The Issue The issue in this case is whether the proposed amendments to existing Rule 61A-5.0105, Florida Administrative Code, constitute a valid exercise of delegated legislative authority.
Findings Of Fact The Division, on October 11, 2002, in Volume 28, No. 41 of the Florida Administrative Weekly noticed a proposed amendment to Rule 61A-5.0105, Florida Administrative Code, concerning the conduct of Section 561.19(2), Florida Statutes, in double random selection drawings for revoked pre-1981 quota alcoholic beverage licenses. The proposed amendment states, in the portion relevant to this challenge, as follows: The division will follow the below listed procedures when entry forms are accepted for issuance of new state liquor licenses authorized by Florida Law, when they become available by reason of an increase in the population of a county or city, or a county voting to permit the sale of intoxicating beverages when such sale had previously been prohibited, or by revocation of a license under 565.02(1)(a)-(f), inclusive issued by Special Act prior to 1981 quota:1 Respondent cited as specific authority for the rule its general rulemaking powers contained in Section 561.11, Florida Statutes. The laws implemented by the proposed amendment included, in relevant part, Sections 561.19 and 561.20, Florida Statutes. Section 561.19, Florida Statutes, is the statutory authority for granting or denying applications for all liquor licenses and quota liquor licenses. Section 561.19(2)(a), Florida Statutes, establishes the double random selection drawing process for quota liquor licenses. Section 561.19, Florida Statutes, states in relevant part: Upon the completion of the investigation of an application, the division shall approve or disapprove the application. If approved, the license shall be issued upon payment to the division of the license tax hereinafter provided. (2)(a) When beverage licenses become available by reason of an increase in the population of a county or by reason of a county permitting the sale of intoxicating beverages when such sale had been prohibited, the division, if there are more applicants than the number of available licenses, shall provide a method of double random selection by public drawing to determine which applicants shall be considered for issuance of licenses. The double random selection drawing method shall allow each applicant whose application is complete and does not disclose on its face any matter rendering the applicant ineligible an equal opportunity of obtaining an available license. After all applications are filed with the director, the director shall then determine by random selection drawing the order in which each applicant's name shall be matched with a number selected by random drawing, and that number shall determine the order in which the applicant will be considered for a license. (Emphasis supplied.) In general, quota liquor licenses are issued in a limited number based on the population of a county or the increase, if any, in the population of a county. The licenses can also be issued when a county initially changes from a county which does not permit the sale of intoxicating liquor to one that does permit the sale of intoxicating liquor. The quota license is the only liquor license which is numerically limited; all other types of liquor licenses are available without numerical limitation. Because quota licenses are numerically limited, applications for such licenses can exceed the number of available licenses. Prior to 1981, quota licenses were issued based on an application. The evidence did not reveal the method used by the Division or the Governor in awarding quota licenses to qualified applicants when the applications for such exceeded the number of available licenses. Clearly, such decisions were made since quota licenses were issued prior to 1981. The evidence did indicate that in 1981 the Governor did not wish to be involved in the process of determining which applicants received quota liquor licenses and developed legislation establishing a double random drawing process. The legislation eventually became Section 561.19(2)(a), Florida Statutes. At some point, the number of licenses which could be issued was reduced from one license per 2,500 residents in a county to one license per 7,500 residents in a county. See Section 561.20, Florida Statutes (2002). Moreover, the Beverage Law comprised of Chapters 561, 562, 563, 564, 565, 567 and 568, Florida Statutes, establishes that quota licenses exist as un-issued licenses at the time the statutory criteria by county vote or population are met. See Beverly v. Division of Beverages, 282 So. 2d 657 (Fla. 1st DCA 1973). Indeed, the Division has the duty to issue these licenses to qualified applicants once they become available for issuance. The effect of revocation of a license is to revoke the current licensee's privilege to use a certain license at a certain location. Revocation under the Beverage Law simply returns a license to the possession of Respondent which again has the duty to issue the license if the population of the county supports its re-issuance. See Section 561.20(3), Florida Statutes, and Beverly v. Division of Beverages, 282 So. 2d 657 (Fla. 1st DCA 1973). In general, the double random drawing process provides a method for notifying the public of the availability of quota licenses and a method for selecting applications for further investigation and possible award of a quota license when those licenses are available. There is currently no administrative rule which gives Respondent guidance on what procedure to follow with regard to the award of pre-1981 quota licenses that have come back into the possession of Respondent by reason of revocation. There is also no rule which governs the re-issuance of post-1981 revoked quota licenses. Historically, Respondent has re-issued these revoked pre-1981 and post-1981 quota licenses through the double random drawing process. The pre-1981 revoked quota licenses issued through the double random drawings were never issued in excess of the population limits; however, they were issued in excess of the population increase for the prior year, if the total population supported the number of licenses issued. Respondent's long-standing policy was not challenged until the recent multiple litigation on this issue involving Petitioner as outlined above. Petitioner has applied for approximately 57 previously- revoked quota licenses. There was no evidence whether these licenses were initially created based on an increase in county population.
Recommendation Based on the foregoing Findings of Facts and Conclusions of Law, it is ORDERED that the Petition Challenging a Proposed Agency Rule challenging the proposed amendment to Rule 61A-5.0105, Florida Administrative Code, is granted. The proposed amendment is declared invalid. DONE AND ORDERED this 27th day of January, 2003, in Tallahassee, Leon County, Florida. DIANE CLEAVINGER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 27th day of January, 2003.
The Issue At issue in this proceeding is whether the Respondent, Brian Pitts, treasurer for Justice-2-Jesus, a political committee, willfully violated Section 106.07(1), Florida Statutes, by failing to file a Campaign Treasurer's Report for the first quarter of 2008 (referred to herein as the 2008 Q1 CTR).
Findings Of Fact Based on the oral and documentary evidence adduced at the final hearing, and the entire record in this proceeding, the following findings of fact are made: Respondent is the treasurer for Justice-2-Jesus, a political committee that registered with the Division of Elections (Division) on December 12, 2007. Justice-2-Jesus registered by filing an "Appointment of Campaign Treasurer and Designation of Campaign Depository for Political Committees and Electioneering Communication Organizations" form, or Form DS-DE-6. Justice-2-Jesus designated Respondent, Brian Pitts, as its treasurer. Respondent signed the document, giving as his address 1119 Newton Avenue South, St. Petersburg, Florida. Also on December 12, 2007, Justice-2-Jesus filed a "Registered Agent Statement of Appointment," Form DS-DE 41, naming Calvester Benjamin-Anderson as its registered agent. Respondent signed the document and gave 1119 Newton Avenue South, St. Petersburg, Florida as the address of the registered agent. The Division sent a letter, dated December 14, 2007, to Respondent acknowledging receipt of the Form DS-DE-6 and providing information about the Division's electronic filing system for CTRs. The letter informed Respondent that all political committees that file reports with the Division are required to do so by means of the electronic filing system. The Division's letter concluded with the following paragraph, set out in bold type: All of the Division's publications and reporting forms are available on the Division of Elections' web site at http://election.dos.state.fl.us. It is your responsibility to read, understand, and follow the requirements of Florida's election laws. Therefore, please print a copy of the following documents: Chapter 106, Florida Statutes, 2006 Committee and Campaign Treasurer Handbook, 2007-2008 Calendar of Reporting Dates, and Rule 1S- 2.017, Florida Administrative Code. The Division's letter also enclosed a sealed envelope containing PIN numbers to allow Respondent secure access to the Division's electronic filing system in order to submit CTRs for Justice-2-Jesus. A CTR lists all contributions received and expenditures made during a given reporting period. The 2008 Q1 CTR is the report that a campaign treasurer should have filed on behalf of his committee at the close of the first quarter of 2008. Respondent's 2008 Q1 CTR was due to be filed on or before April 10, 2008. Candidates and political committees have been required to file their CTRs electronically since 2004. § 106.0705(2), Fla. Stat. The CTR data may be uploaded using any of several proprietary programs that have been approved by the Division. These programs carry a fee for their use. As an alternative, the treasurer may enter the CTR information directly into the Division's electronic filing system at no cost. The Division has published