Findings Of Fact Respondent, Mark O. Holland, is a licensed registered building contractor holding license number RB 0039443. Respondent was licensed at all times material to this action. Sometime around June 19, 1986, Respondent entered into a contract with Mrs. Mary Sue Thames. Ms. Thames resided in Tennessee. The contract covered Ms. Thames' partially burned out home located at 528 Dement Circle, Panama City, Florida. Respondent was to rebuild the damaged portions of the home and to build an addition onto the home. The contract improvements were to be completed within sixty days of the contract date. The contract contemplated installment payments by Mrs. Thames, by September 5, 1986, she had paid $15,000.00 of the total contract price of $17,300.00 to Respondent. The remaining $2,300.00 was to be paid upon completion of the job. Mrs. Thames became concerned that the job was not progressing in a reasonably timely manner in September 1986 when she visited the job site from Tennessee. She observed that "nothing was done" even though the sixty day contract period had expired. Suppliers were removing items from the job that Respondent had not paid for under the contract. Mrs. Thames throughout the job had telephoned the Respondent weekly to check on the progress. Respondent would assure Mrs. Thames that he would "get right on it" and finish the job. Due to Respondent's assurances, Mrs. Thames elected to stay with Respondent so that he could complete the contract. Respondent never substantially performed the job although he did perform part of the contract. Between September 1986 and January 1987, Mrs. Thames in an effort to get the job finished, paid for supplies and materials that Respondent was contractually obligated to purchase. She paid for sheet rock, vinyl, carpet and doors. Respondent had told Mrs. Thames that he had no money to finish the job and that if she would purchase those materials he could finish the job. Mrs. Thames knew the contract obligated the Respondent to furnish the materials she purchased but was trying to work with the Respondent. The effort did not pay off. Respondent had in effect abandoned the job. As stated earlier, Respondent did not complete Mrs. Thames' job. In March 1987, Mrs. Thames' family assisted her in obtaining other subcontractors and suppliers to complete the job. She incurred costs of $8,000.00 to these subcontractors and suppliers, an amount less than the amount already paid to Respondent. Mrs. Thames testified that at least two subcontractors have not been paid by the Respondent those being Stephens Heating and Air Conditioning and M.D. Stewart Plumbing Company. Mr. Lester Stephens, owner of Stephens Heating and Air Conditioning subcontracted with the Respondent. Stephens' company roughed in the central ducts system valued at $700.00 on September 1, 1986 and as of September 27, 1988, had not been paid by Respondent. Coastal Insulation of Northwest Florida, Inc. filed a lien against Mrs. Thames' property as a result of Respondent not paying for supplies. The lien was apparently discharged by Respondent. Mr. Richard Dodson confirmed the testimony of Mrs. Thames. Mr. Dodson added that in addition to the $8,000.00 Mrs. Thames paid to complete the job, she also incurred hotel and travel bills. She also lost approximately 1 - 1/2 years worth of rental income on the house because of Respondent's misconduct and abandonment of the job. Respondent was disciplined by the Panama City Beach Board of Examiners on September 10, 1987 for misconduct and violations of the Building Regulations and Ordinances of the City of Panama City Beach during the Thames job. Respondent's competency card was revoked by the Board. Respondent has never refunded any of the contract price to Mrs. Thames.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That an administrative fine in the amount of $1,000.00 be levied against Respondent. DONE and ENTERED this 9th day of November, 1988, in Tallahassee, Florida. DIANE CLEAVINGER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9th day of November, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-2489 The facts contained in paragraphs 1, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12 and 13 of Petitioner's Proposed Findings of Fact are adopted in substance, in so far as material. The facts contained in paragraph 2 of Petitioner's Proposed Findings of Fact are subordinate. COPIES FURNISHED: Elizabeth R. Alsobrook, Esquire Tectonics Section Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 Mark O. Holland Route A, Box 366 Youngstown, Florida 32466 Fred Seely Executive Director Construction Industry Licensing Board Department of Professional Regulation Post Office Box 2 Jacksonville, Florida 32201 Lawrence A. Gonzalez, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 Bruce D. Lamb, Esquire General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750
The Issue Whether there is probable cause for Petitioner to bring an action against Respondents for violation of the Florida Deceptive and Unfair Trade Practices Act?
Findings Of Fact Respondents sell used cars in Pensacola, about 500 a year. On or about June 19, 1981, when Fannie Mae Tunstall bought a '76 Buick LeSabre from Fairfield Motors, Inc. (Fairfield), she dealt with Elaine Owens Atkins, who is Fairfield's general manager, secretary-treasurer and a six-year employee. The installment sales contract specified an annual percentage rate of 29.64 percent, and was stamped with the legend, "MINIMUM $25 REPO OR COLLECTION FEE." Respondent's Exhibit No. 1. Ms. Tunstall told Ms. Atkins the payments were too much but signed the papers anyway, and did so without reading them, although Ms. Atkins had told her to read them. The payments did indeed prove too much and Ms. Tunstall fell behind. She was 13 days late with a payment in November of 1981, but Ms. Tunstall and Ms. Atkins had discussed the matter and Fairfield agreed to accept the payment late. Fairfield accepted other payments late, but arranged to have Willie Easley (formerly a singer and now a minister as well as a repossessor of cars) take possession of the Quick early in the morning of January 10, 1983, and drive it away. Ms. Tunstall had failed to make the monthly payment due December 30, 1982. Ms. Atkins had telephoned her once and gotten no answer. Later on January 10, 1983, Fairfield agreed to return the car in exchange for December's payment, another payment in advance, a six dollar late fee and a $100 repossession fee. Ms. Tunstall paid the entire balance Fairfield claimed to be owed and retrieved the car. Linda Louise LaCoste and her husband Ronnie have bought several cars from Fairfield, including a 1976 Chevrolet Suburban Mr. LaCoste bought on February 7, 1983, under an installment agreement calling for interest at an annual percentage rate in excess of 30 percent. The "cash price" was $3,459.75, and the "total sale price" was $4,613.15. Respondent's Exhibit No. 3. The LaCostes understood from prior dealings that their agreement required Mr. LaCoste to maintain insurance on the vehicle, and Mr. LaCoste contracted with Allstate Insurance Company (Allstate) for appropriate coverage. Allstate sent Fairfield a notice of cancellation for nonpayment of premium effective 12:01 A.M. April 4, 1983. Petitioner's Exhibit No. 4. At 11:25 A.M. on April 4, 1983, Allstate accepted the premium Ronnie LaCoste offered in order to reinstate the policy, No. 441361747, and Allstate's Chirstine Smith also wrote a new policy to be sure there would be coverage. Ms. Smith told Fairfield that insurance was in force on April 4, 1983. On April 20, 1983, Allstate issued another notice of cancellation for nonpayment of premium on policy No. 441361747, effective 12:01 A.M. May 4, 1983. At ten minutes past three o'clock on the afternoon of May 4, 1983, Mr. LaCoste's Chevrolet Suburban was repossessed at Fairfield's instance on account of the apparent lapse of insurance. Mrs. LaCoste and here sister appeared promptly at Fairfield's place of business and tendered payment due that day. All prior payments to Fairfield were current. When Mrs. Atkins refused payment, Mrs. LaCoste and here sister protested with such vehemence that a Fairfield employee called the sheriff's office. According to Fairfield's contemporaneous records, Fairfield employees ("we") tried to give Mrs. LaCoste a letter "advising vehichle [sic] would be held for 10 days" (i.e., that it would be sold thereafter) but "she refused to accept a copy." Respondent's Exhibit No. 3. At hearing, Ms. Atkins conceded that she had not mailed a copy of the letter to Mr. LaCoste but testified that Mrs. LaCoste accepted a copy after refusing to take it initially. Mrs. LaCoste denied that she ever received the letter, and her version has been credited. On May 7, 1983, Fairfield received another communication from Allstate. Whether insurance coverage in fact lapsed on May 4, 1983 was not clear from the record. On May 17, 1983, Fairfield sold the Chevrolet Suburban for $2,050.00. Carolyn V. Kosmas purchased a 1978 Ford LTD II from Fairfield and made a downpayment of $550.00 on June 2, 1983. Under the terms of the installment sale contract, which called for an annual percentage rate in excess of 29 percent, she was to begin seventy dollar ($70.00) biweekly payments on June 22, 1983. At the time of the sales of the Ford to Ms. Kosmas on June 2, 1983, Fairfield asked for credit information about her fiance as well as about herself. On June 24, 1983, she appeared at Fairfield's place of business and tendered not only the payment due June 22 but also the payment due July 6, a total of $140.00 in cash. Ms. Atkins refused to accept the money, telling