The Issue The issue for determination is whether the Intervenor was properly qualified to complete the construction project contemplated by Invitation to Bid No. DCF-03211120 (ITB)
Findings Of Fact The Department issued the ITB for a construction project, involving the re-roofing of Buildings 1 and 2 at 12195 Quail Roost Drive, Miami, Florida. The ITB was published in the Florida Administrative Weekly on December 24, 2008. The ITB outlined the terms and conditions for responsive bids. The ITB indicated, among other things, that all sealed bids were required to be submitted at 401 NW 2nd Avenue, S-714, Miami, Florida 33128, by January 15, 2009, at 2:00 p.m. Leo Development submitted its sealed bid at the location and by the date and time, in accordance with the ITB. FBM submitted its sealed bid by the date and time, but at a different location—the offices of Russell Partnership— contrary to the ITB. All other bidders submitted their sealed bids at the location and by the date and time, in accordance with the ITB. The Department’s architect of record on the project, Russell Partnership, and one of its principals, Terry Holt, performed the examination and bid tabulation. Mr. Holt, a registered architect for approximately 36 years, was very familiar with the procurement process and had extensive experience in determining whether a bidder was licensed by DBPR in order to complete the work contemplated for a project. The sealed bids submitted at 401 NW 2nd Avenue, S-714, Miami, Florida 33128, on or before January 15, 2009, at 2:00 p.m. were as follows: All Time Roofing, with a bid of $73,400.00; Taylor Roofing, with a bid of $59,708.00; Leo Development, with a bid of $54,109.00; John W. Hunter Enterprises, with a bid of $75,000.00; and Trintec Construction, with a bid of $75,500.00. 9. FBM’s bid was $71,600.00. Mr. Holt determined that Leo Development was the lowest bidder. FBM’s bid was not considered as being non-responsive. Additionally, Mr. Holt reviewed Leo Development’s website to ascertain as to whether any factors existed to disqualify Leo Development. The website failed to reveal any basis for Mr. Holt to disqualify Leo Development. Having discovered no basis to disqualify Leo Development as the lowest bidder, Mr. Holt submitted the list of bidders, with their bids, to Bill Bridges, the Department’s senior architect and a registered architect for approximately 25 years. Mr. Bridges was the person responsible for oversight of the ITB process. As Leo Development was the lowest bidder, Mr. Bridges reviewed the website of the Florida Department of State, Division of Corporations (Division of Corporations) in order to ensure that Leo Development was registered with the Division of Corporations. His review revealed that Leo Development was a fictitious name properly registered to Leo Premier Homes, LLC. Further, Mr. Bridges performed a license background check on Leo Development in order to ensure that Leo Development was licensed by DBPR. Mr. Bridges reviewed DBPR’s website, which revealed that Frank Anthony Leo was the owner of Leo Development and that the following licenses were issued by DBPR: Qualified Business Organization License #QB50182 to Leo Premier Homes, LLC, Leo Development; Certified Building Contractor License #CBC1254723 to Frank Anthony Leo, Leo Development; and Certified Roofing Contractor License #CCC1328402 to Frank Anthony Leo, Leo Development. Mr. Bridges confirmed and was satisfied that Leo Development was properly licensed to complete the work contemplated by the ITB. Mr. Bridges recommended that Leo Development be awarded the ITB as the lowest responsive bidder. FBM filed a written protest (Initial Protest) of “its exclusion from the bid tabulation.” The Department issued a Final Order Rejecting Bid Protest (Final Order) on February 19, 2009. The Final Order provided in pertinent part: FBM was determined non-responsive because the bid was not presented at the time and place specified in the ITB. . . FBM’s formal written protest alleges that FBM, on the date of the bid submission/bid opening, was misdirected as to the location of the bid opening. . . . FBM’s protest must be rejected because it does not state a claim that could entitle it to relief. . . In the context of a bid protest proceeding . . . the protest must adequately allege that the protestor could obtain the contract award or otherwise benefit should the protest be successful. . . Assuming all of FBM’s factual allegations are true and that those facts entitle FBM to have its bid considered, FBM would still be entitled to no relief. Had FBM’s bid been accepted, FBM would have been the third lowest of six bidders. FBM’s formal protest does not allege that the lowest and second lowest bids were deficient in any manner. FBM was not injured in fact, because it still would not have received the contract award. Accordingly, FBM’s formal written protest is REJECTED. No appeal was taken by FBM of the Department’s Final Order rejecting FBM’s Initial Protest. Among other findings, the Department’s Final Order on FBM’s Initial Protest found that, taking FBM’s allegations as true, FBM would have been the third lowest bidder. FBM would not have been the second lowest bidder. The parties agree that the holder of a certified building contractor’s license and a certified roofing contractor license would be permitted to complete the work contemplated by the ITB. Subsequent to the opening of the sealed bids, Leo Premier Homes, LLC, registered the fictitious name of Leo Roofing & Construction with the Division of Corporations. After the registration with the Division of Corporations and after the Department’s Final Order, licenses were issued by DBPR. As to the licenses issued, the record of the instant case provides2: Qualified Business Organization License #QB50182 to Leo Premier Homes, LLC, Leo Roofing & Construction; Certified Building Contractor License #CBC1254723 to Frank Anthony Leo, Leo Roofing & Construction; and Certified Roofing Contractor License #CCC1328402 to Frank Anthony Leo, Leo Roofing & Construction. The licenses reflect the same license numbers, as before, and only the fictitious name is different on each license to indicate Leo Roofing & Construction.3 The contract for the ITB was entered into between the Department and Leo Development. In these proceedings, the Department incurred costs in the amount of $1,311.05.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Children and Family Services enter a final order dismissing FBM General Contracting Corporation’s Protest and awarding costs in the amount of $1,311.05 to the Department of Children and Family Services. DONE AND ENTERED this 21st day of August 2009, in Tallahassee, Leon County, Florida. ERROL H. POWELL 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 21st day of August, 2009.
The Issue Whether the Second Amended Notice of Driveway Modification, in which Respondent, Florida Department of Transportation (“FDOT”), seeks to modify the driveway used by Petitioners, John Majka, individually and on behalf of Harry E. Miller, and Intervenor, JPM Ventures, Inc. (“JPM”), is consistent with sections 335.181, 335.182, and 335.1825, Florida Statutes, and Florida Administrative Code Rules 14-96.011 and 14-96.015; and whether FDOT engaged in conduct in violation of section 120.569(2)(e).
Findings Of Fact Background and Existing Driveway FDOT is the state agency responsible for regulating access to the state highway system, which includes SR 80. § 335.182, Fla. Stat. Based on a request by Lee County’s Metropolitan Planning Organization (“MPO”), FDOT began designing plans to build a four to five mile shared use path for pedestrians and bicyclists along SR 80 (“Project”). In that area, SR 80 is a class three road with a 45 mph speed limit. Petitioners’ property is within the Project and uses a 98-foot wide, unpermitted driveway to access SR 80. The Estate of Harry Miller owns the easternmost parcel on which the entire driveway and an office building are located. Mr. Majka’s business, JPM Ventures, is a licensed motor vehicle dealer and uses the Miller parcel as both an office (the right half of the building) and to store recreational vehicles, such as motor homes, campers, and trailers. Mr. Majka owns the three adjacent parcels to the west and leases those parcels to Superior Sheds, which sells sheds that are delivered to and picked up from the property on large trucks. Superior Sheds uses the 3 As detailed in Orders dated October 21, 2020, and November 10 and 30, 2020, the undersigned made extraordinary efforts to accommodate Petitioners throughout this case, including granting several extensions to file their PRO. But, instead of doing so, Petitioners’ representative spent that time filing numerous motions raising untimely and already- rejected issues while arguing that he was too sick to file the PRO. The Orders denied Petitioners’ motions and explained that the undersigned could no longer acquiesce to these improper efforts to delay the resolution of this case. Miller parcel as an office (the left half of the building) and to access SR 80 via the driveway, and uses the Majka parcels to store its sheds. The following photo taken in January 2018 depicts the driveway and the two business’s operations, which are delineated by the two dotted-lined boxes: Petitioners’ driveway has been in existence since at least the 1960s and remains unchanged today. Aerial photographs from 1986 and 1990 confirm the presence of a building on the Miller parcel, the driveway in its current form, and the Majka parcels being used for what appears to be parking or storage. Mr. Majka purchased his parcels in 1998 and has been using the driveway continuously since. JPM Ventures has operated on the Miller parcel and Superior Sheds has operated on the Miller and Majka parcels since as early as 2015. Superior Sheds uses a paved pathway so its trucks can travel between the Majka parcels, where the sheds are stored, and the driveway. Based on the weight of the credible evidence, Petitioners’ driveway has existed and been continuously used since 1988. Though the vehicles and/or storage containers located on the Majka parcels may vary and a pathway was paved on the Majka parcels to allow for easier access to the driveway, the evidence did not establish significant changes to the buildings, facilities, or overall use of the property that “caus[ed] an increase in the trip generation of the property exceeding 25 percent more trip generation (either peak hour or daily) and exceeding 100 vehicles per day more than the existing use,” as required by section 335.182(3)(b). The Project and Proposed Modifications to Petitioners’ Driveway Based on the MPO’s request, FDOT began planning for the Project in 2014. FDOT retained AIM Engineering to design the Project. Ms. Ratican, an AIM employee, is one of the engineers of record on the Project. FDOT identified 24 driveways along the Project that required modification. In late 2017, FDOT’s project manager, Mr. Weeks, went door-to-door along SR 80 to try to meet with as many property owners as possible and discuss the Project. FDOT thereafter sent certified letters to all property owners to notify them about any proposed modifications to their driveway. On December 7, 2017, FDOT issued its Notice advising Petitioners of its plans to modify the driveway to improve safety and operations along SR 80. FDOT sought to reduce the driveway width from 98 feet to a design standard of 24 feet. Upon receipt, Mr. Weeks met on site with Mr. Majka. At the time of the 2017 meeting and as depicted in the following photograph, there was a covered parking spot in front of the left half of the building (Superior Sheds’ office), but there were neither defined parking spots with painted lines along the front of the right half of the building (JPM Ventures’ office) nor a fence next to the covered parking spot that separated the two business operations: Mr. Majka objected to the smaller driveway and requested a hearing. FDOT transmitted the Notice to DOAH and it was assigned Case No. 18-4433. While that case was pending at DOAH, the parties engaged in numerous discussions to try to reach an amicable resolution. In July 2018, Mr. Weeks, several FDOT employees, and a state Senator’s aides met Mr. Majka on site to discuss the proposed modifications. Mr. Majka presented a PowerPoint and argued that the driveway could not be modified because it was grandfathered. At that time, there were no parking spots with painted lines or a fence perpendicular to the front of the building; vehicles simply parked diagonally or parallel to SR 80 in that area. Over the next few months, FDOT proposed several options for driveway widths between 30 and 53 feet, relocating the driveway to the east side of the Miller parcel, creating a second driveway on the Majka parcels, and others. Petitioners rejected each of them. In January 2019, after jurisdiction in the prior case was relinquished for failing to properly serve the Miller Estate, FDOT served its Amended Notice. FDOT now sought to modify the driveway to improve safety and operations on SR 80 as part of a sidewalk project. FDOT proposed a non- standard driveway width of 53 feet. Petitioners objected and requested a hearing, which began the instant case. At some point between July 2018 and April 2019, and while on notice of FDOT’s intent to modify the driveway, Petitioners made changes to the paved lot in front of the building. They added lined parking spaces perpendicular to the front of the building and a fence extending beyond the new parking spots that divided the two business operations. The following photograph taken in April 2019 depicts these changes: Petitioners apparently had not obtained a permit to add the parking spaces, which may not have even been possible because the spaces are so close to the property line that vehicles would have to use FDOT’s right-of-way—i.e., a large portion of the paved lot between the bottom of the parking spaces and the top of the shared use path, as shown in the diagram in paragraph 17 below—in order to back out of the parking spaces and exit the property. Notwithstanding, FDOT attempted to design subsequent proposals with minimal impacts to those parking spaces to appease Petitioners and their existing business operations. In May 2019, FDOT Southwest District Secretary L.K. Nandam met with Mr. Majka and his professional engineer, Mr. Trebilcock, to discuss Petitioners’ concerns with the Amended Notice, which were outlined in an Access Connection Report (“ACR”) prepared by Mr. Trebilcock in April 2019. The ACR focused on the two business operations and on site circulation problems that allegedly would exist due to the size of the trucks using the driveway. To alleviate those problems, the ACR proposed retaining the existing 98 feet of pavement, but utilizing a 45-foot-wide, double-yellow-lined area to limit the operational width of the driveway to 53 feet. The meeting resulted in additional proposals by FDOT and another phone call between Secretary Nandam, Mr. Majka, and Mr. Trebilcock. FDOT created another proposal that sought to address Petitioners’ concerns and use information they provided as to the size of the trucks. Based on Petitioners’ request for all of the engineers to meet, FDOT facilitated a meeting at its Southwest District office with Mr. Majka, Mr. Trebilcock, several FDOT employees, Ms. Ratican, and her supervisor. Because the latest proposal did not address all of their concerns, Petitioners rejected it. In August 2019, FDOT served a Second Amended Notice, on which the final hearing proceeded. As corrected, it proposes the following design: FDOT seeks to modify the driveway to improve safety and operations on SR 80 as part of a 10-foot-wide shared use path project. The decision to revert back to a shared use path was made by the MPO at a public meeting. FDOT proposes a non-standard driveway width of 53 feet, which is about 15 to 20 feet wider than a standard design for this portion of SR 80 and larger than any other modified driveway within the Project. A mountable, five-inch-tall type E curb outlines a triangular concrete island on the right side of the driveway, which larger trucks can slowly drive over to maneuver on site. A non-mountable, six-inch-tall type F curb extends from the concrete island to the property line, discouraging vehicles from driving over it and crossing the shared use path. FDOT also moved the shared use path closer to SR 80 in this proposal to accommodate the trucks that Petitioners claimed visited the property frequently and granted Petitioners an 11-foot area to circulate vehicles within FDOT’s right-of-way, which minimizes interference with Petitioners’ newly-created, lined parking spaces. Based on the weight of the credible evidence, FDOT’s proposed modifications are necessary to improve the safety and operational characteristics of SR 80. The existing driveway is hazardous to pedestrians and bicyclists using the shared use path. It is as wide as an eight-lane highway and contains no barrier to protect those crossing it. Vehicles can enter and exit the driveway at high speeds and at multiple angles, which creates numerous conflict points and confusion for pedestrians and bicyclists who have little time to react. By reducing the driveway width to 53 feet and utilizing mountable and non-mountable curbs, FDOT has reduced the speed with which vehicles can enter and exit the property, prevented vehicles from driving through the shared use path beyond the driveway, limited conflict points, and lessened the risk of confusion for pedestrians and bicyclists. A safety report prepared by AIM, which was signed and sealed by Ms. Ratican, conducted a crash assessment along the Project corridor for the prior five years. It revealed 750 crashes, seven of which involved pedestrians and bicyclists. Although no crashes occurred at this driveway, the report found FDOT’s design would reduce the risk of crashes by 70 percent, decrease the time it takes pedestrians and bicyclists to cross the driveway by 38 percent, and improve their awareness of vehicles using the driveway. And, though FDOT is allowing a driveway that is wider than standard, the design will reduce the risk associated therewith and enhance pedestrian safety through the use of curbs. Petitioners