allow Xerox to substantially amend its proposal after the opening,6 as occurred in this procurement, then PCS has violated its governing statutes in a fashion that is clearly erroneous, contrary to competition, arbitrary, or capricious. PCS argues that even if the Xerox Addendum contained material deviations, the RFP and PCS's rule permitted bidders to submit addenda with material deviations. PCS based this argument on that portion of Section 3.1 of the Special Conditions stating that bidders "may propose whatever program they feel best meets the district's needs and are not restricted in any way other than to meet the basic equipment specifications, terms and conditions outlined in this bid." When read within the context of the Special Conditions in their entirety, this language clearly contemplates allowing the vendors to offer creative solutions within their field of substantive expertise, i.e., the establishment of a comprehensive copier program countywide. It was rational for the drafters of the RFP to assume that a company such as Xerox enters the process in possession of more knowledge and experience in the field of copier installation, service, and repair than the school district possesses. PCS conducted focus groups to determine the top priorities of the school personnel who use the copiers and presented the bidders with specifications broad enough to allow maximum flexibility in crafting proposals responsive to the listed priorities. However, there are rarely "creative solutions" to boilerplate RFP terms such as shipping, limitation of liability, the requirement that cost proposals be all-inclusive, inspection of equipment prior to acceptance, and response time for repairs. These are areas in which the purchasing department of PCS may be presumed to have at least as much expertise as Xerox or IKON. Variations from the RFP's requirements proposed by a bidder regarding these items are likely to be self-serving efforts to protect the bidder's interests or pass on costs to the agency. Paragraph 31 of the General Terms and Conditions recognizes this reality by stating that a bidder that substitutes its standard terms and conditions for those of PCS will be considered nonresponsive.7 PCS is correct that the "Integrity of Bid Documents" paragraph of Section 1 of the Special Conditions of the 2007 RFP allows bidders to submit addenda that clearly state "modifications or alterations that a bidder wishes to propose." However, contrary to PCS's treatment of Xerox in this procurement, the RFP does not state that the bidder may propose modifications of the RFP terms without risk.8 The cited paragraph clearly warns bidders that proposed modifications or alterations constitute grounds for rejection of a bid. The paragraph does not, and under Subsection 120.57(3)(f), Florida Statutes (2006), could not, state that bidders will be given the opportunity to withdraw those portions of their proposals deemed nonresponsive after bid opening. PCS also emphasizes the first sentence of the "Acceptance of Vendor Responses" paragraph of the Special Conditions: "The purchasing department reserves the right to accept proposals from multiple vendors, and to accept or reject portions of a proposal based upon the information requested." However, the next sentence of that paragraph states that the remedy is not after-the-fact withdrawal of the rejected portion of the proposal, but rejection of the proposal: "Vendors may be excluded from further consideration for failure to fully comply with the requirements of this RFP solely at the purchasing department's discretion." Both PCS and Xerox raised the issue of the 2006 RFP in an effort to show that IKON was now attacking a process from which it earlier benefited. In the 2006 procurement, IKON was allowed to withdraw portions of an addendum after a competitor filed a protest. PCS ultimately rejected all of the 2006 Proposals because of confusion on the part of the bidders, partly related to the fact that IKON was allowed to withdraw its addendum but a competitor was not given the same opportunity. PCS then issued the 2007 RFP in December 2006 to procure the same copy services sought by the 2006 RFP. The 2006 RFP is relevant only to show that PCS has allowed the withdrawal of amendments in at least one previous procurement, a moot point because PCS has freely stated its position that it has the authority to reject an addendum without rejecting the entire proposal. Xerox's original proposal, including the Addendum, was nonresponsive for the reasons set forth above. PCS's effort to save Xerox's low bid by allowing it to withdraw the Addendum violated Subsection 120.57(3)(f), Florida Statutes (2006), as well as the terms of the RFP. The remaining question is whether IKON's proposal was responsive and may therefore be awarded the contract. As already found above, IKON's proposal materially deviated from Section 4.10.2 of the Special Conditions by substituting a complex formula for the simple response time requirement of the RFP and by making compliance with the four- hour response time requirement contingent upon the location of IKON's service centers.9 Section 7.1.3 of the Contractor Response portion of the 2007 RFP, "Proposed Models and Equipment Configurations," provides the following: The respondent must provide a comprehensive description of its proposed standard models and equipment configurations for each of the various grade levels (elementary, middle, high school). Consideration should be given to the stated needs of the focus groups (Section 3), particularly "ease of operation", "accessibility" to machines and "reliability". Vendors should provide detailed, technical product literature for each piece of equipment proposed including all options. The respondent should also describe what flexibility will be allowed for adding or deleting equipment as program needs change and how that will effect the amount billed according to the cost proposal plan proposed. [Emphasis added] Section 7.1.7 of the Special Conditions, "Cost Proposal," provides the following: Respondent must include a complete, detailed cost proposal which encompasses all costs associated with the proposed program. The cost proposal must allow for flexibility to add or delete equipment as program needs change. The district will not entertain any proposals to purchase or lease any equipment. [Emphasis added] IKON's proposal contained the following paragraph within its response to Section 7.1.3 of the Special Conditions: As requested by PCS in Section 7.1.7 of the Invitation to Bid, IKON's cost proposal allows for flexibility. IKON will permit PCS to add or delete equipment as PCS' needs change by permitting PCS to upgrade or downgrade equipment at the beginning or at the end of its fiscal year. Under this program, PCS may replace upgraded or downgraded equipment with additional equipment that addresses PCS' needs. Specifically, IKON will permit PCS to identify up to [three] percent of the overall equipment fleet value procured by PCS from IKON, including models and specifications that are representative of the entire fleet population, as flexible equipment that may be upgraded or downgraded at the beginning or at the end of the fiscal year, while all other equipment may be canceled only in the event of a non- appropriation or termination for cause. The flexible equipment may also be relocated or otherwise used to facilitate a rightsizing program, as directed by PCS. PCS may utilize this flexibility program in its own discretion. In no event shall either party be liable to the other party for any indirect, special or consequential damages. Xerox contends that by limiting PCS to a three percent change in the overall equipment fleet value, IKON's proposal materially deviates from Sections 7.1.3 and 7.1.7 of the Special Conditions, which required that PCS have the flexibility to increase or decrease the size of the copier fleet to meet its needs. However, Section 7.1.3 did not prescribe the amount of "flexibility" required in the vendors' bids; rather, it expressly requested the vendors to "describe what flexibility will be allowed for adding or deleting equipment." IKON's bid described the allowed flexibility as three percent of the overall equipment fleet value and was thus responsive on its face. The evidence presented at hearing was insufficient to determine whether a three percent limit would be so restrictive of PCS's needs to add or delete equipment as to render IKON's proposal nonresponsive. More problematic is the last sentence of the quoted paragraph: "In no event shall either party be liable to the other party for any indirect, special or consequential damages." Xerox cogently argues that if its own proposed limitation of liability is a material deviation, then this similar limitation of liability included in the IKON bid must also be found a material deviation. IKON responds that it is clear from the context that this limitation of liability provision, unlike that in Xerox's proposal, applies only to Section 7.1.3. For this reason, IKON contends, PCS determined that IKON's bid was responsive. IKON argues that its own limitation of liability provision is implicated only in the event that PCS requires additional equipment and that it does not limit any direct liability of IKON to PCS and concerns only a distinct class of damages: indirect, special or consequential damages. The position of the quoted sentence, at the end of the final paragraph of IKON's response to Section 7.1.3 of the Special Conditions, supports IKON's contention that the limitation of liability applies only to that section. However, the wording of the sentence ("In no event . . .") indicates a broader intended application. IKON also failed to explain why the requirement of additional equipment, and only the requirement of additional equipment, raised concerns within IKON that indirect, special or consequential damages might be claimed by either party to the contract. At best, this provision is ambiguous in the scope of its application and, in any event, seeks to limit the liability of IKON beyond the limits provided by the RFP. If Xerox's limitations of liability constitute material deviations, then so must IKON's. IKON's proposal thus contains two material deviations from the RFP, one regarding response time and one regarding limitations of liability. IKON's proposal is nonresponsive.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is RECOMMENDED that PCS enter a final order that (a) declares Xerox's bid to be materially nonresponsive and, accordingly, rescinds the proposed award to Xerox; and (b) declares IKON's bid to be materially nonresponsive and, accordingly, rejects the same. Because the choice of remedies for invalid procurement actions is ultimately within the agency's discretion, the undersigned declines to make a recommendation as to whether PCS should award the contract to the next-lowest responsive bidder or reject all bids and start over. DONE AND ORDERED this 10th day of May, 2007, in Tallahassee, Leon County, Florida. S LAWRENCE P. STEVENSON 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 10th day of May, 2007.
The Issue The issue is whether the Department of Corrections (DOC) acted fraudulently, arbitrarily, illegally or dishonestly when it decided to award the contract under Bid Number 94-CO-6355, for Inmate Pay Telephones and Long Distance Service (the Contract), to the number two-ranked bidder, North American Intelecom, Inc. (NAI).
