The Issue Whether Respondent's determination that the bid submitted by Petitioner was non-responsive, was arbitrary, capricious, or beyond Respondent's scope of discretion as a state agency.
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the formal hearing, the following relevant facts are made: A. Background The Department issued a Request For Proposal and Bid Submittal Form (BID) for a full service lease, Lease Number 700:0556, seeking to rent office space in an existing facility located in Polk County, Florida. Responses to the BID were to be filed with the Department by 10:00 a.m. on June 12, 1990. Six proposals were timely submitted in response to the BID, including McCarty's and Fearn's proposal. The Department evaluated the six proposals and made site visits to the properties proposed to be leased. The McCarty proposal received the highest evaluation score of 95.4 points, while the Fearn proposal received the second highest evaluation score of 92.6 points. Because the McCarty proposal had been found responsive to the BID and received the highest evaluation score, the Department awarded the lease contract for Lease No. 700:0556 to McCarty. Fearn filed a timely protest challenging the award to McCarty. The Fearn protest was referred to the Division of Administrative Hearings for hearing. However, after the protest was referred to the Division of Administrative Hearings but before McCarty could intervene or a hearing could be held, the Department reviewed the McCarty proposal and found it to be non- responsive. The Department determined that the McCarty proposal was non-responsive because the McCarty proposal was for more space than authorized by the BID and that not all owners of the property proposed to be leased signed the BID. After determining that the McCarty proposal was non-responsive, the Department rejected the McCarty proposal and awarded the lease contract for Lease No. 700:0556 to Fearn. Upon Fearn withdrawing its protest, the Division of Administrative Hearings closed its file by relinquishing jurisdiction to the Department and the Department entered a Final Order dismissing the Fearn protest. By letter dated July 31, 1990, the Department advised McCarty of its decision to reject his proposal as non- responsive and award the bid to Fearn. By this same letter, the Department advised McCarty of his right to file a protest and his right to a formal administrative hearing. B. Lease Space Requirement Prior to issuing the BID the Department submitted to the Department of General Services (DGS) a Request For Prior Approval of Space Need (BPM Form 4405) wherein the Department justified, through a Letter of Agency Staffing, the need for 3,108 square feet of office space to be located in an existing facility in Auburndale, Polk County, Florida. However, the Department requested approval of only 3,017 net square feet. DGS approved the request for 3,017 net square feet of space and the Department issued the BID referred to in Finding of Fact l. The BID requested bidders to submit proposals to lease 3,017 square feet (plus or minus 3%) measured in accordance with Standard Method of Space Measurement and advised the bidder that the space offered must be within the plus or minus three percent required. The maximum square footage requested by the BID was 3,108 square feet (3017 + 3%). The McCarty proposal was for 3,150 square feet or 42 square feet over the maximum requested. The Department was aware of, and considered, the square feet of rental space proposed by each response to the BID in the initial evaluation since it rejected two proposals for exceeding this requirement by 145 and 392 square feet, respectively. The Department apparently considered the excess 42 square feet of space in the McCarty proposal in its initial evaluation but through an oversight failed to reject the McCarty proposal as it had in the other two proposals. Upon the Fearn protest being filed the Department's legal office reviewed the McCarty proposal and determined that the excess 42 square feet of space was a deviation that should not have been waived. At this point, the McCarty proposal was found to be non-responsive. The price per square foot of the McCarty proposal in all years, one through five, was less than the Fearn proposal. The total price of the lease in the McCarty proposal, including the excess 42 square feet, in all years, one through five, was less than the Fearn proposal. There was no evidence that the cost of the McCarty proposal would exceed the amount budgeted by the Department for this lease. C. Signature of Owner(s) and Transfer of Ownership Requirements. At the time McCarty signed and submitted the BID he was co-owner of the property bid with Adrian Gabaldon. Gabaldon was aware that McCarty was offering the property in question for lease to the Department having witnessed McCarty's signature on the BID and having been involved with the Department personnel concerning the BID. Section D. 4. A, General Provision, page 8 of the BID provides in pertinent part: Each proposal shall be signed by the owner,(s), corporate officer(s), or legal representative(s). The corporate, trade, or partnership title must be either stamped or typewritten beside the actual signature(s). If the Bid Submittal is signed by an agent, written evidence from the owner of record of his/her authority must accompany the proposal McCarty's signature was the only signature, as owner, appearing on the McCarty proposal. Below McCarty's signature the word "owner" was handwritten. Gabaldon signed the McCarty proposal as a witness to McCarty's signature and not as an owner. There is insufficient evidence to establish that at the time McCarty submitted his proposal the property bid was owned by a partnership consisting of McCarty and Gabaldon. There is no printed or typewritten partnership name in the vicinity of McCarty's signature in his proposal or anywhere else in his proposal. Sometime between the date McCarty submitted his BID and the date of the hearing, Gabaldon transferred his interest in the property bid to McCarty. D. General By signing the BID, McCarty agreed to comply with all terms and conditions of the BID and certified his understanding of those terms and conditions. In accordance with Section D.10., General Provisions, page 9 of the BID, all question concerning the specifications were to be directed to C. Donald Waldron. And, although McCarty or Gabaldon may have discussed the space requirement and other matters with certain employees of the Department, they knew, or should have known, that these questions should have been directed to Waldron. Otherwise, the answer could not be relied upon. Neither McCarty or Gabaldon ever contacted Waldron concerning the terms, conditions or specifications of the BID and, more specifically, concerning the space requirement or who was required to sign the BID. Submitted with the Fearn proposal was a letter from Entrepreneur of Tampa as owner of the property bid in the Fearn proposal appointing David Fearn, CCIM and The Fearn Partnership, Inc. as its agent to submit a proposal on behalf of Entrepreneur of Tampa.
Recommendation Pursuant to notice, the Division of Administrative Hearings by its duly designated Hearing Officer, William R. Cave, held a formal hearing in the above- captioned case on October 16, 1990 in Tampa, Florida.