presented no credible evidence to suggest that FDOT’s proposed design would not improve safety or the operational characteristics of SR 80. Indeed, Mr. Trebilcock offered no specific testimony on this subject. Petitioners instead focused on how FDOT’s proposal purportedly failed to provide them with reasonable access. But, they conceded in pleadings that FDOT’s design arguably constituted reasonable access and they presented no credible evidence disputing the reasonableness of FDOT’s proposed reduction in the width of the driveway to 53 feet. Petitioners will maintain the same number of access connections and the evidence showed that the trucks that Petitioners claim frequent the site can safely enter and exit the property from either direction on SR 80. The modifications simply will neither impact the ability of vehicles to enter and exit the property safely nor affect roadway traffic patterns. Nevertheless, Mr. Trebilcock opined that reasonable access will be lacking because FDOT’s design will cause multiple problems on site. Specifically, trucks must drive over mountable curbs, through existing parking spaces and fences, and over pervious surfaces, which could create permitting issues. The weight of the evidence established otherwise. It is true that FDOT’s design may cause trucks to have to maneuver on site differently than before. But, that is expected given the reduction in the width of the driveway. The potential issues identified by Mr. Trebilcock do not prevent access, but rather create reasonable limitations that would only arise (if at all) once the vehicles are on site. FDOT also took into account information provided by Petitioners as to the types of trucks that regularly visit the property. FDOT used auto-turn software to demonstrate how the trucks could safely enter and exit the property and maneuver on site. FDOT’s witnesses explained that the auto- turn exhibits illustrate one way that the vehicles could maneuver on site and that additional maneuvering could be performed to avoid the parking spots, fences, and pervious surfaces. The weight of the credible evidence also undermined testimony as to the purported problems that FDOT’s design will cause on site. As to interference with the lined parking spaces, Petitioners created the very problems about which they are complaining because they installed them with knowledge of the Project, including FDOT’s intent to reduce the width of the driveway. Additionally, photographs introduced by Petitioners into evidence show that JPM Ventures already uses the pervious surface along the right side of the Miller parcel to park vehicles it has for sale—the same pervious surface that Mr. Trebilcock testified could create permitting issues if vehicles had to traverse over it to maneuver on site. Mr. Trebilcock also testified extensively as to two alternative designs that he believed were equally safe, but avoided any issues on site. First, he proposed the following design that retained the original 98 feet of pavement, but utilized a double-yellow-lined area to reduce the operational width of the driveway to 53 feet: Second, Mr. Trebilcock proposed the following design that essentially retained the original 98 feet of pavement, but used a truck apron with a three-inch tall, RA mountable curb to reduce the operational width of the driveway to 53 feet: Mr. Trebilcock testified that this design aligned with the recommendation in the AIM safety report to use a truck apron. Mr. Trebilcock acknowledged that vehicles could drive over either the double-yellow-lined paved area or the truck apron and RA curb. But, he opined that both were just as safe as FDOT’s design because they created separation between the driveway and the shared use path and forced vehicles to reduce their speed. Because the vehicles could make similar movements to enter and exit the property as they could with the existing driveway, the alleged on-site problems he identified would be avoided. However, Ms. Ratican credibly explained why these two designs were not as safe. She believed the first design provided less protection because there was no physical separation between the driveway and the shared use path except for the painted lines, which could be driven over without slowing down. She believed the second design was safer than the first, but still provided less protection because vehicles could drive over the three-inch RA curb more easily and at a faster speed than the five-inch type E curb in FDOT’s design. Further, despite the fact that the conclusion section of FDOT’s safety assessment report recommended a truck apron, she confirmed that the design exhibits included within the report and attached to the Second Amended Notice clearly use a type E curb. She confirmed that FDOT never proposed a truck apron for this driveway. In sum, the weight of the credible evidence showed that Petitioners’ existing driveway is unsafe and poses a safety risk for pedestrians and bicyclists using the shared use path. FDOT’s proposal is a safe design that substantially reduces that risk consistent with the operational characteristics of SR 80, and continues to provide Petitioners with reasonable access. Although Petitioners prefer their alternative designs, they pose a greater safety risk to users of the shared use path. Petitioners also challenge the proposed modifications based on alleged procedural failures.4 However, the evidence was to the contrary. 4 Petitioners also have repeatedly argued that the Project as a whole should not occur, that this case was prematurely brought because the Project lacks federal approval and/or funding, that FDOT failed to comply with the National Environmental Policy Act (“NEPA”), and that FDOT submitted a different driveway design to the SFWMD to obtain an environmental resource permit for the Project, among other arguments. Because jurisdiction in this case is limited to determining if FDOT’s proposed driveway modifications are consistent with the design and safety standards under Florida law and provide Petitioners with reasonable access, arguments as to why the Project is ill-advised and whether it will ever be funded or approved by federal or other governmental agencies are not addressed herein. Petitioners questioned the validity of the exhibits attached to the Second Amended Notice because they were not signed and sealed by a professional engineer. Ms. Ratican and her design team at AIM prepared the exhibits on FDOT’s behalf. Ms. Ratican acknowledged that they were not signed and sealed by her or another engineer of record, but that was because they were preliminary in nature. She confirmed that the final plans would be signed and sealed once this case was resolved. Petitioners also argued that FDOT failed to hold a public hearing in violation of section 335.199. Throughout the Project’s development, the MPO and FDOT worked together. The MPO and other local government entities have held numerous public meetings, at which FDOT employees attended. Mr. Majka has attended many of them, too. In fact, he has made over 30 presentations to the various entities about both the Project and the proposed modifications to Petitioners’ driveway. The MPO also received substantial public input and approved revisions to the Project based thereon. FDOT has conferred with Petitioners multiple times and adjusted its proposed modifications based on the input received. The weight of the credible evidence established that FDOT received substantial input about the Project generally from the public’s involvement at the MPO and about Petitioners’ driveway specifically from the multiple meetings with Mr. Majka and his engineer. Lastly, Petitioners have repeatedly argued that FDOT acted in bad faith in seeking to modify their driveway and, as such, should be sanctioned. Contrary to Petitioners’ argument, there is no credible evidence to find that FDOT’s pleadings, positions, or other actions in this case were made in bad faith or for an improper purpose, as required by section 120.569(2)(e). Mr. Trebilcock testified that he did not believe FDOT acted in bad faith or for an improper purpose with any of its proposals. Although he believed FDOT initially failed to understand the business operations on site and the process could have gone better, he testified that FDOT’s proposals improved after it received more information and further input from him and Mr. Majka. The weight of the credible evidence established that FDOT made extraordinary efforts to take Petitioners’ concerns into account and revised its proposed modifications numerous times in a good faith effort to accommodate their individual needs. FDOT employees met on site with Mr. Majka twice and at FDOT’s office once. FDOT employees engaged in multiple conversations with Mr. Majka by telephone and e-mail. The district secretary had two meetings with Mr. Majka and his engineer, in person and over the phone. FDOT’s proposed modifications provide for a driveway that is significantly wider than any other within the Project corridor and provides for an 11-foot area within FDOT’s right-of-way to assist Petitioners with circulation on their property—an accommodation only one other owner received because he agreed to two driveways on his property, which Petitioners rejected when offered. FDOT not only treated Petitioners fairly, but accommodated them more than the other property owners.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Transportation enter a final order approving the proposed modifications to Petitioners’ driveway connection as outlined in the Second Amended Notice. DONE AND ENTERED this 15th day of January, 2021, in Tallahassee, Leon County, Florida. S ANDREW D. MANKO 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 15th day of January, 2021. COPIES FURNISHED: John Majka 18700 Old Bayshore Road Fort Myers, Florida 33917 (eServed) David Tropin, Assistant General Counsel Florida Department of Transportation 605 Suwannee Street, Mail Station 58 Tallahassee, Florida 32399 (eServed) Austin M. Hensel, Assistant General Counsel Florida Department of Transportation 605 Suwannee Street, Mail Station 58 Tallahassee, Florida 32399 (eServed) Amber Greene, Clerk of Agency Proceedings Department of Transportation Haydon Burns Building 605 Suwannee Street, Mail Station 58 Tallahassee, Florida 32399-0450 (eServed) Kevin J. Thibault, P.E., Secretary Department of Transportation Haydon Burns Building 605 Suwannee Street, Mail Station 57 Tallahassee, Florida 32399-0450 (eServed) Sean Gellis, General Counsel Department of Transportation Haydon Burns Building 605 Suwannee Street, Mail Station 58 Tallahassee, Florida 32399-0450 (eServed)
Findings Of Fact Based on the stipulations of the parties, on the exhibits received in evidence, on the testimony of the witnesses at the hearing, and on the deposition testimony received in evidence, I make the following findings of fact: On October 30, 1985, the Florida Department of Transportation ("FDOT") received and opened sealed bids on State Project Number 72270-3431, in Duval County, Florida. Five bids were submitted for this project. The lowest bid, in the amount of $6,235,948.35, was submitted by Hubbard Construction Company ("Hubbard"). The amounts of the other bids were as follows: the second low bidder, $6,490,796.91; the third low bidder, $6,519,447.90; the fourth low bidder, $7,470,941.74; and the fifth low bidder, $7,477,038.49. All bids submitted were more than seven per cent over FDOT's estimate of the project price. The two lowest bids also appeared to be unbalanced and, as set forth in more detail below, the Hubbard bid was in fact unbalanced in several particulars. It is FDOT policy to give special review to bids that are more than seven per cent above the estimated price of the project. All bidders were made aware of this policy by the following language on the first page of the Notice To Contractors: Bidders are hereby notified that all bids on any of the following projects are likely to be rejected if the lowest responsive bid received exceeds the engineer's estimate by more than seven per cent (7 percent). In the event any of the bids are rejected for this reason, the project may be deferred for readvertising for bids until such time that a more competitive situation exists. Upon review of the bids submitted on the subject project, FDOT decided to reject all bids. By notices dated December 6, 1985, all bidders were advised that all bids were rejected. The stated reasons for the rejection of all bids were as follows: All bids were too high; the apparent first and second low bidder's bids were unbalanced and the apparent first low bidder failed to meet the WBE Requirements. Hubbard submitted its formal written protest to the FDOT regarding the proposed rejection of its bid on the subject project on January 3, 1986. This protest was made pursuant to Section 120.53, Florida Statutes (1985), the instructions to bidders and bid information provided by the Department, and rules of the Department, including Rules 14-25.04 and 14-25.05, Florida Administrative Code. Unbalancing occurs when a contractor puts a higher price on a particular item of work in the project in anticipation of using more of that item than the FDOT has estimated will be required. Unbalancing can also occur when a lower than estimated price is placed upon a particular item. When a bid appears to be unbalanced, the bid is submitted to the Technical Awards and Contract Awards committees for review. In this case, the FDOT's preliminary estimate personnel discovered six items that were unbalanced within Hubbard's bid. The first item of concern was an asphalt base item for which the FDOT's estimate was $4.00 per square yard and the Hubbard bid was $19.29 per square yard. The second item was clearing and grubbing for which FD0T's estimate was $50,000 and Hubbard's bid was $200,000. The third item was removal of existing structures for which FDOT's estimate was $190,762 and Hubbard's bid was $38,000. The fourth item was installing new conductors for which FDOT's estimate was $251,000 and Hubbard's bid was $141,000. The fifth item was removal of existing pavement for which FDOT's estimate was $78,000 and Hubbard's bid was $153,000. Finally, the sixth item was surface asphalt items for which FDOT's estimate was $98,000 and Hubbard's bid was $169,000. The FDOT has a policy that any bid that is seven per cent or more over the estimate will go before the Awards Committee for review. Further, the FDOT has a policy that whenever the bids are more than seven per cent higher than the estimate, the FDOT's Bureau of Estimates will then review their estimate and the apparent low bidder's bid to determine whether the original estimate was correct. The FDOT maintains a Women's Business Enterprises ("WBE") program. The FDOT's program requires that successful bidders provide for participation of women owned and controlled business in FDOT contracts. The program is implemented by the setting of so-called "goals" for certain projects. The goal is stated as a percentage of the total dollar bid for each project. Thus, the WBE goal for a project requires that the bidder utilize FDOT certified WBE's in constructing the project to the extent that the FDOT's goal is a percentage of the total bid. The FDOT has implemented rules to effectuate its WBE program. Rule 14- 78, Florida Administrative Code (amended effective May 23, 1984). In submitting a bid, the rules offer the bidder the option of meeting the WBE goals or submitting proof of a good faith effort to meet the goal and if a good faith effort is sufficient, the FDOT may waive the goal. The FDOT's bid package and specifications, as furnished to contractors, in no place referred to the Department's rule providing that only 20 percent of the amount of subcontracts with WBE suppliers shall count toward the goals on Federal aid projects. The specifications clearly state that WBE suppliers may be counted toward the goals. The specifications as furnished by the Department also imply that the 20 percent rule applies only to non-federal aid jobs. The project in question in this case is a Federal aid project. There is a conflict between the rule and the language of the specifications which creates an ambiguity in the specifications, as well as a trap for the unwary bidder who overlooks the requirements of the rule. The FDOT is in the process of amending the specifications to make them conform to the rule. The Special Provisions contained within the bid specifications established certain minority participation goals for this project--ten per cent for Disadvantaged Business Enterprises (DBE) and three per cent for Women Business Enterprises (WBE). FDOT personnel analyzed the bid documents submitted by Hubbard according to the criteria set forth at Rule 14-78, Florida Administrative Code, and determined that Hubbard exceeded the DBE goal but failed to meet the WBE goal. Hubbard's WBE participation was two per cent. All other bidders on the project met both of the DBE and WBE goals. When Hubbard submitted its bid on this project, Hubbard thought that it had complied with the three per cent WBE goal by subcontracting 3.5 per cent of the contract price to WBE certified firms. However, 2 per cent of the contract price was to be subcontracted to a WBE for supplies to be furnished by a WBE who was not a manufacturer. Accordingly, when the 20 per cent rule discussed above was applied to that 2 per cent, the total amount of WBE participation which could be counted toward Hubbard's compliance with the rule was approximately 2 per cent, which was less than the 3 per cent goal. Once it was determined that Hubbard had failed to meet the WBE goal, FDOT personnel analyzed Hubbard's good faith efforts package pursuant to Rule 14-78, Florida Administrative Code. Hubbard's good faith efforts package failed to demonstrate that Hubbard had taken sufficient action in seeking WBE's to excuse its failure to meet the WBE goal for this project. Similarly, Hubbard's evidence at the hearing in this case was insufficient to demonstrate that Hubbard had taken sufficient action in seeking WBE's to excuse its failure to meet the WBE goal for this project. Most telling in this regard is that all four of the other bidders on this project were successful in meeting or exceeding the DBE and WBE goals.