Findings Of Fact Background On or about August 12, 1994, the DOC issued Invitation to Bid Number 94-CO-5355, Inmate Pay Telephones and Long Distance Service. Michael H. Johnson, a General Services Specialist, prepared the ITB at the direction of Jim Morris, Chief of the DOC's Bureau of General Services. Johnson developed the evaluation criteria and point allocations in Section 8.0 of the ITB. The document was reviewed and approved by Morris, Jim Biddy, Chief of the DOC's Bureau of Finance and Accounting, and Max Denson of the DOC's Operations Office. Inmate pay telephone and long distance service requires more than just the installation of pay phones in correctional facilities. The service vendor must also provide a means of blocking inmate telephone calls and, when calls are authorized, preventing inmates from making harassing calls to members of the public. Additionally, the ITB includes a provision requiring some means for monitoring and automatically recording inmate telephone calls, and for deactivating the automatic recording function when an inmate calls his or her attorney. A requirement is also included in the ITB that the system limit the length of inmate calls and generate monthly call detail reports. Other mandatory, no cost features to be provided under the Contract include a Personal Identification Number ("PIN") system capability, a three-way call detection and cutoff feature, a pilot site to test the call monitoring/recording system, on-site administrators to free facility staff from all tasks associated with the inmate phone system, and a semi-annual audit to ensure that the provider is meeting all technical and service requirements. The specifications in the ITB for provision of inmate pay telephone and long distance service are some of the most comprehensive in the country, requiring state-of-the-art hardware, software, and service in order to implement specified mandatory system features. Security concerns are prominent among reasons for having adequate service and support for the inmate pay telephone and long distance service. PIN-Driven System One of the primary features specified in the ITB is a PIN-driven system for blocking inmate calls. The PIN system requires each inmate to be assigned his or her own personal identification number for use with the telephone system. An inmate must key in his or her personal identification number before dialing an outgoing call. The system must automatically screen the telephone number dialed to ensure it is one which has received prior authorization for accessibility by the PIN. A PIN-driven system is labor-intensive and requires on-site administration to facilitate assignment of inmate PIN numbers and constant input and modification of each inmate's list of numbers for authorized outgoing calls. Project Staffing The DOC specifically requested the inmate phone system vendor to provide sufficient on-site administrators for a number of reasons including, but not limited to, support for proper administration of the PIN system. Noting that on-site administrators are to relieve DOC staff of all responsibilities relating to the inmate phone system, the DOC stated in the ITB that it did not want its staff to be involved with time-consuming service and maintenance problems. The DOC expressed a preference in the ITB for one on-site administrator being assigned to each major facility, except in those circumstances in which a single individual may cover several facilities in close geographic proximity to one another. Support services are important to maintain the proper functioning of the type of inmate phone system requested by the DOC. The ITB, taken as a whole, is a solicitation for an integrated telecommunications system, encompassing not only hardware, but systems software, service and project support. The ITB did not simply solicit manufacturers and models for various pieces of hardware; it contained a comprehensive description of functional requirements that had to be met. As a consequence, any determination that one bidder's "equipment" is identical to that offered by any other bidder must take into consideration proposed support and service, as well as proposed hardware and software applications. Bid Evaluation Procedure Specified in the ITB As established at final hearing by the unrebutted testimony of MCI's expert in telecommunications service bid response preparation, DOC's ITB differed from those in many other states. Unlike the instant ITB, many ITBs from other jurisdictions provide for a determination that bids meet specified minimum requirements and then dictate the award of a contract to the responsive bid with the lowest price. Conversely, DOC's ITB specified a detailed procedure to be followed in evaluating the bids, including evaluation criteria, points to be assigned to each criterion, and an evaluation committee to conduct the evaluation of bids. Johnson, the DOC employee responsible for the preparation of the ITB, understood that the Contract would be awarded to the bidder with the highest number of points allocated in accordance with the evaluation scheme described in Section 8.0 of the ITB. The DOC includes in its ITB both general and special conditions and specifications. The ITB, by its own terms, provides that special conditions and specifications shall have precedence over general conditions. The ITB contains numerous special conditions and specifications, including the bid evaluation procedures under Section 8.0. The bid evaluation criteria which are described by these special conditions and specifications identify the areas of the state's interest which must be addressed by the bids, as well as the weight to be assigned to each. Section 8.3 of the ITB emphasizes that any information gleaned from post bid demonstrations will not be used to change bid responses. The bid evaluation scheme specified in the ITB provided for points to be awarded to each bid using the following weighted criteria: CRITERIA POINTS CORPORATE QUALIFICATIONS 15 REFERENCES 10 PROPOSED PROJECT STAFF 5 COMMISSION RATE 70 TOTAL POSSIBLE POINTS 100 The points awarded for "commission rate" were to be determined by using a formula specified in the ITB which initially gave 70 points to the bidder proposing the highest commission rate, with all other bidders receiving a lesser number of points, depending on how close they came to the highest proposed commission rate. The points awarded for all of the other criteria were to be determined by a seven-member Evaluation Committee, members of which were selected by Assistant Secretary Kronenberger for their experience with management and actual operation of inmate phone systems, both from the institutional perspective and the regional office perspective. Each bid was required to be independently evaluated. The DOC issued two addenda to the ITB. The first addendum was issued August 23, 1994, and advised potential bidders of a change in location for the pre-bid conference scheduled for September 7, 1994. At the pre-bid conference, the DOC explained the award process to potential bidders. Johnson, the DOC representative, advised potential bidders at the pre- bid conference that the contract award would not be determined solely on the strength of the commission rate quote. On September 22, 1994, the DOC issued Addendum Number Two to the ITB which, among other things, changed the evaluation procedure by adding a new criterion and re-allocating the weight among the expanded criteria as follows: CRITERIA POINTS CORPORATE QUALIFICATIONS 10 REFERENCES 10 PROPOSED PROJECT STAFF 5 TECHNOLOGICAL ENHANCEMENTS 10 COMMISSION RATE 65 TOTAL POSSIBLE POINTS 100 The addition of "technological enhancements" was made at the request of Deputy Secretary Thurber, who wanted to be sure that the DOC had an opportunity to see what features above and beyond the minimum features specified in the original ITB were available for an inmate pay telephone system. When technological enhancements were added as an evaluation criterion, the weight to be given the commission rate in the evaluation scheme was lowered from 70 to 65 points. The DOC officials who reviewed and approved Addendum Number Two determined that the reduced weight for proposed commission rates was appropriate. At 65 percent of the available points, the reduced weight for the proposed commission is still higher than the 45 percent to 50 percent weight typically given by the DOC to the revenue side of a bid. Bidder Preparation MCI relied on the representation in the ITB and assurances of DOC's representative, Michael H. Johnson, at the bid conference that DOC's decision would not be made solely on the basis of cost. As a consequence of DOC representations, MCI prepared its bid to address the specifications in the ITB and thereby maximize its overall points under the ITB's evaluation scheme, as opposed to submission of a bid package concerned solely with scoring the highest possible points for "commission rates." Bid Opening and Initial Review On October 21, 1994, bids were submitted to DOC by MCI, NAI, AT&T, TEI, Robert Cefail & Associates (RC&A), 21st Century, RC&A/21st Century, and LDDS Metromedia. At the Bid Opening, Johnson again explained the award process to bidders on behalf of the DOC, and advised bidders that the bid tabulation was strictly for the purpose of documenting responses and that nothing was to be inferred from the proposed commission rates. Bidders were again advised that commissions would be only one aspect of the award. Johnson's understanding at the time of the Bid Opening was that the Contract would be awarded based on points awarded pursuant to the bid evaluation scheme specified in the Section 8.0 of the ITB. Johnson participated in an initial review of the bids, reading each of the proposals to determine whether the mandatory requirements were satisfied. Of eight bids received, five, including the bids submitted by MCI and NAI were determined by the DOC to satisfy the mandatory requirements. The Evaluation Committee As required in the ITB, the DOC formed an Evaluation Committee to evaluate the bids. Selected by Assistant Secretary Kronenberger, members of the Evaluation Committee were: Jim Biddy, Chief of the Bureau of Finance and Accounting; Jerry Pilcher, Chief of Regional Administrative Services for Region II; Kermit Kerley, Superintendent of the Hardee Correctional Institution; Stan Czerniak, Superintendent of the North Florida Reception Center; Charles Mask, Superintendent of the Corrections Mental Health Institution; Charles Dennard, Business Manager for the Polk Correctional Institution; and Robert Sandal, General Services Manager for Region I. Members of the Evaluation Committee were selected from the DOC's business managers and superintendents on the basis that their participation would provide an overall perspective with respect to management and actual operation of the inmate phone system. Evaluation Committee's Recommendation All five of the bids determined by the DOC to be responsive were thoroughly reviewed by Evaluation Committee in accordance with the bid evaluation procedures specified in the ITB, including Addendum Number Two, in an almost day-long session in the DOC's Central Office on January 5, 1995. The total points awarded by each Committee member for all of the four evaluation criteria were averaged to establish each bidder's total Evaluation Points. Every member of the Evaluation Committee scored MCI's bid as their number one or number two choice. NAI was ranked no higher than third by anyone on the Committee and was ranked fourth by five of the Committee's members. No member of the Committee gave NAI a higher score than MCI on any of the evaluation criteria. Comments on a majority of the evaluation forms of the seven members of the Evaluation Committee reflect a general concern for the adequacy of NAI's proposed project support. Specifically, Mr. Biddy noted that "[p]roposed project staff consisted of only 17 people [and that it was] questionable whether this would be sufficient for site administration as well as contract management." Similarly, Mr. Kerley noted on the NAI bid evaluation form that "17 staff may not be enough to support [the] system." Mr. Pilcher's comments indicated that "[p]roject support was not as I expected or not explained very well." Mr. Dennard indicated that NAI's bid provided "no breakdown of [the] 17 staff to support [the] contract [and] no mention of site administrators." The NAI bid indicates that a total of 17 personnel will be made available to support the Contract with more to be "added if the schedule so indicates." NAI's bid does not specifically identify the number of persons to be involved in on-site administration. However, NAI has committed only 17 