Findings Of Fact Lee County School District (District) Invitation to Bid #4908 (ITB) was provided to the vendors on December 9, 1992. The ITB sought bids for 61 hardware and tool items to be used in the District Supply Department. The District maintains an inventory of hundreds of miscellaneous hardware items. Quantities of available materials are monitored through a computerized system which is used to generate a list of items which need to be replenished. The District has historically utilized ITB's to acquire hardware items in order to maintain appropriate inventory levels. Eight sealed bids were opened on January 6, 1993 at 2:00 p.m. Bids were submitted by Parker-Mahn Ace Hardware, W.W. Grainger, Action Bolt & Tool, Biscayne Electric & Hardware Distributors, Bob Dean Supply, Scotty's, Shadbolt & Boyd, and the Petitioner. The ITB states that the School District of Lee County: reserves the right to waive minor variations to specifications, informalities, irregularities and technicalities in any bids; to reject any and all bids in whole or in part with or without cause, and/or to accept bids that in its judgement will be in the best interest of the District. The District further reserves the right to make awards on a multiple, lump sum, or individual item basis or combination as shall best serve the interest of the District unless otherwise stated. Three of the vendors bid on all 61 items. The remaining vendors bid on some but not all of the items. The bids were tabulated by personnel in the Purchasing Department. The information in the bids is set forth in tabulation sheets which facilitate comparison of buds. On January 7, 1993, the Petitioner sent a letter to the Respondent stating that there were only "two authentic submissions: Ace Hardware and S.W. Supply, Inc." The tabulation sheets and additional materials included in the bid responses were forwarded to the Supply Department where supply personnel reviewed the submissions and made recommendations to the Purchasing Department as to which vendors should receive awards. As part of the evaluation of the bid proposals, the District determined that the cost of the total bid award would be lower if the awards were made on an individual item basis. The District considered prompt payment discounts in making this determination. The total amount of the proposed awards to the eight vendors is $7,104.55. Were the Petitioner to receive awards for all items, the total amount of the award would be $7,965.00, accounting for the Petitioner's proposed prompt payment discount. The Purchasing Department posted a Notice of Intention to Award on January 15, 1993. The proposed awards were made on an individual item basis. All eight vendors received awards. The parties have stipulated that the Petitioner timely filed a notice of protest. Subsequent to the January 15 posting, the Petitioner discovered several errors in determining the proposed awards. In the Petitioner's formal protest, four awards are identified as incorrect. Despite the Petitioner protest, the first item identified was correctly awarded because the Petitioner failed to account for the prompt payment discount offered by the winning vendor. A second item protest was based on clerical error and was withdrawn by the Petitioner. The two remaining items were resolved and were addressed in a corrected Notice of Intention to Award posted February 16, 1993. There is no evidence that the errors were other than mistakes made in calculation or transcription of bid data from the vendor's documents to the bid tabulation form. No further specifically challenged items were identified by the Petitioner prior to the hearing. General condition 1.d. of the ITB states as follows: For purposes of evaluation, the bidder must indicate any variances from specifications, terms and/or conditions regardless of how slight. If variations are not stated in the proposal, it will be assumed that the product or service fully complies with the specifications, terms and conditions herein. (emphasis supplied) General condition 6 of the ITB states as follows: Use of brand names, trade names, make, model, manufacturer, or vendor Catalog Number in the specifications is for the purpose of establishing a grade or quality of material only. It is not the District's intent to rule out other competition; therefore, the phrase OR APPROVED EQUAL is added. However, if a product other that specified is bid, it is the vendor's responsibility to submit with the bid brochures, samples and/or detailed specifications on item(s) bid. The District shall be the sole judge concerning the merits of bids submitted. If a bidder does not indicate what he is offering in the proper blank and if the bidder is successful in being awarded the item(s) then the bidder shall be obligated to furnish the specified item(s). If packing is different from that specified, the bidder must note manner and amounts in which packing is to be made. (emphasis supplied) Only one vendor, Parker-Mahn Ace Hardware, proposed to supply all items exactly as specified in the ITB. The remaining vendor proposals included at least some items which varied in some respects from the items identified in the ITB. Where a vendor fails to identify that a product bid is "not as specified", the proposal is evaluated as if all specifications have been met, in which event, price is the determining factor in determining the award. Where a vendor identifies a variance related to a specified item, the proposal is evaluated as if all specifications other than the identified variance are met. If the product is determined by the Supply Department to be the equivalent of the product identified in the ITB, price is again the determining factor in determining the award. Where the ITB specifies a brand name followed by the word "ONLY", the vendor may not bid another brand. Where the ITB does not qualify the brand name as "only", the vendor may propose an equivalent product. Where a vendor does not identify the brand name of the item to be supplied, the vendor presumed to be bidding an item which will meet the specifications. If the vendor delivers goods which are not as specified, the District rejects delivery and cancels the order. The evidence establishes that, where bid items were not as specified in the ITB, the District had access to sufficient information to permit a determination of equivalency and an award of bids. The evidence fails to establish that, except as stated herein, the Petitioner should have received an award other that as set forth in the February 16, 1993, Notice of Intent to Award. General condition 5 of the ITB states as follows: Cash discount for prompt payment of invoices will be considered in making awards. The District prefers cash discount items which allow at least twenty (20) days for approval and payment of invoices. Four vendors included proposals for prompt payment discounts in the responses. One vendor offered a 2 percent discount for payment within 20 days, one offered a 1 percent discount for payment within 15 days and one offered a 1 percent discount for payment within 10 days. The Petitioner offered a 12 per cent discount for payment within five days, but only if the Petitioner received the award for all items bid. The District preference for a 20 day payment period reflects the time needed to accept delivery, process invoices and make payment for goods received. The District has accepted a five day prompt payment discount when the purchase was for a single item and the delivery date was specified. Such payment is otherwise difficult and results in other vendor payments being delayed. There is no evidence that based on the costs of goods involved in this bid, the savings are of such event as to warrant such extraordinary treatment of deliveries and invoices. General condition 16 of the ITB states as follows: Any and all special conditions that may vary from these General Conditions shall have precedence. Special condition 1 of the ITB states as follows: A SAMPLE OR COMPLETE SPECIFICATION SHEET MUST ACCOMPANY EACH BID ITEM THAT IS NOT "AS SPECIFIED." IF AN ITEM CANNOT BE EVALUATED, IT WILL BE DISQUALIFIED. Parker-Mahn Ace Hardware submitted product brochures or other materials related to items bid. The Petitioner submitted an extensive selection of photocopies pages from a hardware product catalog. W.W. Grainger submitted an index of part numbers and identified where such parts could be located in the Grainger catalog, which was on file with the District. Action Bolt and Tool included product information by brand name and model number in the ITB response. The remaining four vendors (Biscayne Electric & Hardware Distributors, Bob Dean Supply, Scotty's, and Shadbolt & Boyd) attached no specification sheets or other descriptive materials for items bid. As stated previously, the ITB directed vendors to submit specification sheets for "not as specified" items. The request for such information was intended to facilitate the review of the bids by eliminating the need for District personnel to consult vendor product catalogs already in the District files. The ITB also provided for disqualification where an item could not be evaluated. The Petitioner asserts that the failure to submit such product information materials with the bids is a material defect which cannot be waived and which renders the bids nonresponsive. The evidence fails to support the assertion. Of the four vendors which included no specification sheets, all four had product catalogs on file in the Purchasing and/or Supply Departments of the Lee County School Board. The District had sufficient information to evaluate the bids submitted by the vendors with catalogs on file. The Petitioner asserts that it was disadvantaged by the District's decision to waive the failure to attach specification sheets where catalogs were on file, because it was allegedly not possible to compare his bid to those submitted by the other vendors. The evidence does not support the assertion. The relevant catalogs are on file in the Purchasing and Supply Departments of the District and are available for public inspection. There is no evidence that the Petitioner sought at any time to reference the materials on file. The fact that the omitted specification sheets made such a comparison less convenient than it would have been had such sheets been attached to the bids does not render the bid proposals nonresponsive. At hearing, the Petitioner challenged many of the individual intended awards announced by the District. Prior to the hearing, the Petitioner had not asserted that such items were inappropriately awarded. The evidence fails to establish that the Petitioner would be entitled to an award of any of the additional items challenged at hearing. In the case of individual items, a bidder other than the Petitioner would be entitled to the award if the Petitioner's challenge succeeded. None of the other bidders challenged the proposed bid awards. No vendors intervened in this proceeding. Accordingly the Petitioner is not affected by such individual awards and is without standing to challenge the items first identified at hearing. The Petitioner asserted that if the low bidder for each identified product is disqualified, and the next lowest bid included in the total bid calculation, the Petitioner's total bid, including the prompt payment discount, would be lower than the total of individual bids, and that accordingly, he would be entitled to an award of all items. The evidence fails to support the assertion. The Petitioner identified one item at hearing for which the Petitioner should have received the award. The ITB sought bids to supply 24 galvanized one quart metal funnels, item #58115. One of the vendors proposed to supply a plastic funnel at a cost of .56 each. The next lowest bidder was the Petitioner which proposed to supply the metal funnel requested at a cost of $1.44 each. On a previous bid, a plastic funnel was proposed by a vendor and rejected by the District as not meeting the specifications. Although in the instant case, purchasing personnel were informed by supply personnel that a plastic funnel would serve the same purpose and was acceptable, the vendors were not provided the opportunity to bid on the provision of the plastic funnels. General condition 9.c. of the ITB states as follows: If the material and/or services supplied to the District is found to be defective or does not conform to specifications, the District reserves the right to cancel the order upon written notice to the seller and return the product to the seller at the seller's expense. In other words, the District has the right to reject delivery and cancel orders for items which are not as specified in the ITB and for which no variance was identified by the successful vendor. A vendor delivering goods which are not as specified in the vendor's proposal will not be invited to participate in the ITB process for an indeterminate period of time. At hearing, the Petitioner asserted that item #58800 (a plastic sheet of twelve garden hose washers) was mistakenly awarded to a vendor whose proposal was for individual washers rather than the sheet. The Respondent acknowledged that accordingly the proposed vendor's bid was not the lowest. The next two lowest bids (one of which is an "as specified" bid) were received from vendors other than the Petitioner. The Petitioner therefore would not receive this award. The Petitioner asserts that some bidders did not complete "drug-free workplace" forms. Although correct, the assertion is irrelevant. Such forms are used to determine award winners where there are identical bids ("ties"). There were no tie bids related to this case.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that: The School Board of Lee County enter a Final Order directing that the District Purchasing Department refrain from purchasing item #58115 pending the next invitation to vendors to submit bids for miscellaneous hardware supplies and otherwise DISMISSING the Petitioner's Notice of Bid Protest. DONE and RECOMMENDED this 2nd day of June, 1993, in Tallahassee, Florida. WILLIAM F. QUATTLEBAUM Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 2nd day of June, 1993. APPENDIX TO CASE NO. 93-1260BID The following constitute rulings on proposed findings of facts submitted by the parties. Petitioner The Petitioner's proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 7. Rejected, irrelevant. Item #58038 does not require that ONLY an Ace Hardware item may be bid. Based on the ITB, it is clear that the item bid by Action Bolt & Tool meets the specifications set forth in the proposal. 11-12. Rejected, irrelevant. 14. Rejected, irrelevant. The evidence fails to establish that the Petitioner attempted to obtain the materials used by District personnel to evaluate the bids. 16-17. Rejected, irrelevant. Respondent The Respondent's proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 9. Rejected, immaterial. 23. Rejected, irrelevant. 28. Rejected, unnecessary. COPIES FURNISHED: Dr. James A. Adams Superintendent School Board of Lee County 2055 Central Avenue Fort Myers, Florida 33901-3988 Garey F. Butler, Esquire Humphrey & Knott 1625 Hendry Street Fort Myers, Florida 33907 Marianne Kantor, Esquire School Board of Lee County 2055 Central Avenue Fort Myers, Florida 33901-3988
The Issue The issues to be considered here are those associated with the appropriate disposition of RFP-DOT-88-01 (the RFP), related to proposals received from Planning Research Corporation (PRC), AGS Information Services, Inc., (AGS), and which originally involved the proposal by Cubic Western Data, Inc., (Cubic).