Recommendation For all of the foregoing reasons, it is recommended that the Florida Department of Transportation issue a Final Order rejecting all bids on Federal Aid Project No. ACIR-10-5 (76) 358 (Job No. 72270-3431). DONE AND ORDERED this 24th day of March 1986, at Tallahassee, Florida. MICHAEL M. PARRISH Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 FILED with the Clerk of the Division of Administrative Hearings this 24th day of March 1986. APPENDIX TO RECOMMENDED ORDER IN DOAH CASE NO. 86-0O24BID The following are my specific rulings on each of the proposed findings of fact submitted by each of the parties. Rulings on findings proposed by the Petitioner, Hubbard Construction Company The substance of the findings of fact proposed by the Petitioner in the following paragraphs of its proposed findings have been accepted and incorporated into the findings of fact in this Recommended Order: 1, 2, 3, 4, 5, and 8. The substance of the first sentence of paragraph 6 is accepted. The remainder of paragraph 6 is rejected as an unintelligible incomplete statement. Paragraph 7 is rejected as not supported by competent substantial evidence. (The Standard Specifications for Road and Bridge Construction were not offered in evidence.) Paragraph 9 is rejected for a number of reasons, including not being supported by competent substantial evidence, being to a large part irrelevant, being predicated in part on an erroneous notion of which party bears the burden of proof, and constituting in part legal argument rather than proposed findings of fact. The first and third sentences of paragraph 10 are accepted in substance. The second and fourth sentences of paragraph 10 are rejected as irrelevant. The last sentence of paragraph 10 is rejected as irrelevant and as not supported by competent substantial evidence. Paragraph 11 is rejected as irrelevant and as including speculations which are not warranted by the evidence. Paragraph 12 is rejected as irrelevant and as including speculations which are not warranted by the evidence. Paragraph 13 is rejected as not supported by competent substantial evidence and as being contrary to the greater weight of the evidence. Rulings on findings proposed by the Respondent, Department of Transportation The substance of the findings of fact proposed by the Respondent in the following paragraphs of its proposed findings have been accepted and incorporated into the findings of fact in this Recommended Order: 1, 2, 3, 4, 5, 6, 7, and 8. Paragraph 9 is rejected as irrelevant. COPIES FURNISHED: John E. Beck, Esquire 1026 East Park Avenue Tallahassee, Florida 32301 Larry D. Scott, Esquire Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32301-8064 Thomas Drawdy, Secretary Department of Transportation Mail Station 57 605 Suwannee Street Tallahassee, Florida 32301-8064
Findings Of Fact In August 1985, the Department issued a Request for Proposal (RFP), State Project Number RFP-DOT-85-06, for a demonstration bonding assistance program. The program was authorized in 1985 by Congress, using Federal Highway Administration funds, to assist economically and socially disadvantaged business enterprises (DBEs) to meet the bonding requirements mandated on public works projects, and thereby increase their participation in the bid process. Consistent with existent agency policy, and Section 287.057(16), Florida Statutes, the RFP provided: A selection committee of at least three members will be established to review and evaluate each proposer's response to this Request for Pro- posal and subsequently decide the preference order of the proposers. In response to the RFP, the Department received six proposals. The evidence established that it is Department policy to submit the proposals to a "technical review committee," comprised of three members for evaluation of the technical responsiveness of the proposals, and to an employee of the Department's Bureau of Contractual Services to evaluate the cost responsiveness of the proposals. In this case, the proposals were submitted to a "technical review committee" consisting of two members and to an employee of the Department's Bureau of Contractual Services. The "technical review committee" separately evaluated and scored the technical responsiveness of each proposal, and reported their scores to an Operations and Management Consultant, with the Department's Bureau of Minority Programs. 1/ The Consultant did not evaluate the proposals. He merely averaged the scores of the two members of the "technical review committee," added the cost responsiveness of the proposals received from the Department's Bureau of Contractual Services, and prepared a summary evaluation package for the "Selection Committee." The evaluation package ranked the proposals by score. The "Selection Committee" consisted of the Department's Secretary (Thomas E. Drawdy), Deputy Assistant Secretary (Mel Hilliard), and Director of the Division of Administration (Bruce Gordon). Mr. Gordon, based on the scores set forth in the evaluation package, recommended, and the Committee concurred, that Boone's proposal be accepted. Mr. Gordon did not review any of the proposals submitted in response to the RFP. Kenneth L. Sweet, one of the evaluators on the "technical review committee," is an engineer for the Department's Bureau of Construction. While steeped with a broad range of technical and engineering experience, Mr. Sweet lacked knowledge of the requisites to successfully secure a bonding commitment.
The Issue The issues are whether the specifications in two requests for architectural and construction management services violate Subsection 120.57(3)(f), Florida Statutes (2003), for the reasons alleged in two written protests.
Findings Of Fact Petitioner is a general contractor/construction management firm in the State of Florida. The firm maintains its principal office in Tampa, Florida, and provides construction management services throughout the state. The state previously certified Petitioner as a certified minority business enterprise (MBE), and that certification remains current. Mr. Paul Curtis is the president and chief executive officer (CEO) of Petitioner, a majority shareholder, and an African-American. Petitioner's president and CEO is licensed by the state as a general contractor, underground utilities and excavation contractor, pollutant storage systems and specialty contractor, and specialty structures contractor. However, Petitioner does not employ any person qualified to provide architectural services. Respondent is a local school district of the state. Respondent is responsible for the construction, renovation, management, and operation of the public schools in Hillsborough County, Florida. Respondent routinely obtains the services of architects, engineers, and other professionals through competitive procurement in accordance with Section 287.055, Florida Statutes (2003), the Consultants' Competitive Negotiation Act (CCNA). On December 30, 2003, Respondent posted on its website, a request for proposals (RFP) for architectural and construction management services. On January 20, 2004, Respondent posted a second RFP for architectural and construction services. The two RFPs seek architectural services and construction management services incident to the construction or expansion of approximately 12 public schools (the project). The proposed budget for the project is approximately $66.37 million. Respondent seeks to complete the projects to comply with minimum class-size requirements recently imposed by the state. Petitioner did not submit responses to either RFP at issue in this proceeding. Rather, Petitioner protested the specifications in each RFP. On January 5 and 20, 2004, Petitioner timely served Respondent with respective notices of intent to protest each RFP. On January 15 and February 2, 2004, Petitioner timely served Respondent with a formal written protest of each RFP. Petitioner alleges that each RFP is deficient for identical reasons. First, the RFPs allegedly violate the requirement in Subsection 120.57(3)(a), Florida Statutes (2003), to notify potential bidders that failure to protest the specifications in each RFP within the statutorily prescribed time, waives their right to protest either RFP (the statutory notice). Second, the RFPs allegedly fail to adequately disclose selection criteria used to select a successful applicant. Third, the RFPs allegedly violate MBE guidelines in Subsection 287.055(3)(d), Florida Statutes (2003). Fourth, the evaluation criteria are allegedly confusing or ambiguous and make it impossible to determine the basis upon which Respondent awards points. Finally, Respondent allegedly failed to consider the recent volume of work of each applicant in violation of Subsections 287.055(3)(d) and (4)(b), Florida Statutes (2003). Neither RFP includes the statutory notice. Subsection 120.57(3)(a), Florida Statutes (2003), requires Respondent to provide the statutory notice in any notice of decision or intended decision (notice of decision). Florida Administrative Code Rule 28-110.002(2)(a) defines a notice of decision to include the RFPs. Subsection 120.57(3), Florida Statutes (2003), requires Respondent to "use the uniform rules of procedure" prescribed in Florida Administrative Code Rule 28-110.002. Each RFP is a notice of decision that omits the required statutory notice in violation of Subsection 120.57(3)(a), Florida Statutes (2003). Respondent's violation of Subsection 120.57(3)(a), Florida Statutes (2003), did not result in any injury in fact to Petitioner. Petitioner received actual notice of each RFP and timely protested each RFP. Respondent issued the RFPs and partially evaluated the responses to them in accordance with a procedure prescribed in a publication that the parties identified in the record as Chapter 7.00 of the School Board Policies and Procedures Manual (the Policy Manual). In general, the Policy Manual requires a Professional Services Selection Committee (the Committee) to conduct at least two rounds of evaluation before Respondent can select a successful applicant. During the first round, each member of the Committee evaluates each application in accordance with the evaluation criteria prescribed in a Project Information Packet incorporated by reference in the RFP and made available to each applicant. Each Committee member assigns a point total for each response (a score). The Committee then designates a threshold score that an applicant must attain in order to advance to the second round of evaluation that involves face-to-face interviews. The Committee prepares a list of those applicants that attain scores sufficient to advance to the second round of evaluation. The parties identified as the "short list," the list of applicants that qualify for the second round of evaluation. In practice, the short list usually includes more than three applicants thereby necessitating a third round of interviews. Once the Committee prepares the short list, Respondent issues a second notice of decision within the meaning of Subsection 120.57(3)(a), Florida Statutes (2003). Respondent sends the notice to all applicants that submitted a response to an RFP. The second notice of decision informs each applicant of the applicant's score and identifies those applicants selected to advance to the second round of evaluation. The second notice of decision includes the statutory notice required in Subsection 120.57(3)(a), Florida Statutes (2003). The deadline for submitting applications in response to the first RFP was January 16, 2004. By January 15, 2004, Respondent had received approximately 30 applications from architects and approximately 30 applications from construction managers. By January 15, 2004, the Committee had evaluated the responses it had received and determined a short list. Respondent had notified the applicants of their respective scores and identified those applicants selected for interviews in the second round of evaluations. When Petitioner filed a written protest of the first RFP, Respondent suspended further evaluations of the applicants pursuant to Subsection 120.57(3)(b), Florida Statutes (2003). Respondent notified bidders of the short list prior to the deadline for filing responses to the RFPs on January 16, 2004. The written protests do not challenge Respondent's issuance of an apparently premature notice of decision. Petitioner submitted no relevant findings of fact or conclusions of law in its PRO concerning Respondent's practice. Nor did the PRO cite to any evidence of record to support a finding concerning Respondent's practice. The deadline for submitting applications in response to the second RFP was February 6, 2004. Petitioner filed a written protest on February 2, 2004. Respondent stopped accepting applications in response to the second RFP in accordance with Subsection 120.57(3)(b), Florida Statutes (2003). The specifications for each RFP adequately disclose selection criteria to prospective applicants, including criteria to be used for interviews during the second round of evaluation. Petitioner's PRO includes no findings of fact or conclusions of law relevant to this issue. Nor does the PRO cite to any evidence of record that supports a finding concerning the issue. The two RFPs disclose selection criteria to prospective applicants in the same manner. Each RFP includes the following statement: Any applicant interested in providing either architectural or construction management services shall make application by submission of materials prescribed in the Project Information Packet. The Project Information Packet, additional project information, and the weights associated with each qualification and evaluation criteria can be obtained by contacting the Planning & construction Office at (813)272-4112 or via the Internet. . . . Each RFP contains a separate Internet address. Respondent published the foregoing statement in three area newspapers and on Respondent's official website. Petitioner received notice of the RFPs on the official website. The Project Information Packets include a list of the members of the Committee, a summary of Respondent's procedures for acquiring professional services, a two-page chart of the evaluation criteria, and a selection activity schedule. Respondent made the Project Information Packets available to prospective applicants in hard copy and electronically on Respondent's official web site. The Project Information Packets adequately identify and describe evaluation criteria and the weight assigned to each criterion, including those to be used during interviews. The evaluation criteria are not confusing or ambiguous. The language used to describe the criteria does not make it impossible for prospective applicants to determine the basis upon which the Committee will award points. Petitioner's PRO includes no findings of fact or conclusions of law relevant to this issue. Nor does the PRO cite to any evidence of record to support a finding that the criteria are confusing or ambiguous. DOAH previously approved Respondent's selection criteria. In