people in support the Contract as a whole, ten of whom are expressly identified as performing tasks other than on-site administration. While NAI's bid indicates provision of additional personnel if required by the schedule, ambiguity about whether NAI would expand the number of on-site administrators for the entire term of the contract is evident. The "installation requirements" described in the ITB refer to time-limited activities necessary to initiate operation of the inmate telephone system, as opposed to the ongoing nature of the commitment necessary for on-site administration. In its bid response, NAI also agreed to cooperate with the DOC "to insure the proper distribution of on-site administrators." This offer does not suggest, however, that the number of on-site administrators committed in support of the Contract will be augmented by NAI. Such assurance relates to location and not number of on-site administrators. Testimony of NAI presented at final hearing that additional on-site administrators will be provided is not credited, inasmuch as such testimony constitutes an impermissible attempt by NAI to modify its bid after the bid opening. Based upon the substantial disparity in the proposed levels of customer service, the MCI and NAI bids cannot be considered to be identical. NAI's assertion at hearing that its bid included other system features which do not appear on the face of its written proposal constitutes a prohibited post-bid-opening modification. Such modifications included PCs, keyboards, printers and color monitors at each facility. These items are included on the face of the MCI bid. MCI offered 28 personnel in support of the Contract, including an express commitment for 20 on-site administrators. MCI's proposal to provide 20 on-site administrators is one of the highest number of on-site administrators offered by any bidder and a very costly aspect of MCI's bid since all employee salary and benefits must be covered for each on-site administrator dedicated to the project. The assignment of points for each bidder's proposed commission rate (Commission Points) was based on a scale which assigned 65 points to the bid with the highest commission rate quote. A lesser number of points was assigned to all other bids pursuant to a formula specified in Section 8.2 of the ITB, as amended by Addendum Number Two. The highest commission rate quoted by any bidder was proposed by NAI at 56 percent. NAI was accordingly assigned 65 Commission Points. NAI was also awarded 22.143 Evaluation Points, which, when combined with NAI's 65 Commission Points, produced a total of 87.143 points. MCI proposed a 53 percent commission rate and, in accordance with the formula set forth in the ITB, earned 61.51 Commission Points. MCI was also awarded 30 Evaluation Points which, when combined with MCI's 61.51 Commission Points, produced a total of 91.51 points. When the Evaluation Committee's other scores were combined with the scores for commission rates obtained by applying the formula in the ITB, MCI's point total was higher than that received by any of the other bidders. The DOC officials later involved in the decision to award the Contract to NAI indicated that they had no reason to question the work of the Evaluation Committee. After reviewing the bid evaluation forms produced by the Evaluation Committee, and based on his continuing understanding that the Contract would be awarded to the bidder receiving the highest number of points under the evaluation scheme specified in the ITB, Michael H. Johnson prepared a memorandum for signature of his supervisor, Mr. Morris, to Assistant Secretary Kronenberger. Dated January 31, 1995, the memorandum recommended award of the Contract to MCI. Morris signed the January 31, 1995 memorandum and forwarded the same to Assistant Secretary Kronenberger. At prehearing deposition in this case on April 13, 1995, Kronenberger denied having received any recommendation from anyone regarding which company should be awarded the contract. Later at the final hearing following Johnson's testimony that he, Johnson, had been instructed to destroy the signed document by Morris (his supervisor), Kronenberger finally admitted that he had told Morris "we ought to pull that memo." These instructions were followed by Morris, who directed Mr. Johnson to destroy the January 31, 1995 memorandum recommending award of the Contract to MCI. Significantly, neither Morris, Kronenberger, nor Thurber--all DOC officials involved in the contract award decision--mentioned the existence of this document prior to Mr. Johnson's revelation on the witness stand that it had been destroyed. After-The-Fact Evaluation In a February 22, 1995 memorandum to Deputy Secretary Thurber, Kronenberger, after acknowledging that MCI received the highest number of points, formally recommended that the Contract be awarded to NAI. This memorandum was drafted by Morris at the direction of Kronenberger. Before making the recommendation to award the contract to NAI, Kronenberger had not read the ITB, the addenda to the ITB, or any portion of the bids. Morris was the only member of his staff with whom Kronenberger consulted. Kronenberger's decision was approved by Deputy Secretary William Thurber. Neither Kronenberger, Morris, nor Thurber read the bids at any time prior to the DOC's issuance of the notice of intended award to NAI. Kronenberger based his decision to recommend award of the Contract to NAI on his belief that NAI and MCI proposed to install "identical equipment," and that at least $1.1 million in additional revenue would be generated by the 3 percent higher commission rate offered by NAI over the three-year base term of the Contract. Although the February 22, 1995 Kronenberger memorandum states that the DOC could find no correlation between the proposed commission rates and equipment capabilities, the DOC officials who made the decision to award the Contract to NAI (Morris, Kronenberger and Thurber) performed no analysis of the proposals, did not complete a score sheet, did not talk with any of the members of the Evaluation Committee, and were unaware of the specific content of the bids and the proposed differences in staffing offered by the two bidders. In contrast to the assertion of the Kronenberger memorandum, the proof establishes a direct inverse correlation between the total average scores awarded by the Evaluation Committee to the top three bids and the commission rates offered in those bids. This inverse correlation proves that the bidders had to balance the cost of the hardware, software and support personnel aspects of their bids against the commission rate they could offer and that the cost of each hardware, software and support personnel aspect of a bid has a direct impact on the commission rate which could be offered. This balancing is precisely what is required by the ITB since all of these aspects of the bid were assigned specific weights in the specified evaluation scheme. Kronenberger's assumption, as set forth in his memorandum recommending award of the contract to NAI, that both NAI and MCI proposed to install identical "equipment" ignores the fundamental premise of the solicitation--that hardware, software and support were needed to provide a fully functioning, secure inmate phone system, as well as the fact that the vendors offered different approaches in responding to this requirement. System hardware proposed by MCI and NAI includes the Telequip System Automatic Call Processor ("ACP") 4000, a Dictaphone recording and monitoring system, and Philips & Brooks/Gladwin phone instruments. However, with regard to all aspects of the hardware offered, MCI's bid was more detailed and specific as compared with the NAI bid which generally identified system capabilities by referencing attached brochures. At best, NAI's bid is ambiguous as to whether it offered the same hardware component features. NAI's general references to the brochures in its bid failed to specify which features of a piece of equipment was being affirmatively offered. NAI's after-the-fact assertion at the final hearing regarding features to be provided cannot be credited since such constitutes an impermissible attempt to modify its bid after the bid opening. Software jointly developed by MCI and Telequip would permit operation of the attorney exception capability utilizing the Telequip ACP-4000 with the proposed Dictaphone recorder systems. Until MCI requested development of the necessary software, the attorney exception capability, which deactivates the automatic recording function when an inmate calls his or her attorney, was not available with the Telequip ACP-4000 when used in conjunction with the Dictaphone recorder. Software jointly developed by MCI and Telequip was also necessary to provide an international call capability because the standard Telequip ACP-4000 ordinarily utilizes a debit system to process international calls, and "the debit system is inherently incompatible with the PIN system and the allowed calling list feature that are requirements in the . . . ITB." The MCI bid offers more technological enhancements at no cost to the DOC, than does the NAI bid. Further, the items identified on MCI's list of technological enhancements do not appear anywhere on the face of the NAI bid. NAI's omission of the enhancements listed in the MCI bid adds further credence to the finding that the DOC had no reasonable basis to conclude that it would be getting those enhancements under the NAI bid at the time it was submitted. Moreover, the DOC's own synopsis of technological enhancements shows that it was aware of differences in the bids. Differences in the hardware, software and services offered in the MCI and NAI bids preclude a determination that the two bids offered "identical equipment." Monetary Considerations Revenue figures used by the DOC to project a $1.1 million difference in commissions were drawn from a period of time in late 1994 and early 1995 when the DOC's own summary reports indicate that NAI's billing exceptions range from 41 percent to 49 percent of all calls. Billing exceptions are the number of calls which exceed AT&T rates or could not otherwise be reviewed in monthly call detail reports. NAI's customer overcollections for telephone calls from inmates in the correctional facilities presently served by NAI provide an additional basis for uncertainty regarding the reliability of the projected $1.1 million difference in commissions. While the overcollections have not yet been quantified, NAI has admitted to the Florida Public Service Commission overcollections from customers receiving telephone calls from inmates under its current contract with the DOC in the amount of $394,318. Notwithstanding the ongoing PSC inquiry and reports of extensive billing exceptions under its existing contract with NAI, the DOC has no apparent incentive to closely scrutinize overcollections inasmuch as the more revenues billed by NAI, the greater the amount of commissions received by the DOC. Thus, while there is a 3 percent difference in the proposed commission rates between the two bidders, it cannot be determined from this record with any degree of certainty how that difference will translate into actual dollars to the DOC. In any event, the revenues generated by the contract for inmate pay telephones are placed in the Inmate Welfare Trust Fund, which does not support essential correctional facilities or services. Notice of Award and Protest On March 2, 1995, the DOC issued an intent to award the Contract to NAI. On March 8, 1995, within 72 hours of receipt of DOC's notice of intent, MCI timely filed a Notice of Protest. On March 20, 1995, within ten days of filing its Notice of Protest, MCI timely filed a Formal Written Protest pursuant to Section 120.53(5) and 120.57, Florida Statutes, and Rule 33-20.005, Florida Administrative Code. With its Formal Written Protest, MCI delivered to the DOC a cashier's check in the amount of $5,000. On April 10, 1995, the DOC served its Motion to Dismiss MCI's protest, alleging that MCI has no right to a formal administrative hearing on the award of the Contract. On April 12, 1995, the undersigned Hearing Officer, after consideration of the parties' pleadings and oral argument, ruled that MCI is entitled to a formal administrative hearing under Chapter 120, Florida Statutes, to determine whether the DOC's decision to award the contract to NAI was arbitrary, illegal, fraudulent, or dishonest. MCI has requested reasonable attorneys' fees and expenses pursuant to Section 120.57(1)(b)5, Florida Statutes, for costs incurred in responding to the DOC's Motion to Dismiss. The Hearing Officer has ruled on the motion by order issued concurrently with this recommended order.
