The Issue Whether TestCorp's bid was contingent on DHSMV's entering into a maintenance and service contract with TestCorp? Whether TestCorp's offer of a 12-month cost-free warranty was contingent on DHSMV's entering into a maintenance and service contract with TestCorp? Whether TestCorp failed to offer a 12-month warranty at no charge? Whether DHSMV impermissibly proposes to consider the cost of maintenance in awarding the bid? Whether TestCorp's failure to register to do business in Florida until June 20, 1986 precludes an award to TestCorp? Whether TestCorp's failure to offer all right, title and interest in and to its system renders its bid unresponsive? Whether TestCorp failed to provide sufficient technical information to show that its system would meet specifications? Whether TestCorp failed to furnish the names of three customers with like or similar equipment? Whether TestCorp failed clearly and concisely to describe variances between its bid and the specifications set out in the ITB? Whether Juno's proposal has bilingual capability consistent with clearly visible images even on handicap display units?
Findings Of Fact ITB No. 2887-85 (Rebid) is in evidence as Joint Exhibit No. 1. The parties stipulated that pages 26 through 34 of Joint Exhibit No. 3, which replace two of the original ITB pages and consist otherwise of bidders' questions about the ITB and DHSMV's answers, also constitute part of the invitation to bid, whose purpose "is to secure Automated Driver Testing Equipment for the Florida Division of Driver Licenses." Joint Exhibit No. 1, p. 2. ITB No. 2887-85 (Rebid) calls for ten testing machines to be tied to an examiner's console in each of five systems, and specifies that the testing systems have both "English and foreign language capability," Joint Exhibit No. 1, p. 13, 3.3.02, that they "function in such a manner that controls and operations for both examiner and examinee are minimal," Joint Exhibit No. 1, p. 14, 3.4, and that they be "capable of presenting a visual question test" to all examinees, including handicapped (seated) examinees. With each system, ITB No. 2887-85 (Rebid) as modified in response to questions from TTSS, Inc., calls for 80 questions, consisting of "30 operator questions, 30 chauffeur questions, and 20 road signs." Joint Exhibit No. 3, p. DHSMV would administer 40-question tests to applicants for operator's licenses and to applicants for chauffeur's licenses, each consisting of "20 written questions and 20 road signs." Joint Exhibit No. 3, p. 34. The specifications also call for "the highest quality professional duplicating film" and specify that "[n]o visible deterioration . . . be noticeable in the quality of the projected image during the warranty period." Joint Exhibit No. 1, p. 23, 4.6.2(c). ITB No. 2887-85 (Rebid) calls for "[c]omplete product information, including technical and descriptive literature sufficiently detailed to substantiate [that] the system offered meet[s] or exceed[s] the specifications." Joint Exhibit No 1, p. 3. ITB No. 2887-85 (Rebid) requires that each bidder use the "bid forms furnished by this Department," Joint Exhibit No. 1, p. 5, 2.21A, see Joint Exhibit No. 1, p. 1, which both TestCorp and Juno did. While warning that "[b]ids containing terms and conditions conflicting with those contained in this Invitation to Bid shall be rejected," Joint Exhibit No. 1, p. 6, 2.24, the ITB also reserves to DHSMV the right to waive "minor deviations or exceptions . . . defined as those that have no adverse effect upon the State's interest and would not affect the amount of the bid by giving a bidder an advantage or benefit not enjoyed by other bidders." Joint Exhibit No. 1, p. 5, 2.18. In a related provision, the ITB requires that any nonconformity "be clearly and concisely described with a request for variance . . . accompanied by a full explanation as to the advantages and/or disadvantages." Joint Exhibit No. 1, p. 5, 2.19. Bids Submitted DHSMV received four bids in response to ITB No. 2887-85 (Rebid). Low at $94,470.00 was Computer Specialties, Inc., but DHSMV deemed this bid unresponsive and Computer Specialties, Inc., filed no notice of protest. Second low was Juno's alternate bid of $237,795.00, which tracked the bid DHSMV now proposes to accept, except that the alternate bid did not provide for a performance bond. DHSMV rejected Juno's alternate bid as unresponsive, and Juno has not questioned this determination. Third low was TestCorp's bid at $242,000, and Juno's bid was high at $246,795.00. Juno's Bid The parties stipulated that the lack of bilingual capability would be material, but did not agree that Juno's system was deficient in that respect (T.73). Juno's bid states that each display unit "shall utilize an unnotified Kodak Ektagraphic Slide Projector Model E-2 . . . [and] shall be capable of displaying up to eighty (80) separate question slides." Joint Exhibit No. 3, p. The sample slide representations Juno furnished with its bid depicted traffic scenes and accompanying questions in English only. Joint Exhibit No. 3, pp. 111, 111a. Foreign language capability would require either separate slides with foreign language questions or the same slides with questions in English as well as in foreign language(s). In the event of separate slides, one machine of the ten called for (in each of the five systems specified) could be dedicated to each foreign language in which the tests were to be administered, or foreign language slide trays could be substituted as needed. TestCorp's Bid Set out as a general condition in ITB No. 2887-85 (Rebid) was the following: SERVICE AND WARRANTY: Unless otherwise specified, the bidder shall define any warranty service and replacements that will be provided during and subsequent to this contract. Bidders must explain on an attached sheet to what extent warranty and service facilities are provided. Joint Exhibit No. 1. In the event of a conflict between a general condition and a specification, the ITB states that the specification is to take precedence. Among the specifications included in ITB No. 2887-85 (Rebid) were these: 2.1 Bidder must submit copy of maintenance and service contract and costs with bid. (Informa- tion on maintenance during warranty and after warranty expires). Joint Exhibit No. 1, p. 4 2.27.2 If maintenance of the equipment is to be the responsibility of the State, training necessary to properly maintain the equipment must also be provided. Joint Exhibit No. 3, p.27 2.30 Warranty - Service - Mai[n]tenance Parts Replacement: Parts determined to be defective must be repaired or replaced at no charge to this Department for a period of twelve (12) months. Labor must be furnished (normal working hours) at no charge to this Department for a period of twelve (12) months. EXCEPTION: It is understood that warranty does not include consumable parts/ supplies. Joint Exhibit No. 3, p.27. 