an online "Electronic Filing System (EFS) User's Guide" (the Guide) to explain the use of the electronic filing system. The Guide contains help menus to assist the user in completing the data entry for a CTR. The Guide is available in a PDF format that can be read online or downloaded to the user's computer at no cost. A user may also make a public records request to the Division for a hard copy of the Guide. The Division will provide the hard copy at a cost of $0.20 per double-sided page, or approximately $4.80 for the 47-page Guide. On or about April 11, 2008, the Division sent Respondent a letter informing him that it had not received the 2008 Q1 CTR for Justice-2-Jesus, which had been due on April 10, 2008. On or about April 25, 2008, the Division sent Respondent a second letter informing him that it had not received the 2008 Q1 CTR for Justice-2-Jesus. Both letters were sent to 1119 Newton Avenue South, St. Petersburg, Florida, the address provided by Respondent on the Form DS-DE-6 for Justice-2-Jesus. Neither letter was returned to the Division as undeliverable or unclaimed. At the hearing, Respondent did not deny receiving these letters in April 2008. On or about July 10, 2008, the Division sent to Calvester Benjamin-Anderson, the registered agent for Justice-2- Jesus, a final notice that Respondent had failed to file the 2008 Q1 CTR for Justice-2-Jesus. The letter was sent certified mail, return receipt requested. Ms. Benjamin-Anderson signed for the letter on or about July 14, 2008. Respondent testified that he attempted to hand-deliver a paper copy of the 2008 Q1 CTR to the Division, but that a Division employee told him that he was required to file all reports for his committee electronically. The Division's records indicate that Respondent had filed Justice-2-Jesus' 2007 Q4 CTR and its 2007 SR2 report2/ electronically, prior to the due date for the 2008 Q1 CTR. Erin NeSmith, a supervisor in the Bureau of Election Records, testified that Respondent came into the Division's offices on November 20, 2008. Respondent asked Ms. NeSmith questions about the 2008 Q1 CTR. She told him that the matter had already been referred to the Commission because Respondent had not filed the report despite repeated notices, but that Respondent still needed to file the 2008 Q1 CTR. Respondent explained to Ms. NeSmith that he had not filed the report because he had been busy and had a lot of items to pull together for the report. As of August 10, 2009, Respondent had yet to file the 2008 Q1 CTR for Justice-2-Jesus. At the hearing, Respondent testified that he had at least 50 contributions and 80 to 100 expenditures to report for the first quarter of 2008. Respondent testified that the due date for the 2008 Q1 CTR fell during the legislative session, when Respondent was extremely busy at the Florida Capitol. The Division's offices are open only during normal business hours, when Respondent was unavailable, and thus Respondent was unable to phone the Division for assistance in preparing the reports. Respondent defended his subsequent failure to file the report as something in the nature of a protest against the Division's electronic filing requirement and its alleged refusal to provide him with a paper copy of the Guide to facilitate his preparation of the report. Respondent complained that the vendors who provide Division-approved data uploading programs charge prohibitively expensive fees. He further complained that the alternative means of filing, direct entry of the data onto the Division's electronic filing system, is difficult and confusing without a paper copy of the Guide for assistance. Respondent acknowledged the availability of the Guide in printable PDF format, but asserted that purchasing printer cartridges and paper sufficient to print the Guide and other necessary Division handbooks would cost between $80.00 and $120.00. Respondent did not acknowledge the Division's willingness to print the Guide for $0.20 per double-sided page pursuant to a public records request. Respondent testified that he has assisted several other persons in preparing and filing their electronic reports to the Division. On behalf of Justice-2-Jesus, Respondent has electronically filed several reports to the Division subsequent to the due date for 2008 Q1 CTR. Willfulness is a question of fact. § 106.25(3), Fla. Stat. See Beardslee v. Fla. Elections Comm'n, 962 So. 2d 390, 393 (Fla. 5th DCA 2007); McGann v. Fla. Elections Comm'n, 803 So. 2d 763, 764 (Fla. 1st DCA 2001). Florida Administrative Code Rule 2B-1.002 provides: For purposes of imposing a civil penalty for violating Chapter 104 or 106, F.S, the following definitions shall apply: A person acts "willful" or "willfully" when he or she knew that, or showed reckless disregard for whether his or her conduct was prohibited or required by Chapter 104 or 106, F.S. "Knew" means that the person was aware of a provision of Chapter 104 or 106, F.S., understood the meaning of the provision, and then performed an act prohibited by the provision or failed to perform an act required by the provision. "Reckless disregard" means that the person disregarded the requirements of Chapter 104 or 106, F.S., or was plainly indifferent to its requirements, by failing to make any reasonable effort to determine whether his or her acts were prohibited by Chapter 104 or 106, F.S., or whether he or she failed to perform an act required by Chapter 104 or 106, F.S. The evidence established that Respondent was well aware of the requirement to file the 2008 Q1 CTR on behalf of Justice-2-Jesus. Shortly after Respondent filed the committee's initial paperwork, the Division sent him an acknowledgement letter directing him to the Division's website for information about the electronic filing of campaign treasurer's reports. Respondent could have downloaded the Guide or any other Division publication. At the hearing, Respondent claimed no lack of knowledge of the filing requirements. After he failed to file the 2008 Q1 CTR, Respondent received two letters from the Division notifying him of the failure. Despite these notices, Respondent never filed the report. The evidence established that Respondent electronically filed two reports with the Division prior to the due date of the 2008 Q1 CTR, and filed several electronic reports after the due date of the 2008 Q1 CTR. These facts demonstrate Respondent's knowledge of the filing requirements and ability to prepare an electronic report. Respondent has acted willfully in his failure to file the 2008 Q1 CTR for Justice-2-Jesus. At the hearing, Respondent asserted that Justice-2- Jesus was indigent, but offered no financial data to support the assertion.
The Issue At issue in this proceeding is whether Respondent committed the offenses set forth in the Administrative Complaint and, if so, what penalty should be imposed.
Findings Of Fact Petitioner, Department of Business and Professional Regulation, Division of Pari-Mutuel Wagering (Department) is a state agency charged with the duty and responsibility for regulating the pari-mutuel wagering industry in Florida and those licensed under Chapter 550, Florida Statutes. At all times material hereto, Respondent, Jack J. Garey, held pari-mutuel wagering license number 1470144-1081, was a licensed thoroughbred owner, and was a permitholder authorized to conduct horseracing at permitted facilities in the State of Florida. Calder Race Course (Calder) was, at all times material hereto, a permitholder authorized to conduct horseracing in the State of Florida. Incident to the operation of that business, Calder extended check cashing privileges to trainers, owners and other pari-mutuel wagering licensees. On or about November 3, 1997, Respondent endorsed and presented to Calder for payment two checks, each in the amount of $500.00, which were payable to Respondent and drawn on the account of Karin Montejo and Ramiro Montejo at Barnett Bank. Both checks, which Calder paid, were returned unpaid because the account was closed. On or about November 12, 1997, Respondent endorsed and presented to Calder for payment a check in the amount of $1,600.00 which as payable to Respondent and drawn on the account of Karin Montejo and Ramiro Montejo at Barnett Bank. The check, which Calder paid, was, as the previous check drawn on such account, returned unpaid because the account was closed. In late November 1997, Michael Abes, the vice president of finance at Calder, spoke with Respondent regarding the returned checks and demanded repayment. In turn, Respondent acknowledged the debt and promised to repay it; however, no payments were forthcoming. On or about December 27, 1997, Respondent endorsed and presented to Calder two more checks for payment. One check was in the amount of $2,000.00 and the other in the amount of $500.00, and each was payable to Respondent and drawn on the account of Karin Montejo and Ramiro Montejo at Barnett Bank. The checks, paid by Calder, were, as with the previous checks drawn on the same account, returned unpaid because the account was closed. Given the return of the previous checks and his discussion with Mr. Abes, it cannot be subject to serious dispute that Respondent knew when he presented the checks to Calder for payment, that the account on which the checks were drawn had been closed and that they would not be honored by the bank. Despite numerous demands, Respondent did not pay any portion of the outstanding obligation owed Calder until February 1998, when a payment of $300.00 was remitted. Subsequently, on June 5, 1998, the balance of the outstanding obligation due Calder was paid.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered finding Respondent guilty of violating the provisions of Subsection 550.105(6), Florida Statutes, as alleged in Count I of the Administrative Complaint and imposing, as a penalty for such violation, an administrative fine of $300.00, a 30-day suspension, and exclusion from all pari-mutuel facilities in the state for the period of suspension. DONE AND ENTERED this 9th day of March, 1999, in Tallahassee, Leon County, Florida. WILLIAM J. KENDRICK 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 9th day of March, 1999.