Conclusions The Department adopts the Conclusions of Law contained in its Proposed Order, except for paragraph 189. The Hearing Officer's Conclusions of Law are also adopted, to the extent they do not conflict with the Department's. The following additional Conclusions of Law are now adopted into this Final Order. Service and personnel support were clearly part of the ITB, and were scored accordingly. Although Mr. Kronenberger considered service and support by recognizing the work already performed by Intervenor under its existing contract, sufficient consideration was not given for the $394,318 overcharge which Intervenor admitted to at the hearing. Since this overcharge was admitted to the Public Service Commission and not the Department, oversight is understandable. However, at this time the overcharge cannot be ignored. Certainly the significant amount of this overcharge has an impact on service provided. Although the Department still believes the equipment bid by Petitioner and Intervenor are "identical," service can no longer be considered the same due to the overcharge. Therefore, the award of the contract pursuant to the ITB should be made to Petitioner, MCI Telecommunications Corporation. RULING ON INTERVENOR'S EXCEPTIONS TO RECOMMENDED ORDER Intervenor's exceptions to paragraphs 46-50 of the Recommended Order are accepted by the Department and incorporated into this Final Order. Intervenor's exceptions to paragraph 51 are denied. Although the equipment are "identical," the Department does not, and did not at the hearing, maintain that the bids of Petitioner and Intervenor are identical in terms of support and service. Intervenor's exception to paragraph 70 of the Recommended Order is accepted by the Department and incorporated into this Final Order. Intervenor's exception to paragraph 71 of the Recommended Order is denied. The Hearing Officer is merely reciting the terms of the ITB, that service and support are also an important part of the bid. Mr. Kronenberger never denied the importance of service and support. Intervenor's exceptions to paragraphs 73-77 of the Recommended Order are accepted by the Department and incorporated into this Final Order. Intervenor's exceptions to paragraphs 79 and 81 of the Recommended Order are accepted by the Department and incorporated into this Final Order. Intervenor's exception to paragraph 80 of the Recommended Order is denied to the extent it rejects the finding of fact that Intervenor admitted to an overcharge of $394,318. Intervenor did admit this fact. Intervenor's exception to paragraph 82 of the Recommended Order is accepted by the Department and incorporated into this Final Order. RULINGS ON PETITIONER'S FILINGS No response is provided to the Petitioner's Response to Intervenor's Exceptions. There is no provision for filing such response under Chapter 120, and the Department is not required to respond to such pleadings. The Department has reviewed Petitioner's Request for Official Recognition and Enforcement of Ex Parte Communications Prohibitions. No Department employee who has testified or been deposed in this matter has discussed the merits of this action with the agency head. However, the Department does not agree with Petitioner's contention in its Request for Recognition that section 120.66, Florida Statutes, prohibits the agency head from conversing with the Department employees listed therein. This order may be appealed within thirty days by filing a notice of appeal with the agency and the district court of appeal. Except in cases of indigence, the court will require a filing fee and the agency will require payment for preparing the record on appeal. For further explanation of the right to appeal, refer to Section 120.68, Florida Statutes, and the Florida Rules of Appellate Procedure. DONE AND ORDERED this 17 Day of July, 1995 in Tallahassee, Florida. HARRY K. SINGLETARY, JR, SECRETARY Department of Corrections 2601 Blairstone Road Tallahassee, Florida 32399-2500 (904) 488-2326 COPIES FURNISHED: Carloyn Raepple (via certified mail) Hopping Green Sams & Smith 123 South Calhoun Street Tallahassee, Florida 32314 Hume Coleman (via certified mail) Holland & Knight 315 South Calhoun Street Suite 600 Tallahassee, Florida 32302 Steven S. Ferst Department of Corrections Assistant General Counsel 2601 Blairstone Road Tallahassee, Florida 32399-2500 Mike Johnson Department of Corrections 2601 Blairstone Road Tallahassee, Florida 32399-2500 Don W. Davis, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 Filed in the official records of the Department of Corrections on this 17th day of July, 1995. LORETTA L. LATSON, Agency Clerk
Recommendation Based on the foregoing, it is hereby RECOMMENDED that a final order be entered which declines the award to NAI and takes into account the foregoing findings of fact and conclusions of law when deciding the future course of awarding the contract for hardware, software and support needed to provide a fully functioning, secure inmate telephone system. DONE AND ORDERED this 15th day of June, 1995, in Tallahassee, Leon County, Florida. DON W. DAVIS 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 15th day of June, 1995. APPENDIX In accordance with provisions of Section 120.59, Florida Statutes, the following rulings are made with regard to purposed findings of fact submitted by the parties. Petitioner's Proposed Findings: 1.-30. Adopted. 31.-32. Adopted in substance. 33.-49. Adopted. 50.-54. Adopted in substance. 55.-58. Adopted. 59-63. Adopted in substance. 64-70. Adopted. 71. Rejected, unnecessary to result reached. 72.-82. Adopted. 83. Rejected, unnecessary. 84.-85. Adopted. Adopted in substance. Rejected, unnecessary to result. 88-92. Adopted. 93. Incorporated. 94.-96. Subordinate to HO findings. Respondent's Proposed Findings: Adopted. Rejected, unnecessary. 3.-5. Adopted. Adopted, not verbatim. Adopted. Rejected, redundant. Adopted. 10.-12. Rejected, subordinate. 13.-17. Adopted. 18.-22. Rejected, argumentative and subordinate. 23. Rejected, unnecessary. 24.-25. Rejected, weight of the evidence. 26. Rejected, subordinate. 27.-35. Rejected, weight of the evidence. 36.-43. Rejected, argumentative, weight of the evidence. 44.-52. Rejected, redundant, argumentative, subordinate. 53.-54 Rejected, argumentative, subordinate to HO findings. 55.-58. Rejected,Relevancy, weight of the evidence. 59.-63. Rejected, subordinate, weight of the evidence. Accepted. Rejected,Relevance. Rejected, weight of the evidence. Rejected, stands for proposition that an agency is not bound by terms of ITB at all, argumentative. Rejected,Relevance. Rejected, argument. 70.-71. Rejected, weight of the evidence. 72.-76. Rejected, argument. 77.-78. Rejected, argument, weight of the evidence. Adopted. Rejected, subordinate, authority is to award within perimeters of legality and the ITB. Rejected, comment on testimony. 82.-83. Rejected, subordinate to HO findings. 84. Rejected, legal conclusion. 85.-89. Rejected, subordinate to HO findings. 90.-91. Rejected,Recitation of documents. 92.-95. Rejected, argumentative. Rejected, subordinate. Rejected, recitation of documents. Rejected, relevance. 99.-107. Rejected, subordinate to HO findings. Intervenor's Proposed Findings: 1.-10. Accepted, though not verbatim. 11. Rejected, no record citation. 12.-14. Rejected, subordinate to HO findings. 15. Adopted, not verbatim. 16.-21. Rejected, subordinate to HO findings. 22. Rejected, no record citation. 23.-24. Rejected, subordinate. 25. Rejected, no record citation. 26.-29. Rejected, subordinate to HO findings. Adopted by reference. Rejected, subordinate. 32.-40. Rejected, subordinate to HO findings. 41. Accepted except for last sentence which is rejected on basis of relevance. 42.-43. Rejected, subordinate to HO findings. COPIES FURNISHED: Carolyn S. Raepple, Esquire Cheryl G. Stuart, Esquire Hopping Green Sams & Smith, P.A. 123 South Calhoun Street Tallahassee, FL 32301 Linda P. Armstrong, Esquire MCI Telecommunications Corporation 1133 19th Street, N.W. Washington, D.C. 20036 Steve Ferst, Esquire Florida Department of Corrections 2601 Blair Stone Road Tallahassee, FL 32399-2500 Hume F. Coleman, Esquire Holland & Knight 315 South Calhoun Street Tallahassee, FL 32302 Harry K. Singletary, Jr., Sec. Dept. of Corrections 2601 Blairstone Rd. Tallahassee, FL 32399-2500 Louis A. Vargas, Esq. Dept. of Corrections 2601 Blairstone Rd. Tallahassee, FL 32399-2500
Findings Of Fact This case concerns what is called a "turnkey lease." The program was developed by the State of Florida in 1971. It encompasses a situation whereby agencies seeking space for their operation may, after a specific need is determined that cannot be filled by existing adequate space, solicit competitive bids from developers for the provision of land and the construction of a building there sufficient to meet the agency's needs, for lease specifically to the agency requesting it. The Bureau of Property Management within DGS was given the initial responsibility to develop the guidelines, promulgate the rules, and seek statutory authority for such a program. The Bureau's current role is to work with agencies requesting this program. The agency certifies the need to the Bureau, in addition to the fact that there is no available existing space present. The Bureau then determines agency needs and gives the agency the authority to solicit the bids for the turnkey project. Once the bids have been solicited and the preproposal conferences have been held, the bids are then received, evaluated, and a recommendation for an award is forwarded by the agency to the Department of General Services. DGS reviews the supporting documents required by the provisions of the Florida Administrative Code and either concurs or does not concur in the recommendation. If DGS concurs, the submitting agency is notified and is permitted to then secure the lease. Once the lease has been entered into, it is then sent back to DGS for review and approval, as to the conditions, and thereafter the plans and specifications for the building are also referred to DGS for review and approval as to the quality and adequacy of the plans and specifications and code compliance. Section 255.249 and Section 255.25, Florida Statutes, sets forth the requirement for soliciting and awarding bids for lease space in an amount in excess of 2500 square feet. This provision requires that an award of this nature be made to the lowest and best bidder, and DGS subscribes to that standard in evaluating and determining whether or not it will concur with an agency's recommendation. In the instant case, DHRS advertised for bids for the construction of office space in Palatka, Florida for its District III facilities. Before seeking to solicit bids, District III staff conducted a search for other possible existing space within a five mile radius of the downtown area and located no adequate facilities. Thereafter, a certification of need was processed for a solicitation of proposals and approval was granted by DGS to follow through with the solicitation. A preproposal conference was advertised and held on October 14, 1983 and after review by those present at the conference, bid opening date was set for November 22, 1983. Thirty-two bid packages were distributed and twelve bidders submitted proposals. The public bid opening was held as scheduled at 2:00 P.M. on November 22, 1983, in Palatka, Florida by Robert E. Litza, Facilities Service Coordinator for DHRS District III. Of the bids submitted by the twelve bidders, the lowest bid was rejected because of the failure of the bidder to comply with the requirements of the bid package. Of the remaining eleven bids, the four lowest were evaluated with the understanding that additional high bids would be