2.31. If a defect in the equipment occurs because of obvious misuse or after expiration of the warranty, vendor or his authorized service representative will make repairs promptly for a period of five years from date of acceptance at a reasonable cost to the purchaser. Joint Exhibit No. 3, p. 28. Maintenance Bidder shall submit a maintenance plan with his bid response. Maintenance should be outlined in a schedule or table showing how and when it is to be performed. If the State must perform its own maintenance, this must be specified. Any replacement parts required to be installed under normal main- tenance procedures must be listed, along with cost, method of delivery, and how installation is to be performed. Bid Award - Special Conditions Cost of maintenance, if applicable, will not considered in award of bid . . . Joint Exhibit No. 3, p. 28. Finally, the specifications provided that the "complete system cost" included a year's spare parts and required each bidder to attach "a list of all equipment, service and spare parts included in his bid for each location." Joint Exhibit No. 1, p. 25. Maintenance and Warranty Tied 11. With reference to specification 2.27.2, TestCorp's bid states, "Maintenance will be the responsibility of TestCorp." Joint Exhibit No. 2, p. Otherwise TestCorp's bid responds to maintenance and service specifications by reference to and inclusion of a form "TestCorp Warranty and PerTest Maintenance Agreement." Joint Exhibit No. 2, pp. 34 through 38. On TestCorp's bid sheet is written, "PLEASE SEE REQUIRED MAINTENANCE AGREEMENT ATTACHED." Joint Exhibit No. 2, p. 25. With reference to specification 2.12, TestCorp's bid states, "Warranty and PerTest Maintenance contract is enclosed." Joint Exhibit No. 2, p. 31. Among the provisions of the form contract are the following: This agreement shall be in effect for 5 years from the date of purchase of the system. Service as described below will be provided at no charge during the "Warranty Period," which is the first year following installation. Joint Exhibit No. 2, p. 34. There is no charge for service under this agreement during the 12 month Warranty Period. During the 48-month pre-test maintenance period . . . you will be charged at the rate of $0.48 per test. Joint Exhibit No. 2, p. 35. Variance from the terms and conditions of this agreement in any order or other written notification from you will be of no effect. Joint Exhibit No. 2, p. 38. DHSMV originally determined TestCorp's bid to be responsive to ITB No. 2887-85 (Rebid) and proposed to award to TestCorp on June 23, 1986. Another Look During the pendency of Juno's ensuing protest, DHSMV staff changed their minds. In their prehearing stipulation, the parties set out the following sequence: On July 14, 1986, Merelyn Grubbs, Chief of the Bureau of General Services of the Department, placed a phone call to Ken Muir, Vice President of Sales and Marketing for TestCorp, in order to clarify questions that had arisen with regard to TestCorp's bid. As a result of the July 14 telephone conversation and reexamination of TestCrop's bid, the Department concluded that in order to get TestCorp's 12-month cost-free warranty, the Department would be required to sign the maintenance and service agreement with TestCorp. As a result of tube July 14 telephone conversation and reexamination of TestCrop's bid, the Department concluded that in order to get the TestCorp equipment at the bid price, the Department would be required to sign the maintenance and service agreement with TestCorp. On July 15, 1986, Ken Muir called Merelyn Grubbs to discuss TestCorp's position with regard to the maintenance and service contract. On July 15, 1986, Merelyn Grubbs sent a letter informing TestCorp that its bid had been rejected as nonresponsive because the "bid for equipment was predicated upon the Department agreeing to enter into the four- year maintenance contract." On July 15, 1986, C. W. Keith, Director of the Division of Driver Licenses, sent a memorandum to Fred O. Dickinson, III, Deputy Executive Director of the Department, which said, in relevant part: In view of the recent discovery of the main- tenance contract on TestCorp's bid which would in effect cost our Department approximately $300,000 for a four year period, which we obviously cannot afford and was not listed in the bid, we recommend that TestCorp be notified that they are nonresponsive to the bid and that they be disqualified. Ms. Grubbs verified on July 14 with TestCorp [sic] that their bid was invalid unless we also accepted their maintenance contract at a price of 49 cents per examination administered. ([sic] and 49 in original) In short, DHSMV reconsidered, decided that TestCorp's bid was unresponsive, and proposed to award to Juno, on that account. This is DHSMV's current position. The form contract TestCorp attached to its bid, entitled "TestCorp Warranty and Per-Test Maintenance Agreement," covers five years. After the initial year in which there were to be no maintenance charges, the contract specifies maintenance charges "at a rate of $0.48 per test . . . based on the estimated number of tests given in Addenda #1 to this bid, ITB-DHSMV-2887-85 (Rebid)." Joint Exhibit No. 2, p. 35. The estimated number of tests to which the form contract refers amounted to 950 daily in January of 1986. Joint Exhibit No. 3, p. 33. For years two through five, TestCorp's annual revenues from DHSMV under the maintenance contract can be calculated at $114,000, by multiplying 950 times $0.48 times 250 working days (approximate). If January is an unusually busy month or if the testing centers are not open fully 250 days a year, the figure would be less. Registration At the time TestCorp submitted its bid in response to ITB No. 2887-85 (Rebid), on May 16, 1986, it had not registered with Florida's Department of State as a foreign corporation doing business in Florida. Among the special conditions set out in ITB No. 2887-85 (Rebid) was the following. 