her that her references had not panned out, and asked her to surrender the keys to the car and gather up her personal effects. Ms. Kosmas made no secret of her opinion that she was not being treated fairly, but, crying and afraid, eventually agreed to treat the transaction as a rental and accepted a refund of $104.39 on that basis. Ms. Atkins "advised if she gave me another background sheet, that I could verify, I would renegotiate with her," Respondent's Exhibit No. 5, but Ms. Kosmas told Ms. Atkins that she had lost her job at West Florida Hospital and the renegotiation eventuated in the retroactive lease. Respondent Pearl Allen was present on June 24, 1983, and took the car keys from her. It was also he who wrote her on June 27, 1983 that the 1978 Ford LTD II would be privately sold on July 6, 1983. She did not appear when and where she was told the sale would occur. The Ford was in fact sold at auction in Montgomery, Alabama, on July 19, 1983. Respondent's Exhibit No. 5. Mary Lee Hobbs' husband Forace paid Fairfield $800.00 down on a 1977 Oldsmobile 98 on February 27, 1982, agreeing to maintain insurance on the car until paid for, and to pay the unpaid principal balance of $4134.25 over a two and a half year period together with interest at an annual percentage rate of 29.79. Stamped on the contract was the legend, "MINIMUM $25 REPO OR COLLECTION FEE." In part, the installment sale contract read: * NOTE: DISCLOSURES REQUIRED BY FEDERAL LAW, Respondent's Exhibit No. 6 (reduced in size), has been omitted from this ACCESS Document. For review, contact the Division's Clerk's Office. All payments were current when, at about half past five o'clock on the morning of November 1, 1983, Fairfield's agents used a wrecker to remove the Oldsmobile, damaging the Hobbses' porch in the process. Fairfield acted because it received notice of cancellation or nonrenewal of the insurance policy that Hobbs maintained on the car. Typed on the form notice as the effective date of cancellation was November 29, 1983. Someone has written in ink "should be 10-29." In fact the insurance policy never lapsed. According to Fairfield's records, they received conflicting information, on October 29, 1983, about whether an insurance premium had been paid. The Hobbses' 27-year old "daughter said they p[ai]d--Conway Spence said they did not pay." Respondent's Exhibit No. 6. This was the same day Mr. Spence, an insurance agent, erroneously informed Fairfield that the effective date of expiration "should be 10-29." Respondent's Exhibit No. 6. Even after Mr. Spence's error was known to it, Fairfield refused to return the car without payment of a $75.00 "repossession fee," and also refused to let the Hobbs children return with the laundry they were sent to fetch from the trunk of the car. It was the refusal to give up the dirty laundry that sent Mrs. Hobbs to the authorities. Karel Jerome Bell bought a 1977 Delta 88 Oldsmobile from Fair field on July 22, 1982, under an installment sale contract calling for two "pick up notes" to be paid in August of 1982 and biweekly payments of $125.00 thereafter until payments reached a total of $4161.212. Respondent's Exhibit No. 7. The "pick up notes," each for $220.00 were due August 7 and 21, 1982, and were not treated as down payments on the installment sale form. After reducing his indebtedness to $1221.21, Mr. Bell fell two payments behind, and Fairfield repossessed the Oldsmobile on July 7, 1983. The same day Fairfield wrote Mr. Bell that it intended to sell his car, but not time or date was specified. On July 8, 1983, Mr. Bell called and asked whether he could continue making payments while the car on the lot. Respondent's Exhibit No. 7. Fairfield's Ms. Gilstrap accepted $100.00 from Mr. Bell on July 12, 1983, which she applied to satisfy a reposession fee of $100.00. On the Bell contract, too, had been stamped, "MINIMUM $25 REPO OR COLLECTION FEE." Ms. Gilstrap "told him as long as he paid something something regularly on the account, I felt sure we would hold it for him." Mr. Bell indicated he would pay an additional $125.00 the following Friday and Ms. Gilstrap made a notation to this effect in his file, where she also wrote, "Pls. don't sell he intends to pay for." Respondent's Exhibit No. 7. Mr. Bell had not made any further payment when, on July 30, 1983, without notice to Mr. Bell, Fairfield sold the car for $1,000.00 to a wholesaler. Respondents use form installment sale contracts. A blank form like the one in use at the time of the hearing was received as Respondent's Exhibit No. This was the form used in the Kosmas and LaCoste transactions. The predecessor form used in the Bell, Hobbs and Tunstall transactions was similar in many respects. The earlier form provided, "LATE CHARGES: Buyer(s) hereby agrees to pay a late charge on each installment in default for 10 days or more in an amount of 5 percent of each installment or $5.00 whichever is less." On the reverse, the form provided: ACCELERATION AND REPOSSESSION. In the event any Buyer(s) or Guarantor of this Contract fails to pay any of said installments, including any delinquency charges when due or defaults in the performance of any of the other provisions of this Contract or (c) in case Buyer(s) or Guarantor becomes insolvent or (d) institutes any type of insolvency proceedings or (e) has any thereof instituted against him, or (f) has entered against him any judgment or filed against him any notice of lien in case of any Federal tax or has issued against him any distraint warrant for taxes, or writ of garnishment, or other legal process, or (g) in case of death, adjudged incompetency, or incarceration of the Buyer(s) or Guarantor or (h) in case the seller or the holder of this Contract, upon reasonable cause, determines that the prospect of payment of said sums or the performance by the Buyer(s) or his assigns of this Contract is impaired, then, or in such event, the unpaid portion of the balance hereunder shall, without notice, become forthwith due and payable and the holder, in person or by agent, may immediately take possession of said property, together with all accessions thereto, or may, at first, repossess a part and later, if necessary, the whole thereof with such accessions, and for neither or both of these purposes may enter upon any premises where said property, may be and remove the same with or without process of law. Buyer(s) agrees in any such case to pay said amount to the holder, upon demand, or, at the election of the holder, to deliver said property to the holder. If, in repossessing said property, the holder inadvertently takes possession of any other goods therein, consent is hereby given to such taking of possession, and holder may hold such goods temporarily for Buyer(s), without responsibility of liability therefor, providing holder returns the same upon demand. There shall be no liability upon any such demand unless the same be made in writing within 48 hours after such inadvertent taking of possession. Should this contract mature by its term or by acceleration, as hereinabove provided, then, and in either such event, the total principal amount due hereunder at that time shall bear interest at the rate of 10 percent per annum, which principal and interest, together with all costs and expenses incurred in the collection hereof, including attorneys fees (to be not less than 15 percent of the amount involved), plus appellate fees, if any, and all advances made by Seller to protect the security hereof, including advances made for or on account of levies, insurance, repairs, taxes, and for maintenance or recovery of property shall be due the Holder hereof and which sums Buyer(s) hereby agrees to pay. * * * LIABILITIES AFTER POSSESSION. Seller, upon obtaining possession of the property upon default, may sell the same or any part thereof at public or private sale either with or without having the property at the place of sale, and so far as may be lawful. Seller may be a purchaser at such sale. Seller shall have the remedies of a secured party under the Uniform Commercial Code (Florida) and any and all rights and remedies available to secured party under any applicable law, and upon request or demand of Seller, Buyer(s) shall, at his expense, assemble the property and make it available to the Seller at the Seller's address which is designated as being reasonably convenient to Buyer(s). Unless the property is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, Seller will give Buyer(s) reasonable notice of the time and place of any public or private sale thereof. (The requirement of reasonable notice shall be met if such notice is mailed, postage prepaid, to Buyer(s) at address shown on records of Seller at least five (5) days before the time of the sale or disposition) Expenses of retaking, holding, preparing for the sale, selling, attorneys' fees, supra, incurred or paid by Seller shall be paid out of the proceeds of the sale and the balance applied on the Buyer(s) obligation hereunder. Upon disposition of the property after default, Buyer(s) shall be and remain liable for any deficiency and Seller shall account to Buyer(s) for any surplus, but Seller shall have the right to apply all or any part of such surplus against (or to hold the same as a reverse against) any and all other liabilities of Buyer(s) to Seller. Similarly, the more recent form provides, on the obverse, Late Charge: If a payment is received more than ten (10) days after the due date, you will be charged $5.00 or five (5 percent) of the payment, whichever is less. and on the reverse, has identical provisions on "Acceleration and Repossession" and "Liabilities After Repossession."