RHC & Associates, Inc. v. Hillsborough County School Board, DOAH Case No. 02-3138RP (October 11, 2002), ALJ T. K. Wetherell, II, concluded that the Policy Manual is a valid exercise of delegated legislative authority. In RHC & Associates, Inc. v. Hillsborough County School Board, DOAH Case No. 02-4668BID (January 3, 2003), ALJ Wetherell concluded that the specification factors and weight assigned to each, comply with the CCNA and are not otherwise arbitrary, capricious, or contrary to competition. After the decisions in the two RHC cases, Respondent slightly adjusted the weights given to certain criteria in order to increase minority and small business participation. Respondent made the adjustments after consulting with the NAACP. In relevant part, Respondent increased the weight given for an applicant's resume from 20 to 25 points. Respondent increased the weight given for recent volume of business with Respondent from 5 to 10 points. Respondent decreased the weight given for Project/Applicant Correlation from 25 to 15 points. The changes to the weights assigned to certain evaluation criteria after the two RHC cases comply with the CCNA, are not confusing or ambiguous, and do not make it impossible for prospective applicants to determine the basis for awarding points. The specifications for each RFP do not violate MBE guidelines in Subsection 287.055(3)(d), Florida Statutes (2003). Petitioner's PRO includes two proposed findings relevant to this issue. The two proposed findings are correct, but not material. Respondent has no practice or procedure in place to certify prospective applicants as MBEs. Rather, Respondent registers an applicant as an MBE if the applicant has been certified as an MBE by another agency. Both public and private agencies, sometimes for a fee to private consultants, certify MBE firms. The National Minority Association certifies companies as MBEs for a fee. Subsections 287.055(3)(d) and (4)(b), Florida Statutes (2003), contain no express requirement for Respondent to independently certify applicants as MBEs. The former provision requires Respondent to evaluate whether an applicant is a certified MBE. The latter provision requires Respondent to determine whether an applicant is qualified based on prescribed factors that include certification as an MBE. Petitioner cites no legal precedent that authorizes the ALJ to construe either statutory provision to require Respondent to independently certify applicants for either RFP. Petitioner cites no other legal authority to support its allegation that Respondent must independently certify applicants as MBEs. Respondent's policy of accepting MBE certifications by other agencies and private companies is reasonable. Independent certification would be redundant and a waste of taxpayer resources. Respondent relies on a company identified in the record as Morrison & Associates to conduct background checks on every applicant claiming to be certified as an MBE. In addition, Respondent's Office of Supplier Diversity maintains certification information for new contractors and subcontractors. The Office of Supplier Diversity confirmed for the Committee that each applicant claiming to be an MBE was in fact certified as an MBE. The Committee awards each applicant with an MBE certification the maximum number of points in that category. If Petitioner were to have submitted an application for either RFP, the Committee would have awarded Petitioner the maximum number of points available for MBE certification. Respondent properly determined the volume of work of each applicant in accordance with Subsections 287.055(3)(d) and (4)(b), Florida Statutes (2003). Respondent defines the phrase "recent volume of work" to mean the dollar amount of work performed for Respondent as a construction manager or architect within five years of the date of determination. Respondent awards the maximum number of points to applicants who have not performed any work for Respondent in the previous five years. Respondent determines recent volume of work based on information that does not include work performed by subcontractors. Petitioner has performed work for Respondent in the past, but only as a subcontractor. Petitioner last performed work for Respondent approximately seven years ago. If Petitioner were to have submitted an application for either RFP, the Committee would have awarded Petitioner the maximum number of points for recent volume of work. The information that the Committee would have reviewed would not have identified the work previously performed by Petitioner as a subcontractor. Moreover, the work was performed more than five years ago. Petitioner is a nonprevailing adverse party within the meaning of Section 120.595, Florida Statutes (2003). Petitioner failed to change the outcome of Respondent's proposed use of the RFPs to obtain construction and architectural services for the project. Petitioner did not participate in the proceeding for an improper purpose. The issue of whether Respondent must include the statutory notice in the RFP specifications is a justiciable issue of law. Petitioner's participation in this proceeding was not for a frivolous purpose. Respondent is the prevailing party in this proceeding. Respondent did not submit evidence concerning the amount of attorney's fees and costs that Respondent incurred to defend the written protests or the reasonableness of those fees and costs.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Respondent issue a Final Order dismissing the two protests. DONE AND ENTERED this 1st day of July, 2004, in Tallahassee, Leon County, Florida. S DANIEL MANRY 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 1st day of July, 2004. COPIES FURNISHED: W. Crosby Few, Esquire Few & Ayala 501 East Kennedy Boulevard, Suite 1401 Tampa, Florida 33602 Arnold D. Levine, Esquire Levine, Hirsch, Segall, Mackenzie & Friedsman, P.A. 100 South Ashley Drive, Suite 1600 Tampa, Florida 33602 Thomas Martin Gonzalez, Esquire Thompson, Sizemore & Gonzalez 501 East Kennedy Boulevard, Suite 1400 Post Office Box 639 Tampa, Florida 33602 Dr. Earl J. Lennard, Superintendent Hillsborough County School Board Post Office Box 3408 Tampa, Florida 33601-3408 Honorable Jim Horne, Commissioner of Education Department of Education Turlington Building, Suite 1514 325 West Gaines Street Tallahassee, Florida 32399-0400
Findings Of Fact The Florida Department of Transportation (hereinafter "DOT") advertised for bids on State Project No. 72190-3530 in Duval County, Florida, with the bids to be closed on June 19, 1985. The notice to contractors and the special provisions included with the bid package provided that the subcontractor participation goal for the project for firms owned and controlled by Disadvantaged Business Enterprises (hereinafter "DBE") was eight percent and for firms owned and controlled by Women Business Enterprises (hereinafter "WBE") was two percent of the total contract bid for that traffic signal installation and resurfacing project. In response to that advertisement for bids, Regency Electric Contracting Company (hereinafter "Regency") submitted a bid of $571,561.86 for the project. Mike Hunter, Inc.; Traffic Control Devices, Inc.; and Wiley N. Jackson Company also submitted bids for that project. Regency was the apparent low bidder. The bid submitted by Regency proposed to utilize 6.21 percent DBE subcontractors and .39 percent WBE subcontractors. Mike Hunter, Inc., proposed to utilize 5.4 percent DBE subcontractors and 2.8 percent WBE subcontractors. Traffic Control Devices, Inc., proposed to utilize 9.8 percent DBE subcontractors and 2.6 percent WBE subcontractors. Wiley N. Jackson proposed to utilize 39.9 percent DBE subcontractors and 2.7 percent WBE subcontractors. DOT, after reviewing the bids, issued a notice of switch in apparent low bidder for the project based upon the failure of Regency to achieve the DBE/WBE project goals and failure to submit documentation of good faith efforts to achieve those goals. Since Mike Hunter, Inc., (the second lowest bidder), also failed to achieve the project's DBE/WBE goals, DOT declared Traffic Control Devices, Inc. (the third lowest bidder), to be the low responsible bidder with its bid of $660,240.47 which is $88,678.61 more than the bid submitted by Regency. The 9.8 percent DBE participation proposed by Traffic Control Devices, Inc., was achieved by allocating a portion of the electrical work being performed by Traffic Control Devices, Inc., to a single DBE subcontractor at a price which was approximately double that proposed to be charged by Regency utilizing its own forces. W & T Enterprises, Inc., is the sole DBE subcontractor proposed to be utilized by Traffic Control Devices, Inc. Although W & T is a North Carolina corporation, it is certified by DOT as a DBE subcontractor for participation in contracts awarded by DOT. W & T qualified to transact business in the State of Florida on August 4, 1980, but its permit to transact business in Florida was revoked on December 16, 1981 for failure to file the annual report as required by law. Since that time, W & T has not re-qualified itself to do business in Florida, and W & T cannot now qualify to do business in Florida since there is now a Florida corporation under the name of W & T Enterprises, Inc. which is not affiliated with the North Carolina corporation, so that that name is no longer available in the State of Florida. Further, the North Carolina W & T Enterprises, Inc. is not registered under a fictitious name in Seminole County where it is alleged to maintain an office. Since Regency's Utilization Form No. 1 reflected that Regency had failed to achieve either the DBE or the WBE goals required for the project, an evaluation was made by DOT's "good faith efforts" review committee of Regency's "good faith efforts" documentation required to be submitted with its bid. In an attempt to evidence "good faith efforts" Regency submitted with its bid a one-page note which lists the DBE and WBE firms contacted by Regency. Regency only contacted a total of ten potential subcontractors and did not contact all of the potential subcontractors in any of the possible areas of subcontracting. The note further fails to indicate when the solicitations were made or that the solicitations were made at least seven days prior to the bid letting. Further, the few solicitations that were made were done by telephone and not by certified mail, return receipt requested, or by hand-delivery with a receipt. There is no evidence to indicate what information was given in the solicitations or that Regency offered to assist the firms contacted with preparation of their quotes, with review of the bid package, or with the obtaining of any required bonding or insurance. Lastly, none of the quotes obtained from any of the DBE or WBE firms contacted were attached to Regency's bid. DBE goals and WBE goals are established by DOT on a project-by-project basis. The evidence in this cause indicates that there were a number of facets to the project including, for example, grassing, asphalt/concrete, barricades/signs, guard rails, signalization and striping. Although one of Regency's witnesses who was not qualified as an expert made the statement that there was an insufficient amount of work available for subcontracting in the project, no specifics were offered as to the basis for that opinion other than the fact that Regency did not choose to subcontract any of the signalization work. No evidence was offered to show what portions of the project involved other-than-signalization work what portion of the project involved materials, or why no portion of the signalization should be subcontracted other than that witness's testimony that loop assembly work proposed to be subcontracted to W & T Enterprises Inc., by Traffic Control Devices, Inc., doubled the price of that portion of the work over Regency's estimate of the costs to do the loop assembly using Regency's own forces. Further, two of the four bidders were able to allocate sufficient portions of the project to subcontractors to meet the DBE goals set by DOT for the project, and three of the four bidders met the WBE goals.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is, therefore, RECOMMENDED that a Final Order be entered declaring the bid of Regency Electric Contracting Company on State Project No. 72190-3530 nonresponsive, rejecting that bid, and dismissing with prejudice Regency's formal protest of intent to award a contract. DONE and ORDERED this 1st day of November, 1985, at Tallahassee, Florida. Hearings Hearings LINDA M. RIGOT, Hearing Officer Division of Administrative The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative this 1st day of November, 1985. APPENDIX TO RECOMMENDED ORDER, CASE NO. 85-2820 The following proposed findings of fact of Regency Electric Contracting Company have either been adopted verbatim or have been adopted as modified to conform to the evidence: 3-6 and 16-19. The following proposed findings of fact of Regency Electric Contracting Company have been rejected as not constituting findings of fact but as constituting either argument of counsel or conclusions of law: 1, 2, 13-15, and 20. The following proposed findings of fact of Regency Electric Contracting Company have been rejected as unnecessary: 7-12. The following proposed findings of fact of the Department of Transportation have either been adopted verbatim or have been adopted as modified to conform to the evidence: 1, 4, 7, and 8. The following proposed findings of fact of the Department of Transportation have been rejected as not constituting findings of fact but as constituting either argument of counsel or conclusions of law: 2, 3, 6, and 11. The following proposed findings of fact of the Department of Transportation have been rejected as unnecessary: 5, 9, and 10. The following proposed finding of fact of the Department of Transportation has been rejected as not being supported by any evidence: 12. COPIES FURNISHED: Larry D. Scott, Esquire Department of Transportation Haydon Burns Building Tallahassee, Florida 32301 Ronald W. Brooks, Esquire 863 East Park Avenue Tallahassee, Florida 32301 Thomas Drawdy, Secretary Department of Transportation Haydon Burns Building, M.S.-58 Tallahassee, Florida 32301