2.1 All corporations seeking to do business with the State shall, at the time of submitting a bid in response hereto, be on file with the Department of State in accordance with the Provisions of Chapter 607, Florida Statutes; Chapter 607, Florida Statutes; TestCorp registered with the Department of State in accordance with the provisions of Chapter 607, Florida Statutes (1985) on June 20, 1986, three days before the original tabulation on the rebid was posted. When TestCorp originally applied for registration is not clear from the record. Purchase Contemplated The ITB No 2887-85 (Rebid) announces DHSMV's intention to purchase five complete systems, and defined purchase as "acquisition of all rights, titles and interest in the systems in exchange for payment . . . ." Joint Exhibit No. 1, p. 2, 1.3. With reference to the bidder's use of any patented or copyrighted "design, device or materials" the specifications provide that "bid prices shall include all royalties . . . . " Joint Exhibit No. 1, p. 12. TestCorp conditioned its bid by stating The Department will acquire all rights, titles and interest in the systems purchased save and except the department shall not sell, lease, transfer, duplicate or copy the TestCorp hardware configuration, software, or video disc for any purpose whatsoever. In using this language, the drafter of TestCorp's bid referred by section number, 1.3, to that part of the ITB calling far sale outright. Product Information TestCorp's bid represents that all components of the systems it offers "are of standard manufacture." Joint Exhibit No. 2, p. 31. It proposes touch screens in lieu of keyboards. Included in its bid are technical specifications for the touch screens, as well as for the Hitachi video disc player, the multi- user host adapter and the monitor components. Technical specifications for the cable, the Roland printer, the TestCorp housing and the IBM-compatible microcomputer components are not included in the bid, which describes the software and video disc components only as "proprietary." A narrative description of how the system works is also included with TestCorp's bid, however, and the bid recites that the software for the examiner's station "controls all Testing/Information stations and saves all the answers given during each test." Joint Exhibit No. 2, p 29. TestCorp's substitution of touch screens for keyboards, while not framed as a request for variance, was clearly and concisely described. An explanation of the perceived advantages of touch screens accompanied the description. Right and Wrong ITB No. 2887-85 (Rebid) calls for "correct answer feedback," Joint Exhibit No. 1, p. 13, 3.3.05, which the specifications describe in some detail, after first making clear that "wording and procedures . . . serve only as a guideline [and that d]ifferent procedures, wording or indications will be acceptable." Joint Exhibit No. 1, p. 16. "WHEN SURE PUSH SCORE" should be an indicator and shall come on after an answer choice has been made to advise the applicant to depress the "SCORE" selection device. "RIGHT" [or] "WRONG" will appear after the "SCORE" selection device has been depressed and will indicate the correctness of the applicant's answer choice. Joint Exhibit No. 1, pp. 16 and 17, 3.9.5 3. 9.5 3.9.7 The final answer selection device, when activated by the applicant, shall cause the selected answer to be recorded and the correct or incorrect indicator to be activated. It shall not be possible to activate the final answer selection device until an answer selection has been made. Joint Exhibit No. 1. p. TestCorp's bid, which states, "The test can be presented as specified in this proposal," Joint Exhibit No. 2, p. 29, indicates that the "TestCorp method uses an answer until correct procedure for administering tests." Joint Exhibit No. 2, p. 30. "The computer does the scoring . . . . Examinees know the correct answer to each question at the end of the test." Joint Exhibit No. 2, p. 30. TestCorp's bid also includes the following description: When the test begins, the software chooses a question at random and presents it to the examinee. The examinee touches a key to register the answer of his choice. If it is wrong, the computer tells him to try again until he gets the right answer . . . Joint Exhibit No. 2, p. 71. Apparently TestCorp's system would cause a "Try Again" panel rather than a "Wrong" panel to light up, but this difference is not material, as Section 3.9.5 explicitly states. Cabinetry ITB No. 2887-85 (Rebid) requires that the cabinet for the "handicapped display unit . . . be so constructed as to permit an applicant for a driver's license test to remain seated while taking the test," Joint Exhibit No. 1, p. 15, 3.8.1; and requires that the examiner's console cabinet "be a small desk top unit with a sloping panel for ease of operation and readout viewing." Joint Exhibit No. 1, p. 19, 8.14. TestCorp's bid does not explicitly address the cabinetry either for the handicapped display unit or for the examiner's station. TestCorp's bid does say, "Any testing station can be used as an alternate Examiner's Station." Joint Exhibit No. 2, p. 27. TestCorp's bid also states, however that the "Examiner's Station consist[s] of the same components [as make up an examinee's station, viz., housing, cables, a microcomputer, a monitor, a touchscreen and a video disc player] with the exception of the video player, which is replaced by a printer," Joint Exhibit No. 2, p. 29, and that the "Examiner's Console also includes the local area network hardware that controls the Testing/Information Stations." Joint Exhibit No. 2, p. 29. The latter statements raise some question about the asserted interchangeability. In context, the claims that the different types of stations are similar or interchangeable must relate to their technical construction, and not to the cabinets in which the working components would be housed. References ITB No. 2887-85 (Rebid) calls for a "list of three (3) customers having equipment like or similar to that being bid." Joint Exhibit No. 1, p 4, 2.17. TestCorp supplied the names of four customers, for only two of whom, however, TestCorp had installed automated driver testing systems. TestCorp furnished the other two customers hardware identical to that called for by ITB No. 2887-85 (Rebid), albeit "not all tied together to a command console or master console as" (T.63) called for by ITB No. 2887-85 (Rebid). As for the software TestCorp furnished these other two customers, "[t]here are some differences in terms of commands, but the program, software program, is not a dissimilar program" (T. 64) even though these customers use the systems for purposes other than testing drivers, purposes requiring the input of different data.