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That Petitioner find probable cause to initiate judicial proceedings against Respondents pursuant to Section 501.207(1), Florida Statutes (1981). DONE and ENTERED this 26th day of April, 1985, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904)488-9675 FILED with the Clerk of the Division of Administrative Hearings this 26th day of April, 1985. COPIES FURNISHED: William P. White, Jr., Esquire Assistant State Attorney Post Office Box 12726 Pensacola, Florida 32501 Paul A. Rasmussen, Esquire Eggen, Bowden, Rasmussen & Arnold 4300 Bayou Boulevard, Suite 13 Pensacola, Florida 32503 Curtis A. Golden, State Attorney First Judicial Circuit of Florida Post Office Box 12726 190 Governmental Center Pensacola, Florida 32501
The Issue The issue in this case is whether Respondent's intended decision to award a contract, challenged by Petitioner, is contrary to Respondent's governing statutes, rules, policies, or the proposal specifications.
Findings Of Fact Admitted Facts Per Joint Pre-Hearing Stipulation The Department advertised for proposals and bids for the Project under procurement contract number E5R63. Commercial was a bidder on the Department's contract E5R63 for the Project. Commercial reviewed the Department's advertisement for proposals and bids for the Project. The Project consists of replacing the existing Daytona Avenue Bridge (Bridge No.: 795502). The Project was advertised as a low bid design-build Project. Commercial did not file a challenge to the specifications for the Project. The advertisement for the Project included pre- qualification requirements for design professionals and pre- qualification work class requirements for the contractor. The advertisement for the Project included requirements for design professional services 8.1 and 8.2, Florida Administrative Code Rule Chapter 14-75.5/ The bids and technical proposals for the Project were due at the Department's District 5 offices by no later than 2:30 p.m., on June 18, 2012. Commercial submitted a technical proposal for the Project in response to the advertisement for procurement E5R63. Commercial submitted a bid price for procurement E5R63. The technical proposal submitted by Commercial for procurement E5R63 did not contain a firm or individual pre-qualified by the Department to perform work types 8.1 and 8.2. District 5 representatives contacted Commercial and sought to clarify who had been identified in Commercial's technical proposal to meet the pre-qualification requirements for work types 8.1 and 8.2. Andrus Gaudet was identified in response to the inquiry regarding who would satisfy work type 8.1 and 8.2 pre- qualification requirements. As of June 18, 2012, Andrus Gaudet had not been pre- qualified by the Department in work types 8.1 and 8.2 under rule chapter 14-75. The Department determined that Commercial was non- responsive based on its failure to include a firm or an individual possessing the pre-qualification requirements in work types 8.1 and 8.2 as advertised in the procurement solicitation. The advertisement states on page one that "all qualification requirements must be met prior to the Response Deadline." The Department sent a letter to Commercial that informs all responding firms that in order to be considered for the award, the team must be pre-qualified in the areas in the advertisement. Commercial could not be considered for award of this contract since it did not comply with the pre-qualification requirements. Additional Findings of Fact The Department's advertisement summarized the key terms for the Project, which included the following: NOT TO EXCEED BUDGET AMOUNT OR MAXIMUM BUDGET AMOUNT OR BUDGET AMOUNT*: $798,000 * Actual commitment and final execution of this contract is contingent upon an approved legislative budget and availability of funds ESTIMATED CONTRACT TIME: 300 Contract Days SELECTION PROCEDURE: Low Bid Design-Build RESPONSE REQUESTED: Fax Order Form STIPEND AMOUNT: No Stipend PREQUALIFICATION REQUIREMENTS: CONTRACTOR-WORK CLASS REQUIREMENTS Minor Bridges DESIGN-PROFESSIONAL SERVICES WORK TYPE REQUIREMENTS Major: 4.1.2-Minor Bridge Design Minor: 3.1--Minor Highway Design 4.1.1--Miscellaneous Structure 7.1--Signing, Pavement Marking and Channelization 8.1--Control Surveying 8.2--Design, Right of Way, and Construction Surveying 9.1--Soil Exploration 9.2--Geotechnical Classification Lab Testing 9.3--Highway Materials Testing 9.4.1--Standard Foundation Studies TECHNICAL QUESTIONS SHOULD BE ADDRESSED TO: http://www2.dot.state.fl.us/construction/bid questionmain.asp. The selection procedure for a low bid design-build project is that the Department's technical review committee starts with the lowest price bidder and reviews that bidder's technical proposal to determine if it meets the technical requirements or if it is non-responsive. If the lowest bidder's technical proposal is deemed non-responsive, the technical review committee proceeds to review the technical proposal of the next lowest bidder. The technical proposals of other bidders are not reviewed at all for responsiveness unless and until the committee deems the lowest bidder's proposal non-responsive. The technical review committee prepares its recommendations as to the responsiveness of the proposals reviewed and identifies which bidder, if any, should be deemed the lowest responsive bidder. The technical review committee recommendations are then submitted to the selection committee, which makes the final decision that is posted as the Department's intended decision. Commercial submitted the lowest bid for the Project in the amount of $780,000. Therefore, the technical review committee began with a review of Commercial's technical proposal. After that review, the technical review committee made the following recommendation: The Technical submitted by [Commercial] was reviewed and is recommended as non- responsive. [Commercial] did not identify how the advertised prequalification requirement on 8.1--Control Surveying and 8.2--Design, Right of Way, and Construction Surveying would be met within their Technical. The technical review committee proceeded to the next lowest bidder, Gregori, with a bid price of $817,500. Gregori's technical proposal was reviewed and found to meet the technical requirements for the Project. The technical review committee recommended that Gregori be deemed the lowest responsive bidder. The decision to award the contract to Gregori was made by the selection committee, which agreed with the technical review committee's recommendations. Before making that decision, the selection committee considered whether Gregori's bid price was reasonable. The selection committee made the judgment that Gregori's bid price, which exceeded the engineer's estimate used to establish the budget amount by a relatively small percentage, was reasonable. Funds for contracts must be provided for in the Work Program. When an RFP is issued, the Department sets aside funds in the Work Program in the estimated budget amount. Therefore, in order for the selection committee to award a contract for a bid price that exceeds the estimated budget amount, the selection committee must get approval to fund the excess amount in the Work Program. In this case, the selection committee obtained approval to add $20,500--the amount by which Gregori's bid price exceeded the advertised budget amount--to the Work Program. Commercial did not contend or attempt to prove that Gregori's bid price was unreasonable. Instead, Commercial's challenge to the intended contract award was that the Department was required to reject the bid as non-responsive, because the bid price exceeded what Commercial referred to as the "advertised not to exceed budget amount." Thus, Commercial's challenge hinges on its characterization of the advertisement as specifying a "not to exceed budget amount." However, the actual language in the advertisement was: "NOT TO EXCEED BUDGET AMOUNT OR MAXIMUM AMOUNT OR BUDGET AMOUNT*: $798,000." Commercial was unable to point to any statute, rule, or RFP specification that narrowed the quoted language or that required the Department to deem a proposal non-responsive solely because the bid price is higher than the advertised budget amount. Without more, the dollar amount identified in the advertisement cannot be considered a "not to exceed budget amount." Instead, the amount was either a "not to exceed budget amount," or a "maximum amount," or simply a "budget amount." Commercial unsuccessfully attempted to prove that the Department's prior practice was to declare non-responsive any bids over the advertised budget amounts. To support its position, Commercial relied on the Department's prior practice in connection with an earlier solicitation for the same bridge replacement project, designated contract no. E5R48 (project E5R48), which resulted in a Department decision to reject all bids and re-advertise. The evidence established that the advertisement for project E5R48 set forth a "NOT TO EXCEED BUDGET AMOUNT OR MAXIMUM BUDGET AMOUNT OR BUDGET AMOUNT" of $650,000. The advertisement specified the same "PREQUALIFICATION REQUIREMENTS" in the same work type categories as did the advertisement for the Project at issue here. Potential bidders were given the opportunity to review the RFP and submit questions to the Department. The questions and answers were posted. One question/answer provided as follows: [Question:] The advertisement makes mention of a Maximum Budget for the project. The RFP is silent as to a Maximum Allowable Bid for the project. Is the budget estimate provided in the Advertisement a maximum bid price and will our bid be non-responsive if it is over that amount? [Answer:] No. Technical proposals and bids were submitted by two bidders in response to the solicitation for project E5R48. Following the same selection procedure as for the Project at issue in this case, the technical review committee first reviewed the technical proposal of the bidder with the lower bid, which was in the amount of $798,000. The technical review committee recommended as follows regarding the lower bidder: The Technical submitted by United Infrastructure Group was reviewed and is recommended as non-responsive. United Infrastructure Group did not identify how the advertised prequalification requirement on 9.3--Highway Materials Testing would be met within their Technical. The technical review committee for