Findings Of Fact THE RFP In October 1988 DOT put out a RFP requesting responses from 52 potential offerors. This solicitation garnered responses from three offerors, PRC, AGS, and Cubic. Those responses were received in March 1989. As described in the RFP, DOT desires to acquire a new barrier and ticket toll collection system which would automate the toll collection operations and retrieval of toll audit data, having in mind increased reliability and performance. This project is principally one which envisions the purchase of commodities. It also has associated service requirements. Those service items are principally involved with training and maintenance. This purchase would update technology in the existing toll system which is basically 1950's technology. The existing equipment presents maintenance problems and accounting problems. Those accounting problems are associated with an inaccurate portrayal of the monies collected and the monies that were not collected. The latter item is significant as it relates to the opportunity for potential theft of toll revenue by employees. In addition, there are problems with traffic counts. There are problems with report processing time for management and revenue reports. In the southern end of the turnpike there is the specific problem wherein the DOT is converting from a ticket type system to a coin operated system, and until the barrier type or coin collection equipment contemplated under the RFP is installed, the DOT will be manning those toll collection lanes that are designed for automatic or machine operation. Those lanes are manned by OPS personnel. A copy of the basic RFP may be found as PRC Exhibit 3 admitted into evidence. It does not contain addenda. Within the RFP is found a form which is entitled "State of Florida Request for Proposal Commodities Acknowledgment Form." Under General Conditions, at paragraph 5, it directs the offerors to submit any questions concerning the provisions and specifications in writing to DOT for receipt at a time no later than ten days prior to the proposed opening. It cautions the offerors that if they dispute the reasonableness, necessity, or competitiveness of the terms and conditions in the RFP or the contract award recommendation, to offer that opposition in accordance with Rule 13A-1.006, Florida Administrative Code, and within the time requirements of Section 120.53(5), Florida Statutes. In that same form, paragraph 17 references the liability question and reminds the offerors that any contract resulting from this proposal is designed to hold and save the State of Florida harmless against claims by third parties that resulted based upon a contractor's breach of contract or negligence. Under Special Condition 2.04 DOT reserves the right to reject all proposals. It also speaks to the ability to waive minor irregularities which are seen as those variations from the terms and conditions of the RFP which are not price effective or advantageous to the offeror or beneficial in a way not enjoyed by other offerors or to the extent that the irregularities do not adversely impact the DOT. It reminds the offerors that departure from the RFP requirements other than minor variations cannot be waived. It further states that an offeror cannot modify its proposal after the opening. Special Condition 2.05 follows up the previous condition by stating that nonresponsive proposals will not be considered for the award. Proposals are seen as being subject to rejection in that they may be rejected if found irregular and not in conformance with the requirements and instructions set out in the RFP. Those items may be found to be irregular and nonresponsive in the instance of conditional proposals and indefinite or ambiguous proposals, among other things. Two Special Conditions which are involved with DOT's right to cancel the contract are as follows: Cancellation for Unappropriated Funds The performance by the Department of any of its obligations pursuant to this RFP is subject to and contingent upon the availability of monies lawfully appropriated for the purpose. If the Department deems at any time during the proceedings that funds are not available, the Department will notify the Proposers of such status, and all obligations of the parties, if any, shall end as cancelled by mutual consent. Cancellation for Other Causes A contract arising from this RFP may be cancelled by the Department at any time for failure of the Contractor to complete specified work in accordance with the provisions of the contract and this RFP. Cancellation for such cause shall occur immediately upon Contractor's receipt of written notification thereof from the Department to the Contractor by certified mail, return receipt request. Special Condition 2.12 identifies the terms of a general or prebid conference that calls for mandatory attendance of the offerors and indicates that the members of the Technical Review Committee will be available to respond to questions that the offerors have which relate to clarification of the details of the specifications. Affiliated with that section is Special Condition 2.13 which relates to the offerors' inquiries. It reminds those offerors to examine the RFP to determine whether the DOT requirements are clearly stated. It invites the offerors to state in writing any belief that the requirements of the RFP are restrictive to competition. If the offeror wishes to change any specification, it is required to identify that specification and describe why it is difficult to meet the specification and to give a detailed explanation of why the change is justified. The offeror in that instance also provides what is referred to as a recommended change to the specification. A suggested change must be received by the DOT no later than the date shown as the last date for inquiries and questions set out in the schedule of RFP events. Under the amended schedule of RFP events, the date for last inquiries and questions to the DOT was November 28, 1988. If an offeror failed to request the change by the deadline specified, the offeror is seen to accept the Department's specifications. The DOT is to decide which changes would be acceptable. If necessary, the DOT would issue an addendum reflecting acceptable changes to the RFP, as was done in the instances referred to before. Any changes through an addendum are sent to all offerors to make certain that the offerors are given the opportunity of making proposals that deal with a common set of specifications. Special Condition 3.04 identifies the fact that the price proposals would not be opened until after completion of the evaluation and rating of technical proposals. An offeror's price would not be considered if the technical proposal was rejected during the evaluation. Special Condition 4.01 identifies the stages of the evaluation process. The first stage examines the qualifications of all offerors. The second stage examines technical proposals. The third stage examines price proposals. The fourth stage looks at the remaining proposals in the review process and rates them to arrive at the best overall proposal. Special Condition 6.01.02 speaks to indemnification and states: The contractor shall indemnify, defend, save and hold harmless, the state, the Department and all of its officers, agents, or employees from all suits, actions, claims, demands, liabilities of any nature whatsoever arising out of, because of, or due to breach of, this Agreement by the Contractor, its subcontractors, agents or employees or due to any act or occurrence of omission or commission of the Contractor, its subcontractors, agents or employees. Neither the Contractor nor any of its subcontractors will be liable under this section for damages arising out of injury or damage to persons or property directly caused or resulting from the sole negligence of the Department or any of its officers, agents or employees. The parties agree that 1% of the total compensation [sic] to the Contractor for performance of this agreement is the specific consideration from the Department to the Contractor for the Contractor's indemnity agreement. Special Condition 6.01.03 deals with liabilities for wrongful or criminal act by the Contractor and its language is to this effect: The bond shall be subject to the additional obligation that the principal and surety executing the bond shall be liable to the State in any civil action which might be instituted by the Department or any officer of the State authorized in such cases, for double any amount in money or property the State might lose, or be overcharged, or otherwise be defrauded of by any wrongful or criminal act of the Contractor, his agent or his employees. The parties agree that 1% of the total compensation to the Contractor for performance of this agreement is the specific consideration from the Department to the Contractor for the Contractor's indemnity agreement. General Provision 5.07.02 deals with failure to remove and renew defective materials and work, and it states: Should the Contractor fail or refuse to remove and renew any defective materials used or work performed, or make necessary repairs in an acceptable manner and in accordance with the requirements of the specifications, within the time indicated in writing, the Engineer shall have the authority to cause the unacceptable or defective materials or work to be repaired, removed and renewed, as may be necessary; all at the Contractor's expense. Any expense incurred by the Department in making these repairs, removals, or renewals, which the Contractor has failed or refused to make, shall be paid for out of any monies due or which may become due the Contractor, or may be charged against the contract bond. Continued failure or refusal on the part of the Contractor to make any or all necessary repairs promptly, fully and in an acceptable manner shall be sufficient cause for the Department, at its option, to perform the work with its own organization, or to contract with any other individual, firm or corporation to perform the work. All costs and expenses incurred thereby