Findings Of Fact Petitioner, M & J Construction Company of Pinellas County, Inc. (M & J) is a contractor prequalified to bid on FDOT construction projects in excess of $250,000. Mayo Contracting, Inc. (Mayo) is a contractor prequalified to bid on FDOT construction projects in excess of $250,000. Bid solicitation notices for state project no. 75280-3416 were mailed out to prospective bidders, including M & J, on August 26, 1994; and bid packages were mailed to firms requesting them on September 26, 1994. M & J received a bid package. On September 28, 1994, bids were submitted for a bridge repair contract in Orange County. Mayo submitted the lowest bid for the contract in the amount of $426,860.75 which was $54,060.05 lower than the second low bidder. M & J submitted the third lowest bid for the contract in the amount of $499,103.40. (Exhibit 5) The bid documents included the following notice which is printed in two different places in the bid package; once in double spaced bold capital letters, and once in standard size font. UNLESS OTHERWISE NOTIFIED IN WRITING, RETURN RECEIPT, THE SUMMARY OF BIDS FOR THIS PROJECT WILL BE POSTED WITH THE CLERK OF AGENCY PROCEED- INGS, FLORIDA DEPARTMENT OF TRANSPORTATION, 605 SUWANEE STREET, ROOM 562, TALLAHASSEE, FLORIDA 32399-0458, ON OCTOBER 20, 1994 OR NOVEMBER 7, 1994. BY CALLING THE CLERK OF AGENCY PROCEEDINGS, FLORIDA DEPARTMENT OF TRANSPORTATION, (904) 488-6212, DURING EACH POSTING PERIOD, INFORMATION CONCERNING THE POSTED PROJECTS CAN BE OBTAINED. INTERESTED PARTIES THAT HAVE A COMPUTER AND A MODEM CAN ACCESS INFORMATION FROM THE CONTRACTS ADMINISTRATION ELECTRONIC BULLETIN BOARD CONCERNING PROJECTS WHICH WERE POSTED WITH THE CLERK OF AGENCY PROCEEDINGS DURING EACH POSTING PERIOD BY DIALING (904) 922-4158 OR 922-4159. POSTING WILL PROVIDE NOTICE OF THE DEPARTMENT'S INTENT TO AWARD A CONTRACT OR TO REJECT ALL BIDS. THE DEPARTMENT'S NOTICE OF INTENT REGARDING THIS PROJECT WILL BE POSTED ON ONLY ONE OF THE ALTERNATE POSTING DATES. BIDDERS ARE SOLELY RESPONSIBLE FOR TIMELY MONITORING OR OTHERWISE VERIFYING ON WHICH OF THE SPECIFIED ALTERNATE POSTING DATES THE POSTING OF AWARD OR REJECTION OF ALL BIDS ACTUALLY OCCURS. (Exhibits 1 and 2). This notice is included in all FDOT bid packages. M & J has been bidding for FDOT contracts for seven years and submits approximately 40 bids to FDOT per year. M & J admits it did not heed the notices in the bid documents advising bidders that (1) the posting dates identified in the bid documents would not be changed unless written notice was provided, and (2) that the bidders are solely responsible for monitoring the posting dates. Mr. Boutzoukas and Mr. Leone said they were aware that the bid documents contained information regarding posting but they did not made any special note of the time frames nor did they double check after Mr. Leone's conversation with an FDOT employee. The day after the bid was submitted, M & J personnel became concerned about some alleged irregularities in the bid specifications or the bidding process. Mr. Leone called the FDOT contract office to find out the posting date. He is not certain of the identity of the person with whom he spoke, but he believes that it was Michael Schafenacher because of his "distinct, eloquent voice". The FDOT staff person, according to Mr. Leone, told him the posting was November 17 or December 5, 1994. This information was in conflict with the printed information in the bid package described in paragraph 5, above. No one at M & J bothered to look at the dates in the bid package, either before or after the telephone call to FDOT. Instead, Mr. Leone put the November 17/December 5 dates on the office chalkboard and continued with his investigation of the alleged irregularities, as directed by Mr. Boutzoukas. On October 20, 1994, consistent with the requirements of Section 120.53, F.S. and as provided in the notices in the bid packages, FDOT posted the notice of intent to award the contract to Mayo. On or about November 4, 1994, during the course of collecting data on the project, Mr. Boutzoukas realized that posting must have already occurred. He told Mr. Leone to call FDOT again and they then learned that the posting had occurred on October 20. Michael Schafenacher has worked in the FDOT contracts administration office for nine years. He maintains the critical dates chart for various projects and is involved in the pre- and post-bidding process. He and at least four or five other staff respond to numerous telephone inquiries each day regarding dates and the posting process. He remembers the early November call from M & J but nothing sooner, and he does not believe that he would have given erroneous dates from the critical dates chart. The chart reflects the same dates for the project as stated in the bid packages. FDOT keeps track of its contracts by the "letting" date, that is, the month in which bids are opened for a particular project. The project at issue, No. 75280-3416, was in the September letting. Mr. Schafenacker keeps his critical dates chart taped to his desk for easy reference. With or without the letting date, Mr. Schafenacher can quickly and easily find dates in response to telephone inquiries. If Mr. Schafenacher had given the wrong dates and had been told that the dates were inconsistent with the bidding documents, he would have investigated further to resolve the discrepancy. FDOT did not change the dates for the award of the project at issue; if it had, M & J and the other bidders would have received written notice. When there was no timely protest after the October 20 letting, FDOT awarded the contract to Mayo on or about October 26, 1994. As soon as it found out on November 4th that the bid was let, M & J filed its notice of protest by FAX on November 4, 1994. It did not follow up this notice with a formal protest, but rather filed a document called "Request for Opportunity to Protest More than Ten Days after the Post of the Intent to Award Bid, on or about November 30, 1994, after discussions with FDOT's legal staff. At no time did M & J file a protest bond. M & J's reliance on erroneous verbal information by an unidentified FDOT employee was unreasonable since M & J had the proper information readily in hand and ignored it. M & J waived its right to protest the bid award when it failed to timely file notice of the protest, a proper protest bond or a formal protest.
Recommendation Based on the foregoing, it is hereby RECOMMENDED: That the Florida Department of Transportation enter its final order denying the bid protest of M & J. DONE AND ENTERED this 24th day of January, 1995, in Tallahassee, Florida. MARY CLARK 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 24th day of January, 1995. APPENDIX The following constitute specific rulings on the findings of fact proposed by the parties. Petitioner's Proposed Findings M & J filed a memorandum and a four paragraph order. The findings proposed in that order are rejected as unsupported by the weight of evidence. However, the finding proposed in paragraph 3 is adopted to the extent that it establishes that M & J filed a notice as soon as it learned from FDOT that the bid was let on October 20. Respondent's Proposed Findings 1. Adopted in paragraph 3. 2.-4. Adopted in paragraph 5. Adopted in paragraph 3. Adopted in paragraph 5. Rejected as unnecessary. 8. Adopted in paragraph 1. 9. Adopted in paragraph 6. 10.-11. Rejected as unnecessary. 12.-13. Adopted in substance in paragraph 6. 14. Adopted in paragraph 3. 15.-16. Adopted in substance in paragraph 7. 17. Adopted in paragraph 11. 18.-20. Adopted in paragraph 12. 21. Adopted in paragraph 11. 22. Rejected as unnecessary. 23. Adopted in paragraph 12. 24. Adopted in paragraph 13. 25. Adopted in substance in paragraph 16. 26.-27. Adopted in paragraph 14. 28.-29. Adopted in paragraph 15. 30. Adopted in paragraph 14. 31. Adopted in paragraph 15. 32. Adopted in paragraph 16. Intervenor's Proposed Findings 1.-7. Adopted in paragraphs 1-6. Adopted in paragraph 7. Adopted in paragraph 9. Adopted in paragraph 14. 11.-12. Adopted in paragraph 15. COPIES FURNISHED: Michael E. Boutzoukas, Esquire Post Office Box 2731 Dunedin, Florida 34697-2731 Thomas H. Duffy, Esquire Department of Transportation 605 Suwannee Street Tallahassee, Florida 32399-0450 Mary M. Piccard, Esquire Post Office Box 589 1004 DeSoto Park Drive Tallahassee, Florida 32302-0589 Ben G. Watts, Secretary ATTN: Deidre Grubbs Department of Transportation Haydon Burns Building, MS 58 605 Suwanee Street Tallahassee, Florida 32399-0450 Thornton J. Williams, General Counsel Department of Transportation 562 Haydon Burns Building Tallahassee, Florida 32399-0450
Findings Of Fact After the Department of Transportation (DOT) proposed to reject its bid on State Project, Job No. 97860- 3319 as unresponsive, for failure to meet a women's business enterprise (WBE) goal, and failure to document good faith efforts to reach the goal, Capeletti initiated substantial interest proceedings, Capeletti Brothers, Inc. and State Paving Corporation vs. Department of Transportation and John Mahoney Construction Company, Inc., No. 85-3003, contending that it had made good faith efforts to meet the goal and that it had adequately documented the efforts; that the second low bidder had not met the goals; that DOT treated the goals as quotas; and that the DOT committees who evaluated the bids met in violation of the Sunshine Law. At the hearing in the present case, the parties stipulated that Capeletti's "bid was rejected because of noncompliance with Rule 14-78.03 as it relates to women's business enterprises and for noncompliance with the bid specifications which incorporated those provisions. The rule provisions under challenge read, in pertinent part: 14-78.03 General Responsibilities. In furtherance of the purpose of this rule chapter, the Department shall establish overall DBE and WBE goals for its entire DBE one WBE program. In setting the overall goals the Department shall consider the following factors: the number and types of contracts to be awarded by the Department; the number, capacity, and capabilities of certified DBEs and VBEs likely to be available to compete for contracts let by the Department; and the past experience of the Department in meeting its goals and the results and reasons therefore. To implement its DBE and WBE goal program the Department may: . . . (b) establish contract goals on each contract with subcontracting opportunities for certified DBEs and WBEs The Department shall establish separate contract goals for firms owned and controlled by socially and economically disadvantaged individuals and for firms owned and controlled by women. In setting contract goals, the Department shall consider the following factors: the type of work required by the contract to be let; the subcontracting opportunities in the contract to be let; the estimated total dollar amount of the contract to be let; and the number, capacity and capabilities of certified DBEs and WBEs. For contracts with an estimated total dollar amount of $1,000,000 or less, the contract goals shall not exceed 50 percent of the identified potential for DBE and WBE participation. For contracts with an estimated total dollar amount of $1,000,000, the contract goals shall not exceed 75 percent of the identified potential for DBE and WBE participation. For all contracts for which DBE and WBE contract goals have been established, each bidder shall meet or exceed or demonstrate that it could not meet, despite its good faith efforts, the contract goals set by the Department. The DBE and WBE participation information shall be submitted with the contractor's bid proposal. Award of the contract shall be conditioned upon submission of the DBE and WBE participation information with the bid proposal and upon satisfaction of the contract goals or, if the goals are not met, upon demonstrating that good faith efforts were made to meet the goals. Failure to satisfy these requirements shall result in a contractor's bid being deemed nonresponsive and the bid being rejected. DOT proposes to deem Capeletti's bid nonresponsive forits conceded failure to meet a WBE goal and for the alleged failure to document good faith efforts to meet the goal. Citation Deleted In the course of the adoption of amended Rule 14- 78.03, Florida Administrative Code, Bjarne B. Andersen, Jr., an attorney on the staff of the Joint Administrative Procedures Committee, wrote Ms. Margaret-Ray Kemper, DOT's Deputy General Counsel, on January 22, 1985, with reference to amended Rule 14-78.03, stating: Sections 339.05 and 339.081, F.S., contain no specific rulemaking authority . . . while we do agree that the rule appears in part to implement s.339.05, F.S., as amended by Ch. 84-309, L.O.F.; we do not believe this "assent to Federal aid" is specific rule authority. It is at best implied authority. The day before a DOT employee (who, counsel represented at hearing, is not a lawyer) had written Ms. Elizabeth Cloud, Bureau Chief, Bureau of Administrative Code and Laws, Department of State, as follows: Based upon a telephone conversation with Mr. Bjarne B. Andersen, Jr. of the Legislative Joint Administrative Procedures Committee and further legal review by our office, we request that the . . . "law implemented" be amended to . . . [delete reference to Section 339.05, Florida Statutes (1984 Supp.)] In an internal memorandum dated March 8, 1985, DOT's Deputy General Counsel set out DOT's legal position in these words: Subpart A of 49 CFR, Part 23, defines minority persons . . . The definition of minority does not include women. However, women are encompassed within the definition of minority business enterprise which is defined as a small business concern owned and controlled by one or more minorities or women. 49 CFR, 23.5. 49 CFR, Part 23, Subpart C, sets forth general requirements for all recipients of federal funds. Among those requirements is a policy statement to be included in every financial assistance agreement affirming a commitment to MBE/DBE participation in contracts financed in whole or in part with federal funds. Also required is a MBE/DBE affirmative action program which must be incorporated by reference into financial assistance agreements. The program is made "a legal obligation and failure to carry out its terms shall be treated as a violation of this financial assistance agreement." 49 CFR, S23.43(b). The goal program is one of the required WBE/DBE program components. 49 CFR, S23.45(g). . . . However, although women are included within the definition of MBEs, 49 CFR, Part 23, Subpart C, requires recipients to establish separate overall and contract goals for firms owned and controlled by minorities and firms owned and controlled by women. 49 CFR, 23.45(g)(4). The memorandum relies exclusively on 49 CFR, Part 23, Subpart C, 23.45(g)(4) as authority for Florida's WBE program, citing no federal or state statutes as authority.
The Issue The threshold issue in this case is whether the decisions giving rise to the dispute, which concern the allocation and disbursement of funds appropriated to Respondent by the legislature and thus involve the preparation or modification of the agency's budget, are subject to quasi-judicial adjudication under the Administrative Procedure Act. If the Division of Administrative Hearings were possessed of subject matter jurisdiction, then the issues would be whether Respondent is estopped from implementing its intended decisions to "de- obligate" itself from preliminary commitments to provide low- interest loans to several projects approved for funding under the Community Workforce Housing Innovation Pilot Program; and whether such intended decisions would constitute breaches of contract or otherwise be erroneous, arbitrary, capricious, or abuses of the agency's discretion.