project E5R48 did not also recommend that the United Infrastructure Group's proposal be declared non-responsive for the additional reason that its bid of $798,000 exceeded the advertised budget amount of $650,000. The technical review committee for project E5R48 then considered the other bidder's proposal, with a bid price of $1,100,000. However, it did not proceed to review that bidder's technical proposal for compliance with technical requirements, for the following reason: The Technical submitted by Superior Construction Company has not been reviewed. The bid submitted by Superior Construction Company is 69% over the Department's advertised Budget Amount. The Technical Review Committee recommends rejecting all bids and readvertising this project. The selection committee for project E5R48 agreed with the technical review committee's recommendations and made the decision to reject all bids and re-advertise. The Department's representative at the final hearing, who served on the selection committees for both bid solicitation rounds for the Daytona Avenue bridge replacement project, confirmed that the selection committee's decision to reject all bids for project E5R48 was not based on a determination that the two bids were "non- responsive" because the bid prices were higher than the advertised budget amount. Instead, the lower bidder for project E5R48 was deemed non-responsive for the same reason that Commercial was deemed non-responsive in this case (non- compliance with all pre-qualification requirements as of the response due date); and the only other bidder proposed a price that was found to be unreasonably high. The Department has the discretion to award contracts when the amounts bid are higher than the advertised budget amounts, absent an RFP specification to the contrary. In deciding whether to exercise that discretion, one factor the Department considers is the magnitude by which the bid price exceeds the advertised budget amount. For project E5R48, after the low bidder was found non-responsive, the only other bid was so much higher than the advertised budget that the Department reasonably exercised its discretion to reject all bids and re-advertise. When bids come in much higher than estimated for a project, the Department will go back to review the engineer's estimate from which the budgeted amount was derived to determine if something needs to be changed in a re-advertisement, such as clarification of the project terms, increase in the budget amount, or both. In this case, the Department clarified the Project terms and increased its budget amount in the re-advertisement of the Project (but not nearly to the level of the very high bid that the Department refused to consider). The Department's exercise of discretion in the prior solicitation round to not consider a bid exceeding the budgeted amount by 69 percent does not dictate that the Department reject Gregori's bid as non-responsive. Instead, the Department's prior practice was shown to be entirely consistent with the Department's exercise of discretion in this case to consider Gregori's bid that was only three percent higher than the advertised budget amount. Petitioner failed to prove any Department's prior practice of rejecting bids as non-responsive when they exceed the advertised budget amount. The evidence showed otherwise. The evidence regarding project E5R48 also demonstrated that the Department's prior practice has been to reject proposals as non-responsive for failure to meet the advertised pre-qualification requirements as of the response submission deadline. That prior practice is consistent with the Department's decision to deem Commercial's proposal non- responsive because the proposal failed to satisfy all of the advertised pre-qualification requirements as of the response submission deadline of June 18, 2012.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by Respondent, Department of Transportation, dismissing the formal protest of Petitioner, Commercial Industrial Corporation. DONE AND ENTERED this 20th day of November, 2012, in Tallahassee, Leon County, Florida. S ELIZABETH W. MCARTHUR 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 20th day of November, 2012.
The Issue Whether Respondent, Department of Corrections' ("Department") intended decision to award contracts to Intervenors, Gateway Foundation, Inc. ("Gateway"), and The Unlimited Path, Inc. ("UPI"), for licensed in-prison substance abuse treatment services pursuant to Invitation to Negotiate FDC ITN 17-112 ("the ITN"), is contrary to the Department's governing statutes, rules, or the ITN specifications, and contrary to competition, clearly erroneous, arbitrary, or capricious.
Findings Of Fact The ITN, Site Visits, and Addenda The Department is a state agency responsible for the supervisory and protective care, custody, and control of all inmates incarcerated by the Department in each of its four regions. As of June 30, 2016, the Department had a total inmate population of 99,119, with 62 percent (61,454) of those inmates in need of treatment for a substance abuse disorder. The Department wants to strategically improve the manner in which it provides licensed substance abuse treatment services to inmates by focusing on maximizing the levels of treatment and individual inmate needs without increasing costs. The Department chose to utilize a flexible competitive procurement process to achieve its goals; specifically, an invitation to negotiate method of procurement rather than an invitation to bid or request for proposals, because it wanted industry leaders to craft individual and innovative solutions to address the problem.1/ Against this backdrop, on September 21, 2016, the Department issued the ITN, "In-Prison Substance Abuse Treatment Services," seeking replies from qualified vendors to provide licensed substance abuse treatment services to inmates incarcerated by the Department in each of its four regions. The Department reserved the right to make separate awards to each of its four regions, or to make a statewide award to a single vendor. The initial term of the contract(s) to be awarded under the ITN is five years. In addition, the Department may renew the contract(s) for up to one additional five-year term. The ITN separated substance abuse treatment services into five distinct service types: Prevention Services, Outpatient Substance Abuse Treatment, Intensive Outpatient Substance Abuse Treatment, Long-term Residential Therapeutic Community, and Aftercare. Additional services were also required, including motivation/readiness classes for program participants awaiting admission to Outpatient, Intensive Outpatient, or Residential Therapeutic Community services, and an alumni support group for program participants who have completed treatment services. The ITN required that the treatment services be provided in programs licensed pursuant to Florida Administrative Code Chapter 65D-30. The ITN identified the selection criteria as follows: The focus of the negotiations will be on achieving the solution that provides the best value to the State based upon the "Selection Criteria" and satisfies the Department's primary goals as identified in this ITN. The Selection Criteria may include, but is not limited to, the following. Selection Criteria: Respondent's articulation of their solution and the ability of the solution to meet the requirements of this ITN and provide additional innovations. Respondent's experience in providing the services being procured and the skills of proposed staff relative to the proposed approach and offering. Respondent's Technical Reply and Cost Reply, as they relate to satisfying the primary goals of the services identified herein. All interested vendors, before submitting their replies, were required to visit various sites within the regions covered by their reply. GEO attended these site visits, which were held in October to November 2016. During the visits, the topic of the budget was discussed. All vendors were informed that the Department "did not have any new money," and that it would be operating within the existing budget. Section 4.10, TAB A, of the ITN required that each vendor submit with its reply a letter from a surety company or bonding agent that documents the vendor's present ability to obtain a performance bond or irrevocable letter of credit in the amount of $1,500,000, per region. In Section 4.8 of the ITN, Pass/Fail Mandatory Responsiveness Requirements, the Department stated it would reject any and all replies that did not meet the pass/fail criteria. One of these criteria, Section 4.8e), specifically required each vendor to demonstrate its ability to meet the performance bond requirement. A vendor was likewise required to make this certification on Attachment IV to the ITN, Pass/Fail Requirement Certification and Non-Collusion Certification. Section 4.8e) stated as follows: The Vendor must be able to demonstrate its ability to meet the Performance Bond requirements. Prior to execution of prospective contract, Respondent will deliver to the Department a Performance Bond or irrevocable letter of credit in the amount equal to the lesser of $1.5 million dollars, per region, or the average annual price of the Contract (averaged from the initial five year Contract term pricing). The bond or letter of credit will be used to guarantee at least satisfactory performance by Respondent throughout the term of the Contract (including renewal years). Section 5.36 of the ITN, Performance Guarantee, also provided: The Vendor shall furnish the Department with a Performance Guarantee in the amount of $1,500,000, per region, on an annual basis, for a time frame equal to the term of the Contract. The form of the guarantee shall be a bond, cashier's check, or money order made payable to the Department. The guarantee shall be furnished to the Contract Manager within thirty (30) days after execution of the Contract which may result from this ITN. No payments shall be made to the Vendor until the guarantee is in place and approved by the Department in writing. Upon renewal of the Contract, the Vendor shall provide proof that the performance guarantee has been renewed for the term of the Contract renewal. Based upon Vendor performance after the initial year of the Contract, the Department may, at the Department's sole discretion, reduce the amount of the bond for any single year of the Contract or for the remaining contract