Findings Of Fact On, or about, November 20, 1991, HRS released ITB 92-18BC. ITB 92-18BC was an invitation to bid on HRS' procurement of a data processing cartridge tape subsystem for Unisys computers. Prior to the issuance of the ITB, HRS conducted a bidder's conference. The bidders' conference was attended by representatives of HRS, Unisys and StorageTek. Vendor representatives at the bidders' conference were informed that HRS would "attempt to answer the questions in the best" possible manner. Vendors were also instructed that the answers received at the bidders' conference were "not binding, are not official, and must be submitted in writing to receive an official answer." Additionally, the ITB contains language stating that any questions concerning specifications or conditions were to be submitted in writing to HRS and that no interpretation shall be binding on HRS unless it is in writing. StorageTek and Unisys submitted written questions pursuant to the above mentioned instructions. The only relevant inquiry submitted by Unisys had to do with the requirement of "one (1) dual path controller with redundant paths for each string." Pursuant to Unisys' request, HRS modified that requirement to read "At least one (1) dual path controller with redundant paths for each string." The only relevant written inquiry submitted by StorageTek is found on page 14 of the written inquiries of the ITB. The written inquiry by StorageTek asked whether HRS would consider the total automation through an RFP rather than only a small piece of total automation through an ITB. HRS responded negatively stating that the success of this ITB will be based on using current allocations to fund the change to cartridge tape. Following the issuance of ITB 92-18BC, StorageTek filed a notice of intent to protest the specifications of the ITB. StorageTek never filed a formal notice of protest and subsequently withdrew the notice of intent to protest the bid specifications. The ITB as finally issued states its "Purpose" as "The purpose of this Invitation is to obtain competitive bid prices for a data processing cartridge tape subsystem, with installation components and maintenance, to be attached to Unisys A17-L and A15-I computers located at the HRS Technology Centre, 1940 North Monroe Street, Tallahassee, Florida." The ITB also contains the following hardware "Quantities and Technical Specifications": The following minimum specifications shall govern any equipment offered: Twenty-eight (28) cartridge tape drives configured as follows: One (1) string of sixteen (16) tape drives One (1) string of eight (8) tape drives One (1) string of four (4) tape drives At least one (1) dual path controller with redundant paths for each string In the General Conditions, the ITB states 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. In bold print at the bottom of the "General Conditions" is found: "NOTE: ANY AND ALL SPECIAL CONDITIONS AND SPECIFICATIONS ATTACHED HERETO WHICH VARY FROM THESE GENERAL CONDITIONS SHALL HAVE PRECEDENCE." The ITB also contains the following "Special Conditions": The Office of Management Systems intends to acquire robotic tape units within 24 months to manage approximately 20,000 tapes. The future value of the cartridge tape drives toward this goal will be a consideration in this bid. If the purchased tape drives will directly attach to the robotic units then 100% of the value is maintained. However, if the tape drive unit must be replaced then a trade-in value must be bid (see Cost Table). Auto load trays are considered part of the tape drive unit. The Office of Management System also must be able to connect these tape drives to an IBM computer in the future. This capability is mandatory and must be stated with supporting documentation. The hardware/software to accomplish this goal is not part of this bid, but associated cost should be identified in the documentation provided. The ITB also specified that "[t]he award will be made to the responsive bidder with the lowest bid price for 'Net Future Cost'." Finally, the ITB contains the following pricing sheet formula for calculating cost, the blanks of which were to be completed by the bidder: CARTRIDGE TAPE SUBSYSTEM COST $ Includes all costs for specified 28 cartridge tape drives . . . . LESS TRADE-IN ALLOWANCE ( ) (see specified Bid Condition #5 and 13) SUPPLIES MAINTENANCE NET COST . . . . . . . . FUTURE VALUE OF TAPE EQUIPMENT (See Notes A and B below) * ( ) NET FUTURE COST $ Note to Bidders: (A) If the tape drives directly attach to the robotics unit, the future value of tape equipment shall equal to [sic] the amount entered for item 1 above. (B) If the tape drives must be replaced in accordance with section 6 of this ITB, the amount entered will be the trade-in value of the equipment in October 1993. HRS received two bids for ITB 92-18BC. The bids that were submitted were bids by StorageTek and Unisys. The two bids were publicly opened at Winewood and transported to Management Systems for evaluation. When the bids arrived at Management Systems they were evaluated by an evaluation team consisting of Joe Duggar, Marilyn VanDusseldorp and Dick Bradley. The evaluation team concluded that both bids that were submitted were materially responsive to the ITB. However, review of the StorageTek bid showed that StorageTek failed to subtract line six from line five on the bid pricing sheet and had placed a zero for the cost on line seven of the bid pricing sheet. HRS reworked the numbers and entered a price on line seven in accordance with the mathematical requirements of the pricing sheet. HRS corrected StorageTek's entry on line seven and found that StorageTek's bid for line seven was over $300,000. Unisys' bid for line seven was for $243,454. HRS concluded that Unisys was the lowest responsive bidder for ITB 92- 18BC. As such, Management Systems reported these findings to Secretary Robert B. Williams, Secretary, Department of Health and Services, on January 2, 1992. After, reviewing the Unisys bid, StorageTek raised concerns about whether the Unisys bid satisfied the mandatory requirements of the ITB. StorageTek was concerned with whether Unisys had met the requirement of "At least one dual path controller with redundant paths for each string." Larry Smith, an employee of StorageTek, contacted Tom Johnson, Assistant Deputy Secretary for Management Systems, about the contents of the Unisys bid. Mr. Johnson, after listening to Larry Smith's concerns, asked Marilyn VanDusseldorp to check into StorageTek's allegations. Ms. VanDusseldorp and Mr. Duggar met with Mr. Greg Priest and Mr. John Thompson of the Unisys Corporation. Mr. Priest and Mr. Thompson went over the bid with the HRS evaluators. At this meeting, a conversation took place about the number of controllers that StorageTek and Unisys had bid and the cross coupling cables between those controllers. Unisys informed HRS that if HRS wanted that cable for strings B and C, Unisys could make that cable available at no additional charge. However, HRS would not avail itself of this crosscabling until after the acceptance period for the hardware as bid. The ability to cross cable strings B and C is not a requirement of or part of this ITB. Ms. VanDusseldorp and Mr. Duggar were convinced that they understood the Unisys bid and their original understanding of the Unisys bid's responsiveness did not change because of these conversations. Ms. VanDusseldorp reported back to Tom Johnson that the allegations by StorageTek were unfounded and that Unisys was responsive as bid in Unisys' response to the ITB. HRS awarded the bid to Unisys on January 16, 1992. StorageTek filed a timely notice of protest and formal written protest. As framed by StorageTek's amended formal written protest and the parties' Prehearing Stipulation, StorageTek contended that the award to Unisys was improper because: Unisys did not meet the requirement of providing "at least one dual path controller with redundant paths for each string"; Unisys allegedly failed to prove equipment capable of connecting the tape drives to an IBM computer without the loss of redundant paths; and Unisys allegedly failed to accurately represent net future costs. DISPUTED TECHNICAL REQUIREMENTS At Least One Dual Path Controller With Redundant Paths for Each String The ITB contained the following pertinent hardware requirements: Quantities and technical specifications: The following minimum specifications shall govern any equipment offered: (28) Cartridge tape drives configured as follows: One (1) string of sixteen (16) tape drives One (1) string of eight (8) tape drives One (1) string of four (4) tape drives At least one (1) dual path controller with redundant paths for each string . . . StorageTek bid equipment to provide two controllers for string A, two controllers for string B and two controllers for string C. Unisys bid two controllers for string A, one controller for string B and one controller for string C. StorageTek interpreted the requirement "at least one dual path controller with redundant paths for each string" as calling for dual or redundant controllers and complete redundancy from the mainframe or host computers to the tape drives. StorageTek's interpretation is contrary to the plain language of the specification and the common usage in the industry. In determining the common usage in the industry, the testimony of Dr. Fred J. Taylor is given great weight. He is an expert in configuration and design of I/O subsystems. He is an independent expert in that he is not an employee of any party and he had no involvement in the bid proceedings. A "path" is an unidirectional connection between two points. The word "path" has a different meaning depending on whether it is being used in reference to software or hardware. In the software context a "logical path" is the artificial path which exists only within the software configuration. The "physical path" is a hardware path along which information is actually communicated. It is the wires themselves. ITB 92-18BC is seeking a hardware system, not a software system. Therefore, the requirement of "[a]t least one dual path controller with redundant paths" relates only to the physical connection path. It refers only to the physical path (the wires) between the host computer (the A15 and A17) and the controller. Each controller can control only eight tape drives. Therefore, for string A, two controllers are needed. For Strings B and C, only one controller is required as long as it has two physical paths between the host and the controller and two other redundant physical paths between the same points. The term "redundant" given both its common English