shall be charged against the defaulting Contractor and the amount thereof deducted from any monies due or which may become due him, or shall be charged against the performance bond. Any work performed subsequent to forfeiture of the contract, as described in this section, shall not relieve the Contractor in any way of his responsibility for the work performed by him. Under General Provision 8.08 dealing with default and termination of contract, for reasons described, DOT has the right to take the contract work away from that Contractor and declare the contract in default within ten days of notice that the complained-of conditions have not been corrected. General Provision 8.09 speaks to the Department and states: Upon declaration of default the Department will have full power to appropriate or use any of all materials and equipment on the site which are suitable and acceptable, and may enter into an agreement with others for the completion of the work under the contract, or may use other methods which in the opinion of the Engineer are required for the completion of the work in an acceptable manner. All costs and charges incurred by the Department because of the Contractor's default, including the costs of completing the work under the contract, shall be charged against the Contractor. In case the expense so incurred by the Department is less than the sum which would have been payable under the contract if it had been completed by the defaulting Contractor, the defaulting Contractor shall be entitled to receive the difference. In case the expense exceeds the sum which would have been payable under the contract, then the Contractor and the surety shall be liable and shall pay the Department the amount of the excess. If after the ten calendar day notice period, and prior to any action by the Department to otherwise complete the work under the contract, the Contractor should establish his intent to prosecute the work in accordance with the Department's requirements. The Department may elect to permit the Contractor to resume the work, in which case any costs to the Department incurred by the delay, or from any reason attributable to the delay, will be deducted from any monies due or which may become due under the contract. General Provision 8.10 deals with the amount of liquidated damages and it states: Such liquidated damages shall be the amounts established in the following schedule which shall apply to each project and retainage. Daily Charge Per Original Contract Amount Calendar Day $50,000 and under ................. $ 200 over $50,000 but less than $250,000 ................... 300 $250,000 or more but less than $500,000 ........................ 400 $500,000 or more but less than $2,500,000 ...................... 550 $2,500,000 or more but less than $5,000,000 ...................... 650 $5,000,000 or more but less than $10,000,000 ..................... 750 $10,000,000 or more but less than $15,000,000 ................ 1,000 $15,000,000 or more but less than $20,000,000 ................ 1,250 $20,000,000 or over ............ 1,250 plus 0.005 percent per day for any amount over $20,000,000 Under the section in the RFP dealing with the Contract Agreement is found Section 14.00 which contains the language set out in Special Conditions 6.01.02 previously quoted. Under the Contract Agreement at Section 19.00 is found a statement of further emphasis about the ability of the DOT to proceed premised upon available funding wherein it is stated: The Department during any fiscal year, shall not expend money, incur any liability, or enter into any contract which, by its terms, involves the expenditure of money in excess of the amounts budgeted as available for expenditure during such fiscal year. Any contract, verbal or written, made in violation of this subsection shall be null and void, and no money shall be paid on such contract. The Department shall required a statement from the comptroller of the Department that funds are available prior to entering into any such contract or other binding commitment of funds. Nothing herein shall prevent the making of contracts for periods exceeding one year, but any contract so made shall be executory only for the value of the services to be rendered or agreed to be paid for in succeeding fiscal years, and shall be contingent upon an annual appropriate of the legislature. THE FIRST EVALUATION COMMITTEE: ITS DECISIONS The committee that was formed to evaluate the several responses had strong technical expertise and limited contractual or administrative experience. Its members were Debra Stemle, Deputy Director Office of Toll Operations; Richard Humphry, head of the facilities and equipment section with toll operations; Scott Love, a data processing manager in the Fort Lauderdale toll operation; Bernard Schmit, a toll technical supervisor; Herb Pressly, associated with the DOT information system and service office; and James Anderson, internal audit staff. Non-voting members included persons from the consulting groups, Post, Buckley, Shue, and Jernigan and Palmer and Associates. Woody Lawson from the DOT Office of Contractual Services served as a liaison to the evaluation committee to address contract questions should they arise. In the experience of DOT it is unusual to purchase commodities by use of an RFP. Moreover, it is unusual to have a commodities purchase in which the Purchasing Division within DOT is not involved. It was not involved on this occasion and the liaison and advisory functions concerning the purchase were through the Contractual Services Division. The evaluation committee began its work within a week of receipt of the proposals. After its first week of review it had made certain discoveries concerning the proposals that can be characterized as problem areas. Those discoveries are outlined in the memorandum prepared through the offices of Post, Buckley, Shue and Jernigan. The operative terms of that memorandum are based upon observations by the evaluation committee. A copy of that memorandum may be found as PRC Exhibit No. 4 admitted into evidence. Cubic's responsiveness was called to question for reasons outlined in the memorandum attachments. In addition, under paragraphs 21-27 attached to the memorandum, certain comments were offered about AGS and its suggestion of changes to the RFP filed with its proposal. A copy of those items that are alluded to in those paragraphs 21-27 may be found as PRC Exhibit No. 5 admitted into evidence. In the attachment to the memorandum, PRC 4, there were observations to the effect that AGS was taking exception to some of the terms of the RFP. Quoting from those paragraphs 21-27, they remarked: AGS - Special conditions Proposal Page No. FDOT TSC-1 Takes exception with RFP 2.008 Need Purchasing and Attorney's office to review. AGS - Special condition Proposal Page FDOT TSC-1 Request Addition to SEC. 2.09 AGS - Special Condition Proposal Pg FDOT TSC-1 Request changes in Section G.01.02 of RFP. [sic] AGS - Special Condition Proposal Pg. FDOT TSC-2 Request Changes in Section 6.01.03 of RFP. AGS - General Provisions Proposal Pg. FDOT TSC-2 Request Changes in Section 5.07.02 AGS - General provision Proposal pg FDOT - 2 Request changes - Section 8.08 Section 8.09 Section 8.10 Refer to Purchasing and Attorney AGS - Proposal Pg FDOT TSC-3 Request Contract Agreement Sec. 22.00 Sec. 14.00 Sec. 19.00 Go to cubic western data Vol 1 CWD Qualification Statement These relate back to sections within RFP already described. As can be seen the evaluation committee was persuaded that it needed the assistance of the Purchasing Division and attorneys within DOT to examine the problems with the AGS suggestions. This is somewhat misleading, because assistance was provided from contractual services, not purchasing. It also felt the need for consultation concerning the responsiveness of Cubic. Ms. Stemle's testimony describes the evaluation committee's reaction to the Cubic and AGS proposals as an attempt by Cubic to change the documentation of the DOT and for AGS to propose a language change to the contract document. In its effort to have the matters examined the evaluation committee contacted Woody Lawson and asked if the evaluation committee should have any real concern about Cubic and AGS. Lawson advised that the evaluation committee should move forward to examine the technical proposals of the three offerors and that the problems that had been seen in the responses might not in their own right constitute a matter of concern. The observation by Ms. Stemle was that this meant, if the proposals in their terms complied in all respects with the RFP, that DOT would be contracting with an offeror for what the RFP called for. This specifically refers to compliance with the technical aspects of the RFP. In essence, the method contemplated by Mr. Lawson's advice to the evaluation committee was one in which the issue of overall responsiveness in view of the problem language in the Cubic and AGS responses related to administrative or contractual requirements was set aside until the technical proposals could be examined. That examination revealed that the technical proposal by Cubic related back to the problems of changes to the contract format and caused the evaluation committee great concern about the responsiveness of Cubic. The technical aspects of AGS were not found to present sufficient problems, in the mind of the evaluation committee, to cause a re-examination of the contract or administrative issues that were addressed in the memorandum attachments within PRC No. 4 as they describe the suggestions in PRC No. 5 that had been promoted by AGS in its response. From Ms. Stemle's point of view, the, problems that existed with the AGS suggested contractual changes or administrative changes that could be addressed in the course of a negotiating phase leading to a contract should AGS be found to be the most advantageous offeror. Persons within DOT who might have a greater appreciation of the significance of the AGS suggestions, that is to say persons from the contracting services or legal arm