evaluated if the four lowest were found to be unacceptable. Among the four bids considered were bids of Chuck Bundschu, Inc.; Kenneth McGunn, the Intervenor (Mr. McGunn submitted five price schedules for his bid and of these only one was considered); Elizabethan Development, Inc.; and TSU. A recommendation by the evaluation committee which met at DHRS District III that Intervenor's bid be selected was forwarded to DGS in Tallahassee through the Director of DHRS's General Services in Tallahassee on December 22, 1983. The terms of the successful bid and the reasons for its being considered lowest and best are discussed below. The successful bid for the lease in question, lease number 590:8030, was, upon completion of the committee's evaluation, also evaluated by Mrs. Goodman in the Bureau of Property Management of DGS. She also considered the McGunn bid as the lowest and best of the eleven non-disqualified bids. In that regard, not only Mr. McGunn's bid but all of the twelve bids received were considered and reviewed not only at the local level but at DHRS and DGS Headquarters as well. In her evaluation of the proposal and the bids, Mrs. Goodman considered the documentation submitted by DHRS. This included a letter of recommendation supported by a synopsis of all proposals, the advertisements for bids, and any information pertinent to the site selection process. The letter from DHRS dated December 22, 1983, which recommended award of the lease to Mr. McGunn, included Mr. Litza's December 21, 1983 analysis and recommendation letter which, itself, was attached to McGunn's primary bid documents. Her analysis did not include a prior award recommendation and analysis from Mr. Litza, dated December 8, 1983. It also did not include the site plan, the floor plan for the proposed building, or a survey of the site, but these areas are considered to be within the discretion of the leasing agency. Their absence is not considered to be particularly significant. In her analysis, Mrs. Goodman found that Petitioner's bid was also responsive. However, comparing it with Mr. McGunn's bid, she and her staff found that the latter was the lowest bid submitted. The determing factor in her decision was cost. In determining that McGunn's bid was the lowest as to cost of all bids, Mrs. Goodman compared the average rate per square foot per year for each. This did not take into consideration proration of costs per year, but strictly the average over the fifteen years of the term of the lease (10 year basic plus 5 year option) . According to Mrs. Goodman, this same method of calculating cost has been used in every lease involving a turnkey situation and in fact in every lease since 1958 - as long as she has been with DGS. This particular method, admittedly, is not set forth in any rule promulgated by DGS. However, the agencies are instructed by DGS to advertise and bidders to bid on an average square foot basis, the basis utilized by Mrs. Goodman and her staff in analyzing the bids submitted. In that regard, the request for proposals does not, itself, indicate how the calculation of lowest cost would be made by DHRS and DGS but it does tell prospective bidders what information to submit. This procedure has been followed exclusively in situations like this for many years and many of the bidders have bid before using this same system. While Mrs. Goodman is not certain whether TSU has ever bid before, using this system, she does not consider it to be unfair because all bidders are considered on the same footing in an evaluation. They are notified of what information to submit and if they do so, their information will be considered along with all other bidders. Further, anyone who inquires as to the basis for evaluation will be given a straight and complete answer as to the method to be used. In the instant case, DHRS followed procedure for solicitation and evaluation utilized in the past and DGS followed its own policy in evaluating the submissions. In short, the primary consideration for DGS is the price factor and all other factors are considered to be within the expertise of the requesting agency. In Mrs. Goodman's opinion, based on the fact that she worked with the Florida Legislature on the development of the controlling statute, and helped develop the existing rule within DGS, that was the intent of the Legislature. Consequently since the statute requires award to the lowest and best bidder, it can be said that in this case the term "lowest" falls within the purview of both DHRS and DGS but "best" is solely within the purview of DHRS. Therefore, utilizing the lowest and best criteria and accepting the fact that the lowest bid may not be the best bid, the determination of "non-best" should be based on the reasonable "end objective" of the agency and need not be based on a criterion which is set forth in the bid proposal. In other words, it is not necessary for the agency to set forth the manner of evaluation it will use or the factors it will consider, according to Mrs. Goodman. With regard to the bid and evaluation committee process, Mr. Litza, the facilities manager for DHRS in Gainesville, was involved in putting together the bid package along with Mr. George Smith from Tallahassee, Litza's predecessor in the job in Gainesville. He worked with Mr. Smith in order to take advantage of Smith's experience in evaluating bids for leases. So far as he knew, the bid package contained minimum standards for all parts of the bid, and the package was, in fact, approved by officials in Tallahassee before being released. While no particular factors were identified to prospective bidders as being significant, Mr. Litza did conduct a bid conference for them prior to the date the bid was due and was available to answer any questions that prospective bidders might have. He did not receive any questions regarding the significance of any particular factor from any bidder. The bids were advertised and when received, were opened and read properly in accordance with the terms of the solicitation. When the bids were received and opened, it was seen that Mr. McGunn had submitted five different bids for the same project. Litza had not been confronted with this situation before and asked Mr. Smith what to do about it. Mr. Smith's reply was to put all five McGunn bids in with the rest and extract the lowest five of all bids. When this was done, Mr. McGunn was shown to have submitted two of the lowest five bids. In determining which were the lowest five bids, Mr. Litza utilized the average cost per square foot formula utilizing therein the entire 15,772 square feet authorized for the project. Once the five lowest bids were determined, Mr. Litza selected an evaluation committee made up of local Palatka DHRS supervisors except for the fiscal member, Mr. Foust, Mrs. Shinholster, Litza's secretary and Litza himself. He gave each of the members a score sheet with point values for each area. Each member filled out the form independently. Though he gave very little briefing to the evaluation committee, he admits that he did, in advance, tell each member that Mr. McGunn was the lowest bidder and should be awarded the highest points for criteria number 1, which related to cost. There were several irregularities in Mr. Litza's processing of the evaluation committee's results. For example, on the evaluation of the file conducted by member Sheryl Dollar, regarding criteria number 2, which relates to the conformity of space offered to the specific requirements contained in the invitation to bid (with a weight of 25 points), Mr. Litza admitted he lowered Mrs. Dollar's point award in that area from 35 to 25 without first checking with her to insure that his action would meet with her approval. While this is irregular, it is of little or no consequence since - the maximum number of points that could be given for that particular item was 25 and Mr. Litza's actions did not reduce that member's award to less than the maximum allowable. He contends that his action was based on what he considered to be a mistake on her part. In another apparent irregularity, Mr. Litza prepared a recommendation letter based on his and the other committee members' evaluation of the files to DHRS Headquarters in Tallahassee on December 8, 1983. In that letter, be indicated that McGunn would provide gas heat for the proposed building for free. Though McGunn had not specifically stated this, he implied it from the energy features paragraph in the Intervenor's bid. On the other hand, the bid by TSU contained an express comment offering to pay the utility charges. This specific provision was overlooked and omitted from the evaluation and report to Tallahassee by Litza, who contends that this omission was merely an oversight. There are other discrepancies as well. In his testimony, Mr. Litza indicated Mr. McGunn proposed to build one building but his letter of December 8th and that of December 21, 1984, both reflect two buildings. Here again, Mr. Litza explains this as the result of his being confused. Nonetheless, this erroneous information was referred to Mrs. Goodman at DGS. This is significant in that at the evaluation committee meeting, when the forms were given out, several of the members expressed a preference for a two-building complex. After the award, Mr. Litza secured agreement from McGunn to build two buildings. Mr. Litza admits that much of this was done in an attempt to insure that McGunn, as the low bidder, got the award. Mr. Litza equated the lowest bid with the best and had Petitioner been the low bidder, he contends he would have done the same thing. In most areas, he would not, however, have given Petitioner's four-building concept a high score because of the increased heat and air requirements of four buildings. Mr. Litza also downgraded Petitioner on that bid criteria which relates to the proximity of offered space to the clients to be served because Petitioner's site, he contends, was too close to the clients to be served. In this case, a housing project for low income families which make up much of the clientele to be served by DHRS, was located across the street from the proposed site offered by the Petitioner. Mr. Litza contends that he was thinking of the potential damage to the building because of increased activity by virtue of the facility being so close. There were other questionable areas in Mr. Litza's testimony. For example, he testified that though Petitioner provided 15 more parking spaces than Intervenor, this would result in mud being tracked in from the adjacent dirt road 200 feet away in greater quantities than in Intervenor's proposal. He also considered positively that the Intervenor's proposed site was closer to a restaurant than that of the Petitioner. Though it was recommended by DHRS Headquarters in Tallahassee that only two of the committee members be from the Palatka office, Mr. Litza disregarded that advice because, he contends, there was a morale factor in that office and the people assigned there wanted to have a part in this decision. Because of this, he allowed Ms. Stouffenberg to put five extra members of her staff on the committee. Nonetheless, the evaluation committee serves only in an advisory capacity. Its recommendation is no more than an advisory opinion. The ultimate decision as to which of the bidders should be awarded the contract is made at DHRS Headquarters in Tallahassee. Ms. Shinholster, a Clerk IV in the DHRS Gainesville office, who works as a secretary to Mr. Litza and several others, was advised she would be on the committee for the evaluation at the same time she was given the bid file. She did not get an opportunity to meet with other committee members to talk about the standards to be used, nor was she given any standards by which