language usage and its usage in the industry means "duplicate," "copy," "alternate," or "more than one of that thing." The three string configurations bid by Unisys are responsive to the requirements of the ITB because each string contains dual paths between the host and the controller and each contains redundant paths for each of the requisite dual paths. StorageTek claimed to have asked HRS at the prebid conference and later in a telephone conference with Tom Johnson, Assistant Deputy Secretary for Management Systems, whether HRS intended to require two controllers per string. The evidence does not support this claim. StorageTek also claimed to have orally questioned whether the purpose of requiring at least one dual path controller with redundant paths for each string was to provide for simultaneous data transfers. Again, the competent, substantial, credible evidence does not support this claim. StorageTek did not put any such questions in writing. The ITB provided and StorageTek understood that changes or clarifications to the contract were not binding unless in writing. Nothing in the ITB required each string of tape drives to contain two controllers. Nothing in the ITB required that each string be capable of processing simultaneous data transfers. Nothing in the ITB required complete redundancy from the host computers to the tape drives. Capability to Connect Tape Drives to an IBM Computer in the Future The ITB contained the following special condition: The office of management systems also must be able to connect these tape drives to an IBM computer in the future. This capability is mandatory and must be stated with supporting documentation. The hardware/software to accomplish this goal is not part of this bid, but associated costs should be identified in the documentation provided. StorageTek claimed that Unisys' bid was nonresponsive because it did not demonstrate that the subsystem as bid in its entirety was capable of attaching to an IBM computer without losing one of the redundant paths on string B and string C. Nothing in the ITB required the bidders to demonstrate that the subsystem as bid could attach to an IBM computer without losing one of its redundant paths. To the contrary, the specification was specifically limited to demonstrating the capability of connecting the underlying tape drives to an IBM computer in the future. The purpose of the requirement for demonstrating the capability to attach to an IBM computer was to insure that the tape drives retained some value in the future if HRS no longer used the equipment to attach to the Unisys A series computer. Unisys' bid demonstrated it was capable of attaching the tape drives to an IBM computer and therefore the bid was responsive. NET FUTURE COST The ITB provided that the contract would be awarded to the bidder with the lowest dollar amount for "net future cost." Net future cost was the descriptive term for line item 7 on the ITB pricing information sheet (the pricing sheet). The ITB pricing sheet is set forth in Findings of Fact 14 above. The bidders were to insert the appropriate amount on each line, adding or subtracting as indicated by the presence or absence of parentheses. Unisys and StorageTek both filled out the pricing sheet appropriately with respect to line items 1-6. On line item 7, Unisys entered the difference between line item 5 and line item 6. This resulted in a figure of $243,454.00. StorageTek entered a zero on line item 7. The clear meaning of the pricing sheet was that line item 7 would be the difference between line item 6 and line item 5. StorageTek inserted on line item 7 its proposed cost to HRS in the future to attach the cartridge tape drives bid by StorageTek to robotic units. Line item 2 required bidders to enter one of two numbers. If the bidders' cartridge tapes would be capable of directly attaching to robotic units, the bidder was given a 100% credit for the present cost of the cartridge tapes on the pricing sheet. If the bidders' cartridge tapes would not be capable of directly attaching to robotic units, the bidder was required to insert on line item 2 the amount of the trade-in value the bidder would provide in the future in order to attach to robotic units. Under StorageTek's asserted interpretation of the pricing sheet, there would have been no difference between the information provided on line item 2 and the information provided on line item 7 because, as submitted by StorageTek, the substance of the information provided on both line 2 and line 7 was that there would be no additional change to HRS to attach the StorageTek cartridge tape drives to robotic units. Under StorageTek's asserted interpretation of the requirements of the pricing sheet, the amount of money being expended by HRS today would have had no bearing on the award of the contract. If StorageTek's bid on line item 5 -- the net cost to HRS today -- had been $10 million or $100 million, under StorageTek's theory it still would have been entitled to award of the contract because it would charge zero dollars in the future to attach the tape drives to robotic units. Such an interpretation is both illogical and unreasonable. The ITB did not define net future cost as the cost of attaching the cartridge tape drives to robotic units in the future. During the prebid conference, Larry Smith, the account representative for StorageTek, questioned Karin Morris, the HRS contract administrator for the ITB. Larry Smith suggested to HRS that the cost of attaching to the robotic units "was being totally ignored in this ITB." Karin Morris advised Larry Smith to put his concerns in writing. StorageTek did put its concern in writing requesting HRS to reconsider this acquisition by issuing an RFP (request for proposals) which would include consideration of the cost of converting to automation (robotics). HRS' response to StorageTek's written question was "No. The success of this ITB will be based on using current allocations to fund the charge to cartridge tape. No new appropriations have been requested for this acquisition." Larry Smith testified that he objected to the ITB because it ignored the cost of attaching to robotics, yet he inserted zero on line 7 because he understood net future costs to be the cost of attaching to robotics. The response of HRS to StorageTek's written question no. 11 unequivocally stated that the ITB would be awarded based on current allocations. HRS properly concluded that StorageTek deviated from the bid requirements by placing a zero on line 7. HRS properly waived the irregularity in StorageTek's bid regarding the line item 7 and recalculated StorageTek's pricing sheet to comport with the pricing sheet requirements by subtracting line six from line five to arrive at the net future cost in line 7. After recalculating StorageTek's pricing sheet, HRS correctly found that Unisys submitted lower dollar amounts on line item 5 and line item 7. ULTIMATE FACTS Unisys' bid was responsive to the ITB in all material respects. Unisys' bid was the lowest bid. Unisys' bid was the lowest responsive bid and should be awarded the contract.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Health and Rehabilitative Services enter a Final Order therein: Determine Unisys to be the lowest responsive bidder pursuant to Section 287.057(1). Award the bid for ITB 92-18BC to Unisys. DONE and ENTERED this 31st day of March, 1992, in Tallahassee, Florida. DIANE K. KIESLING Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 31st day of March, 1992. APPENDIX TO THE RECOMMENDED ORDER The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on the proposed findings of fact submitted by the parties in this case. Specific Rulings on Proposed Findings of Fact Submitted by Petitioner, Storage Technology Corporation 1. Each of the following proposed findings of fact is adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 1(1); 2-7(9-14); and 34(43). 2. Proposed findings of fact 8-10, 52-54, 93, 103, 111, 112, 122, 134, 135, 141, 145, 146, 148, 156, and 158 are subordinate to the facts actually found in this Recommended Order. 3. Proposed findings of fact 11-21, 29-32, 39, 40, 47-51, 91, 92, 104-107, 110, 123-129, 131, 132, 136-140, 142, 143, 149, 150, 152, and 153 are irrelevant to the resolution of the issues raised in this case. 4. Proposed findings of fact 22-28, 35-38, 41-43, 55-76, and 113-121 are mere summaries of testimony and to the extent that factual matters recited in them are reflected in the Findings of Fact herein, they are subordinate to those Facts. 5. Proposed findings of fact 33, 44-46, 77-79, 94, 98, 102, 108, 109, 130, 133, 144, 147, 151, 154, 155, 157, 159, and 160 are unsupported by the credible, competent and substantial evidence. 6. Proposed findings of fact 80-90, 95-97, and 99-101 are unnecessary in light of the Findings of Fact and issues herein. Specific Rulings on Proposed Findings of Fact Submitted by Respondent, Department of Health and Rehabilitative Services Each of the following proposed findings of fact is adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 1-8(1-8); 9-26(15-32); 27(34); 28(41); 29(43); 30(50); 35(52); 37(57); 38(58); 39(63); 40(62); 41(77); 42(78); and 43(82). Proposed findings of fact 31-34 and 36 are subordinate to the facts actually found in this Recommended Order. Specific Rulings on Proposed Findings of Fact Submitted by Intervenor, Unisys Corporation Each of the following proposed findings of fact is adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 1(57); 2(58); 3(14&59); 4-23(60-79); 29-33(34-38); 34-40(45-51); 41(41); 43(44); and 45-49(52-56). Proposed findings of fact 24-28, 42, and 44 are subordinate to the facts actually found in this Recommended Order. COPIES FURNISHED: F. Perry Odom Melissa Fletcher Allaman Attorneys at Law Ervin, Varn, Jacobs, Odom & Ervin 305 South Gadsden Street Post Office Drawer 1170 Tallahassee, Florida 32302 Peter A. Lewis Assistant General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Building one, Room 407 Tallahassee, Florida 32399-0700 W. Robert Vezina, III Mary M. Piccard Attorneys at Law Cummings, Lawrence & Vezina, P.A. 1004 DeSoto Park Drive Post Office Box 589 Tallahassee, Florida 32302-0589 Robert B. Williams, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 John Slye General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Sam Power, Agency Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700
The Issue The issue to be decided is whether Petitioner was making improvements to real property or purchasing tangible personal property when it entered into a contract for the furnishing and installation of the Swisslog System in its Lake City facility.