Findings Of Fact Petitioners Pasco CWHIP Partners, LLC ("Pasco Partners"); Legacy Pointe, Inc. ("Legacy"); Villa Capri, Inc. ("Villa Capri"); Prime Homebuilders ("Prime"); and MDG Capital Corporation ("MDG") (collectively, "Petitioners"), are Florida corporations authorized to do business in Florida. Each is a developer whose business activities include building affordable housing. The Florida Housing Finance Corporation ("FHFC") is a public corporation organized under Chapter 420, Florida Statutes, to implement and administer various affordable housing programs, including the Community Workforce Housing Innovation Pilot Program ("CWHIP"). The Florida Legislature created CWHIP in 2006 to subsidize the cost of housing for lower income workers performing "essential services." Under CWHIP, FHFC is authorized to lend up to $5 million to a developer for the construction or rehabilitation of housing in an eligible area for essential services personnel. Because construction costs for workforce housing developments typically exceed $5 million, developers usually must obtain additional funding from sources other than CWHIP to cover their remaining development costs. In 2007, the legislature appropriated $62.4 million for CWHIP and authorized FHFC to allocate these funds on a competitive basis to "public-private" partnerships seeking to build affordable housing for essential services personnel.1 On December 31, 2007, FHFC began soliciting applications for participation in CWHIP. Petitioners submitted their respective applications to FHFC on or around January 29, 2008. FHFC reviewed the applications and graded each of them on a point scale under which a maximum of 200 points per application were available; preliminary scores and comments were released on March 4, 2008. FHFC thereafter provided applicants the opportunity to cure any deficiencies in their applications and thereby improve their scores. Petitioners submitted revised applications on or around April 18, 2008. FHFC evaluated the revised applications and determined each applicant's final score. The applications were then ranked, from highest to lowest score. The top-ranked applicant was first in line to be offered the chance to take out a CWHIP loan, followed by the others in descending order to the extent of available funds. Applicants who ranked below the cut-off for potential funding were placed on a wait list. If, as sometimes happens, an applicant in line for funding were to withdraw from CWHIP or fail for some other reason to complete the process leading to the disbursement of loan proceeds, the highest-ranked applicant on the wait list would "move up" to the "funded list." FHFC issued the final scores and ranking of applicants in early May 2006. Petitioners each had a project that made the cut for potential CWHIP funding.2 Some developers challenged the scoring of applications, and the ensuing administrative proceedings slowed the award process. This administrative litigation ended on or around November 6, 2008, after the parties agreed upon a settlement of the dispute. On or about November 12, 2008, FHFC issued preliminary commitment letters offering low-interest CWHIP loans to Pasco Partners, Legacy, Villa Capri, Prime (for its Village at Portofino Meadows project), and MDG. Each preliminary commitment was contingent upon: Borrower and Development meeting all requirements of Rule Chapter 67-58, FAC, and all other applicable state and FHFC requirements; and A positive credit underwriting recommendation; and Final approval of the credit underwriting report by the Florida Housing Board of Directors. These commitment letters constituted the necessary approval for each of the Petitioners to move forward in credit underwriting, which is the process whereby underwriters whom FHFC retains under contract verify the accuracy of the information contained in an applicant's application and examine such materials as market studies, engineering reports, business records, and pro forma financial statements to determine the project's likelihood of success. Once a credit underwriter completes his analysis of an applicant's project, the underwriter submits a draft report and recommendation to FHFC, which, in turn, forwards a copy of the draft report and recommendation to the applicant. Both the applicant and FHFC then have an opportunity to submit comments regarding the draft report and recommendation to the credit underwriter. After that, the credit underwriter revises the draft if he is so inclined and issues a final report and recommendation to FHFC. Upon receipt of the credit underwriter's final report and recommendation, FHFC forwards the document to its Board of Directors for approval. Of the approximately 1,200 projects that have undergone credit underwriting for the purpose of receiving funding through FHFC, all but a few have received a favorable recommendation from the underwriter and ultimately been approved for funding. Occasionally a developer will withdraw its application if problems arise during underwriting, but even this is, historically speaking, a relatively uncommon outcome. Thus, upon receiving their respective preliminary commitment letters, Petitioners could reasonably anticipate, based on FHFC's past performance, that their projects, in the end, would receive CWHIP financing, notwithstanding the contingencies that remained to be satisfied. There is no persuasive evidence, however, that FHFC promised Petitioners, as they allege, either that the credit underwriting process would never be interrupted, or that CWHIP financing would necessarily be available for those developers whose projects successfully completed underwriting. While Petitioners, respectively, expended money and time as credit underwriting proceeded, the reasonable inference, which the undersigned draws, is that they incurred such costs, not in reliance upon any false promises or material misrepresentations allegedly made by FHFC, but rather because a favorable credit underwriting recommendation was a necessary (though not sufficient) condition of being awarded a firm loan commitment. On January 15, 2009, the Florida Legislature, meeting in Special Session, enacted legislation designed to close a revenue shortfall in the budget for the 2008-2009 fiscal year. Among the cuts that the legislature made to balance the budget was the following: The unexpended balance of funds appropriated by the Legislature to the Florida Housing Finance Corporation in the amount of $190,000,000 shall be returned to the State treasury for deposit into the General Revenue Fund before June 1, 2009. In order to implement this section, and to the maximum extent feasible, the Florida Housing Finance Corporation shall first reduce unexpended funds allocated by the corporation that increase new housing construction. 2009 Fla. Laws ch. 2009-1 § 47. Because the legislature chose not to make targeted cuts affecting specific programs, it fell to FHFC would to decide which individual projects would lose funding, and which would not. The legislative mandate created a constant-sum situation concerning FHFC's budget, meaning that, regardless of how FHFC decided to reallocate the funds which remained at its disposal, all of the cuts to individual programs needed to total $190 million in the aggregate. Thus, deeper cuts to Program A would leave more money for other programs, while sparing Program B would require greater losses for other programs. In light of this situation, FHFC could not make a decision regarding one program, such as CWHIP, without considering the effect of that decision on all the other programs in FHFC's portfolio: a cut (or not) here affected what could be done there. The legislative de-appropriation of funds then in FHFC's hands required, in short, that FHFC modify its entire budget to account for the loss. To enable FHFC to return $190 million to the state treasury, the legislature directed that FHFC adopt emergency rules pursuant to the following grant of authority: In order to ensure that the funds transferred by [special appropriations legislation] are available, the Florida Housing Finance Corporation shall adopt emergency rules pursuant to s. 120.54, Florida Statutes. The Legislature finds that emergency rules adopted pursuant to this section meet the health, safety, and welfare requirements of s. 120.54(4), Florida Statutes. The Legislature finds that such emergency rulemaking power is necessitated by the immediate danger to the preservation of the rights and welfare of the people and is immediately necessary in order to implement the action of the Legislature to address the revenue shortfall of the 2008-2009 fiscal year. Therefore, in adopting such emergency rules, the corporation need not publish the facts, reasons, and findings required by s. 120.54(4)(a)3., Florida Statutes. Emergency rules adopted under this section are exempt from s. 120.54(4)(c), Florida Statutes, and shall remain in effect for 180 days. 2009 Fla. Laws ch. 2009-2 § 12. The governor signed the special appropriations bills into law on January 27, 2009. At that time, FHFC began the process of promulgating emergency rules. FHFC also informed its underwriters that FHFC's board would not consider any credit underwriting reports at its March 2009 board meeting. Although FHFC did not instruct the underwriters to stop evaluating Petitioners' projects, the looming reductions in allocations, coupled with the board's decision to suspend the review of credit reports, effectively (and not surprisingly) brought credit underwriting to a standstill. Petitioners contend that FHFC deliberately intervened in the credit underwriting process for the purpose of preventing Petitioners from satisfying the conditions of their preliminary commitment letters, so that their projects, lacking firm loan commitments, would be low-hanging fruit when the time came for picking the deals that would not receive funding due to FHFC's obligation to return $190 million to the state treasury. The evidence, however, does not support a finding to this effect. The decision of FHFC's board to postpone the review of new credit underwriting reports while emergency rules for drastically reducing allocations were being drafted was not intended, the undersigned infers, to prejudice Petitioners, but to preserve the status quo ante pending the modification of FHFC's budget in accordance with the legislative mandate. Indeed, given that FHFC faced the imminent prospect of involuntarily relinquishing approximately 40 percent of the funds then available for allocation to the various programs under FHFC's jurisdiction, it would have been imprudent to proceed at full speed with credit underwriting for projects in the pipeline, as if nothing had changed. At its March 13, 2009, meeting, FHFC's board adopted Emergency Rules 67ER09-1 through 67ER09-5, Florida Administrative Code (the "Emergency Rules"), whose stated purpose was "to establish procedures by which [FHFC would] de- obligate the unexpended balance of funds [previously] appropriated by the Legislature " As used in the Emergency Rules, the term "unexpended" referred, among other things, to funds previously awarded that, "as of January 27, 2009, [had] not been previously withdrawn or de-obligated . . . and [for which] the Applicant [did] not have a Valid Firm Commitment and loan closing [had] not yet occurred." See Fla. Admin. Code R. 67ER09-2(29). The term "Valid Firm Commitment" was defined in the Emergency Rules to mean: a commitment issued by the [FHFC] to an Applicant following the Board's approval of the credit underwriting report for the Applicant's proposed Development which has been accepted by the Applicant and subsequent to such acceptance there have been no material, adverse changes in the financing, condition, structure or ownership of the Applicant or the proposed Development, or in any information provided to the [FHFC] or its Credit Underwriter with respect to the Applicant or the proposed Development. See Fla. Admin. Code R. 67ER09-2(33). There is no dispute concerning that fact that, as of January 27, 2009, none of the Petitioners had received a valid firm commitment or closed a loan transaction. There is, accordingly, no dispute regarding the fact that the funds which FHFC had committed preliminarily to lend Petitioners in connection with their respective developments constituted "unexpended" funds under the pertinent (and undisputed) provisions of the Emergency Rules, which were quoted above. In the Emergency Rules, FHFC set forth its decisions regarding the reallocation of funds at its disposal. Pertinent to this case are the following provisions: To facilitate the transfer and return of the appropriated funding, as required by [the special appropriations bills], the [FHFC] shall: * * * Return $190,000,000 to the Treasury of the State of Florida, as required by [law]. . . . The [FHFC] shall de-obligate Unexpended Funding from the following Corporation programs, in the following order, until such dollar amount is reached: All Developments awarded CWHIP Program funding, except for [a few projects not at issue here.] * * * See Fla. Admin. Code R. 67ER09-3. On April 24, 2009, FHFC gave written notice to each of the Petitioners that FHFC was "de-obligating" itself from the preliminary commitments that had been made concerning their respective CWHIP developments. On or about June 1, 2009, FHFC returned the de- appropriated funds, a sum of $190 million, to the state treasury. As a result of the required modification of FHFC's budget, 47 deals lost funding, including 16 CWHIP developments to which $83.6 million had been preliminarily committed for new housing construction.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that FHFC enter a Final Order dismissing these consolidated cases for lack of jurisdiction. DONE AND ENTERED this 18th day of February, 2010, in Tallahassee, Leon County, Florida. JOHN G. VAN LANINGHAM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 18th day of February, 2010.
The Issue The issues to be resolved in this proceeding concern whether the intent to award a contract by the Department of Children and Family Services (DCF) or (Department) for programming and programming analysis support services for the Florida Online Recipient Integrated Data Access System (the Florida System) to Intervenor, Deloitte Consulting LLP (Deloitte), is in accordance with the governing statutes, rules, and policies applicable to the Department's procurement, and to the specifications in the Request for Proposals (RFP). It must also be determined whether the decision by DCF to disqualify the Petitioner, Unisys Corporation (Unisys), for allegedly being unresponsive to the specifications and terms of the RFP in a material way, is clearly erroneous, contrary to competition, arbitrary, or capricious.