period, including the renewal. The purpose of a performance bond is to mitigate the Department's risk should a vendor fail to perform on a contract. In Addendum 2, the Department identified six current contracts being replaced by the ITN, and provided links to those contracts and budgetary information on the Florida Accountability Contract Tracking System ("FACTS").2/ The Department also provided two rounds of formal questions and answers, which are reflected in Addenda 6 and 7. In Addendum 6, question 3, a vendor asked a question about cost. In response, the Department answered as follows: Vendors are encouraged to submit a Cost Reply in such a manner as to offer the most cost effective and innovative solution for quality services and resources, as both cost efficiency and quality of services will be a consideration in determining best value. In Addendum 6, question 77, a vendor asked a question about how to submit a reply. In response, the Department answered as follows: Vendor's shall only submit one Reply, and the Reply must be clearly labeled with the Region(s) included, or that the Reply is Statewide. In Addendum 7, question 2, the Department again addressed the issue of how many replies are required of a vendor who was interested in either a statewide or a regional award, through the following questions and answers: Question 2: In the responses to vendor questions (Addendum 006), Change to No. 6- "4.9 Submission of Replies" states that "In Reply to this ITN, each Vendor shall: Submit a separate Reply for each Region (bullet item a on page 8). However, under answer #77 (p.21), it states that "Vendor's shall only submit one Reply, and the Reply must be clearly labeled with the Region(s) included, or that the Reply is Statewide." Can you please confirm that a statewide proposal can be one, single proposal for the entire state rather than four separate proposals for each of the four regions? Answer: Yes. If submitting for a Reply for Statewide, the Reply can be submitted as one (1) Reply. If submitting a Reply for multiple Regions such as Regions 1 and 2, a Reply must be submitted for each Region. A separate Technical Reply and Cost Reply must be included for each submission. The Cost Replies must be sealed in a separate envelope from the Technical Replies, but they can all be submitted in the same package. Submission and Evaluation of Replies to the ITN On June 15, 2017, the Department received replies to the ITN from the following six vendors: GEO, Gateway, UPI, SMA Behavioral Health Services, Inc., Village South, Inc., and Bridges of America, Inc. GEO submitted five separate replies, one for each region and one for statewide. Gateway submitted a single statewide reply, but indicated in the reply that it wanted to be considered for a statewide award and one or more regional awards. Gateway also included a detailed budget breakdown by region with pricing for each region. The Department's instructions to the evaluators of the replies included a note reminding them that Gateway submitted a statewide response, but that it wanted to be considered for each individual region. UPI submitted three separate replies, one each for Regions 1, 2, and 3. UPI made the required certifications regarding the performance guarantee and submitted a letter from a surety company evidencing its ability to obtain a performance bond in the amounts required by the ITN. All of the replies were deemed to satisfy the pass/fail criteria and were then evaluated and scored. Negotiations Following the evaluation of the replies, the Department entered into the negotiation phase with GEO, Gateway, UPI, and Bridges of America, Inc. Negotiations commenced in August 2017 and continued through October 2017. The Department held a total of three negotiation sessions with each of these vendors. The ITN provided that the scores from the evaluation phase would not carry over into negotiations and that the negotiation team was not bound by the scores. The Department's negotiation team consisted of Kasey Faulk, chief of the Bureau of Procurement (lead negotiator); Patrick Mahoney, chief of the Bureau of Readiness and Community Transition; and Maggie Agerton, the assistant chief of In-Prison Substance Treatment in the Bureau of Readiness and Community Transition. Ms. Faulk has a master's degree in business administration from the University of Florida. She is also a Florida-certified project management professional; Florida- certified contract negotiator; and Florida-certified contract manager. In her tenure as chief of the Bureau of Procurement, she has overseen more than 130 competitive solicitations, including at least 80 invitations to bid, at least 30 requests for proposals, and approximately 17 invitations to negotiate. She has drafted procurement procedures at two different state agencies, and helped draft revisions to Florida Administrative Code Chapter 68-1. Without objection, Ms. Faulk was accepted at hearing as an expert in the area of Florida procurement processes. Ms. Agerton authored the programmatic portions of the ITN and served as an evaluator. She has a bachelor's and master's degree in criminology. She is also a Florida-certified addiction professional and certified criminal justice addictions professional. She currently serves as contract manager for the Everglades Recovery Center ("Everglades") contract, of which GEO is the incumbent vendor.3/ During negotiations, GEO, which had only provided services to the Department for a short time, touted its experience and devotion of resources at Everglades. However, GEO was under a corrective action plan at Everglades as of May 12, 2017, because of missing information in clinical files and lack of staff supervision. Complete clinical files are very important to substance abuse treatment. Proper clinical documentation is necessary for licensure purposes and allows the Department to ensure that services are being provided in accordance with the contract. By the end of October 2017, Ms. Agerton had conducted a site visit to Everglades, and although GEO had made significant progress in the area of leadership and staff, the clinical files were still a significant problem. Ms. Agerton and Ms. Faulk had concerns about GEO's current contract performance at Everglades. During the negotiation phase, GEO was aware of the Department's concerns regarding its performance at Everglades. During negotiations, GEO was told by the Department that it is trying to spend its money more efficiently and in a cost-effective manner. GEO was told by the Department that its price was outside the range of competitive replies, and GEO was encouraged to provide alternative pricing models and "sharpen its pencils." During negotiations, the Department asked every vendor to identify its cost drivers. GEO did not identify the performance bond as a cost driver. However, UPI identified the performance bond as a cost driver. UPI informed the Department that a performance bond would cost it $200,000 per year regardless of whether the amount of the bond was reduced, because the cost of the bond is based on the complete value of the contract. UPI requested that it be allowed to submit a cashier's check to the Department in the amount of $1,000,000 for three regions in lieu of paying $200,000 per year for five years to a bonding company for a performance bond. At hearing, Ms. Faulk explained the process of negotiating with individual vendors, the importance of having a strategy, and the value of making individual concessions with individual vendors during negotiations. UPI had performed services for the Department for over ten years, through budget cuts, and had not walked away from their contracts. Accordingly, the negotiation team considered UPI's suggestion to be a low risk. That is, the Department did not believe there was a significant risk that UPI would abandon the contract. In any event, the cashier's check proposed by UPI would benefit the Department because the Department could easily take the money and use it to recoup losses in the event of nonperformance, as opposed to a bond, which may require the Department to engage in protracted litigation with a surety company to obtain the value of the bond. The Department also saw the cashier's check as an opportunity to obtain lower pricing from UPI. The negotiation team told UPI it would accept, in lieu of the performance bond, a $1,000,000 cashier's check if UPI was awarded three regions; a $750,000 cashier's check if UPI was awarded two regions; and a $500,000 cashier's check if UPI was awarded one region. Allowing UPI to post a cashier's check in the amount of $750,000 for the two regions it was awarded did not provide UPI with a competitive advantage over GEO. At hearing, GEO's representative, John Thurston, who oversaw the development of GEO's reply and BAFO, and participated in the negotiations, acknowledged that GEO's cost to obtain a performance bond in the amount of $1,500,000 would only have been $67,500 per year. During negotiations, the Department revised the scope of work. Following the negotiations, on October 25, 2017, the Department emailed an RBAFO to those vendors who participated in the negotiations. The RBAFO informed vendors that the term "Best and Final Offers" is used to provide the vendor the opportunity to clarify its response and adjust its price based on the negotiations, and that this does not preclude the Department from seeking clarification or additional information upon receipt of the BAFOs. The RBAFO further stated that the BAFO "must contain a written narrative of services to be provided inclusive of clarifications and any alternative or modifications discussed during the negotiation process." The BAFO required an executive summary, description of service delivery, a staffing matrix, and a price sheet. GPR-037 (General Program Requirements) in the RBAFO addressed staffing and provided, in pertinent part: The vendor shall ensure that all required Vendor staff positions are filled for the entire scheduled 40 hour weekly working period, and that those individuals are physically present at the work site. All positions are full-time, unless otherwise specified, inclusive of interim positions. As to the price sheet, the per diem pricing "should represent the best price the Vendor is willing to offer to the Department." The RBAFO specifically addressed and allowed for vendors to provide alternative pricing models and methods. Providing