to evaluate the files. All she was told by Mr. Litza was that McGunn was the lowest bidder. She cannot explain how she accorded points on her evaluation sheets except that she gave the low bidder the highest number of points. Mr. George Smith, a Senior Analyst with DHRS in Tallahassee, relied on Mr. Litza's input when he made his recommendation to his superiors that the award should be made to McGunn. He also formulated his own opinion, based on his own analysis of the bids. He resolved any dispute regarding cost in favor of Mr. McGunn on the basis of the average rental, and regarding space, in favor of McGunn on the basis of the number of buildings. Dr. Perry, an economist with the University of North Florida, testified to the Federal Government's policy regarding the desirability of using the present value of money methodology and the determination of an acceptable discount rate or index in calculating the actual cost of the bids. Both experts, Dr. Perry and Dr. Scott, who testified for DGS, agree that the present value methodology is valid and presents a more accurate analysis of cost than the average rental cost methodology which does not utilize this theory. The major difference between the two was primarily in the percentage to be utilized in applying the discount rate. Whereas Dr. Perry adopted the Federal policy and suggested a 10 percent discount rate, Dr. Scott testified that a more viable percentage rate in November, 1983, at the time the award was to be made, would have been 3.3 percent. If the 10 percent rate were used, then the Petitioner's bid would be the lowest of all submitted. On the other hand, if the 3.3 percent rate were used, Intervenor's bid would be the lowest. If a different discount rate, that of 5.7 percent were to he used, the bid of Elizabethan Development Corporation would be low. It is at about the 6 percent point and above that Petitioner's bid becomes the lowest. Nonetheless, the State has not adopted the present value of money theory and the policy followed by the State is not to consider that methodology in analyzing costs. State policy is to use only the average rental methodology. There are no written instructions (rules) on evaluating bids for leases of this nature. Oral instructions given by DGS to each agency are that the average rate per square foot is to be computed using, if the square footage is constant, for each year of the lease, the basic square footage requested, multiplied by the rental rate proposed for each year of the basic lease, divided by the number of years. If the square footage is not constant in every year of the lease, evaluators are directed to apply the rate per square foot proposed in each year to the square footage to be utilized in that year, total up the annual rentals, total up the square footage involved, and divide to arrive at the average rate per square foot per year. Utilizing one or the other of those two methods in evaluating both the McGunn and the TSU bids, it becomes clear that the McGunn bid results in an average of $8.86 cost per square foot per year and the TSU bid an average of $9.58 per square foot per year. Recalculation of DHRS' evaluation by DGS showed the DHRS' figures as stated above were correctly arrived at. This procedure is followed on all turnkey and non-turnkey leases in the State of Florida. The reason the State uses this process instead of the present value of money process is because it is easy. DGS statistics indicate that most landlords in the approximately $32,000,000 worth of leases presently existing with the State are "Mom and Pop" landlords. These people are not normally trained lease evaluators. By using the straight average rental rate method, there are no arbitrary variables. It has always worked because people can understand it and all agencies which lease property in the State of Florida follow this procedure. Also, this procedure does not require computer-based calculations, and it does not require economists to work with it. Both latter reasons are amplifications of the first. In Mrs. Goodman's estimation, if the present value of money system were to be adopted, her division would have to hire at least two $30,000 per year economists and buy an in-house computer to operate the system. This additional cost, she believes, would far outweigh the paper savings to be realized by utilizing the present value of money system. As of the hearing date, considering all the factors, in Mrs. Goodman's opinion, DGS would nonetheless still recommend Mr. McGunn's bid as the lowest and best bid.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore RECOMMENDED that DHRS lease Number 590:8030 be awarded to Kenneth R. McGunn. RECOMMENDED this 5th day of September, 1984, in Tallahassee, Leon County, Florida. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 5th day of September, 1984. COPIES FURNISHED: Donald E. Holmes, Esquire William E. Townsend, Jr., Esquire Post Office Drawer D Palatka, Florida 32078-0019 James A. Sawyer, Jr., Esquire District III Legal Counsel Department of Health and Rehabilitative Services 1000 Northeast 16th Avenue Gainesville, Florida 32609 Stephen J. Kubik, Esquire Department of General Services Room 452, Larson Building Tallahassee, Florida 32301 H. Allen Poll, Esquire 112 South Main Street Gainesville, Florida 32601 Linda C. McGurn, Esquire 1717 Northeast 9th Avenue Gainesville, Florida 32301 David H. Pingree, Secretary Department of Health and Rehabilitative Services 1321 Winewood Boulevard Tallahassee, Florida 32301 Ronald W. Thomas, Executive Director Department of General Services 115 Larson Building Tallahassee, Florida 32301
The Issue Whether Petitioner/Intervenor Hedin's challenge to Respondent's preliminary determination to award Lease No. 590:2241 to 1436 Building, Inc. should be sustained? Whether Petitioner/Intervenor Schlitt's challenge to said preliminary determination should be sustained?
Findings Of Fact Based upon the record evidence, the following Findings of Fact are made: 1 In March, 1991, after requesting and receiving approval from the Department of General Services, the Respondent issued an Invitation to Bid for Lease No. 590:2241 (hereinafter referred to as the "ITB"). The cover page of the ITB contained the Bid Advertisement, which read as follows: The State of Florida, Department of Health and Rehabilitative services is seeking approximately 17,064 net rentable square feet of office space to lease in Indian River County within the following boundaries: North, to Lindsey Road, South to Olso Road, East to A1A and West to Kings Highway. Space must be in an existing building. Occupancy no later than October 1, 1991, or within 120 days after notification of bid award, whichever occurs last. Desire a five (5) year lease with five (5) one year renewal options. Sealed bids will be received until 3:30 p.m.,, April 24, 199[1] at Riviera Beach, FL. Information and specifications will be provided to all interested parties at a mandatory pre-proposal conference to be held at Department of Health and Rehabilitative Services, 1050 15th Street West, Riviera Beach, FL. 33404, April 5, 1991 at 1:00 p.m. The Department of HRS reserves the right to reject any and all bids received and if necessary to reinstate procedures for soliciting competitive bids. The office space sought by Respondent was to house a client service center that is currently operating out of a 12,000 square foot facility owned by Petitioner/Intervenor Hedin. Respondent needs approximately 5,000 more square feet of office space for this center. Page B-1 of the ITB contained the definitions of various terms used in the ITB. Among the terms defined was "lowest and best bid." "Lowest and best bid" was defined as follows: That bid selected by the District Administrator, designee, or Deputy Secretary upon the recommendation of the bid evaluation committee following an objective and detailed process to evaluate and compare bids. "Lowest" refers to the total evaluation score. Weights for evaluation criteria are prescribed on pages B-7 through 9. Actually, this information was found on pages B-5 though 7 of the ITB, which read in pertinent part as follows: EVALUATION OF BIDS Bids received are first evaluated to determine technical responsiveness, such as use of Bid Submittal Form, inclusion of required information, data, attachments, and signatures. Non- responsive bids will be withdrawn from further consideration. Non-responsive bidders will be informed promptly by certified mail. Responsive bids are presented to a bid evaluation committee for comparison and formulation of a recommendation for award. This is accomplished by a visit to each proposed property and application of the evaluation criteria. The committee's recommendation will be presented to the Department official having award authority for final evaluation and determination of a successful bidder. EVALUATION CRITERIA AWARD FACTORS The successful bidder will be that determined to be the lowest and best. All bids will be evaluated based upon the award factors enumerated below: Associated Fiscal Costs Rental Rental rates for basic term of lease. Evaluated using present value methodology by application of she present value discount rate of 8.74%. 2/ (Weighting: 35 minimum) Rental rates for optional renewal terms of lease. Rates proposed are within projected budgeting restraints of the Department. (Weighting: 5 minimum) Total for rental shall be not less than 40. Moving Costs: a) Cost of relocating communications network computer drop lines as determined by a site survey conducted at each proposed facility by the Department's management information office, or: (Weighting: 5 maximum) b) Cost of relocation of major statewide operational data system as determined by a site survey conducted at each proposed facility by qualified data center management. (Weighting: 6 maximum) Telephone costs as determined by a site survey conducted at each proposed facility by an engineer from the applicable deregulated vendor. (Weighting: 5 maximum) Relocation of furniture and equipment not addressed above. (Weighting: 5 maximum) LOCATION The effect of environmental factors, including the physical characteristics of the building and the area surrounding it, on the efficient and economical conduct of Departmental operations planned for the requested space. Proximity of facility to a preferred area, such as a courthouse or main traffic arteries. (Will not be applicable if there are no preferred areas within the bid boundaries). (Weighting: 5 maximum) Frequency and availability of satisfactory public transportation near the offered space. (Weighting: 5 maximum) Proximity of offered space to the clients to be served by the Department at this facility. (Weighting: 5 maximum) Aesthetics of the building, property the building site [is] on, and of the surrounding neighborhood. (Weighting: 1 maximum) Security issues posed by building and surrounding neighborhood. (Weighting: 1 maximum) PROPERTY Susceptibility of the property's design to efficient layout and good utilization, such as ability of physical structure to house large units together and in close proximity to interdependent units. (Weighting: 15 maximum) Suitability of the building, parking area and property as a whole for future expansion. (Weighting: 5 maximum) Provision of the aggregate square footage in a single building. Proposals will be considered (but fewer points given) which offer the aggregate square footage in not more than two buildings provided the buildings are immediately adjacent to or within 100 yards of each other. If in separate buildings, the structures are connected by enclosed climate controlled walkways. (Weighting: 2 maximum) Prospective bidders were instructed on page B-3 of the ITB that they had to submit their bids on the 22-page Bid Submittal Form, which comprised Section C of the ITB. The Bid Submittal Form (BSF) provided detailed information regarding the needs of the Department and the terms, conditions and requirements that prospective bidders were expected to meet. Among the requirements addressed was that the proposed space be an "existing building," meaning that it was "dry, fully enclosed, and capable of being physically measured." The BSF further indicated that a multistory building would be acceptable, provided that it met certain specified requirements. In addition, pages C-3 through 4 of the BSF informed prospective bidders that, as part of their bid submittal, they would have to provide, among other things, the following: * * * b. A scaled (1/16" or 1/8" or 1/4" 1'0") floor plan showing present configurations with measurements. The final floor plan will be described in the specifications. * * * A scaled site layout showing present location of building(s), location, configuration and number of parking spaces assigned to the Department, access and egress routes and proposed changes. This is to be drawn to scale. Final site layout will be a joint effort between Department and Lessor so as to best meet the needs of the Department. The subject of floor plans was also discussed on page C-11 of the ITB, which provided in pertinent part as follows: Final floor plans will be a joint effort of Departmental staff and the successful bidder. The successful bidder is to provide architectural services by a licensed architect to prepare renovation plans. The final floor plan is subject to Departmental determination and State Fire Marshal review and approval. 