The Issue Should the Department of Financial Services, f/k/a Department of Insurance (Petitioner) impose discipline on the Non-resident All Lines Independent Adjuster License (75-20) held by Kathylean Ashburn-Riley (Respondent)?
Findings Of Fact Respondent holds license EO24890 (75-20). The license was issued on April 26, 2002. Chapter 626, Florida Statutes, creates jurisdiction for the Petitioner to issue the license and regulate Respondent in its use. On March 26, 2002, Respondent had made application for the license by executing a written application for Non-resident All Lines Independent Adjuster license. One of the questions to be answered in the application was the question: Have you ever been charged, convicted, found guilty, or pleaded guilty or nolo contendere (no contest) to a crime under the laws of any municipality, county, state, territory, or country, whether or not adjudication was withheld or a judgment of conviction was entered? Respondent checked the box adjacent to the question indicating "no" as the answer. Above the signature Respondent placed on the application language which states in pertinent part: I do solemnly swear that all answers to the foregoing questions and statements are true and correct to the best of my knowledge and belief . . . * * * Whoever knowingly makes a false statement in writing with the intent to mislead a public servant in the performance of his/her official duty shall be guilty of a misdemeanor of the second degree. Under penalties of perjury I declare that I have read the foregoing application for license and that the facts stated in it are true. I understand that the misrepresentation of any fact required to be disclosed through this application is a violation of the Florida Insurance and Administrative Codes and may result in the denial of my application and/or the revocation of my insurance license. Petitioner relied upon the information in the application. In particular, Petitioner relied upon the answer to the question concerning Respondent's criminal record as quoted and the oath accompanying Respondent's signature at the end of the application. Based upon that reliance the license was issued. Contrary to the representations in the application in response to the subject question concerning Respondent's criminal history, Respondent has a criminal history. In the State of New Jersey v. Kathylean Williams a/k/a Kathylean Ashurn, Defendant, before the Superior Court of New Jersey, Mercer County, Law Division-Criminal, File No. 82-3660, Indictment Number 661-5-83, Respondent was charged with theft by deception. The indictment stated: The Grand Jurors of the State of New Jersey for the County of Mercer, upon their oaths present that KATHYLEAN WILLIAMS AKA KATHYLEAN ASHBURN on divers dates between March, 1980, through April, 1981, in the City of Trenton in the County aforesaid, and within the jurisdiction of this Court, did purposely obtain the property of the Mercer County Welfare Board, to wit: United States Currency valued at over $500.00, by deception, contrary to the provisions of N.J.S. 2C:20-4, and against the peace of the State, the Government and dignity of the same. On September 17, 1984, in response to the Indictment Number 661-53-83 in the Superior Court of New Jersey, Mercer County, Respondent retracted her plea of not guilty and entered a plea of guilty to theft by deception. On November 1, 1984, it was Ordered and Adjudged that Respondent be sentenced to third degree probation for a period of five years, on condition that restitution of $3,777.10, less any wage execution payments already made at the rate of $80.00 per month as set forth in the Judgment Lien, be paid. A fine of $150.00 was imposed payable at $20.00 per month. On March 19, 1989, the probation in the case was terminated. The probation was terminated early following restitution made in full. The subject question on the application for Non- resident All Lines Independent Adjuster license, which Respondent answered inappropriately concerning her criminal history, was not ambiguous. As the question contemplates, Respondent was charged and convicted of a crime in the State of New Jersey. A Judgment of Conviction (Sentence) was entered. It is inconceivable that Respondent did not understand the question and appreciate that the answer being given to the question in the application was untruthful. In addition the Respondent gave an oath by signing the application according to the instructions for the oath and by her signature acknowledged the consequences of her choice to provide the wrong answer about her criminal history as constituting a violation of the Florida Insurance Code. The fact that Respondent's name changed from the time in which she was involved in the criminal case in New Jersey and made application for the insurance license in Florida is not significant. In both instances the date of birth and social security number were the same which confirmed the identity to be the same.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That a Final Order be entered revoking the Non-resident All Lines Independent Adjuster license held by Respondent. DONE AND ENTERED this 30th day of May 2003, in Tallahassee, Leon County, Florida. CHARLES C. ADAMS 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 30th day of May, 2003. COPIES FURNISHED: Kathylean Ashburn-Riley 6948 Tom Woody Road Snow Camp, North Carolina 27349 Ladasiah Jackson, Esquire Department of Financial Services Legal 4300 200 East Gaines Street Tallahassee, Florida 32399-0333 Honorable Tom Gallagher Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Mark Casteel, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
The Issue Whether the application of Petitioner for registration as an electronic repair dealer should be denied.