alternative price offerings gives the Department more options to solve its problem and demonstrates a vendor's understanding of the Department's needs. All vendors were provided with an equal opportunity to submit BAFOs reflecting revisions to the ITN made by the Department during negotiations. The RBAFO reminded vendors to include in their BAFOs alternatives or any modification discussed during the negotiation process. GEO was aware during negotiations that it could have inquired about or proposed to negotiate different components of all aspects of its proposal. GEO was also aware that any global changes for all vendors would be included in the RBAFO, but that negotiation concessions, innovative solutions, and negotiated points with individual vendors, would not be included. In fact, GEO negotiated items that were not shared with other vendors. The BAFOs and Negotiation Team Recommendation The deadline for vendors to submit their BAFOs was November 14, 2017. The Department received BAFOs from the four vendors invited to negotiate. The ITN provided that BAFOs would not be scored and the negotiation team would make a recommendation of award based on which vendor's solution presented the best value to the state, utilizing the selection criteria in the ITN. Prior to submitting its BAFO, the Department responded to Gateway's inquiries about differences between what was to be included in the BAFO and what was discussed during negotiations, specifically in the context of the ratio of Prevention Services counselors (indicated as one counselor to fifty participants in the RBAFO, but discussed during negotiations as one counselor to eighty participants). The Department instructed Gateway to use the ratios included in the RBAFO, and "provide an alternative price with the ratio your Company is proposing." As allowed by the RBAFO and further clarified by the Department, Gateway's BAFO included both a base price offering and an alternative price offering, with detailed explanations of the assumptions included within each offering. Gateway's BAFO included a ratio for Prevention Services counselors from one counselor for every fifty participants (1:50), and an alternative ratio of one counselor for every eighty participants (1:80). Gateway's staffing models in its BAFO also included part-time positions. The members of the negotiation team reviewed the BAFOs and then made a formal recommendation of award at a public meeting held on November 17, 2017, with recorded minutes. The negotiation team recommended regional awards rather than a statewide award. It recommended an award of Regions 1 and 2 to UPI and Regions 3 and 4 to Gateway. The team recommended these vendors because it believed their solutions represented the best value to the state based on the selection criteria identified in the ITN. Ms. Faulk recommended UPI for Regions 1 and 2 because UPI was an incumbent vendor with a long history of providing satisfactory services to the Department. Additionally, she felt UPI had tremendous ideas on how to maximize treatment, their cost was affordable, and they proposed innovative solutions. Ms. Faulk ultimately recommended Gateway's alternate price offering for Regions 3 and 4 because she found them very innovative and treatment-focused. She felt they had extensive experience in a correctional setting providing substance abuse treatment, and their cost was very affordable. She recommended the alternate price offering because it was an innovative solution to increase services. Gateway's alternate price offering increased the number of available treatment slots and provided staffing which the Department found acceptable and appropriate, while at the same time offering a better price. Ms. Agerton recommended UPI for Regions 1 and 2 because she felt UPI brought an innovative solution in negotiations, as well as many different ideas. She felt that based on their incumbent status, they had knowledge of the Department's systems and were able to suggest improvements while remaining affordable. Ms. Agerton recommended Gateway for Regions 3 and 4 because they also brought innovative solutions, particularly an evaluator that would help with monitoring their implementation. She also felt Gateway was likewise affordable and energetic. Neither Ms. Faulk nor Ms. Agerton recommended GEO for any of the regions. Ms. Faulk felt GEO's cost was significantly higher than the other vendors. She also had concerns about some of GEO's responses during the negotiation sessions, particularly with regard to the problems at Everglades. Ms. Faulk felt GEO lacked innovation, it did not understand the problems at Everglades, and it lacked an effective strategy for how not to have the problems reoccur in the future. Ms. Agerton did not recommend GEO for any of the regions because she felt they were very expensive compared to the other vendors; so expensive, in fact, that their price exceeded the Department's budget. Ms. Agerton also had concerns about GEO's current contract performance at Everglades. A formal recommendation memorandum was prepared by the procurement officer and routed through various levels of the Department. The memorandum included a cost analysis, which reflected the total awarded price for all four regions for the initial five-year term to be $57,683,377.25. GEO's proposed price for all four regions for the same period was $80,558,693.75, approximately $22,000,000 higher than the Department's intended awards for all four regions. Notably, the formal recommendation memorandum mistakenly reflected 225 prevention slots in Region 3, instead of the 320 prevention slots included in Gateway's alternative proposal; and 200 prevention slots in Region 4, instead of the 320 prevention slots included in Gateway's alternative proposal. For Region 3, multiplying 320 slots times Gateway's per diem rate of $3.89 (and by 365 days a year), results in an annual total cost of $454,352; compared to the annual cost figure of $319,466.25 for 225 slots reflected in the memorandum. For Region 4, multiplying 320 slots times Gateway's per diem rate of $3.89 (and by 365 days a year), results in an annual total cost of $454,352; compared to the annual cost figure of $283,970 based on 200 slots. Thus, accounting for the increased prevention slots for Regions 3 and 4 results in an annual increase in cost of $305,267.75 above the $11,536,675.45, for a total annual cost for all four regions of $11,841.943.20, and a five-year cost of $59,209,716. On the other hand, GEO's proposed price for all four regions for the same period was $80,558,693.75, which divided by five results in an annual cost to the Department of $16,111,738.70. GEO eliminated the cost of Aftercare services because the Department intends to use an Alumni Program for zero cost in lieu of Aftercare services. GEO calculated that removing the cost to the Department of Aftercare services would result in $1,885.790.75 less, or a total annual cost of $14,225,948.70. Thus, removing the cost of Aftercare services from GEO's proposed price for all four regions would still result in a five-year cost to the Department of $71,129,743.50, which may exceed the amount appropriated, budgeted, and available to the Department for substance abuse treatment for Fiscal Year 2017- 2018, and which far exceeds the cost of $59,209,716 (the amount of the proposed award to Gateway and UPI for the same time period).4/ The recommendation memorandum was approved by the Department's secretary on January 9, 2018. GEO's Protest GEO's protest raises numerous issues, none of which warrant rescission of the Department's intended award to Gateway and UPI. Gateway's Reply to the ITN GEO contends Gateway submitted only a single "statewide" reply to the ITN, and no reply for any regions, and therefore, Gateway is ineligible for a regional award. The persuasive and credible evidence adduced at hearing demonstrates that Gateway's reply was properly considered as a reply for multiple regions because Gateway clearly indicated its intent to be considered for multiple regions. Moreover, Gateway gained no competitive advantage over other vendors as a result of combining its statewide reply with a regional reply. In fact, the Department would have been inundated with replies if it required a vendor to reply for every conceivable combination of regions. UPI's Performance Guarantee GEO contends the Department materially deviated from the ITN and gave UPI a competitive advantage over it by allowing UPI to provide, in lieu of a performance bond, a cashier's check in the amount of $500,000 if awarded one region; $750,000 if awarded two regions; or $1,000,000 if awarded three regions. The persuasive and credible evidence adduced at hearing demonstrates that the Department did not materially deviate from the ITN and give UPI a competitive advantage over GEO by allowing UPI to provide, in lieu of a performance bond, a cashier's check in the amount of $500,000 if awarded one region; $750,000 if awarded two regions; or $1,000,000 if awarded three regions. Notably, the ITN did not require proposers to submit a performance bond or letter of credit with its reply to the ITN, and none of the vendors submitted a performance bond or letter of credit with their replies. Instead, in replying to the ITN, a vendor was only required to "demonstrate its ability to meet the Performance Bond requirements." UPI satisfied the requirements of the ITN by demonstrating its ability to meet the performance bond requirements. In any event, the reduction in the amount of the bond agreed to by the Department ($750,000 in connection with the award of contracts for two regions) did not provide UPI with a competitive advantage over GEO. At hearing, Mr. Thurston estimated GEO's annual cost of providing a performance bond in connection with contracts to be awarded pursuant to the ITN would be approximately $67,500, well below the $200,000 per year that UPI was quoted for its bond. Moreover, the amount of $67,500 is insignificant compared to the significant disparity in the annual, total prices proposed by GEO and UPI in their BAFOs for Regions 1 and 2 (GEO: $9,299,141.50; UPI: $6,342,203, for a difference of $2,956,938.50 per year). At hearing, Mr. Thurston acknowledged he could have raised the issue of the performance bond during negotiations. As Mr. Thurston also acknowledged at hearing, even if GEO had been able to negotiate an elimination of the performance bond amount