Findings Of Fact Respondent conducted an audit of Petitioner?s sales and use tax compliance for the period December 1, 2004, through November 30, 2007 (the “Refund Period”). Petitioner presented refund schedules to Respondent requesting a refund of $2,179,484.84 in sales and use tax accrued and remitted on the design and construction of a perishable-food storage and handling system. Respondent issued a Notice of Proposed Assessment denying the requested refund on December 6, 2010. Petitioner timely filed a Petition for Redetermination on January 14, 2011, which ultimately resulted in a Notice of Decision upholding Respondent?s December 6, 2010, denial of Petitioner?s requested refund. Petitioner timely filed a Formal Protest on February 28, 2012, challenging the Notice of Decision. The Protest was referred to the Division of Administrative Hearings to conduct a section 120.57 hearing. Petitioner is a national retailer of discounted, high- quality general merchandise and grocery products. Petitioner owns and operates over 120 stores in Florida. Over the past ten years, Petitioner has been increasing the number and quality of grocery offerings in its stores. Petitioner constructed new perishable-food distribution centers to support its grocery operations. Petitioner has built a 420,000 square-foot Dedicated Perishable-Food Distribution Center ("Distribution Center") in Lake City, Florida. The Distribution Center supplies Petitioner?s grocery operations in the Southeastern United States. Petitioner entered into two separate contracts with two different contractors relating to the construction and equipping of the Distribution Center. One contract, between Petitioner and Ryan Corporation, for approximately $60 million, was for construction of a building (the “Building”). The second contract, between Target Corporation and Swiss-Log, for approximately $40 million, was for the material handling and distribution system inside the Building (the “Swisslog System”). The Swisslog System functions as an automated system for storing, inventorying, and distributing approximately 8,000 different items of perishable food products. The two contractors and Petitioner worked together on the planning and design of the Building to accommodate the Swisslog System. The Building has 34 receiving docks and 38 shipping docks. The docks are connected by conveyors that run throughout the Building. The Building was designed to take into consideration the conveyors, lifts, cranes, and “Caddy Picks” of the Swisslog System. The Swisslog System is physically attached to the Building, intended to be a permanent addition, and required for the facility to serve its intended purpose. The Distribution Center has five major storage areas. They are: 83,000 sq. ft. freezer chamber 73,000 sq. ft. cooler chamber 57,000 sq. ft. dry produce area 8,500 sq. ft. meat area 8,600 sq. ft. wet produce area. The contract with Swisslog was for the design, purchase, and installation of the entire integrated material handling and distribution system. The system included conveyors, cranes, de-pallet equipment, Caddy Picks, shelving, and the software and hardware to operate the warehouse management and distribution system's equipment and machinery to move food from the receiving docks to the designated storage areas and then to the appropriate shipping docks. The Distribution Center's general contractor hired several sub-contractors and suppliers to erect the Building and install the Swisslog System. The vast majority of the Swisslog System and its racking is attached to the floor or walls of the Building, or moves along tracks in the floor, or hangs from I- beams in the ceiling. The Building, including the cold and frozen temperature chambers, was designed and constructed to the specifications of the Swisslog System. During construction, the walls of the Building were not enclosed until the framework for the Swisslog System was complete. The freezer section of the Swisslog System is over 68 feet tall and 261 feet long. This section contains two floors and 25,040 merchandise “slots.” The cooler section is 53 feet tall and 261 feet long. The cooler section contains two floors and 12,720 merchandise slots. The building that envelops the Swisslog System contains approximately 1,800 tons of structural steel. The Swisslog System?s racking component includes 3,000 tons of steel. The Swisslog System has its own set of fixtures, including lighting fixtures and components, a fire protection sprinkler system consisting of piping and sprinkler heads, and an electrical system. To accommodate the Swisslog System, the Building foundation contains increased steel reinforcement and footing depths necessary to support the Swisslog System?s weight and design loads. In addition, the foundation contains 24” deep pits in certain areas to support the weight and design height the Swisslog System?s pallet jack inducts. Petitioner paid use tax on the entire contract price for the Swisslog System contract. Petitioner records the Swisslog System as tangible personal property on its ad valorem returns filed with Lake County, Florida. For federal tax purposes, Petitioner depreciates the Swisslog System as (***) year property, under the Modified Accelerated Cost Recovery System. Attached and incorporated into the Joint Stipulation of Facts was a brochure produced by Accalon, which further describes the Swisslog System. The brochure is a fair and accurate representation of the Swisslog System installed at the Distribution Center. The following is a general description of how the distribution system works, and the method of its attachment and incorporation into the Building: Order Receiving Employees, driving forklifts, unload pallets from the semi tractor trailers at the receiving docks. The pallets are then label-scanned into the Work Management System (WMS) and the pallet moves to a pallet de- layering station. The WMS processes data and issues instructions, so that most of the steps necessary to move merchandise within the Swisslog System are automated. If the pallets require de-layering, the pallets are de- layered and the cases from the pallet are loaded onto a split tray and travel by conveyor to the SRM aisle and pick up station. Freezer load units are transferred in to the freezer chamber on conveyors that drive the loads through and cause the automated air-door on the refrigerated chambers to open. Once in the freezer or cooler chambers, one of the 16 automated cranes will pick up the pallets from the conveyors. These cranes, several stories tall and traveling on railroad-like tracks mounted to the floor, will travel down the aisles behind the racks to the appropriate storage rack locations, where the crane will lift the pallet and slide the pallet into the storage rack. Like the crane, the 75-foot tall storage racks are physically bolted to the building's floor or walls. The pallet-size conveyors are bolted to the floor or walls of the facility. Pallets are stored in specific locations using WMS logic. Order Picking The WMS receives orders from the store and groups the orders, allocates, and releases batches of orders for efficient pickup. During allocation, the WMS separates full-pallet picks from partial picks. The WMS virtually guides pallets from individual store orders based on cubic volume of the quantity of cases selected. The WMS maps the picking locations for the Caddy Picks and allocates orders for the Caddy Picks. There are 70 Caddy Picks in the aisles in front of the racks. Each Caddy Pick may carry up to 2,800 pounds of merchandise. The Caddy Picks hang from ceiling I-beams and travel down the aisles to pick containers and boxes from pallets on the racks and load onto outgoing pallets. An employee is required to follow the Caddy Pick as it travels down the aisles and manually pick the containers and boxes and load onto the outgoing pallets. This picking process will continue until the outgoing order of mixed products is fulfilled. These pallets are then transferred via conveyors and lifts (mechanical elevators) to ground level where the pallets are wrapped in shrink wrap on the conveyor. The pallets are then conveyed to a double-shuttle car interface station where the pallet is transferred to the double shuttle, also mounted to the floor. This car can carry two pallets simultaneously and transfer them to allocated conveyor shipping lanes. Employees driving forklifts pick up the pallets from the conveyor shipping lanes and load them into the semi-tractor trailers parked in the shipping docks. The entire process (excepting where human interaction is required) is performed by the WMS, and automated computer and software system. The system reads bar code labels on the pallets and determines where incoming inventory should be stored, manages store re-supply orders, determines product pulls to optimize time resources and pallet configuration, and determines which shipping dock the pallet of inventory being pulled should be routed to. Mr. Scott Browdy had the necessary qualifications to responsibly represent Petitioner?s interests in a manner which would not impair the fairness of the proceeding or the correctness of the action to be taken. The parties filed a package of electronic documents that was agreed to be a true copy of the December 7, 2006, contract between Petitioner and Swisslog Logistics, Incorporated. The term “System” was described in the contract as “all Plant to be provided and the installation services or other work to be done by the Contractor or any permitted Subcontractors under the Contract, which shall include delivery, installation, testing and commissioning of an order fulfillment system with all required software, hardware, racking, mezzanines, conveyors, cranes, Caddy Picks as specified in the Specifications.” The contract did not specifically describe and itemize each item of tangible personal property to be provided. However, in the “Investment Summary,” which was originally a December 5, 2006, proposal from Swisslog to Petitioner, that was part of the package of electronic documents that was agreed to be a “true copy” of the December 7, 2006, contract, the various elements of the contract were priced. Racking was priced at $11,658,000.00, the warehouse management system was priced at $2,441,000.00, and project and implementation services were priced at $2,691,000.00. The stacker cranes, pallet conveyors, and Caddy Picks for the cooler and freezer were priced at a total of $22,656,000.00. The prices for all of these elements totaled $39,446,000.00, which was the price of the final contract when executed. The contract did not charge Petitioner for items of tangible personal property as they were delivered, but charged the lump sum amount of $39,446,000.00 for all services, tangible personal property, and improvements to real estate. It provided for various percentages of this total contract price to be paid at certain milestone events leading toward the completion of the contract. The Swisslog contract was a mixed contract providing for sale of tangible personal property such as perishable food transport and handling equipment; improvements to real property such as permanent storage racks; electrical, computer control, and plumbing components which were not described sufficiently in the contract to classify; and project and implementation services, which were not associated in the contract with either improvements to real property or sale of tangible personal property. The contract clearly allocated the contract price among these various elements of the contract. It indicated that $11,658,000.00 was allocated for the permanent storage racks. This allocation was bona fide and reasonable in terms of their great size and the large amount of steel used in their construction. The permanent storage racks installed as part of the Swisslog System were not industrial machinery or equipment but were instead improvements to real property. Petitioner failed to prove which, if any, of the remaining elements of the contract were improvements to real property. It was unclear if any of the electrical, computer, or plumbing components were integrated into the Building?s systems, or which services related to the improvement to real property.