Findings Of Fact Petitioner Jack Resnick d/b/a Smart Service petitioned for an administrative hearing upon receipt from the Respondent of a Notice of Intent to Deny License or Registration. The hearing was scheduled for November 27, 1978 at 2:00 p.m. in Tallahassee, Florida. Prior to the hearing the parties requested that the Hearing Officer write a Recommended Order upon submission of "Stipulation of Facts and Questions of Law" filed jointly by the parties, copy of which is attached hereto and made a part hereof. The instruments filed in this case reflect that in February, 1978 Petitioner Jack Resnick applied to the Respondent, Division of General Regulation, for an electronic repair dealer registration under the provisions of Chapter 468, Florida Statutes. In April, 1978 the Respondent notified Petitioner of its intent to deny said application for registration for the reason that applicant Jack Resnick intended to employ one Arthur Resnick as a repair work person In the business. Previously, in 1976 Arthur Resnick had been denied a registration certificate as an electronic service dealer by the Respondent, having been determined to be unfit and ineligible to be registered as an electronic repair service dealer. The Recommended Order entered in that cause, which was adopted as Respondent's final order, made the following; findings of fact: Arthur Resnick caused to be advertised in local (Florida)newspaper advertisements which would the public believe Arthur Resnick Television Repair Service was registered with the Bureau of Electronic Repair when, in fact, it was not. Arthur Resnick had been asked to disclose on his application for registration whether he had been convicted of a felony, misdemeanor, or any infraction other than traffic viola- tions to which Arthur Resnick answered "no" when, in fact, Arthur Resnick had been convicted of three counts of theft by deception involving the repair of television sets by the Court of Common Pleas in Montgomery County, Pennsylvania. The Hearing Officer concluded that: The acts and conduct of the Petitioner in operating without a registration; advertising in a leading and deceptive manner; making false statements as an inducement to the public to authorize repair, and his failure to answer truthfully to certain questions on his sworn application for registration is good and sufficient cause for the director of the Department of Business Regulation, Division of General Regulations to deny the Petitioner a registration certificate as an electronic service dealer. The order of the Respondent adopted the Recommended Order noting that it had received no exceptions to the Recommended Order from either party and thereupon denied the application for registration as an electronic service dealer filed by Arthur Resnick. The application of Petitioner Jack Resnick indicates that he is to be the sole proprietor of the business Smart Service. It indicates that Arthur Resnick, who has the same address as the Petitioner, is to do repair work with a possible employee named Jerry Cohen. Respondent gave no other reason for the denial of Petitioner's application except for the indicated employment of Arthur Resnick.
Recommendation Retract the Notice of Intent to Deny License or Registration which was based on the fact that Arthur Resnick was the prospective employee of the Petitioner. Grant Petitioner's application for registration as an electronic repair dealer providing he presently meets the requirements of the Respondent. DONE and ENTERED this 20th day of December, 1978, in Tallahassee, Florida. DELPHENE C. STRICKLAND Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 COPIES FURNISHED: David M. Hudson, Esquire Deputy General Counsel Depariment of Business Regulation The Johns Building 725 South Bronough Street Tallahassee, Florida 32304 Alexander M. Siegel, Esquire 1303 North State Road 7 Margate, Florida 33062 ================================================================= AGENCY FINAL ORDER ================================================================= STATE OF FLORIDA DIVISION OF GENERAL REGULATION DEPARTMENT OF BUSINESS REGULATION JACK RESNICK and SMART SERVICE, Petitioner, vs. CASE NO. 78-1687 DEPARTMENT OF BUSINESS REGULATION, DIVISION OF GENERAL REGULATION, Respondent. /
The Issue This is a rule challenge proceeding in which the following specific issues are presented: Whether Florida Administrative Code Rule 61G4-12.006 is an invalid delegation of legislative authority, and Whether application of the provisions of Section 112.011(1)(b), Florida Statutes, by the Construction Industry Licensing Board in its quasi-judicial capacity constitutes an agency statement of general applicability that requires rulemaking by the agency.