Findings Of Fact The Florida System is a computerized public assistance and child support enforcement system. It contains approximately six million lines of programming code and is very complex. It supports the state entitlement system which, among other functions, determines eligibility for benefits under the Medicaid program, temporary assistance for needy families, and food stamp programs. The child support enforcement component of the System records collections of child support payments by the circuit courts. The System is vital to the client population and the public of Florida and it is vital that it be properly maintained. Essential services could be disrupted if such is not the case, causing serious problems for the client populations for state and federal programs that are related and for the tax-paying public, regarding these multi-billion dollar programs. The RFP to be issued would result in a contract for a period of 36 months. It included a 45-day start-up period, a support phase of the contact extending 36 months and a final 45- day period for transition to a new vendor, upon the approach of the conclusion of the contract. The RFP required each vendor to submit a technical proposal and a separate cost proposal. The technical proposal represented 650 points out of a possible 1000 points. The cost proposal represented 350 points out of 1000 points. The proposed project staff requirements of the three technical criteria received the greatest weight of 350 points. The other technical criteria: corporate experience (150 points) and technical approach (150 points) also compared the availability of qualified staff, which was an important part of the contract. Unisys was the incumbent contractor. It submitted a proposal and response to the first RFP (RFP09), as did the other two vendors, Deloitte and Spherion. The Department disqualified Deloitte and Spherion's initial proposals. It did not disqualify the initial Unisys proposal, but decided to reject all proposals for that RFP and to issue a new RFP. The Department did not wish to award a contract to Unisys since it would be an exceptional or sole source purchase under these circumstances. It appeared that re-issuing the RFP at that time could result in more competitive bidding by attracting more than one responsive vendor. In that earlier procurement, Spherion's proposal had been disqualified because it did not include the proposal bond manditorily required by the RFP. Deloitte's proposal was disqualified because Deloitte attached exceptions or conditions to its supplemental proposal sheet submitted as part of its proposal. It thus failed a fatal criterion in the RFP which required agreement to all terms and conditions. The DCF procurement officer, David Shepard, announced the decision to reject all bids, to the vendors, via telephone. He advised a representative of Deloitte that its proposal was rejected for including conditions attached to its supplemental proposal sheet. He told a Spherion representative that its proposal had been rejected for failure to include the proposal bond. He told a Unisys representative that its proposal had not been disqualified, but that Deloitte and Spherion had been disqualified for failure to meet fatal criteria. Mr. Shepard also advised Unisys that the Deloitte proposal had been "conditioned". Beyond that he was reluctant to provide competing vendors more detailed information about the other vendors' proposals because a new RFP was contemplated. In preparing the new RFP the Department intentionally highlighted the requirement in the document advising vendors that "any qualification, counter-offer, deviation from or condition to the terms, condition or requirements of the RFP may render the proposal non-responsive." This language was moved to a more prominent place in this second RFP and put in "bold-faced type" with space surrounding it. This change was made because of Deloitte's disqualification for conditioning its proposals by including "exceptions" when it responded to the first RFP. The Agency wanted to emphasize and highlight this prohibition on qualifications, counter-offers, deviations or conditions to the requirements of the RFP so proposing vendors would clearly know that this was a serious requirement. When the new proposals were submitted in response to the second RFP (the subject RFP), the Department made a determination that all three proposals had passed the certain "fatal criteria" identified in the RFP. Thus the technical proposals were all reviewed and scored by the five member evaluation team. The separate cost proposals from each vendor were opened at a later date. DCF determined at that time that Unisys included with its cost proposal a list of fifteen enumerated "assumptions" which the Agency ultimately determined to be "qualifications, counter-offers, deviations from or conditions to, the terms, conditions or requirements of the RFP." Because of these "assumptions" the Unisys proposal was found to be non- responsive and was not scored. The Agency determined the other two vendors, Deloitte and Spherion, to be responsive to the RFP. Deloitte was determined to have the highest score. Therefore, DCF proposed to award the contract to Deloitte, on July 27, 2005. Unisys timely filed a Notice of Intent to Protest and a Petition protesting the proposed award, requesting a formal administrative proceeding and hearing. Deloitte intervened in that proceeding. The Department filed a Motion for Summary Recommended Order with the Administrative Law Judge contending that the Unisys proposal was non-responsive as a matter of law, and, therefore, that no standing existed for Unisys to challenge the award to Deloitte or to challenge other aspects of the procurement process. That Motion was denied without prejudice on September 23, 2005, because the elicitation of evidence as to material, relevant facts was deemed necessary. Deloitte filed a similar Motion on September 19, 2005, ruling on which is subsumed in this Recommended Order. Responsiveness "Fatal criteria" were delineated in both this RFP and the previous one. The purpose of including "fatal criteria" in an RFP is to determine responsiveness to the criteria the Department has published. Fatal criteria are sometimes referred to as "initial screening criteria" or "responsiveness criteria." A vendor which does not meet all identified fatal criteria is disqualified upon opening its proposal for the RFP. It is not scored. If its proposal passes the initial fatal criteria screening it is sent to the evaluators to be scored. All mandatory requirements in an RFP are not necessarily fatal criteria. The only RFP requirements that result in automatic disqualification are those formally identified as fatal criteria. Both of the RFPs which are involved in the issues in this proceeding include "non-fatal criteria," which are criteria that are reviewed and scored by evaluators. Vendors that do not satisfy the non-fatal criteria may be scored poorly in the competitive evaluation, but are not disqualified unless they fail to meet one or more of the identified fatal criteria. Certain changes were made when the second RFP was issued as compared to the first RFP. Some of the fatal criteria in the first RFP were changed or deleted in the second, including a requirement which had been a fatal criterion in the first RFP that a vendor provide resumes for all its proposed staff, including references and other information. The requirement that providing such was mandatory was retained in the second RFP, but it was made a non-fatal criterion. The DCF kept the requirement that a vendor had to provide sufficient personnel to successfully perform the project, but made it a non-fatal criterion in the second RFP. Mr. Shepard explained the change in the context of looking in the first RFP proposal for every name of 117 proposed staff members and checking to see if a corresponding resume had been supplied became extremely burdensome and it was ". . . very difficult to have a repeatable process on it, so we eliminated it." The vendors were noticed of the change in the fatal criteria through the publication of the second RFP. All vendors had an opportunity to challenge the specifications and none challenged the specification as to the changes in the fatal criteria between the two RFPs. All vendors had an opportunity to ask questions in the question-and-answer period related to the second procurement, concerning the changes to the fatal criteria. No one asked about the changes. Unisys has contended that the Spherion proposal should be disqualified as non-responsive to the second RFP because it did not include the proper number of resumes. Inclusion of the proper number of resumes was no longer a fatal criterion for the second RFP, however. Spherion was scored poorly by the evaluators for failing to fully comply with the non-fatal criterion regarding sufficient support personnel. Although Unisys contends that a procurement manual (CFOP75-10) purports to require the rejection of any proposal which is incomplete or has significant inconsistencies or inaccuracies, the manual was not in effect at the time of the procurement at issue. The procurement officer, Mr. Shepard, was unaware of its existence and none of the vendors were then aware of it, including Unisys. Mr. Shepard, for the Agency, felt that he had to inform the vendors on what basis they would be evaluated and could not use anything against the proposals in a negative way when he had not disclosed a particular evaluation criterion. Unisys also contends that Spherion is non-responsive as to the second RFP because in its signed proposal sheet (SPS) wherein it agrees to all terms and conditions to the RFP it included a statement saying it "has a contract in place with the State of Florida to date. We will abide by the terms and conditions already agreed upon." The procurement officer Mr. Shepard professed not to know what the statement meant, but he did not view it as a condition, saying that it is non- specific and contains no specific terms or conditions. He believes that it did not affect the price of the Spherion proposal and therefore is not a material irregularity in any event. Unisys also raises the alleged non-responsiveness of Deloitte because in its technical proposal it uses the statement that "in the cases where other background checks are required, the Deloitte consulting will be responsible for obtaining such background checks based on costs negotiated with the Department." Mr. Shepard professed to not understand what the phrase meant regarding "negotiating costs," but noted that, in compliance with the RFP, Deloitte had agreed to be responsible for background checks. He thus considered the phrase a minor irregularity that did not affect the price of the Deloitte proposal and thus was not a disqualifying indicia of non- responsiveness. In the first RFP Spherion was disqualified for violating fatal criterion number ten relating to inclusion of a proposal guarantee or performance bond. Deloitte was disqualified in that procurement for violating fatal criterion number twelve relating to a completed and signed "supplemental proposal sheet." The Agency felt that the proposal of Deloitte contained conditions, even though the SPS was properly signed by a representative of Deloitte. The supplemental proposal sheet requires a vendor to agree to comply with all terms and conditions of the RFP. The vendor must not only sign a statement to that effect, but also place the initials of an authorized person beside the statements showing that the vendor understands and agrees with each individual provision of the RFP. Although Deloitte's representative signed the SPS and provided the necessary initials, it also attached "exceptions" to that sheet which resulted in the proposal being rejected in the first RFP process. In the second procurement Unisys was found non- responsive for violating fatal criteria relating to the supplemental proposal sheet (fatal criterion number nine in the second RFP). Mr. Shepard felt that it was a conditioned proposal. His handwritten note beside fatal criterion number nine stated, "opened cost proposal. Cost proposal included potential conditions . . . final decision was a conditioned proposal." Although Unisys had submitted a signed and initialed SPS (attachment K), the assumptions included with its proposal were determined by the Agency to actually modify the signed SPS. Ultimately, after conferring with its counsel, the Agency Assistant Secretary and Secretary determined that Unisys in its proposal was conditioned in a way as to violate the requirements of the RFP, determined it was non-responsive, and thus disqualified. The Unisys Assumptions The vendors in the procurement at issue were precluded from submitting with their proposal any contract terms, conditions or exceptions that did not conform with the terms and conditions provided in the specifications in the RFP. They are warned in bold type that "that any [p]roposal containing terms and conditions conflicting with this requirement shall be rejected . . .". In a separate RFP provision they are cautioned that "[a]ny qualification, counter-offer, deviation from or condition to the terms, conditions or requirements of the RFP may render the proposal non-responsive." See Joint Exhibit 1, Sections 7.2D and 2.9, in evidence. Unisys, like all vendors, was required to and did submit a signed supplemental proposal sheet, but Unisys' corporate representative testified that he nevertheless included the assumptions with the cost proposals because he was not sure that the Department had the same understandings of certain terms and conditions in the RFP as Unisys did. As he stated, " . . . that was why we asked to clarify." If any vendor, including Unisys did not understand the import of the various terms and conditions in the RFP specifications, or a particular term, the RFP provided an opportunity for vendors to seek clarifications through various means, including written questions, prior to bid submission and opening. Moreover, if a contract term or specification was deemed improper, unclear or otherwise inappropriate the vendors had an opportunity, prior to submitting proposals, to challenge the specifications of the RFP themselves. During the ten days between the issuance of the second RFP and the deadline for submission of proposals Unisys did not challenge the specifications nor submit any questions to the Agency concerning the subject matter of the assumptions which it placed in its proposal. The RFP does not allow for negotiations between a winning vendor and the Department. Once the contract is awarded by announcement by the Agency, pursuant to the RFP, and until the contract is signed, the only discussion between the vendor and the Agency may be about technical errors. Any negotiations about the terms and conditions of the RFP with the winning vendor would be unfair to other vendors who submitted proposals based solely on the terms and conditions published in the RFP, and who had no such opportunity for "after-proposal negotiations" with the procuring Agency. The Department considered the Unisys assumptions, especially their placement in the cost proposal as opposed to the technical proposal, part of an effort to gain negotiating opportunity at the end of the evaluating process, an opportunity not provided to the other vendors. The Department believed that the assumptions were not included in the body of the technical proposal in order to make sure that the technical proposals would be evaluated and scored. Then, once Unisys had a score on the technical proposal, it had a cost proposal modified by the assumptions, which the Agency believed was an effort by Unisys to obtain some leeway to negotiate after award and before the final contracting process. In fact, the preamble language Unisys used to propose its list of assumptions states as follows: "The following are assumptions that Unisys has made for this proposal. We would like the opportunity to discuss these assumptions at contract negotiations." (emphasis supplied). The RFP does not allow for negotiations after the posting of a contract award. Even if the Department were to ignore the clear request to enter contract negotiations regarding the assumptions, the Agency still took the position that the assumptions proposed were beyond the specifications of the RFP, in fact altered the proposal and, if accepted, would have altered the terms of the RFP and the contract contemplated in it and by it. In fact, the persuasive evidence, including the testimony of Mr. Fagan and Mr. Shepard, establishes that the proposal by Unisys was based on those fifteen assumption items being considered and implemented in the ultimate contract, should Unisys be awarded the contract. Some of the fifteen assumptions, as shown by the persuasive, credible evidence clearly deviate from the express terms and conditions of the RFP, which the RFP prohibits. Assumption seven provides: We assume that applicable RFP terms regarding recovery against the performance bond are clarified to the extent that the Department will not seek liquidated or any other damages against the performance bond unless the contract is terminated for default and the vendor and the Department have been unable to settle any resulting claim. This assumption, if accepted in the contracting process, would limit those circumstances where the Department would be able to make a claim against the performance bond of Unisys. Pursuant to the plain language of this assumption the Department would be precluded from seeking damages from the performance bond, unless there was actual default by Unisys which resulted in contract termination. The RFP, however, places no such restriction on when the Department may make a claim against the performance bond of a vendor. The RFP in fact, expressly authorizes DCF to file for remuneration against the performance bond based upon any failure to perform by the vendor, regardless of whether the contract is terminated. The RFP specifically provides that if the vendor is given an opportunity to cure a material breach, which would keep the contract in effect, that DCF may still obtain compensation for the results of that breach by preceding against the vendor's performance bond. See Joint Exhibit 1, Section 3.21, in evidence. In fact there are a number of circumstances provided for in the RFP where DCF may make a claim against a performance bond despite the continuation status of the contract. For instance, Section 3.5.C.2.a authorizes the recovery of damages from the performance guarantee where an individual fixed price contract, rather than the entire contract, is terminated due to the vendor's failure to meet the project's completion date. So too, Section 3.9.E provides "any and all occurrences of any dishonesty or deception on the part of the vendor's employees, with regard to Department confidential information, shall cause the Department to suffer damages and the Department shall be entitled to . . . recovering from the vendor, the actual damages the Department sustains up to the insured limits of the vendor's performance guarantee." In his testimony at hearing Unisys corporate representative acknowledged that if the Department accepted assumption seven proposed by Unisys, that the contact would not allow DCF to seek damages against the performance bond unless the contract was actually terminated. This is clearly contrary to the language in the RFP. Assumption twelve provides: We assume that the last sentence of paragraph two under 3.18 ['vendor agrees that any and all work performed exceeding the mutually agreed to time estimates in the ISSR maybe deemed by the Department to be gratuitous and not subject to charge by the vendor'] applies only to fixed price projects. Fixed price projects are defined in the RFP as "one unique activity where the vendor shall establish a fixed price for providing the deliverables . . . ." Unlike fixed price projects, the RFP provides that work tasks assigned to a vendor pursuant to a Information Systems Services Rquest (ISSR) will be performed and paid for on an hourly rate basis. In this regard the ISSR must identify the "vendor's and the Department's agreed-upon estimated work hours and anticipated completion date." Although