Recommendation Upon consideration of the above findings of fact and conclusions of law, it is RECOMMENDED that the Department of Revenue enter a final order: (1) finding that Target Corporation is entitled to a refund of use tax on the $11,658,000.00 portion of the sales price allocated to the design, purchase, and installation of the racking element of the Swisslog contract; and (2) otherwise denying refund. DONE AND ENTERED this 7th day of December, 2012, in Tallahassee, Leon County, Florida. S F. SCOTT BOYD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 7th day of December, 2012.
The Issue Whether Respondent's proposed purchase of a Multigraphics Total Copy Center 7 with TCS copy sorter 67-120 (120 bins) is an authorized "single source" purchase.
Findings Of Fact FSU's Need For An On-Line, Fully Integrated, Off-Set Printing System, With Duplexing Capability. Office Services, a sub-unit of the Business Services Department of FSU, provides printing and copying services to faculty students and staff at three locations on the university's main campus in Tallahassee, Florida. One of these locations, the "Union Copy Center," is on the premises of the University Union building complex. The main function of the Union Copy Center is to provide quick, fast-turnaround copies--from 500,000 to a million copies per month. Copies are made within a very short time, either while the customer waits or within 48 hours. The Union Copy Center is open nine hours a day. It provides additional services such as binding copied materials, laminating small items and making signs. It also has walk-up copying, where the customer operates a copy machine, then pays on a per copy basis. The Union Copy Center is equipped with a Xerox 9500 photocopier collating machines, two walk-up copiers, a sign or nameplate making machine, a laminating machine, a spiral binding machines an A.B. Dick 350 press used for small posters and book covers, and a Multigraphics 4975 duplexing copying machine, which is no longer in service. The Union Copy Center has two employees--a full-time operator or printer, and a print shop supervisor, who also supervises another copy center located elsewhere on the campus. Neither employee is a "dedicated operator"--defined as a person who operates only a single piece of equipment, with no additional duties. For example, the full-time printer not only operates the machinery but also answers telephone calls, waits on walk-up customers, collects copying charges, writes tickets for each job, logs in each job by type of work to be performed, and sells class notes or supplements to students. He also operates the book bindery, which entails a substantial amount of handwork such as taping and stitching. In June 1985, FSU hired Deborah Christie as the Graphics Manager of Office Services. In this capacity she was responsible for the three on-campus printing and copying locations of Office Services, including the Union Copy Center. Her immediate supervisor was Barbara Johnson, Director of Business Services. Ms. Johnson asked Ms. Christie to investigate and find equipment to replace the Xerox 9500 photocopier in the Union Copy Center. The Xerox 9500 is an on-line, duplexing system which uses a photocopying process to produce copies from originals. Although it produces good quality copies in a very short time, it is expensive to operate. It has a "per copy, click charge," costing FSU from $4,000 to $6,000 per month. During the course of Ms. Christie's investigation, she received proposals from The Kodak Corporation, A.B. Dick, and AM International, Inc. She reviewed the literature provided by these and other vendors of duplicating equipment, and surveyed the equipment used by commercial quick-copy shops in the Tallahassee area. She concluded, and reasonably so, that the Xerox 9500 photocopier should be replaced by an on-line, fully integrated off-set printing system, with duplexing capability. "On-line" means that the different components of the system are connected so that the operator is not normally required to manually transfer materials from one component to the other, such as from the master-maker to the press. "Fully integrated" means the components are mechanically and electronically connected, with full synchronization. "Duplexing" means that a single sheet passing through the press can produce a copy with print on both sides. (Over 75 percent of the Copy Center's jobs require two- sided printing.) With these features, the need for operator intervention would be minimal, and the operator could perform other duties while copies were being printed. Finally the quality of copies made by off-set printing is equal or superior to the quality of copies made by photocopying. Since off-set printing eliminates the "per copy click charge," copying is less costly-- as much as 50 percent lower than the cost of photocopying. II. Equipment Capable of Meeting FSU's Need The equipment proposed by Kodak was the more expensive photocopying process, so it would offer little improvement over the Xerox 9500 currently in use. Both A.B. Dick and AM International, Inc. offer off-set printing systems. The A.B. Dick system consists of Models 369T, 171, and a sorter. Model 369T is a tandem or duplexing off-set press, to which an automated sorter can be connected. Model 171 is a master-maker which cannot be connected to or integrated with the Model 369 tandem press. Hence this printing system requires two separate actions by the operator. First, he uses the master- maker to make masters of the originals, then he manually transfers the masters to the document feeder portion of the press. The total cost of the A.B. Dick system is $68,984, which includes the press, the master-maker, the feeder, and the sorter with interface. The AM International, Inc., system consists of a Total Copy System 7 with 67-120 sorter ("TCS-7"). This is a fully integrated; on-lined off-set printing system; with duplexing capability- which fully satisfies FSU's reasonably identified needs. No other system currently available on the market has such a combination of features. It has three components: a camera or master-maker, an off-set printing press, and a sorter or collator. Because of its unique combination of features, the operator normally need only set-up and place the originals in the document- feeder component of the master-maker (at one end of the system), then remove the printed copies from the sorter (at the other end of the system). In the absence of operational problems such as paper jams, the operator does not intervene between the loading of the feeder and the removal of finished copies. This frees him to perform other duties while copies are being made. The total cost of the TCS-7 is $80,123.16. To meet the quick, fast turnaround and minimum operator intervention requirements of FSU, the duplication system must be relatively free of breakdowns. It has not been shown that the CCS-7 is more prone to breakdowns or requires repairs more often than other off-set duplexing systems currently available. III. The On-Line Integrated Features of the TCS-7 Are Unique The unique on-line, integrated components of the TCS-7 means that it, alone, can satisfy FSU's reasonably identified needs. On-Line capability becomes even more critical as the number of "run" lengths shorten and the number of originals per job increase. For example, if the bulk of the work to be copied were two page documents, of which 5,000 duplexed copies were to be made, on-line capacity would become less important. The operator could make two masters, manually load them into a nearby press, and perform other duties while the copies are being run. (Tr. 160) But this is not the situation in the FSU Copy Center, where 60 percent of the jobs range from 50 to 500 copies per originals 25 percent are over 500 copies, and 15 percent range from 20 to 50 copies. The overall average is 19 originals per job, with an average of 700 copies per original. The on-line capacity of the TCS-7 satisfies FSU's needs for quick turnaround, cost-effective, high quality copying, while minimizing the need for operator intervention. Under Section 287.062(1)(c) and Rule 13A-1.10, Florida Administrative Coded the State of Florida, Department of General Services authorizes "single source" purchase by state agencies. It authorized ten "single source" purchases of on-line copy systems between 1976 and 1982. By so doing, it acknowledged the uniqueness and importance of the on-line feature, described as "where the workflow is continuous and uninterrupted, requiring no operator intervention from the time the original is fed through the master-maker onto the press cylinders, printed and then the printed copies removed from the sorter." (Resp. Exhibit L)
Findings Of Fact On April 10, 1978, the Department, through its Division of Purchasing, submitted an Invitation to Bid on State Contract number 451-600-38-BS, to various vendors of copying equipment to secure contracts for the State's annual requirements of bond and bond-like magazine-finish paper copying machines. The Invitation to Bid included General Conditions, Special Conditions and technical specifications which described the various categories of copying equipment based on type, class and system. Paragraph 7 of the General Conditions of the Invitation to Bid provided, in part, that: 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, file number and bid number. Failure to comply with this condition will result in bidder waiving his right to dispute the bid specifications. Paragraph 8 of the General Conditions provided that: The award hereunder is subject to the provisions of Chapter 112, Florida Statutes. All bidders must disclose with their bid the name of any officer, director or agent who is also an employee of the State of Florida, or any of its agencies. Further, all bidders must disclose the name of any State employee who owns, directly or indirectly, an interest of ten percent (10 percent) or more in the bidder's firm or any of its branches. Finally, paragraph 10 of the General Conditions, covering service and warranty, reads as follows: Unless otherwise specified, the bidder shall define any warranty service and replacements that will be provided during and subsequent to this contract. Bidders must explain on an attached sheet to what extent warranty and service facilities are provided. In addition to the General Conditions, the Invitation to Bid also contained Special Conditions, several of which are pertinent to this proceeding. Paragraph 6(A) concerning machine A cost, provides that: In determining the per copy cost of each type and class of copy machine bidders must include installation and removal costs as well as verify