Findings Of Fact Petitioner, Goode “Buddy” Yeoman, is 64 years of age, and is an individual who has applied to the CILB for an individual certified general contracting license. Petitioner Yeoman has a prior felony conviction and his civil rights have not been restored. Petitioner Yeoman's felony conviction was imposed approximately 20 years ago in 1985 and was unrelated to the contracting practice or trade. Petitioner Yeoman was required to, and did, submit a completed form DBPR CILB 4359. Petitioner’s application was denied by the Construction Industry Licensing Board (“CILB” or “Board”), and on June 14, 2004, the CILB entered its “Notice of Intent to Deny” Petitioner Yeoman’s application for initial certified general contractor. Petitioner Yeoman has separately filed a petition for administrative proceedings regarding the CILB's denial of his initial certified general contractor license. As such, by operation of law no final agency action has to date been taken on Petitioner Yeoman's application. The license denial proceeding has been continued. This will allow the parties in that case to have the benefit of the final order in this rule challenge case. The sole basis for the denial of Petitioner Yeoman’s application was that his civil rights had not been restored. The CILB’s “Notice of Intent to Deny” stated: “You have not provided proof to the Board that your civil rights have been fully restored subsequent to a previous felony conviction as required by Section 112.011(1)(b), Florida Statutes.” The requirement that a restoration of civil rights be obtained which is expressed in the challenged existing rule and the challenged agency statement defined as a rule negatively affect Petitioner Yeoman’s substantial interests by denying him a certified general contracting license. As such, Petitioner Yeoman has standing to bring his challenge to Florida Administrative Code Rule 61G4-12.006(2) and the agency statement defined as a rule (Form “DBPR CILB 4359"). Intervenor Smith's felony conviction was for a drug offense in 1989 and was unrelated to the contracting business or trade. Intervenor Smith filed an application with the CILB, including form “DBPR CILB 4359.” On May 4, 2004, the CILB refused to consider his application because his civil rights have not been restored. As such, Intervenor Smith has standing to bring his challenge to Florida Administrative Code Rule 61G4-12.006(2), and the agency statement defined as a rule (Form "DBPR CILB 4359"). Florida Administrative Code Rule 61G4-12.006 was adopted pursuant to Chapter 120, Florida Statutes, on January 6, 1980, and lists and incorporates by reference DBPR/CILB/025 (Rev. 01/01) entitled “Certifications: Certification Change of Status.” This agency form is applicable to applications for certified licenses and change of status applications, and requires individuals applying for initial contracting licenses to provide proof that their civil rights have been restored if they have been convicted of a felony. The form states in the “Financial Responsibility/Background Questions” section: “NOTE: IF YOU, THE APPLICANT/LICENSEE, HAVE HAD A FELONY CONVICTION, PROOF THAT YOUR CIVIL RIGHTS HAVE BEEN RESTORED WILL BE REQUIRED PRIOR TO LICENSURE.” Form “DBPR CILB 4359" has an effective date of March 24, 2004, but has not been adopted as a rule under Chapter 120, Florida Statutes. The form is available for download on the agency’s web-page as “Initial Issuance of Licensure for Certified Contractor Application Package.” Applicants for licensure as a contractor must submit form “DBPR CILB 4359" to the DBPR. Within the “DBPR CILB 4359" package is the form “DBPR CILB 4357 - Qualified Business (QB) License Application and Qualified Business Change of Status Application,” which requires an applicant previously convicted of a felony to provide proof that his/her civil rights have been restored. This form states: “IF YOU HAVE BEEN CONVICTED OF A FELONY, YOU MUST SUBMIT PROOF OF REINSTATEMENT OF CIVIL RIGHTS,” and also: “Note: If you, the applicant/licensee, have had a felony conviction, proof that your civil rights have been restored will be required prior to Licensure.” Both the challenged Florida Administrative Code Rule 61G4-12.006(2) and the form “DBPR CILB 4359" are generally applicable to every individual applying for a contracting license from the CILB. The CILB has previously approved applications for initial licenses, and change of status licenses, to applicants who did not have their civil rights fully restored, subject to probation until the applicant's civil rights have been restored. Neither the type of crime for which a felony conviction has been imposed, the recency of the conviction, nor the completion of any punishment, have been a factor in the CILB’s denial of applications to individuals previously convicted of a felony crime but whose civil rights have not been fully restored. The sole reason for denial is the lack of civil rights. The lack of civil rights is the standard, expressed in Florida Administrative Code Rule 61G4-12.006(2) and in “DBPR CILB 4359," by which the CILB has denied contractor license applications, including Petitioner Yeoman’s application, and Intervenor Smith's application, under the CILB’s interpretation of Section 112.011(1)(b), Florida Statutes. The CILB has not revoked any previously granted licenses due solely to a subsequent felony conviction and lack of civil rights of any licensee. The CILB is a collegial body composed of 18 members, 16 of whom are professionals and two of whom are consumer members. Each member is limited to two 4-year terms, and no member may serve more than two consecutive 4-year terms. If a member is appointed to fill an unexpired vacancy, the new appointee may not serve for more than 11 years. The current members of the Board, and their terms, are as follows: Elizabeth Karcher; term 01/10/02-10/31/04 Barry Kalmanson; term 11/01/02-10/31/07 c. Lee-En Chung; term 09/01/99-10/31/06 Paul Del Vecchio; term 01-10-02-10-31-05 Michelle Kane; term 01-10-02-10/31/05 f. Joan Brown; term 03/14/00-10/31/07 Michael Blankenship; term 11/01/02-10/31/06 Carl Engelmeler; term 11/01/02-10/31/06 Jacqueline Watts; term 01/10/02-10/31/04 John Smith; term 11/01/02-10/31/06 (resigned effective 11/01/04) Raymond Holloway; term 01/10/02-10/31/05 Edward Weller; term 11/21/02-10/31/06 Thomas Thornton; term 08/16/04-10/31/07 Robert Stewart; term 