the DCF must pay for any hours worked up to the total work hours estimated in the ISSR, the RFP provides that DCF is not obligated to pay for any hours worked beyond that estimate. In fact, Joint Exhibit 1, Section 3.18, in evidence, provides in relevant part: The vendor agrees that any and all work performed exceeding the mutually agreed to time estimates in the ISSR's maybe deemed by the Department to be gratuitous and not subject to charge by the vendor. Pursuant to this quoted sentence from the RFP the agreed-upon estimated work hours in the ISSR operates as a limit to the number of hours that a vendor can bill DCF for a particular job or task. However, the plain language of the Unisys assumption materially alters this RFP provision by changing the word "ISSRs" to "fixed price projects," which would make the sentence read, if it were adopted, as follows: The vendor agrees that any and all work preformed exceeding the mutually agreed to time estimate in the fixed price projects deemed by the Department to be gratuitous and not subject to charge by the vendor. (emphasis supplied.) Thus this assumption proposed by Unisys clearly amounts to the substitution of one defined term for another which would change the liability of the proposer, Unisys, with respect to that specific provision. Unisys's own corporate representative acknowledged in his testimony that the change identified by this assumption would mean that Unisys would be paid more under the operation of the contract. If this word substitution were adopted in the contracting process, the estimated work hours that must be agreed to and included in each ISSR would become meaningless, as the ISSR would no longer serve the function of limiting the number of hours that could be billed for hourly rate work. Assumption five provides: Pursuant to the Department's changes to Section 3.12, time is of the essence applies only to failure to meet completion dates for startup and transition tasks and not the contract as a whole. Most of the performance under the contract will be provided during the support task days of the contract. This will represent 36 of the 39 months of the basic contract period. A completion date is provided in the RFP for each support task assigned to the vendor, either through an ISSR or fixed price project. The RFP at Section 3.12 (Joint Exhibit 1 in evidence) emphasizes the importance of completing on a timely basis, where it states: The vendor agrees . . . to proceed diligently to complete the start-up and support tasks in accordance with the requirements set forth in this RFP . . . time is of the essence in this RFP . . . This ”time is of the essence" phrase is qualified in the case of the start-up phase and transition task during which the vendor would have to work with another company that may prevent the timely performance of a particular task. Because of this possibility the RFP provides that a vendor's failure to meet a completion or a start-up or transition task will not be a default if it is due to the failure of another company to timely perform its obligation. The RFP also gives DCF numerous remedies, including termination of the contract, in the event performance is untimely by the vendor. This assumption posed by Unisys attempts to limit the "time is of the essence" requirement to the start-up and transition task and thus limit Unisys's potential liability for failing to meet deadlines during the support phase, the majority time period of the contract term. Numerous parts of the RFP emphasize the importance of timely completion of various tasks. See Joint Exhibit 1 Section 4.5, Section 3.5C.2 and Section 3.7.D and Section 3.15.A, in evidence. Unisys's corporate representative witness testified that assumption five was included because Unisys was confused about a change in the "time is of the essence" language made during the question-and-answer period after the first RFP was issued. (Not at issue in this case.) However, Unisys did not use the question and answer period during this second RFP process to seek clarification of the earlier change or of the meaning of the "time is of the essence" requirement, if indeed it was confused. Various sections of the RFP cited above which emphasize the importance of timely performance show that timely performance is important and a material part of the RFP. The Unisys proposal, at assumption five, will have the effect of changing the requirement of the RFP regarding time being of the essence for completion of support tasks, seeking rather to limit the time is of the essence requirement to only start-up and transition tasks. This would significantly limit Unisys's potential liability for failing to meet the deadlines during the support phase. Assumptions nine and eleven in Unisys's proposal provide respectively as follows: We assume that the RFP attachment C, Section 21 (limitation of liability) is clarified so that in the event the Department does not issue any purchase orders under the contract, to substitute 'amounts paid' under the contract for 'purchase order'. We assume that to comply with attachment C, Section 21, the Department will provide a PO to Unisys or if not, the language will be changed to refer to the contract. The RFP itself contains no provision limiting a vendor's potential liability to DCF in the event of contract breach. Although Section 21 of the PUR Form (RFP attachment C) is entitled "limitation of liability," this provision is inapplicable to this contract because Section 21 only purports to limit liability where a claim is made under a purchase order. It is undisputed that no purchase orders will be issued pursuant to this RFP. PUR Forms attached to the RFP at issue in this case are standard forms that are required by state purchasing rules to be attached to all competitive procurements. They are subordinate to the RFP, and certain provisions of the PUR Forms are not applicable to all procurements. An order of precedence in PUR Form 1001 (attachment D to Joint Exhibit 1 in evidence) makes it clear that the RFP supersedes the PUR Forms. Section 21 of attachment C is not applicable to the RFP at issue in this case. If the language in assumptions nine and eleven were adopted in the contract, DCF would be required to either to issue purchase orders, which ordinarily would not be done in this RFP, or to change the language of Section 21 by substituting the phrase "amounts paid under the contract" for "purchase order." Thus if Unisys assumptions nine and eleven were adopted it would have the effect of limiting Unisys's liability by applying the limitation of liability related to purchase orders to the entire RFP. Such was not the intent behind nor in accordance with the terms of the RFP. Unisys assumptions one and thirteen are also related. They provide: We assume that the parties will reach mutually acceptable clarifications to the RFP and final terms and conditions for the contract. We assume that any direct conflicts if any, between the Department contract documents will be resolved during negotiations. The agreement between the parties will consist of multiple documents, including the contract document, the RFP, and the winning bidder's proposal. To the extent that any of these documents is in conflict, assumption thirteen would compel the Department to resolve the conflict through negotiations with Unisys. This is contrary to Section 2.13 of the RFP which does not make such conflicts subject to negotiation, but rather states that "[a]ny ambiguity or inconsistency among those documents shall be resolved by applying the 'order of precedence'" specified in the RFP. These two assumptions basically incorporate a negotiation phase into the RFP that was not provided for by the RFP. Unisys asserts an order of precedence for resolving ambiguity or inconsistency among the documents and contract terms in its assumption eight, which provides: We assume that the contract terms will be clarified with an order of precedence assigned to each component (contract terms, proposal, PUR Forms, or RFP). This assumption attempts to rewrite Section 2.13 of the RFP which establishes instead the following order of precedence: The contract document; The RFP and its appendices (e.g. the PUR Forms and attachments C and D); and The vendors proposal. Assumption eight, which prioritizes the documents differently (i.e. contract terms, proposal, PUR Forms, and RFP), would materially change the order of precedence by making the Unisys proposal, including the deviations from the RFP it contains, more important in order of precedence than the RFP itself. Assumption eight also assigns the generic PUR Form, which contains the general conditions that are incorporated into all state procurements, a higher priority than the special conditions in the RFP that the Department developed for this particular contract. This conflicts with the PUR Form itself, which states that the general conditions in the PUR Form are subordinate to the special conditions and technical specifications in the RFP. See Joint Exhibit 1, attachment D, paragraph 4 in evidence.1/ Unisys assumption six provides: We assume that the Department is responsible for daily backup of all the production data basis and will perform backups to protect the integrity of the data. Under the RFP, the vendor is responsible for repairing damaged data. Assumption six, however, would shift partial responsibility for this task to the Department or create a potential reason or excuse for any failure by Unisys to repair damaged data by imposing on the Department a duty to protect the data by daily back-ups. Assumption number six thus seems to provide that Unisys would guarantee repair of damage data only if DCF assumes responsibility for the daily back-ups and, if it did not, no liability or obligation for damaged or lost data or its repair would be assumed by Unisys. This assumption is thus at odds with the RFP to the extent that it adds such a contract term that was not contemplated by the RFP Unisys assumption ten provides: We assume that the documentation library and all information provided by the Department is correct, current and complete. The RFP, however, explicitly states that "the Department does not warrant that the information is indeed complete or correct. The Department disclaims any responsibility for the accuracy or completeness of the material information, documentation and data in the documentation library." Past Agency Practices Witnesses for Unisys stated, in essence, that it is their company's policy to include assumptions in responses to RFPs. They introduced evidence concerning two prior procurements by RFP in 1997 and in 1998 to which Unisys responded with assumptions in its RFP proposals. They contend that it is Agency policy to allow for such assumptions in responses to RFPs using these two past procurements as examples. One of those procurements, the 1998 Florida System RFP resulted in a contract between Unisys and the Department. The other procurement, the 1997 "SACWIS" procurement never resulted in a contract because the Agency did not receive enough money from federal funding and legislative funding to meet the price of the awardee, which was Unisys. In the 1998 Florida System procurement RFP three assumptions were placed in the cost proposal submitted by Unisys. The first of them provided that the proposer, Unisys, wanted to negotiate the "indemnity provisions including a reasonable limitation on liability provision." The Department standard contract which was attachment "A" to that RFP, however, specifically provided for the negotiations that Unisys requested in this assumption. The contract stated that "where any contract which may result from this request for proposal contemplates software licensing, software maintenance services, or software developmental services, the language in Section 1.F., indemnification in the standard contract may be subject to change through negotiation." Thus this assumption did not change the terms and conditions of the RFP involved in that procurement because it simply requested something that was already explicitly allowed by the RFP, that is, negotiation. The second assumption in that procurement states that the wording of paragraph 3.20.B(3) in the RFP is "unclear" and that Unisys "assumes that the Department does not intend for the proposer to indemnify the proposer's subcontractors." The reference paragraph in that RFP had contained a mistaken sentence which stated that the successful proposers "shall indemnify its affiliated companies and sub-contractors . . ." That assumption did nothing more than identify a mistake, it did not change the terms and condition of the RFP. The final assumption as to that 1998 procurement RFP stated that Unisys "assumes that language along the lines of the clarification provided for question two on page four of addendum one will become a permanent part of the contact." This assumption did not change the terms and conditions of the RFP, either, because addenda to the RFP are normally incorporated into a contract. The assumptions made by Unisys in response to the 1998 RFP are not the same as the assumptions in the procurement at issue because none of them changed the terms and conditions of the RFP. Notably, the 1998 assumptions acknowledged this fact by inclusion of the following statements: By stating the assumption below Unisys is not taken any exceptions or making any deviations to or from the terms or conditions of the RFP or the standard contract. Our acceptance of the terms and conditions are specifically included at tab 8 . . . We have however made certain assumptions to allow pricing of the proposal where a clear determination of the potential impact for a certain statement could not be ascertained. No similar statement was included with the assumptions made by Unisys in its current procurement RFP proposal. Regarding the 1997 SACWIS procurement, Unisys also submitted a list of assumptions with its proposal. These, however, as shown by Mr. Shepard, did not rise to the same level as the assumptions in the instant RFP situation. Neither Mr. Shepard, nor other witnesses were able to identify if any of the assumptions in that 1997 procurement ever changed the terms and conditions of the RFP because a complete text of the 1997 RFP was not available. No contract resulted from that procurement because the Agency did not receive sufficient funding to implement a contract. Subsequent negotiations to reduce the costs associated with the procurement were halted by the Agency's general counsel because those negotiations "got into areas that were not permitted by the RFP." Moreover, Mr. Shepard for the Agency, in his testimony in this case, acknowledged that if any of the assumptions submitted by Unisys in the 1997 procurement changed the terms and conditions of the RFP, then the Agency would have been in error if it did not reject them as non-responsive. Unisys contends that the Spherion proposal was non- responsive because Spherion only supplied 37 of the required 117 resumes identifying the personnel it would use to operate the contract. The failure of Spherion to include all resumes and identify all sub-contractors gave it a competitive advantage according to Unisys because Unisys had to obtain agreements from all sub-contractors on price in order to formulate a cost proposal for its response to the RFP. By obtaining most of its staff after an award was made, Spherion would be in a more favorable competitive position, in making its proposal, allowing it to, in effect, "bid shop" for sub-contractors at decreased prices after it had secured the bid award. Unisys thus maintains that the failure to submit all the required resumes was a material deviation from the specifications of the RFP. Unisys also cites that part of Spherion's proposal where it announced that it "has a contract in place with the State of Florida to date. We will abide by the terms and conditions already agreed upon." Mr. Shepard for the Agency stated that he simply disregarded this condition expressed in attachment "K" by Spherion because he did not know what it meant. It would appear that it could be interpreted to mean that Spherion was proposing to abide by terms and conditions already agreed upon in some other unidentified contract with the Agency or with the "State of Florida" (Agency unspecified), which could mean interpreting terms and conditions which came from outside the specifications of this subject RFP. If that were the case it would possibly portend a material deviation from the specifications of this RFP. Unisys contends that if Spherion were deemed to be unresponsive, because of these two reasons, that would leave only Deloitte as a responsive proposing vendor, if Unisys's position that it was responsive and should be awarded the contract were rejected by the Agency. It maintains that, in order for this to then be a competitive procurement, a new RFP would have to be issued to allow the Department to have at least two qualified, responsive vendors to consider. Moreover, Unisys contends that, in addition to Spherion, that Deloitte should be treated the same as the Unisys proposal was treated by the Agency in terms of intolerance for alleged deviations from the RFP. It contends that the RFP at Section 3.7G required background checks to be conducted on all contract personnel, at the expense of the contractor. Deloitte indicated that it would conduct such background checks, but "based on costs negotiated with the Department." In response to this contention, at hearing, Mr. Shepard, for the Agency, dismissed this assertion in the proposal by Deloitte as a "minor irregularity" because it wasn't clear to him, stating: It could easily be interpreted to say that the scope of the background checks needs to be negotiated with the Department so they can figure out what it is going to cost them to do that. I mean, there are just a couple of ways you could interpret this language. In given that, I could not come to the conclusion that this was a material deviation from the requirements. The proposal by Deloitte clearly says costs "negotiated" (emphasis supplied) not "scope." Unisys thus contends that it is disparate and in effect arbitrary for the Agency to be willing to overlook the inconsistency thus expressed in Deloitte's proposal by interpreting it as being as unclear or at most a minor deviation when it would allow Deloitte, through that proposal, to present an issue that must be negotiated with the Agency before background checks for any staff to be assigned to the job could be performed. This is contrasted with the Agency interpretation of the Unisys proposal regarding "discussion" of assumptions and regarding conducting "negotiations" as being unallowable conditions and material deviations from specifications. Parenthetically, it is noted that, if this aspect of the Deloitte proposal and the above-discussed aspects of the Spherion proposal concerning the "other state contract" and the fact that its proposal was deemed responsive even though it was not held to the requirement of supplying all 117 resumes of proposed subcontractors (which might allow it "bid shop" subcontractors after an award) were deemed to allow Spherion or Deloitte a competitive advantage or to affect the cost of their proposals, then the argument that these apparent irregularities are material irregularities or departures from the specification of the RFP, might have some merit. However, because of the findings and conclusions below concerning the responsiveness of the Unisys's proposal, and the effect such has on Unisys's standing in this proceeding, these issues regarding Deloitte's and Spherion's proposals cannot, at law, be definitively addressed so as to decide in this proceeding that all proposals should be rejected and the procurement effort be repeated.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is, therefore, RECOMMENDED that a final order be entered by the Department of Children and Families awarding the Florida System contract at issue to Deloitte Consulting LLP. DONE AND ENTERED this 2nd day of February, 2006, in Tallahassee, Leon County, Florida. S P. MICHAEL RUFF 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 Clerk of the Division of Administrative Hearings this 2nd day of February, 2006.