within DOT did not make a critical examination of the AGS suggestions. By contrast to the circumstance with the AGS proposal, a meeting was convened to consider the responsiveness of Cubic following the assessment of its technical terms. Out of that meeting a decision was reached to reject the proposal of Cubic. These activities are described in the composite PRC No. 7, which includes a memorandum of May 16, 1989, concerning the meeting to discuss the responsiveness issue and a May 18, 1989 letter advising Cubic of the decision to reject its proposal. This decision was met with a protest filed by Cubic. The terms of that formal written protest are described in the Cubic Exhibit No. 3 admitted into evidence. That protest was voluntarily dismissed on July 31, 1989 as shown in Cubic's Exhibit No. 4 admitted into evidence. The case had been forwarded to the Division of Administrative Hearings for consideration as Cubic Western Data, Petitioner vs. Department of Transportation, Respondent, DOAH Case No. 89-3852BID. With the advent of the notice of voluntary dismissal, the case was dismissed before the Division of Administrative Hearings by order, shown in Cubic Exhibit No. 5 admitted into evidence. Following the notice of voluntary dismissal of the Cubic protest the evaluation committee proceeded with the work of examining the remaining proposals and the office of contractual services opened the price proposals. The office of contractual services was made aware of the scoring in the technical aspects of the two remaining proposals and conducted the opening of the price proposals at a public session. The office of contractual services and the evaluation committee conducted independent examinations of the pricing. In doing this work those groups had an engineer's estimate of the cost which was based upon all unit rates which had been requested in the RFP. In effect, there was a comparison of the proposals against the engineer's estimate. The committee had in mind making certain that the pricing was in keeping with the technical proposal. Through this process DOT derived its proposal tabulation, a copy of which may be found as PRC Exhibit No. 8 admitted into evidence. It shows that out of a possible 2,000 points PRC achieved 1,830 and AGS 1,304. This document reminds those concerned that any intended award of the contract is contingent upon and subject to the Governor and Cabinet's approval under the authority of Section 287.073, Florida Statutes, and Rule 13N-1.005, Florida Administrative Code. This exhibit constituted a statement of the DOT intent to award to PRC. The bids had been opened on September 11, 1989, and the posting time ran from 8:00 a.m., November 21, 1989 until 8:00 a.m., November 28, 1989. CUBIC RETURNS Notwithstanding the voluntary dismissal of its challenge to the agency decision finding it unresponsive, as noticed July 31, 1989 and the resultant lack of involvement of Cubic in the review process associated with examination of the price quotation and comparison to the remaining offerors, Cubic attempted to resurrect its participation in the administrative process. This was done by a letter of protest on November 27, 1989, which may be seen as Cubic Exhibit No. 6 admitted into evidence, and a formal written protest dating from December 6, 1989, Cubic Exhibit No. 7 admitted into evidence. The case was referred to the Division of Administrative Hearings and became Cubic Western Data, Petitioner vs. Department of Transportation, Respondent, and Planning and Research Corporation, Intervenor, DOAH Case No. 89-6926BID. On January 2, 1990, the Hearing Officer recommended the dismissal of the protest by Cubic and by Final Order of January 22, 1990, the Secretary of DOT dismissed the protest and ordered that the contract be awarded to PRC. That order did not contain the caveat found in the notice of intent to award tabulation that reminded interested persons that the decision was contingent upon approval by the Governor and Cabinet pursuant to Section 287.073, Florida Statutes, and Rule 13N-1.005, Florida Administrative Code. A copy of the Recommended Order and Final Order may be found as Cubic Exhibit No. 8 admitted into evidence. Having determined to award the contract to PRC and in anticipation of that outcome, DOT provided documentation to the Director of the Division of Purchasing of the Department of General Services in support of its choice on November 15, 1989. A copy of that information with a transmittal letter may be seen as PRC Exhibit No. 10 admitted into evidence. This was followed by a February 7, 1990 letter to the Director of the Division of Purchasing of the Department of General Services requesting that the item be agendaed before the Governor and Cabinet for its February 20, 1990 meeting. The letter mentioned the fact that court action which had been commenced by PRC attempting to prohibit the disclosure of the details of its proposal had been dismissed. Thus, the cabinet aides and the Governor and Cabinet would be able to examine the details of PRC's submission. The correspondence points out that the Cubic price proposal had never been examined by DOT and remained unopened. The correspondence; included a copy of the January 22, 1990 Final Order dismissing the Cubic protest. A copy of the February 7, 1990 correspondence was admitted as PRC Exhibit No. 1. The record does not reveal that the Governor and Cabinet sitting as the State of Florida, Department of General Services has ever acted to approve or disapprove the intended contract award to PRC. As of the week of the final hearing it was still a deferred agenda matter in front of that body. Secretary Benjamin J. Watts, agency head for DOT, had his first involvement in this case in the summer of 1989 at about the time Cubic brought its initial challenge to the decision finding it unresponsive. In the absence of the then Secretary Kaye Henderson he spoke with the General Counsel to DOT, Tom Bateman, and advised Bateman to make the decision that Secretary Henderson contemplated; that decision being one where the agency moved forward with the decision making process concerning this RFP. Following that circumstance Watts received a number of telephone calls from different offices or individuals in the legislature inquiring about whether the DOT properly reviewed this case and if Cubic had been treated fairly. Watts replied in the affirmative. Sometime around Christmas of 1989, Watts met with Cubic, PRC and AGS to discuss the pending case and upon the advice of an attorney within DOT, Bob Daniti, decided to leave matters to the Hearing Officer. This pertained to Cubic's existing case which was eventually dismissed on January 22, 1990. Watts then received a telephone call on February 14, 1990, from Brian Ballard of the Governor's office. Watts had a meeting with Ballard to describe Watts' impression of the case. Ballard requested that DOT do a side-by-side comparison of the proposals based upon information that Cubic had supplied Ballard and his office, according to Ballard. Watts is unaware of who Ballard may have met with from the Cubic firm. This inquiry by Ballard was made at a time beyond which DOT had declared its intention to award the contract by entry of its Final Order on January 22, 1990. From what Ballard said to Watts, Cubic had given Ballard two or three exhibits out of the proposal and highlighted certain areas and within those exhibits told Ballard that if Cubic is being declared unresponsive, then some of the other firms should have been found unresponsive as well. The opposition to the DOT choice to award to PRC as expressed by persons who communicated their point of view to Watts was not based upon any concerns as to the technical analysis. It was premised upon concerns about procedures. Ballard also informed Watts that he wanted the review done and a recommendation made about this matter on Monday following that Wednesday, which would have been February 19, 1990. As Ballard expressed it this would allow him to get back with Cubic on February 20, 1990. Watts responded to these instructions by telling a second committee which he selected on February 14, 1990 to make a further review and that he wished to have their recommendations by February 19, 1990, if possible. He told them that if that was not possible, then their reasons should be provided by the end of the upcoming weekend. In anticipation of the discussion with the Governor's office, Watts told his personnel that he wanted them to give him some estimate of how long it would take. If the review could not be completed by the designated time, Watts said that he intended to simply go back to Ballard and tell him that it was not possible to give an impression of this case by the deadline which Ballard had imposed. In furtherance of the instructions which he had been given by Ballard, Secretary Watts convened the second evaluation committee which was constituted of persons who had stronger grounding in administrative and contract matters. This group included George Lovett, the General Counsel for District V; John Ellis, Professional Services Coordinator in that same District; Brant Hargrove, General Counsel for District II; Nodrie Moses, from the procurement office; Jack Monpetit, Professional Services Coordinator, District II and Marly Eichhoefler, from the DOT Auditor's office. Secretary Watts issued a memorandum which gave a written indication of his intentions about the duties of the second evaluation committee. A copy of that memorandum may be found as DOT Exhibit No. 1 admitted into evidence. He charged that group with the responsibility to review the RFP and all proposals, to include the Cubic proposal which had been rejected in the final order entered cutting off the participation of Cubic in the process. He told them to review and compare major elements of each proposal and determine how responsive each offeror had been in completing the RFP. He indicated that they should identify any problem areas, procedures, questions or etc. that revealed themselves. He allowed them to question the first