3/ Prospective bidders were issued the following advisement and warning on page B-8 of the ITB regarding their protest rights: Any person may dispute any part of the competitive bid process through the filing of a protest. To be considered, a protest must be filed in accordance with Section 120.53(5), Florida Statutes, and Chapter 10-13.11 Florida Administrative Code. Failure to file a protest within the prescribed time limits shall constitute a waiver of proceedings under Chapter 120, Florida Statutes. Prospective bidders, who did not want to file a protest, but merely desired clarification regarding a matter relating to the bidding process, were directed, on page B-3 of the ITB, to follow the following procedure: Any questions concerning an interpretation of meaning, ambiguity, or inconsistency on this project are to be received in writing by the project contact person listed on page A-1 [Steven Young) at least 5 working days prior to bid opening so that a written response may be provided to all bidders. 4/ The mandatory pre-proposal conference on the ITB was held as scheduled on April 5, 1991. Petitioner/Intervenor Schlitt, Petitioner/Intervenor Hedin, and Intervenor 1436 Building, Inc. (hereinafter referred to as "`1436") appeared in person or through a representative at the conference. One other prospective bidder, Alan Taylor, was also in attendance. Among the topics discussed at the pre-proposal conference was the present value index discount rate that would be applied in evaluating proposals. The prospective bidders were advised that the rate which appeared on page C-21 of the ITB-- 7.73%--, not the 8.74% rate appearing on page B-5, would be used. Prospective bidders were also told at the pre- proposal conference that the maximum number of total points available for moving costs was not 15 or 16 as a reading of the ITB might suggest, but 21: 5 for item 1)a) (computer drop lines);6 for item 1)b) (statewide operational data system equipment); 5 for item 2 (telephones); and 5 for item 3 (furniture and other equipment). Under the ITB, as originally issued and clarified at the pre-proposal conference (hereinafter referred to as the "Original ITB"), Respondent was to pay its own moving costs, as it had consistently done in the past, without any contribution on the part of the successful bidder and it would award points to each bidder for moving costs based upon what it would cost Respondent, according to its estimates, to relocate computer drop lines, statewide operational data system equipment, telephones, and furniture and other equipment to the facility proposed by that bidder. The less the expense to the Department to relocate these items, the more points a bidder would receive. Accordingly, to the extent that he intended to offer space already occupied by Respondent, Petitioner/Intervenor Hedin had an advantage over the other prospective bidders under the Original ITB. Some time after the pre-proposal conference, David Feldman, 1436's representative, complained to Respondent about this advantage enjoyed by Hedin in the category of moving costs and inquired if anything could be done about it. Steven Gertel, the Respondent's Assistant Staff Director for Facilities Services, Kevin McAloon, the General Services Manager for Respondent's District IX, Louis Consagra, the then Office Operations Manager for General Services for District IX, and Steven Young, the Facilities Services Manager for District IX and the contact person referenced in the ITB, discussed the matter during a telephone conference call held on April 11, 1991. During their discussion, it was decided that it would be in the best interest of the Department, which was operating under severe fiscal constraints, to change the ITB to allow prospective bidders to essentially buy points by agreeing to pay all or a portion of Respondent's estimated moving costs. Such a change, it was thought, would enhance the competitiveness of the bidding process. Before making the change, however, Respondent attempted to quickly estimate what its costs would be if it had to relocate computer drop lines, statewide operational data system equipment, telephones, and furniture and other equipment to another facility in Indian River County within the geographical boundaries prescribed in the ITB. Respondent estimated that it would cost between $25,000 and $30,000 to relocate computer drop lines and statewide operational data system equipment, $35,000 to $45,000 to relocate telephones and $8,000 to $10,000 to relocate furniture and other equipment. In arriving at these estimates, Respondent relied upon agency personnel who, because of their experience, expertise and/or access to contracts with vendors and other pertinent documents, appeared to be reliable sources of information. On April 12, 1991, the day after the telephone conference call and twelve days before the scheduled bid opening, Facilities Services Manager Young, on behalf of the Department, sent by United States Certified Mail, return receipt requested, to all four prospective bidders who attended the mandatory pre- proposal conference on April 5, 1991, the following memorandum: Page C-22 of the Bid Submittal Form has been changed and is enclosed for use in the Invitation to Bid. Please call me if you have any questions on this change/addition or any information that is needed to complete your Bid Submittal on or before 3:30 p.m., April 24, 1991. The "changed" page C-22 of the ITB, which accompanied the foregoing memorandum, provided as follows with respect to moving costs: The bidder will respond to the items as stated in the Bid submittal,, Page B-6, b. Moving Costs: 1) a) b), 2), 3). Department Bidder Estimate Response 1) a) b) $25,000 to $30,000 2) $35,000 to $45,000 3) $8,000 to $10,000 Young also telephoned each of the four prospective bidders and explained to them how moving costs would be evaluated in light of this revision to the ITB. He told them that if they indicated under "Bidder Response" on page C-22 that they would be willing to pay up to $30,000 for item 1, $45,000 for item 2 and $10,000 for item 3, and in Hedin's case, provided he submitted a bid that included the 12,000 square feet of space presently occupied by Respondent, 28% of these amounts, they would capture the maximum number of points available for each of these items, and that if they indicated a willingness to contribute less than these amounts, they would be awarded points in proportion to amount of their proposed contribution. 5/ Respondent's decision to allow Hedin to earn the same amount of points as the other prospective bidders for moving costs by pledging to contribute only 28% of what his competitors had to pledge was based upon square footage considerations. If a bidder other than Hedin was awarded the lease, Respondent would have to move into more than 17,000 square feet of space. If, on the other hand, Hedin submitted a bid that included the 12,000 square feet of space presently occupied by Respondent and he was the successful bidder, Respondents would be occupying only 5,000 or so square feet of space it had not previously occupied, or approximately 28% of the square footage that it would have to move into if the lease had been awarded to another bidder. The ITB, as so revised and clarified by Respondent (hereinafter referred to as the "Revised ITB"), contemplated that the successful bidder would be obligated to pay only Respondent's actual moving costs up to the amounts pledged on page C-22 of the bidder's completed BSF. Moving costs in excess of the amounts pledged by the successful bidder would be borne by Respondent. Respondent wanted to avoid a situation where, because of Respondent's estimating errors, a successful bidder: was forced to bear a cost in connection with its bid that it did not anticipate at the time it had submitted the bid. Respondent, however, was quite confident that the estimates it had made and incorporated in the Revised ITB would not prove to be too low. 6/ All four of the prospective bidders who participated in the mandatory pre-proposal conference submitted timely bids. Each of bids was deemed to be responsive. Facility Services Manager Young then performed the calculations necessary to determine the number of points that each bidder should be awarded for associated fiscal costs, including rental costs and moving costs. This was purely an objective and non-judgmental exercise. Young performed these calculations in accordance with the methodology that had been described to all of the bidders prior to the submission of their bids. Schlitt had the lowest rental rates for the basic term of the lease, as well as for the five option years. Accordingly, he was awarded the maximum 35 points for the former and the maximum 5 points for the latter, for a total of 40 points. The scores received by the other bidders for rental costs were as follows: 1436- basic term: 34.125, and option years: 4.340; Hedin- basic term: 28.865, and option years: 3.710; and Taylor- basic term: 31.938, and option years: 4.575. Schlitt and 1436 indicated on page C-22 of their completed BSFs that they were each willing to pay up to $30,000 for the relocation of computer drop lines and statewide operational data system equipment, up to $45,000 for the relocation of telephones and up to $10,000 for the relocation of furniture and other equipment. Accordingly, they were both awarded the maximum 21 points for moving costs. Hedin indicated on page C-22 of his completed BSF that he was willing to pay up to 28% of these amounts ($8,400.00 for the relocation of computer drop lines and statewide operational data system equipment, $12,600 for the relocation of telephones and $2,800 for the relocation of furniture and other equipment). Accordingly, he too was awarded the maximum 21 points for moving costs. Taylor, who indicated on page C-22 of his completed BSF a willingness to contribute only a small fraction of the Respondent's estimated moving costs, received a total of 1.667 points for moving costs. After computing these scores 7/ Young prepared a written synopsis of all four bids that had been submitted. He gave copies of his synopsis to the four members of the bid evaluation committee, along with score sheets for them to use in their evaluation of these bids. Typed in on each score sheet were the scores the bidders had received for rental costs and moving costs. These scores were accurately reported on the score sheets except for the score that Hedin had been awarded for rental costs associated with the basic term of the lease. The score sheets erroneously indicated that Hedin had been awarded 32.375 points, rather than 28.665 points, for this item. The four members of the bid evaluation committee were: General Services Manager McAloon; Frank Mueller, District IX's chief financial officer; and Kathy Pelaez and Alfred Swanson, two HRS administrators who supervise staff headquartered in Respondent's Indian River County client service center. 