operation of all equipment and training of key operators and warranty for operation of one (1) year. On an Outright Purchase Plan the monthly machine costs shall be determined by dividing the purchase price by 36 months. To this figure add the current monthly cost for preventive maintenance service. In paragraph 29 (D) , the Special Conditions require that: A copy of the manufacturer's standard warranty must be submitted with the proposal. A warranty is required against defective material, workmanship, and failure to perform in accordance with required performance criteria, for a period of not less than one year from date of acceptance. Replacement of all parts found defective, including all labor and materials, within the warranty period shall be made without cost to the State. Finally, paragraph 30 of the Special Conditions provides that: All questions concerning conditions and specifications shall be directed in writing to this office for receipt no later than May 1, 1978. Inquiries must reference the date of bid opening and bid number. Failure to comply with this condition will result in bidder waiving his right to dispute the bid conditions and specifications. Written response to all questions will be mailed to all bidders by May 10, 1978. For the Type I/Class 1 and Type I/Class 1-A categories, the Department received responsive bids from Petitioner and Saxon. Petitioner submitted its bid on June 30, 1978. Saxon submitted its bid from which the Department computed an average per-copy cost of $.0613. In arriving at this figure, the Department applied the following methodology: The $2,525 total cost of the Saxon machine was divided by 36 months, resulting in a figure of $70.14; Saxon's current monthly maintenance cost of $27.71 was then multiplied by 24 months, and that figure was divided by 36 to arrive at a monthly pro-rated maintenance cost of $18.47 for the three year life of the machines; this figure was then added to the $70.14 to arrive at a total monthly machine cost of $88.61. When supply costs and labor costs for various copy volumes were added to the fixed monthly machine costs, an average per-copy cost of $.0613 resulted. Petitioner, however, used a different methodology in formulating its bid and calculating its per-copy cost. Petitioner's methodology was as follows: Petitioner's total machine cost of $2,475 was divided by 36 months, resulting in a figure of $68.75; to this figure was added the current monthly maintenance cost of $10.00, which, when added to the above figure, resulted in a monthly machine cost of $78.75. When supply costs and labor costs were added for various monthly volumes, an average per-copy cost of $.0624 resulted for Petitioner's machine. The essential difference in the bid submitted by Petitioner and that submitted by Saxon is that Saxon amortized its 24-month cost of preventive maintenance over a period of 36 months with the understanding that the first 12 months of preventive maintenance would be furnished by Saxon to the State at no cost. Petitioner, on the other hand, computed its monthly maintenance cost at a flat rate for the full 36-month period apparently assuming that the one-year warranty required in the Special Conditions would necessitate Petitioner's also furnishing preventive maintenance for the first year at no cost. Petitioner therefore contends in its Third Amended Petition that the Department erred in its computations which concluded that Saxon had submitted the low bid in that Petitioner, like Saxon, provides the first year of preventive maintenance at no charge to the State and that: When the first year of maintenance, $120.00, is taken out of [Petitioner's] computation, it results in a copy cost of $.0605, whereas Saxon's stated cost A is $.0613. The manufacturer's warranty submitted by Petitioner with its bid provides, in part, that: Canon U.S.A., Inc. warrants all Canon Copier Products for a period of one year from date of installation against defective material and workmanship. All broken or defective parts not caused by accident or misuse will be replaced at contractors expense, including nonconsumable parts, labor and transportation, if any. Canon U.S.A., Inc. also warrants Canon Copiers against failure to perform in accordance with required performance criteria. Although the Special Conditions require that bidders supply a one-year warranty against defective material, workmanship and failure to perform in accordance with required performance criteria, there is no requirement that a bidder agree to provide cost-free preventive maintenance. Other than Petitioner's notation in its bid of a $10.00 monthly maintenance cost, Petitioner makes no other notation in its bid with respect to the provision of cost-free preventive maintenance. Further, the evidence clearly establishes that the types of services contemplated by the phrase "preventive maintenance" were different from, and outside the "warranty" requirements. The warranty requirements amount essentially to a guarantee of performance for the first 12 months of machine life, whereas the phrase "preventive maintenance" clearly was intended to cover periodic servicing of the machines short of actual repairs of mechanical malfunctions. Had Petitioner intended that its warranty cover cost- free preventive maintenance for the first year of machine life, it should have, but did not, so indicate in response to paragraph 10 of the General Conditions requiring a bidder to define to what extent warranty and service facilities are to be provided. The warranty requirements for outright purchase of copying equipment contained in paragraph 29(D) of the Special Conditions do not include an express or implied requirement that a bidder provide preventive maintenance service at no cost during the first year following purchase of copying equipment. Further, the cost formulas contained in paragraph 6A of the Special Conditions do not require a bidder to include a cost for current monthly preventive maintenance service which it does not intend to charge, and there is no prohibition in that paragraph against expressing the actual monthly preventive maintenance cost for the months in which these costs will be charged. Petitioner failed to submit written questions concerning its interpretation of any of the conditions in the Invitation to Bid or to question the Department's interpretation of those provisions. Additionally, Petitioner failed to define, in accordance with paragraph 10 of the General Conditions, the warranty service which it intended to provide, and likewise failed to express any intent to provide preventive maintenance service at no cost during the first year following possible purchase of its equipment. The Department properly accepted Petitioner's cost data for machine costs set forth in its bid, and properly calculated a per-copy cost for the three-year period without altering Petitioner's machine cost data. Based solely upon data supplied by Petitioner and Saxon, the Department has correctly determined, according to the formula set forth in the bid request, that Saxon's per-copy cost for equipment in the Type I/Class 1 and Type I/Class 1-A categories is lower than that submitted by Petitioner. Petitioner next contends that the Department's bid specifications for bond paper copying machines in the Type I/Class 4 and Type IV/Class 5 System A categories allowed only for machines utilizing a selenium drum, whereby precluding the use of Petitioner's machine which was equipped with a cadmium sulfide drum. Petitioner asserts that the Department " . . . has failed to demonstrate any justification . . ." for the use of a selenium, as opposed to a cadmium sulfide drum, and that " . . . [b]ased on latest available industry-wide data, there is no reason to distinguish between the [selenium] and the [cadmium sulfide] drum used in Petitioner's copying equipment." Although the Department acknowledged that it had no written rules or criteria established for the writing of technical specifications in the Type I/Class 4 and Type IV/Class 5 System A categories, the Department decided on the use of selenium drums in these categories based upon at least five years favorable experience with the selenium drum. Based upon this experience, and a familiarity with literature in the machine copier field, the Department determined that machines equipped with the selenium drum were generally guaranteed for greater volumes than a cadmium sulfide drum equipped machine, and that machines with selenium drums were less susceptible to breakdown in greater volume categories. On the other hand, information available to the Department indicated that machines with cadmium sulfide drums were less likely to withstand heavy usage in types and classifications requiring greater copy volume. Finally, on this issue, at no time prior to the opening of the bids in these categories did Petitioner either question the Department's specifications or attempt to have the Department amend its specifications in these types and classes in order to allow for machines equipped with cadmium sulfide drums. Petitioner neither submitted to the Department prior to bid opening, nor submitted any evidence at the hearing in this cause to substantiate its allegations that the Department was not justified in requiring machines with selenium drums in these categories. In addition, Petitioner failed to submit any evidence to substantiate its allegation that, based upon latest available industry-wide data, there was no rational basis to distinguish between the selenium and cadmium sulfide drums. In its third and fourth affirmative defenses, the Department asserts that Petitioner, in submitting its bid, failed to disclose the name of a corporate officer who was also an employee of the State of Florida, and also failed to disclose indirect ownership of ten percent (10 percent) or more of the Petitioner corporation by an employee of the State of Florida. In view of the foregoing Findings of Fact concluding that the Department reasonably interpreted and correctly applied the bid specification pertaining to the calculation of monthly preventive maintenance costs for the Type I/Class 1 and Type I/Class 1-A categories and that the Department's bid specification requiring a selenium drum for the Type I/Class 4 and Type IV/Class 5 System A categories was a reasonable one, it is unnecessary to reach, and this Recommended Order does not reach the question of whether Petitioner complied or failed to comply with the requirements of Chapter 112, Florida Statutes.
The Issue The issue in this case is whether the Department of Transportation (DOT) acted correctly in deeming the bid of Nippon Carbide Industries (NCI) to be nonresponsive.