review committee as well as others who had been involved in the process to gain information about background and technical matters, and provided a list of names of persons who could be contacted to include the members of the first evaluation committee. The Secretary did not intend that the second review committee look carefully at the technical side of the proposals. Being uncertain of their charge in that respect, the second evaluation committee came back to the Secretary early on in their review process and asked for clarification on that point and were told that they need not concern themselves with the particulars of the technical aspects of the proposals. It was not the intention of Secretary Watts that the second evaluation committee get involved in any in-depth discussion or analysis of the choices of the first evaluation committee or to offer a specific critique of the work done by that group. His intention was that the second evaluation committee operate independent of the activities of the first evaluation committee. Watts even went so far as to instruct his second evaluation committee not to ask questions of the first evaluation committee about what conclusions the initial group had reached and not to get information or documents from the first group that would reveal what the prior group had done. The second evaluation committee pursued its responsibilities for several days. On February 17, 1990, it wrote a memorandum to Secretary Watts with its recommendations. A copy of that memorandum may be found as DOT Exhibit No. 2 admitted into evidence. The second evaluation committee did not draw any different conclusions about the responsiveness of the Cubic proposal, nor ascertain any impropriety in treatment that Cubic received in the evaluation process. It did determine that AGS was also nonresponsive for reasons that will be discussed more thoroughly. The evaluation of the PRC proposal by the second evaluation committee lead to the conclusion that the PRC proposal was responsive. That perception was held by the first evaluation committee as well. It is accepted here, together with the opinion of the unresponsiveness of Cubic. After receipt of the report from the second evaluation committee, Secretary Watts held an exit interview with those persons. In the course of that exit interview the conclusions reached by the second evaluation committee were explained to Watts. It was at that point that Watts gave this group some insight into the history of the case in terms of the contentions that had been made about DOT and its first assessment of these proposals. At this juncture, he asked the second evaluation committee if they discovered anything improper with the bidding or anything in the way of influencing that process, taken to mean improper influence. The second evaluation committee told him that there did not appear to be any impropriety or undue influence. That perception is in accord with the assessment of the present record, in that it has not been revealed that the DOT participated in any impropriety or was susceptible to undue influence in the process of the initial evaluation of the responses. Likewise, nothing in the activities of the second evaluation committee is seen to be inappropriate in terms of the portions of this project that they examined related to the administrative or contractual portion of the RFP. The conclusions that they reached are correct in academic terms. Their ability to proceed to evaluate as a jurisdictional matter is not acceptable for reasons that will be discussed in the conclusions of law. More particularly, the second evaluation committee in its exit conference with Secretary Watts told him that their impression of those persons that they had spoken with from the first evaluation committee did not lead them to conclude that there was any pressure on or undue bias exercised by that group. Secretary Watts described for the second evaluation committee what he called rumors around Tallahassee of political influence used to find Cubic nonresponsive and apparently the suggestion that this would work somehow to the advantage of PRC. Again, to the extent that form of commentary was being pursued, it does not comport with the facts in this case. The second evaluation committee in its conclusions about the work of the first evaluation committee determined that the first group had not spent as much time in analyzing procedural and administrative issues as the second group did and saw this as being the reason the first evaluation committee did not discover the unresponsive nature of the AGS proposal. The second evaluation committee did not look closely at the AGS technical proposals to see how those might have an influence on its proposed contract language. Nonetheless, explanation of the AGS bid with the suggested contractual arrangement which AGS has advanced (See PRC Exhibit No. 5), reveals that a consideration of the technical aspects of the AGS bid would not save the proposal from a declaration that it is unresponsive. With the determination that AGS was not responsive, DOT was left with one responsive offeror. Secretary Watts had a conversation with Ronnie Thomas, Director of Purchasing for the Department of General Services. The recommendation that Thomas made to Watts was to re-advertise in that there were three offerors basically capable of doing the work and it would be in the best interest of the taxpayers to re-advertise. The choice to re-advertise would be in lieu of the award of the contract to PRC. That contract would not be for a sole-source purchase. In would be under the guise of what is referred to in Section 287.062(2), Florida Statutes, as a negotiated purchase. In addition to discussing the situation with the second evaluation committee, Secretary Watts sought the advice of his legal staff. He decided to re-advertise because he felt that DOT had not followed its own procedures, as it relates to examination of the AGS proposal by the original evaluation committee and its failure to deal with the problems in that proposal. Under the circumstances, Watts did not believe that he would be able to support the decision to award to PRC, before the public and the Governor and Cabinet. In his mind this outweighed any decision in favor of PRC as being an arrangement that would be advantageous to the State. He believes that there is a benefit to be derived by competition, whether re-advertising leads to a better price advantage or not. Secretary Watts believes that even though the matter has been referred to the Governor and Cabinet for its decision, DOT has the ability to reject all proposals and re-advertise. On February 21, 1990, all three offerors were informed of the agency decision to reject all bids. The correspondence directed to PRC may be found as PRC Exhibit No. 9 admitted into evidence. The correspondence directed to Cubic may be found as Cubic Exhibit No. 9 admitted into evidence. In its operative terms, that correspondence is the same and in pertinent part states: Further review of the proposals submitted in response to RFP-DOT-88-01, Toll Collection System, revealed that the proposals submitted by AGS Information Services, Inc., and Cubic Western Data were non-responsive. In order to have competitive offers there must be two or more offers submitted by responsive and qualified offerors. As a result, we do not have two competitive proposals. The Department has determined that the commodities which were the subject of this request for proposals are available from more than a single source. Therefore, the Department has decided to withdraw its notice of intent to award RFP-DOT-88-01 to Planning Research Corporation, which was contingent on Governor and Cabinet approval. This letter is your notice of our decision to reject all proposals. It is our intent to issue a new Request for Proposals for a Toll collection System. On that same date an amended final order was issued signed by the same person who had authored the letter notifying the parties of the decision to reject all proposals, as designee of Watts. The amended final order in its substance is associated with DOAH Case No. 89-6926BID and differs from the January 22, 1990 final order to the extent of reminding those parties that the award to PRC is contingent upon approval by the Governor and Cabinet in accordance with Section 287.073, Florida Statutes and Rule 13N-1.005, Florida Administrative Code. Secretary Watts perceives the amended final order as establishing a correction to the January 22 order, concerning advice to the parties that the contract must be approved by the Governor and Cabinet. He does not perceive this as being a continuing statement of the intention to award to PRC in the face of a contradictory decision to reject all bids, as evidenced in the correspondence of that same date. The DOT estimate concerning the time necessary to re-advertise contemplates an intent to award by December 7, 1990, with no time allowance for a protest from a disappointed offeror. PROBLEMS WITH THE AGS PROPOSAL Based upon an examination of the testimony of Secretary Watts, Terry Cappellini, Director of Purchasing within DOT, and members of the second evaluation committee, together with an analysis of the overall record concerning the RFP language and policy matters associated with the RFP process, the AGS proposal is not responsive. As alluded to before, PRC Exhibit No. 5 sets out the suggestions which AGS had in mind when it submitted its proposal. It calls them exceptions. In Special Condition 2.08, the language of which is found at page 6, AGS has recommended insertion of additional language to the affect that: In the event the Department cancels for unappropriated funds this RFP or any contract entered into with Contractor pursuant thereto, the Department will, within 30 days of notification of such cancellation, pay Contractor for all work actually performed. Such payment shall be in accordance with the payment terms specified in the Contract between the Department and the Contractor. Similar language is contemplated as being added