requirement in its entirety, GEO would not have been able to offer a price that would have remedied the disparity. Gateway's BAFO (Prevention Services Ratio) GEO contends Gateway's ratio for Prevention Services counselors of 1:80, as provided in Gateway's BAFO alternative price offering, is a material deviation from the RBAFO requirements. As detailed above, this alternative offering was expressly permitted by the RBAFO and was further clarified by the Department to Gateway before its BAFO was submitted. Moreover, increasing the prevention capacity to 80 per institution adds an additional 605 inmates served at any one time, resulting in the Department being able to serve more inmates for the same appropriation amount. This is precisely the type of innovative thinking the Department sought to reach its goals. GEO did not submit an alternative pricing model, and it never asked the Department if the ratios for Prevention Counselors were negotiable. At hearing, GEO could not say how much it could have lowered staff levels, if at all, if it attempted to negotiate ratios. Gateway was not given a substantial advantage over GEO by increasing the prevention capacity. In addition, although chapter 65D-30 does include required ratios for certain types of services, there is no maximum caseload requirement applicable to Prevention Services. Gateway's BAFO (Part-Time Positions) GEO also contends Gateway violated GPR-037 in the RBAFO because Gateway's staffing models included part-time positions. However, the Department interprets the phrase "unless otherwise specified" to mean that unless the vendor specifies a position in its reply as part time, the Department will assume that any positions referenced in the reply are full time (40 hours). GEO never asked the Department for clarification on the meaning of the phrase "unless otherwise specified." At hearing, Mr. Thurston could not say whether its BAFO would have been adjusted had GEO asked about negotiating the positions, in terms of being full time. In any event, the Department currently utilizes part- time staff under the contracts being replaced by the ITN. Part- time staff may provide a more cost-effective solution than full- time staff. Gateway's BAFO (Clerical Positions) GEO also contends Gateway's alternate price offering provided for a reduction in clerical staff positions contrary to GPR-035 as set forth in Addendum 6 and the RBAFO. GPR-035 required that each vendor provide a minimum of one clerical position for up to 136 treatment slots, and one-half position for each additional 68 treatment slots. In support of its position, GEO presented Exhibit 1. However, GEO's Exhibit 1 is based on incorrect assumptions, and it is unreliable and unpersuasive. First, the ratios calculated by GEO are impermissibly "rounded-up." Secondly, contrary to GEO's position, the Department only calculates an additional one-half position once the full 68 treatment slots have been achieved. GPR-035 does not require one-half positions for "up to each additional 68 slots." A plain reading of GPR-035, consistent with the Department's reasonable interpretation, is that an additional one-half position is required only after the full 68 slots have been achieved. Gateway's base price offering fully complied with the staffing ratios when the ratios are calculated according to a plain reading of GPR-035, which is bolstered by the Department's practice in calculating ratios. Gateway's alternative price offering providing for a reduction in clerical positions to one full-time employee per facility was a cost-saving measure discussed with the Department and a product of negotiations. Even if Gateway's alternative price offering deviated with regard to the clerical positions, given the discrepancy between GEO's and Gateway's price offerings, the deviation is so small that it is a minor irregularity and not a material deviation. Gateway's BAFO (Pricing) GEO also contends Gateway failed to provide region- specific pricing or a final, firm pricing offer of any kind for the initial term or the renewal term. During negotiations and in its BAFO, Gateway reiterated that it would accept a regional or multi-regional award. Under Section 4.12 of the ITN, the Department reserved the right to seek clarification from vendors regarding their BAFOs and to reopen negotiations after receiving BAFOs. The negotiation team recommended awarding Gateway's alternate price offering for Regions 3 and 4 contingent upon clarification from Gateway that its pricing would be applicable to Regions 3 and 4. Although vendors were invited and could have attended the public meeting and heard this for themselves, none of them chose to attend. Four days later, on November 21, 2017, the Department's procurement officer reached out to Gateway's representative asking it to confirm that the pricing listed in the alternate price offering would remain the same if awarded individual regions as opposed to the entire state. Gateway's representative responded that the alternate prices included in Gateway's BAFO could remain in effect with a modified administrative personnel staffing plan if Gateway was awarded more than one region. At the time of this exchange, the Department's negotiation team had already recommended Gateway for Regions 3 and 4; so, the Department knew there would be no need to renegotiate pricing because Gateway was recommended to receive more than Region 4. According to Ms. Faulk, the Department understood Gateway's response to mean that the per diem pricing provided in Gateway's BAFO would apply to Regions 3 and 4. Gateway would reduce the oversight positions to two or three positions, consistent with the smaller level of responsibilities required for two regions instead of four. This exchange occurred prior to the drafting of the award recommendation memorandum, which was dated November 28, 2017. It was not signed by Ms. Faulk until January 3, 2018, or the Secretary until January 9, 2018. Gateway's per diem statewide pricing applied equally to Regions 3 and 4. Although Gateway did not provide a grand total price on its BAFO price sheet, the Department calculated the grand total price using the correct per diem unit prices provided. The ITN stated that unit prices would control in the event of a mathematical error. As it pertains to the price sheet instructions, the RBAFO stated that the vendor's pricing should represent the best price the vendor is willing to offer the Department. Gateway provided both a base price offering and an alternate price offering. The base price offering's price sheet contained the required per diem prices for both the original contract term and the renewal contract term. Under the section titled "TOTAL PRICE," Gateway appeared to sum the individual per diem prices rather than provide an actual grand total contract amount. Gateway did the same for its alternate price offering price sheet. Although Gateway did not provide a grand total price on the price sheet, it included a detailed budget breakdown for both its base price offering and alternate price offering. The Department felt these breakdowns offered additional transparency into Gateway's pricing. Section 4.10, Tab F, of the ITN provided that all calculations would be verified for accuracy by the Department's Bureau of Support Services staff, and that unit prices submitted by a vendor would prevail in the event a mathematical error is identified. Ms. Faulk testified the Department could calculate a grand total price by using the per diem pricing provided on the price page. She explained the Department could multiply the per diem price for each service type by the number of slots for that service, and then multiply that number by 365 days to arrive at the yearly price for a particular service. The Department could then add those prices together to obtain an annual total. She also explained these same calculations could be done for the renewal pricing. UPI's BAFO (Clerical Positions) GEO contends UPI deviated from the staffing requirements by providing fewer clerical support positions than required by the RBAFO. Specifically, GEO contends UPI had a deficit of six clerical support positions, and that if GEO knew it could reduce the staffing complement by six, it would have been worth approximately $270,000. UPI's clerical staffing ratios deviated from GPR-035, because its ratios were calculated based on the belief that prevention slots were not "treatment" slots. The ITN and RBAFO refer to prevention slots as treatment slots. Nevertheless, given the discrepancy between the prices submitted by GEO and UPI, UPI's deviations from the clerical staffing requirements are so small that they are minor irregularities and not material deviations. UPI's BAFO (Pricing) GEO also contends UPI's BAFO failed to include the Revised Price Sheet. Specifically, in paragraph 24 of its amended petition, GEO alleged: "UPI appears to have created its own form that emulated the format of the required form but provides many more spaces for additional information. Other Vendors that used the ITN required form did not have the opportunity to include this additional information." Although UPI did not use the specific Revised Price Sheet form, it provided per diem prices for each level of treatment as required by the form and additional information for the Department's consideration. GEO failed to include per diem pricing for Residential Therapeutic slots in Regions 2 and 4. GEO also modified its price sheets and submitted additional information in the form of annotations denoted by asterisk. In sum, the persuasive and credible evidence adduced at hearing demonstrates that the Department appropriately determined that the proposed awards to Gateway and UPI will provide the best value to the Department based on the selection criteria. Any irregularities in Gateway's and UPI's replies and BAFOs as alleged by GEO were minor and not material deviations. The Department's intended awards to Gateway and UPI are not contrary to the Department's statutes, rules, the ITN specifications, clearly erroneous, contrary to competition, arbitrary, or capricious.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Corrections enter a final order dismissing the protest of GEO Reentry Services, LLC. DONE AND ENTERED this 20th day of April, 2018, in Tallahassee, Leon County, Florida. S DARREN A. SCHWARTZ 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 20th day of April, 2018.