08/16/04-10/31/07 o. Doris Bailey; term 08/16/04-10/31/05 A quorum (51 percent) of the appointed members of the Board is necessary for the Board to conduct official business. The CILB meets 11 times each year. On November 8, 1999, the CILB denied the application of Michael A. Helish for the certification examination on the grounds that his civil rights had not been restored. This decision was per curiam affirmed in Helish v. Department of Business and Professional Regulation, 766 So. 2d 1047 (Fla. 1st DCA 2000). The CILB has previously approved applications for initial licenses, and change of status licenses, to applicants whose civil rights had not been fully restored, at times subject to probation until the applicant’s civil rights have been restored, as follows: On June 14, 2004, the Respondent granted an initial contractor license to Robert F. Jones, subject to probation until his civil rights are fully restored. On May 28, 2004, the Respondent granted an initial contractor license to William P. Campbell, subject to probation until his civil rights are fully restored. On May 28, 2004, the Respondent granted an initial contractor license to Glenn Kasper, subject to probation until his civil rights are fully restored. On May 28, 2004, the Respondent granted an initial contractor license to Danny Mitchell, subject to probation until his civil rights are fully restored. On March 3, 2004, the Respondent granted an initial contractor license to Timothy Burke, subject to probation until his civil rights are fully restored. On February 9, 2004, the Respondent granted an initial contractor license to Anthony Nicholas, Jr., subject to probation and the condition that his civil rights be fully restored within two years. On June 25, 2003, the Respondent granted an initial contractor license to Andrew Dittenber, stating: “The Board permitted licensure with conditions in this case where applicant did not have his civil rights restored, because of the number of years that have passed since the conviction and evidence that application for restoration has been made.” On June 25, 2003, the Respondent granted an initial contractor license to Robert W. Fleming, stating: “The Board permitted licensure with conditions in this case where applicant did not have his civil rights restored, because of the number of years that have passed since the conviction and evidence that application for restoration has been made.” On December 1, 2003, the Respondent granted an initial contractor license to James D. Munroe, Jr., subject to probation until his civil rights are fully restored. On October 21, 2002, the Respondent granted an initial contractor license to Daryl F. Strickland subject to probation and the condition that his civil rights be fully restored within three years. On September 4, 2001, the Respondent granted an initial contractor license to John Richard Brown, subject to probation and the condition that his civil rights be fully restored within three years. On June 24, 2004, the Respondent amended its initial order and again placed John Richard Brown’s license on probation until such time as his civil rights are restored.
The Issue The primary issue for determination is whether the bid of Intervenor, in response to Respondent's invitation to bid, is non-responsive. Secondary issues to be resolved include Petitioner's legal standing to protest all recommended awards to Intervenor in all the bid's categories where intervenor was deemed the successful bidder; whether Intervenor is an operational division of a corporation authorized to conduct business within the State of Florida; whether Intervenor satisfied bid requirements for submission of a valid manufacturer's certificate; and whether intervenor satisfied bid requirements involving identification of a service coordinator and provision of a list of service representatives in the State of Florida for the computer equipment which is the subject of the bid.
Findings Of Fact Respondent issued an Invitation To Bid (ITB) for microcomputers, Bid No. 129-250-040-B, on February 19, 1990. The ITB was revised by a March 22, 1990 addendum which established April 9, 1990, as the date for opening bid responses with bid tabulations to be posted on May 7, 1990. The purpose of the ITB was to establish a twenty-four (24) month contract for the purchase of microcomputers and equipment by all State of Florida agencies and other eligible users. Political subdivisions of the State of Florida, as well as state universities, could exercise the option of purchasing from the contract, if they so desired. The ITB invited bids in several categories of microcomputer equipment. Petitioner's timely filed written protestaddresses 17 of those categories where Intervenor was determined by Respondent to be the successful bidder. Those categories are numbered 255, 256, 257, 258, 259, 260, 266, 267, 268, 269, 271, 272, 273, 275, 276, 277, and 278. However, the bid tabulation posted by Respondent on May 7, 1990, establishes that Petitioner was the next lowest bidder in only four of the 17 categories. Those four categories are 266, 267, 268, and 269. In accordance with Paragraph 13 of the ITB general conditions, all corporations responding to the ITB were required to be registered with the Florida Department of State and authorized to transact business in the state in accordance with requirements of Chapter 607, Florida Statutes. Further, such bidders were required to insert their corporate charter number, resulting from that registration, in the appropriate space in the bidder acknowledgement form provided by Respondent for inclusion in responses to the ITB. Intervenor provided the Department of State Corporate Charter No. 822327 in the bidder acknowledgement form submitted with its response to the ITB. That charter number is assigned by the Department of State to VGC Corporation d/b/a VGC Corporation of Delaware, a corporation organized under laws of Delaware and authorized to transact business in the State of Florida since 1969. Intervenor mistakenly listed, in its bid, the federal employment identification (FEID) number of another subsidiary corporation of VGC Corporation (VGC). The FEID number submitted by intervenor was that of Graphic Arts Supply, Inc., (GAS), acquired by VGC in December of 1986. GAS became a wholly owned subsidiary of VGC at that time and remains such at the present time. At the time of its acquisition, there