to Section 19.00 under the Contract Agreement which language in the Contract Agreement has been recited at page 11 in the recommended order. In describing the reasons for the suggested additional language AGS states that it is requiring assurance that if the RFP or any contract with DOT and AGS is cancelled because of a problem of funding, AGS insists on being paid for work that is actually performed. In furtherance of that arrangement it recommends insertion of the above-quoted language. With respect to Special Condition 2.09, which is quoted at page 6 in this recommended order, AGS vies for cancellation after allowing AGS a reasonable opportunity to remedy the problems contemplated, instead of the right to cancel immediately. It recommends the insertion of additional language to the affect: In the event the Department intends to cancel a contract arising from the RFP due to Contractor's alleged failure to complete specified work in accordance with the provisions of the contract or this RFP, the Department shall notify Contractor of such intention, identifying the alleged deficiency, and allow the Contractor a period of 30 calendar days form the date of such notice to remedy the deficiency. In the event Contractor fails to remedy the deficiency within such 30 day period, the Department may cancel the contract effective immediately. Related to Special Condition 6.01.02 dealing with indemnification, as related on page 8 in the recommended order, AGS states that it finds that the idea of indemnification associated with the sole negligence of the Department is not appropriate and would recommend that the word "sole" be substituted for by "or primary." A similar change is recommended for Section 14.00 under the Contract Agreement which has the same language as Special Condition 6.01.02. In discussing Special Condition 6.01.03, the text of which is found at page 8 in the recommended order, AGS attempts to clarify that the one percent reference at special Condition 6.01.03 is in addition to the one percent total compensation for performance that is set out in Special Condition 6.01.02 by the insertion of additional language in Special Condition 6.01.03 in this way: Section 6.01.03 specifies that 1% of total compensation to the Contractor is the agreed compensation for performance by Contractor of the Indemnity Agreement set forth therein. AGS would like to make clear that this 1% is in addition to the 1% of total compensation for performance of the Indemnity Agreement set forth in Section 6.01.02. Accordingly, AGS recommends insertion of the following additional language in Section 6.01.03: `This 1% in addition to 1% of total compensation specified in Section 6.01.02 above.' General Provision 5.07.02 is associated with the failure to the contractor to remove or renew defective materials and work, the text of which section is set out at page 9 of the recommended order. AGS expresses the belief that the contractor should be given a reasonable period of time to remove or renew before rights of the DOT are triggered. It recommends the insertion of language to the effect: The Department's rights under this Section shall be triggered only in the event Contractor fails to remove or renew defective material and/or work within a reasonable period of time from the date of request for such removal or renewal. Engineer and Contractor shall agree upon the duration of such time period on a case by case basis. By remarks directed to General Provision 8.08 of the General Provisions related to the 10 day grace period to cure the defaults, AGS states its belief that 30 days is more reasonable and requests that the grace period be extended to 30 days. In discussion of General Provision 8.09 dealing with the ability of the DOT to complete work after default, found at page 10 of the recommended order, AGS describes its belief that contract law and equitable considerations mandate that DOT is required to use its best efforts to mitigate damages and recommends insertion of the language to the effect: The Department shall use best efforts to mitigate damages in performing or arranging to have work performed as provided in this Section. Discussion is made by AGS of General Provision 8.10, which is described at page 11 in the recommended order. AGS believes that the schedule of liquidated damages should discharge the contractors liability for acts or admissions unless the law requires otherwise. AGS commends insertion language to the effect: Except as otherwise provided by law, payment by Contractor of liquidated damages in accordance with this schedule shall fully discharge Contractor's liability for acts or omissions giving rise to such damages. In discussing the Contract Agreement AGS requires the addition of a Section 22.00 which has this language: In no event will contractor be responsible for any special indirect, incidental or consequential damages resulting from loss of use or opportunity, data or profits arising out of or in connection with the use or performance of the products or services proposed to be delivered hereunder, even if contractor was informed, knew or should have known of the possibility of such damages. In no event will the liability of contractor in connection with the work proposed to be performed hereunder exceed amounts paid by the Department to contractor for such work. This limitation applies to all causes of action in the aggregate, including, without limitation, breach of contract, breach of warranty, negligence, strict liability and other unintentional torts. Finally, under the Contract Agreement is found this comment by AGS wherein it says: AGS requires that the contract define the work AGS will perform. We have priced the work with the understanding that our Technical Proposal defines the work. If we will be required to do work not defined, we will be willing to review our price proposal. In the provisions within the RFP that were referred to in the initial discussion of its terms, the offerors were given adequate opportunity to discuss and clarify those provisions which they did not understand or agree with. Absent success in the attempt to try to persuade DOT to change its position concerning those items within PRC 5 that AGS takes exception to, it had the ability to make a timely challenge to those terms and conditions. From the record, AGS did not attempt to persuade DOT to make changes nor did it pursue challenges to the terms and conditions excepted to. As a consequence, according to Special Condition 2.13, AGS has acquiesced in the terms and conditions. Absent a challenge within 72 hours of the date for submitting requested changes, which date according to PRC Exhibit No. 3 was November 28, 1988, no challenge may be pursued. To allow AGS to advance these recommendations and requirements set out in PRC 5 through the submission of its proposal, would be to condone a material departure from the requirements of the RFP. These items constitute other than minor irregularities which may not be waived. As described in Special Condition 2.04 these arrangements which AGS promotes could affect the price of the proposal and give the offeror an advantage over the other offerors, benefits not enjoyed by the competition. Of course Cubic sought similar advantage, so it is PRC who bore the brunt of these attempts by the competition. To allow AGS to require items or bargain for items in its favor that are not enjoyed by its competitors at a time beyond the acceptable place at which these adjustments could have been allowed or mandated by a decision honoring a challenge to the specifications, would be violative of Special Condition 2.13. It would also adversely impact the interest of the DOT described in Special Condition 2.04, in that the items which AGS would change are extremely important to DOT as a policy matter. These are items that DOT would not wish to surrender through negotiation. This speaks in particular to changes to Special Condition 2.08, General Condition 8.09, the addition of Section 22.00 under the Contract Agreement and the required deference to the technical proposals of AGS instead of the RFP. Moreover, under Special Condition 2.05 the AGS attempt constitutes a nonresponsive proposal in that it is a conditional proposal and is indefinite and ambiguous. Under the scheme contemplated by the RFP, it would be inappropriate to wait until the time of intended contract award to AGS, as hypothetical winner, before making the final decisions on the recommendations that AGS had made to change the terms of the RFP. Regardless, in those instances which have been identified wherein AGS required a certain outcome associated with the RFP terms, this potential bargaining session is not contemplated and a decision on responsiveness would have to be reached without regard for such a bargaining session. In either event, whether referring to the recommended changes or required changes, AGS did not pursue these matters appropriately and they are items which are material, which may not be waived as minor irregularities and which cause the AGS bid to be unresponsive. As generally described before, in the event changes are requested as contemplated by Special Condition 2.13, DOT determines if those changes are acceptable and to the extent that they are found to be acceptable they are incorporated as an addendum to the RFP, thus allowing all offerors the opportunity to submit proposals to the same controlling specifications. When AGS mandated a different set of requirements or requested them, it deprived the other offerors of the opportunity to submit proposals associated with the same specifications. This created an advantage and benefit for AGS not enjoyed by PRC. In summary, none of the items that the first evaluation committee and the second evaluation committee discovered about the PRC proposal constituted other than minor irregularities. As described by Terry Cappellini, who is the Manager of the Office of Contractual Services for DOT, the PRC proposal is advantageous to the state in the sense of being the high technical low priced proposal.