8/ Young, because he was the Facilities Services Manager, was prohibited by agency practice 9/ from serving on the bid evaluation committee. The bid evaluations committee visited each of the bidder's proposed facilities before determining the amount of points to award them for the non- economic categories, i.e., location and property, set forth in the Revised ITB. The committee members visited Schlitt's, 1436's and Taylor's proposed facilities on the same day. They subsequently paid a visit to Hedin's proposed property, which consisted of the building presently occupied by Respondent, plus an addition of approximately 5,000 square feet connected to the existing building by a walkway. The delay in visiting Hedin's proposed facility was the result of a determination, later overturned, that the entire facility was not dry and measurable as required by the Revised ITB. Following their visits to Schlitt's, 1436's and Taylor's proposed facilities, the members of the bid evaluation committee met as a group and discussed each of these proposed facilities. They had a similar meeting and discussion about Hedin's proposed facility after their visit to that proposed facility. Applying the criteria set forth in the Revised ITB, the committee members agreed that the following point awards should be made for the categories of location and property: location/proximity to preferred area (evaluation criterion 2.a., 5 point maximum)- Schlitt: 3, 1436: 2, Hedin: 5, and Taylor: 1; location/public transportation (evaluation criterion 2.b., 5 point maximum)- all four bidders: 0; location/proximity to clients (evaluation criterion 2.c., 5 point maximum)- Schlitt: 3, 1436: 2, Hedin: 5, and Taylor: 1; location/aesthetics (evaluation criterion 2.d., 1 point maximum): Schlitt, 1436, and Hedin: 1, and Taylor: 0; location/security (evaluation criterion 2.e., 1 point maximum)- all bidders: 1; property/design (evaluation criterion 3.a., 15 point maximum)- Schlitt: 9, 1436: 15, Hedin: 14, and Taylor 10; property/future expansion (evaluation criterion 3.b., 5 point maximum): Schlitt: 4, 1436: 5, Hedin 3.5, and Taylor 3, and property/square footage in single building (evaluation criterion 3.c., 2 point maximum)- Schlitt, 1436, and Taylor: 2, and Hedin: 1. Each of the members of the evaluation committee then recorded these scores on their individual score sheets. Although they agreed to each award the same number of points, evaluation committee members were free to do otherwise. They were not subjects to any threats or coercion. The members of the evaluation committee made a good faith effort to fairly base their point awards on the evaluation criteria for the categories of location and property prescribed in the Revised ITB. For instance, they awarded Schlitt only nine out of a possible 15 points for property/design because of their reasonable concerns that the space he offered, which was located in a multistory building which would have other tenants in addition to the Department, would not be able to house large units together and in close proximity to interdependent units. The committee members did not have similar concerns about the space offered by 1436. Accordingly, they awarded 1436 the maximum 15 points for this category. The points awarded by the evaluation committee for location and property were added to the points the bidders had previously received for rental and moving costs to obtain a total point award for each bidder. The; results were as follows: 1436- 87.465 total points; Schlitt- 84 total points; Hedin- 83.875 total points; and Taylor- 56.18 total points. 1436's bid was therefore the "lowest and best bid," as defined on page B-1 of he Revised ITB. Consistent with the Revised ITB's pronouncement that "[t]he successful bid will be that determined to be the lowest and best," the evaluation committee recommended to the District IX Administrator that 1436 be awarded Lease No. 590:2241. General Services Manager McAloon, in his capacity as chairman of the evaluation committee, provided the District IX Administrator with a written justification for the committee's recommendation. 10/ The committee's recommendation, as well as its written justification, were adopted by the District IX Administrator, who, by letter dated October 3, 1991, to 1436, gave notice of the Department's intention to award 1436 Lease No. 590:2241. Copies of this letter were sent to all bidders. The Department's preliminary decision to award the lease to 1436 was the product of, not any fraudulent, arbitrary, capricious or unlawful conduct on the Department's part, but rather the honest exercise of the agency's discretion. After receiving their copies of the District IX Administrator's October 3, 1991, letter to 1436, Schlitt and Hedin filed protests and initiated the instant proceedings.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department of Health and Rehabilitative Services enter a final order awarding Lease No. 590:2241 to 1436 over the protests of Schlitt and Hedin. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 24th day of February, 1992. STUART M. LERNER Heading 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 24th day of February, 1992.
The Issue Whether DOL should accept either the bid Red Enterprises submitted for T- shirts, in response to invitation to bid No. 89- 026-LOT/Ten/A, or the bid submitted by Party Time, or neither?
Findings Of Fact By invitation to bid No. 89-026-LOT/TEN/A (the ITB), petitioner's Exhibit No. 2, the DOL originally solicited bids from suppliers of beach towels, men's caps ("golf style, sewed back") and canvas sport bags. By an addendum dated March 24, 1989, the invitation was expanded to include 10,000 men's T- shirts. Petitioner's Exhibit No. 2. Three bidders responded: Party Time, Red Enterprises and Bagley Advertising. Respondent's Exhibits Nos. 1, 2 and 3. Only Party Time and Red Enterprises bid on the T-Shirts, Respondent's Exhibit No. 3; Petitioner's Exhibit No. 1, and Party Time's bid was low. Petitioner's Exhibit No. 1; Respondent's Exhibit Nos. 1 and 2. Red Enterprises's bid was responsive to the ITB. With the required paperwork, Red Enterprises submitted a sample T-shirt, along with samples of the other items. Although Party Time submitted samples of caps and towels, it did not submit a sample T-shirt. DOL rejected Party Time's bid on T-shirts for this reason, and announced its intention to award the T- shirt contract to Red Enterprises. Petitioner's Exhibit No. 1. ITB Provisions In paragraph 2.1, the ITB states, under the heading "Samples of Products to be submitted with Bid": SECTION 2: ITEMS REQUESTED 2.1 Samples of Products to be Submitted with Bid. Each bidder shall submit with its bid a sample of the product for each item bid. The samples shall be made of the materials to be used in the final product, if the bidder is successful, and shall be product identified. The samples shall be inspected to determine whether they meet the minimum specifications required. Samples of items, when called for, must be furnished free of expense on or before bid opening time and date, and if not destroyed may, upon request, be returned at the bidder's expense. Each individual sample must be labeled with bidder's name, manufacturer's brand name and number, bid number and item reference. The Department reserves the sole right to determine whether the sample meets or exceeds the quality requirements of the specifications. All such determinations made by the Department are final. (emphasis supplied) Later on the ITB lists all items which comprise the bid, without mentioning samples: 3.1.5 Bids should be presented in the following sequence: Identification of Respondent per Section 3.2 of ITB. Authorized representative of Respondent per Section 3.3 of ITB. Bidder's Affidavit (Attachment A) and Registration Form (Attachment B), if applicable, or notation that said Form is already on file with the Department. Price Sheet per Section 3.5 of ITB. (Attachment C). Florida-licensed per Section 3.6 of ITB. Minority Certification per Section 3.9 of ITB. But still later the ITB explicates the importance of complying with requirements which use "shall . . . except to indicate simple futurity": SECTION 4. MANDATORY REQUIREMENTS The Department has established certain mandatory requirements which must be included as part of any submitted bid. The use of "shall", "must" or "will" (except to indicate simple futurity) in this ITB indicates a mandatory requirement or condition. The words "should" or "may" in this ITB indicate desirable attributes or conditions, but are permissive in nature. Deviation from, or omission of, such a desirable feature will not by itself cause rejection of a bid.... Finally, the ITB specifies DOL's intentions, in the event of a bidder's noncompliance with mandatory requirements: Proposal Submission Only bids submitted in the time frame stated herein and with the content required above will be reviewed and considered by the Department. Review Criteria If Respondent's bid does not meet all the mandatory requirements the bid may be rejected by the Department as nonresponsive. The Department seeks to contract for the items described herein with the responding firm who submits the lowest and best bid. Responsive bids will be evaluated and judged by the Department based on cost. In Section 5.3, the ITB refers to "the lowest and best responsive bid," and Attachment C states, "Bid [e]valuation and award of contract will be based solely on the unit price." The ITB put reasonable bidders on notice that DOL expected bidders to furnish samples of items on which they bid. Except for T- shirts, Party Time did submit samples of everything on which it bid.
Recommendation It is, accordingly, RECOMMENDED: That DOL award the contract for 10,000 men's T-shirts to Red Enterprises. DONE AND ENTERED this 2nd day of June, 1989, in Tallahassee, Leon County, Florida. ROBERT T. BENTON, II, 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 2nd day of June, 1989. APPENDIX Petitioner's proposed findings of fact Nos. 1 through 15 have been adopted, in substance, insofar as material, and to the extent they are more than mere argument. Respondent's proposed findings of fact Nos. 1, 2, 4, 5, 6, 7, and 8 have been adopted, in substance, insofar as material. With respect to respondent's proposed finding of fact No. 3, the evidence did not establish that Party Time did not have a sample. COPIES FURNISHED: Rebecca Paul, Secretary Department of Lottery Capitol Complex Tallahassee, FL 32399-4002 Nan Mancha Red Enterprises 1308 High Road Tallahassee, FL 32304 Linda Bagley Wiggs Bagley Advertising 4406 South Florida Avenue Suite 17 Lakeland, FL 33813 Louisa E Hargrett, Esquire Department of Lottery Capitol Complex Tallahassee, FL 32399-4002 John E Fuller Party Time Specialties, Inc. 12-14 East Bay Street, Suite 2101 Jacksonville, FL 32202