existed within GAS a particular segment of that business which dealt primarily with computer products. This computer segment of GAS was set up by VGC as a separate division of the parent corporation in November, 1988. The formation of the new division within VGC was announced at that time by the VGC president in an interoffice memorandum which stated in pertinent part: The Computer Products Group of Graphic Arts Supply has grown significantly in the last several years, accounting for approximately 10% of the total corporation's sales. The growth opportunities in this area are enormous and our long term goal is to become one of the major material distributors of computer products in the United States. Accordingly, I am pleased to announce that we will make this operation a separate division, reporting to Tom Mclaughlin. At the time of the issuance of the November 1988 interoffice memorandum, Tom Mclaughlin was a vice-president and subsidiary manager of VGC corporation. Another individual, Pat Mclaughlin, was a VGC vice-president and general manager of the new division, the intervenor in this cause. Another memorandum issued by the VGC president on September 14, 1989, further emphasized that VGC's Business Systems Division, which is also intervenor, was an operating division of VGC. That memorandum stated that the company comprising the Business Systems Division was known as "GA Computer Systems" and further provided in pertinent part that: The Business System Division is an operating unit and not a subsidiary. The Business Systems Division relies on VGC-Rochester for financial and administrative support, and VGC-Florida for all other support and reporting. On the date of Intervenor's response to the ITB, GAS and Intervenor continued to maintain a business relationship. Pursuant to that relationship, GAS provides certain administrative services to Intervenor in the form of certain record keeping and payment of various taxes in the state of New York. Intervenor pays a fee to GAS for these services. Other administrative functions, such as federal and state tax return preparation, are performed by VGC-Rochester and VGC-Florida, other components of VGC. Intervenor's response to the ITB was submitted and signed by John J. Piseck, an employee of VGC who serves as the eastern regional sales manager for Intervenor's computer products. Another of the ITB's general conditions requires that bids from non manufacturers to provide microcomputers must be accompanied by a certification from the manufacturer that the bidder is an authorized representative of the manufacturer. The certification submitted by Intervenor with its bid response was executed by a representative of Hewlett-Packard Corporation, the computer manufacturer, certifying that GA Computer Products is an authorized dealer/representative. On the date of Intervenor's response to the ITB, adealer/representative contract existed between Intervenor and Hewelett-Packard. The agreement was signed on Intervenor's behalf by Patrick Mclaughlin, VGC vice- president and general manager of Intervenor. Page 12 of the ITB special conditions provides in pertinent part that: The bidder shall name a service coordinator and provide a complete list of in-state representatives, and manufacturer's authorized service repair centers on page 19 as part of the bid response. In the course of fulfilling its responsibility to evaluate each vendor's response to the ITB, Respondent accepted either a list of the bidders' own in-state representatives or a list of the manufacturer's in-state representatives as meeting this service requirement of the ITB. Respondent does not, and is not required to, verify information supplied by vendors relating to service locations. Intervenor has fully complied with the ITB requirement relating to naming a service coordinator and providing a list of service representatives and repair centers. Specifically, Intervenor named one of its employees as the service coordinator, provided a toll-free telephone number for communication with the coordinator, and listed five Hewlett-Packard service locations within the State of Florida. These service locations honor the warranties of the manufacturer, Hewlett-Packard, without regard to which Hewlett-Packard dealer sold the product. Intervenor was responsive in all material respects to Respondent's ITB No. 129-250-040-B.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that upon Intervenor's submission of a corrected FEID number, a Final Order be entered denying Petitioner's claims and confirming the award of the contested 17 categories of Respondent's ITB No. 129-250-040-B to GA Computer Products, a division of VGC Corporation. DONE AND ENTERED this 23rd day of July, 1990, in Tallahassee, Leon County, Florida. DON W.DAVIS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 23rd day of July, 1990. APPENDIX The following constitutes my specific rulings, in accordance with Section 120.59, Florida Statutes, on findings of fact submitted by the parties. Petitioner's Proposed Findings. Petitioner's proposed findings consisted of 32 pages encompassing unnumbered paragraphs dealing with an intertwined mixture of legal conclusions, argument and proposed factual findings. Therefore, Petitioner's submission cannot be treated by the Hearing Officer in this appendix on an individualized basis for each proposed finding. However, Petitioner's submission has been reviewed and addressed, where possible, by the findings of fact set forth in this recommended order. Otherwise, all disputed issues of material fact have been addressed by the evidence adduced at the hearing held in this cause. Intervenor's Proposed Findings. 1.-32. Adopted in substance. Respondent's Proposed Findings. 1.-2. Adopted in substance. 3.-4. Rejected, unnecessary. 5.-24. Adopted in substance. 25.-27. Rejected, unnecessary. 28. Adopted in substance. COPIES FURNISHED: Thomas F. Morante, Esq. One Biscayne Tower Suite 3750 Two S. Biscayne Boulevard Miami, FL 33131 Susan Kirkland, Esq. Jim Bennett, Esq. Office of General Counsel Department of General Services Suite 309 Knight Building 2737 Centerview Drive Koger Executive Center Tallahassee, FL 32399-0950 Lowell L. Garrett, Esq. 5300 Southeast Financial Center 200 S. Biscayne Boulevard Miami, FL 33131 Ronald W. Thomas Executive Director Knight Building Koger Executive Center 2737 Centerview Drive Tallahassee, FL 32399-0950