Findings Of Fact At all times material hereto Ralph Thomas West was a licensed real estate salesman with license number 0364011, and Charles De Menzes was a licensed real estate broker with license number 0174324. De Menzes was operating as qualifying broker and officer of De Menzes Realty, Inc., 2116 East Silver Springs Boulevard, Ocala, Florida, license number 0208877. De Menzes Realty, Inc. was a corporation licensed as a broker in Florida. From approximately September 3, 1981 to approximately June 14; 1984; West was licensed and operating as a real estate salesman in the employ of De Menzes Realty, Inc. On March 31, 1984, West obtained an exclusive right of sale listing contract from James M. and Grace Bell for the sale of certain real property. The listing contract was for six months, ending on September 30, 1984, and specified that the listing would be placed with Multiple Listing Service. West had the Bells sign the listing contract, gave them a copy, and returned to De Menzes Realty where he signed the listing and then placed it on the secretary's desk for presentation to, and signature by, De Menzes. Standard office practice was that all listings were placed in a file folder after the salesman and De Menzes had signed them, other required authorization forms were placed in the file and it was returned to the salesman who was then responsible for having all required forms in the file·assigned. The salesman then was supposed to return the file to the secretary who would place the listing with the Multiple Listing Service (MLS). De Menzes told his salesmen that they were responsible for following up on the file and making sure the listing had been placed with MLS. De Menzes does not routinely follow up on listings to insure that salesmen carry out these responsibilities, and he took no action on the Bell listing after executing the exclusive listing. After De Menzes signed the Bell listing, it was placed in a file folder along with Key Box Authorization and Notice to Sellers forms which had to be signed by the Bells. West gave these forms to the Bells on April 1, 1984, and they signed them on that date. They also gave West a key to their property and he placed a lock box on the property door. On April 7, 1984, an auction of the Bell property was held by Max Heubner, who was a licensed real estate salesman working in the employ of De Menzes Realty, Inc. as an auctioneer. Huebner arranged for the auctions himself, including the advertising, and conducted them himself. He did not seek or obtain De Menzes' approval to hold auctions. Huebner would routinely give De Menzes a copy of his auction fliers so that De Menzes would be aware that an auction was being held in case someone called the office about it. The Bell property was not sold as a result of this auction. The Bell listing was never placed in MLS. West did show the property to two people following the auction but never followed up to be sure the listing was entered in MLS. After West left the employ of De Menzes Realty, Inc., on or about June 14, 1984, no efforts were undertaken by De Menzes Realty to sell the Bell property. De Menzes Realty, Inc. and Charles De Menzes were unaware of the Bell listing until early July, 1984, when Grace Bell called the office to inquire about progress in selling the property. Gail Barbee, broker- salesperson at De Menzes Realty, told Grace Bell that there was no listing on file with De Menzes Realty, Inc., and no listing of their property had ever been placed with MLS. Barbee sent Bell a new listing contract on July 19, 1984, but the Bells decided not to reexecute another listing. On October 4, 1984, Barbee returned pictures of the property, as well as a key which Bell had sent her in response to Barbee's letter in July. In early May, 1985, West was going through his briefcase and found the entire Bell listing file; including the original listing contract. This was not a file which he prepared on the subject property but was the actual office file prepared on this listing by personnel of De Menzes Realty, Inc. West had placed the file in his briefcase by mistake and did not realize he had it until May, 1985. He subsequently submitted this file to Petitioner on May 30, 1985. The file had been in his sole possession for approximately a year, during which time he had completely forgotten about the listing, and had left the employ of De Menzes Realty.
Recommendation Based upon the foregoing it is recommended that Respondents, Charles De Menzes and De Menzes Realty, Inc., each be reprimanded. DONE and ENTERED this 16th day of October, 1985, at Tallahassee, Florida. DONALD D. CONN, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 16th day of October, 1985. APPENDIX Rulings on Petitioner's Proposed Findings of Fact: 1. Adopted in Finding of Fact 1. 2. Adopted in Finding of Fact 1. 3. Adopted in Finding of Fact 1. 4. Adopted in Finding of Fact 1. 5. Adopted in Finding of Fact 3. 6. Adopted in Finding of Fact 3. 7. Adopted in Finding of Fact 4. 8. Adopted in Finding of Fact 5. 9. Adopted in Finding of Fact 6 and 7. Adopted in Finding of Fact 7. Adopted in Finding of Fact 7. Adopted in Finding of Fact 6. Adopted in Finding of Fact 6 and 7. Adopted in Finding of Fact 3 and 4. Rulings on Respondent's Proposed Findings of Fact: Rejected as irrelevant and unnecessary. Rejected as irrelevant and unnecessary. Adopted in Finding of Fact 3. Adopted in Finding of Fact 3 and 4. Adopted in Finding of Fact 4. Adopted in Finding of Fact 5. Adopted in Finding of Fact 6. Adopted in Finding of Fact 2. Adopted in Finding of Fact 7. Adopted in Finding of Fact 7. Adopted in Finding of Fact 6 and 7. Adopted in Finding of Fact 7. Rejected as irrelevant and unnecessary. Adopted in Finding of Fact 8. Rejected as irrelevant. Adopted in Finding of Fact 8. COPIES FURNISHED: James H. Gillis, Esquire Department of Professional Regulation 400 West Robinson Street Orlando, FL 32801 Harvey R. Klein, Esquire 333 N.W. 3rd Avenue Ocala, FL 32670 Fred Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, FL 32301 Salvatore A. Carpino, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, FL 32301 Harold Huff, Executive Director Division of Real Estate 400 West Robinson Street Orlando, FL 32801
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Construction Industry Licensing Board enter a final order imposing the following discipline for respondent John R. Gardner's violation of Section 489.129(1)(h), Florida Statutes (1983): Payment by respondent of a $500 administrative fine within thirty (30) days from entry of final order; and Indefinite suspension of respondent's license, effective six months from entry of final order with the suspension to be lifted upon respondent's satisfaction of the Lowenthals' judgment. DONE AND ENTERED this 27th day of June 1984 in Tallahassee, Florida. J. LAWRENCE JOHNSTON Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 27th day of June 1984.