Findings Of Fact The bid specifications called for reflective sheeting for the production of roadway signs by DOT. Included in the bid specifications for the reflective sheeting bid was a specification contained in Section 4.1 that required the process inks be one component that required no pre-mixing and air dried in four hours or less. A document contained in NCI’s bid, identified as an “Order Worksheet,” contained the following: PLEASE NOTE: 3800 Series inks are supplied as a set with 80 grams of 3630 hardener. 3800 Series inks are pre-thinned for proper viscosity. If thinning is required, use 3811 or turpentine. 3800 series inks have a pot life of five hours after mixing. The NCI bid reference to mixing the 3800 Series inks with the 3630 hardener and that the ink and hardener were supplied as a set concerned the reviewers. Mixing the 3800 Series inks with the 3630 hardener did not meet the specifications of the bid requiring no component pre-mixing. Immediately following the bid opening and preliminary review on June 10, 1998, the reviewers (composed of Lisa Sweet, Contract Manager in the Purchasing Office; Chris Warren, Manufacturing Operations Engineer for the DOT Sign Shop; and Randall Wainwright, Manager of DOT Sign Shop) were present when Sweet telephoned NCI’s National Technical and Marketing Director (Director) to ask for clarification of the bid documents. NCI’s Director advised the group during the telephone conversation that the process inks bid by NCI required mixing and volunteered to provide mixing instructions. Following the telephone conversation, the Director faxed to DOT a three-page document, a cover letter from the Director referencing the telephone call, and two pages of mixing instructions. Both the telephone conversation with the Director on June 10, 1998, and the mixing instructions provided by the Director to DOT on the same day, confirmed the belief of DOT personnel that that NCI’s bid did not conform to the bid specifications and should be deemed nonresponsive. NCI subsequently contacted DOT on several occasions beginning on June 11, 1998, to indicate that it may have provided the wrong information regarding the process inks. On June 12, 1998, NCI’s Director faxed to DOT a letter stating that the mixing instructions were in error and requested a meeting with key personnel DOT before June 19, 1998, the bid award posting date. The June 12, 1998, letter contained instructions as well. Although the reference to mixing the process ink with a hardener was deleted, the instructions contained information on how to store the process inks and hardener. This new information was in conflict with the previous information and inconclusive in establishing that NCI’s process inks met the requirement for one component ink that did not require mixing. DOT did not consider the information provided in the June 12, 1998, letter in its decision to deem NCI’s bid nonresponsive and award the bid to 3M. NCI requested a meeting with DOT’s Procurement Office, which took place on June 17, 1998. Unable to convince DOT that its bid was responsive, NCI then requested a meeting with DOT administrative officials. On June 18, 1998, NCI representatives met with the DOT’s Assistant Secretary for Transportation Policy and the State Highway Engineer. NCI again attempted to persuade DOT that its process inks did not have to be mixed with the hardener and the use of the hardener was merely an option, even though the ink and hardener are supplied as a set. The use of inks with hardener in the production of roadway signs in the Sign Shop would require a change in the production process not contemplated by the bid specifications, nor desired by DOT. Nevertheless, following the meeting, DOT considered screening NCI’s Process inks without the hardener to determine if the NCI inks met the one component ink bid specification. Under the arrangement, NCI was to provide the ink and reflective sheeting so that the inks could be screened onto the sheeting at the Sign Shop under normal production circumstances and ambient conditions, not under artificially controlled conditions in an independent lab that would not simulate the actual production process environment. In a series of correspondence with DOT employees, NCI raised objections to the type of testing and test protocols to be employed by DOT. Ultimately NCI failed to provide the inks and sheeting for testing in a timely manner and the testing was never conducted. Dr. Eugene Janulis provided unrefuted expert testimony at final hearing that the deletion of hardener from NCI’s 3800- Series inks would raise serious concerns about the durability, weather resistance, and colorfastness of the inks. Dr. Janulis is a research chemist with over 15 years of experience in developing and testing of traffic control materials. He holds, or is co-holder of, 13 patents, and has authored numerous scientific articles pertaining to the chemical and elemental properties of reflective traffic control materials. Janulis testified that NCI’s 3800-Series inks were developed as a two-component reactive ink system which rely upon a chemical reaction between the ink and the hardener to form a “cross linking” chemical bond. A single component, nonreactive ink, has polymers that are high in molecular weight with known durability. Alternatively, the multi-component, reactive system with its cross-links to a second component has resultant effect on the mechanical and physical properties of the two component ink where viscosity builds up in the ink, eventually rendering the ink no longer screen printable. Consequently that is why the NCI 3800 Series inks have a limited pot life after mixing of five to six hours. The fact that NCI calls the 3630 substance a hardener indicates it was placed in the ink system to cause cross-linking. The cross-linking enables the ink system to build viscosity. If you simply delete the use of the hardener, you have a new, different polymer system than when you use the ink and hardener. The primary detriment of a coating’s durability is the polymer matrix and how the pigment in that polymer matrix resists fading. When you change the polymer you no longer have the same system. By not cross-linking, not making the polymer hard, you are making the polymer softer. With a softer polymer, there will be an accelerated degradation mechanism on the surface of the ink and a faster loss of retro-reflectivity performance. As a result, the ink system’s ultimate durability is not known. It is not the same process ink that is warranted by NCI when used with the 3630 hardener. On June 30, 1998, DOT determined to post the bid award to 3M and declare NCI’s bid nonresponsive. There was no bias or prejudice on behalf of DOT against NCI.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Respondent, the Department of Transportation, enter a final order awarding the bid to Intervenor, Minnesota Mining and Manufacturing, Inc. DONE AND ENTERED this 19th day of November, 1998, in Tallahassee, Leon County, Florida. DON W. DAVIS 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 Filed with the Clerk of the Division of Administrative Hearings this 19th day of November, 1998. COPIES FURNISHED F. Alan Cummings, Esquire Alejandro Espino, Esquire Cummings, Thomas and Snyder, P.A. 1004 DeSoto Park Drive Tallahassee, Florida 32301 Geoffrey Smith, Esquire Blank, Rigsby and Meenan, P.A. 204 South Monroe Street Tallahassee, Florida 32301 Brian McGrail, Esquire Department of Transportation Haydon Burns Building 605 Suwannee Street, Mail Station 58 Tallahassee, Florida 32399-0450 James C. Myers, Agency Clerk Department of Transportation Haydon Burns Building 605 Suwannee Street, Mail Station 58 Tallahassee, Florida 32399-0450 Pamela Leslie, General Counsel Department of Transportation Haydon Burns Building 605 Suwannee Street, Mail Station 58 Tallahassee, Florida 32399-0450
Findings Of Fact Dr. Curtis J. McCall, Jr., is licensed by the Florida Board of Chiropractic Examiners to practice chiropractic in Florida. At all times material hereto he has been so licensed. In June 1978, Dr. McCall filed in the United States District Court for the Northern District of Florida a document entitled "The Declaration of the Chiropractic Adjuster General of the United States of America CAP-USAF". Since that time Dr. McCall has assumed the self-created title of Chiropractic Adjuster General of the United States of America (CAG). The purpose of the office is to lobby the United States government to recognize the chiropractic healing arts and to provide the medical benefits which cover government employees, both civil and military, include professional chiropractic healing. In carrying out his goal Dr. McCall has written to every imaginable federal official, from the President of the United States to the acting Deputy Assistant Secretary of Defense (Health Resources and Programs), who might have any function relating to government health care. In his correspondence with these federal officials Dr. McCall has used stationery which represents himself as the CAG. He uses the stationery only for his lobbying activities. He has separate professional stationery for corresponding with his patients and the public. Dr. McCall has never used his CAG stationery to correspond with members of the public. The only time that Dr. McCall used his CAG stationery for other than lobbying was on May 14, 1980, when he wrote a letter to Dr. Ronald L. Harris as President of the Board of Chiropractic Examiners. This letter was a complaint alleging that an organization called Soma Institute was practicing chiropractic in the State of Florida without a license. It was this letter which brought Dr. McCall's self-appointed title of CAG to the attention of Petitioner. Except as "created" by Dr. McCall there is no office called the Chiropractic Adjuster General of the United States of America. In between two bookcases and behind his desk at his professional offices at 811 Grace Avenue, Panama City, Florida, Dr. McCall displays a seal of the CAG. The seal is approximately 4 to 5 inches in diameter and is a copy of the seal imprinted on Dr. McCall's stationery, a copy of which is attached hereto as Appendix A. While the seal behind Dr. McCall's desk was observed by Mr. William Taylor, an investigator for the Department, there is no evidence to show that this seal is seen by Dr. McCall's patients or by members of the public. Dr. McCall is sincere in the creation of the Office of the CAG. He does not employ the title to falsely enhance his ability as a chiropractor. He has instead been a one-man crusade for the recognition of the chiropractic art by the United States government. Dr. McCall does not use the title CAG in his practice of the chiropractic profession. He does use the title only as a private citizen petitioning his government for a change in its politics.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED: That the Board of Chiropractic Examiners enter a final order dismissing the Amended Administrative Complaint against Dr. Curtis J. McCall, Jr. DONE and RECOMMENDED this 13th day of October, 1981, in Tallahassee, Florida. MICHAEL PEARCE DODSON 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 13th day of October, 1981.