Recommendation Based upon the Findings of Fact and the Conclusions of Law, it is, RECOMMENDED: That a Final Order be entered leaving in place the final order dated January 22, 1990 as amended by the February 21, 1990 order, in which the decision was made to recommend the intended award of a contract to PRC to the Governor and Cabinet; which sets aside the decision to reject all proposals, takes the necessary action to arrange for the item to be agendaed before the Governor and Cabinet; and foregoes further action until the Governor and Cabinet has made its decision. DONE and ENTERED this 22nd day of May, 1990, in Tallahassee, Florida. CHARLES C. ADAMS, 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 22nd day of May, 1990. APPENDIX TO RECOMMENDED ORDER, CASE NO. 90-1583BID The following discussion is given concerning the proposed facts of the parties. Petitioner's Facts Paragraph 1 Reference to a September 23, 1988 publication in the Florida Administrative Weekly is not necessary in that the start-up date of October, 1988 has been Established in the recommended order and that suffices. Otherwise this paragraph is subordinate to facts found. Paragraphs 2 through 16 are subordinate to facts found. Paragraphs 17 and 18 are not necessary to the resolution of the dispute. Paragraph 19 in its first and third sentence is subordinate to facts found. The second sentence is not necessary to the resolution of the dispute. Paragraphs 20 through 25 are subordinate to facts found. Paragraph 26 is contrary to facts found. Paragraphs 27 through 31 are subordinate to facts found. Paragraph 32 is subordinate to facts found except to the extent it suggests that the AGS proposal is responsive. In that way it is contrary to facts found. Paragraph 33 is subordinate to facts found with the exception that the problem with the AGS proposal in its suggestive contract language were not answered by the review. In Paragraph 34, the impression by the initial evaluation committee that the AGS problem areas could be worked out later was erroneous. The discussion in Paragraphs 35 through 39 concerning the ability of the agency to reconcile the problems with the change to the specified contract language and conditions contained within the RFP does not comport with the facts in the recommended order. The idea of default by an awardee and collection of the bid bond does not come into play because there is no opportunity to wait that long before resolving the issue of responsiveness of the offer concerning those contract terms and conditions set forth in the RFP. Paragraph 40 is subordinate to facts found. Concerning Paragraph 41, notwithstanding the fact that the agency has no specific policy about indemnification language, if an offeror wanted to modify the suggested language within the contracts and conditions found in the RFP it had to do so in accordance with the discussion in the recommended order. Concerning Paragraph 42, even though there is no definitional statement of what an additional proposal may be, this does not preclude the opportunity to examine that issue on a case by case basis. That was done here. The suggestion by Paragraph 43 that the proposed section 22.00 is other than part of a conditional proposal by AGS is rejected, as is the notion that this language in the proposed section 22.00, described by AGS as required, can be rejected at the time of a contract execution with AGS. It would be inappropriate to wait that long to decide the issue of the acceptability of that proposed section 22.00. That arrangement is not in keeping with the discussion in the recommended order. Paragraph 44 is accepted with the exception that AGS and the DOT could not consider contract changes at the time of potential contract award to AGS. Paragraphs 45 through 48 are subordinate to facts found. Paragraph 49 is contrary to facts found. Paragraphs 50 through 52 are subordinate to facts found. Concerning Paragraph 53, the only thing unique about the Cubic circumstance is its prior participation in the process. Paragraphs 54 through 56 are subordinate to facts found. Paragraph 57 is subordinate to facts found with the exception of the significance of the failure of the second evaluation team to appreciate that the first evaluation team had some knowledge of the problems of the AGS proposal. A clear impression of what was done by the first evaluation team would not appear to have promoted a different result in the analysis made by the second evaluation team. Paragraphs 58 through 60 are subordinate to facts found. Paragraph 61 is contrary to the impression described in the recommended order, in that both Cubic and AGS were unresponsive. The suggestion in Paragraph 62 that a complete evaluation of the technical matters would have caused a different impression of the problems with the AGS proposal is not accepted. Paragraphs 63 through 65 are contrary to facts found. Respondent's Facts These facts are subordinate to facts found. Intervenor's Facts Paragraphs 1 through 21 are subordinate to facts found. Paragraph 22 in the sense of suggesting immediate availability of John Berry to advise the first evaluation committee is not an accurate portrayal and it is that immediate advice which became significant in this case. That advise was provided by Woody Lawson. Paragraph 23 is not necessary to the resolution of the dispute. Paragraphs 24 through 27 are subordinate to facts found. It is accepted that the original evaluation committee perceived the AGS proposed addition of section 22.00 in the Contract Agreement as a recommendation; however, the more pertinent concern was the overall attitude of the first evaluation committee and its actions pertaining to the entire set of issues that were described in PRC 5. Paragraphs 25 and 30 are subordinate to facts found. Paragraph 31 is accepted wherein it describes the lack of contact with the DOT legal office. It is not accepted where it suggests that there was not contact with the purchasing office as having any significance. It sufficed to contact the contractual services office for advice without resort to discussions with the purchasing office. Paragraphs 32 through 43 are subordinate to facts found. Concerning Paragraph 44 it is not considered unusual that in the posting of the proposals, there rating and the statement of intended contract award that mention would be made of the decision being contingent upon approval of the Governor and Cabinet. Paragraphs 45 through 52 are subordinate to facts found. Paragraph 53 is incomplete in its depiction of the reasons for the request of Watts to reevaluate responsiveness. A more complete explanation is set forth in the recommended order. Paragraphs 54 through 61 are subordinate to facts found. Paragraph 62 is not necessary to the resolution of the dispute. Paragraphs 63 through 76 are subordinate to facts found. Paragraph 77 is contrary to the impression of what Secretary Watts concluded. The impression given and found as fact in the recommended order is that his principal concern with the activities of the first evaluation committee were those associated with the failure to ascertain the problems with the AGS proposal. In determining responsiveness the steps for that determination were identified in the RFP as being offeror qualification, responsibilities of the technical proposal, price responsiveness, followed by decision in a comparison of those offerors who had met those first three requirements. In that sense as described in the recommended order declarations regarding Cubic's responsiveness were not dependent on the impression of AGS and the declaration of non- responsiveness of AGS was not dependent on the treatment of Cubic. To the extent that Cubic by the report of those suggested facts is trying to describe some perceived unfairness in the treatment that Cubic received by either evaluation committee or anything that was done in the process in the review of Cubic's proposal, it is rejected as an inferential fact. Paragraph 78 is rejected for reasons as stated above. Paragraph 79 is subordinate to facts found. Paragraph 80 is not necessary to the resolution of the dispute. Paragraphs 81 and 82 are subordinate to facts found. Paragraph 83 is not necessary to the resolution of the dispute. Paragraph 84 is subordinate to facts found with the exception of the statement by Secretary Watts with the ability to reject a contract award once it had been made. That circumstance does not exist here and is not reported factually. Paragraph 85 is not necessary to the resolution of the dispute. Paragraphs 86 and 87 are subordinate to facts found. Paragraph 88 is rejected to the extent that it suggests that Secretary Watts could not defend the award to PRC. More properly stated he chose not to defend an award to PRC. Paragraphs 89 through 92 are subordinate to facts found. Paragraph 93 is rejected for reasons described in discussion of Paragraph 77. Paragraphs 94 through 97 are subordinate to facts found. Paragraph 98 is envisioned by the overall facts found in the recommended order. While the facts suggested in Paragraph 99 are acknowledged, they are not found to be necessary factual findings for the recommended order. Paragraphs 100 and 101 are subordinate to facts found. COPIES FURNISHED: Ben G. Watts, Secretary Department of Transportation Haydon Burns Building, M.S.-58 605 Suwannee Street Tallahassee, FL 32399-0458 Deborah A. Getzoff, Esquire Hala Ayoub, Esquire Richard C. Bellak, Esquire Fowler, White, Gillen, Boggs, Villareal and Banker, P.A. 101 North Monroe Street Tallahassee, FL 32301 Paul J. Martin, Esquire Susan P. Stephens, Esquire Department of Transportation Haydon Burns Building, M.S.-58 605 Suwannee Street Tallahassee, FL 32399-0458 Frank A. Shepherd, Esquire Gary M. Pappas, Esquire Popham, Haik, Schnobrich and Kaufman, Ltd. 4100 One CenTrust Financial Center 100 Southeast Second Street Miami, FL 33131
The Issue The issue is whether Kelly Services is the lowest responsive bidder on Bid No. 89-23 and should be awarded the bid.
Findings Of Fact On June 2, 1988, the School Board of Bay County issued Bid Request No. 89-23 for garbage collection services at thirteen locations. A quotation sheet was included in the bid package. The quotation sheet indicated the thirteen locations with a blank next to each location and a dollar sign in front of each blank where each bidder was to indicate its average monthly total charge for each location. There was also a quotation schedule where the bidder was to indicate the calculations which went into the total bid for each location. The bid request provided: The Board reserves the right to waive formalities and to reject any and all bids or to accept any bid or combination of bids deemed in the Board's best interest and the decision of the Board will be final. Bidders desiring that their bid be considered on an all-or-none basis, either in whole or part, shall so indicate. It is the intent of this bid request to secure prices and establish contracts for garbage collection services for the twelve schools specified herein and the District Maintenance Department. Awards will be made by location and will be based on an average monthly total charge as calculated on the quotation sheet. The bids were opened at 10:00 am., June 13, 1988, at the offices of the Bay County School Board. Three completed bid packages were submitted. Kelly Services, Argus and M&O each submitted a completed bid quotation sheet containing the bid for each location. M&O also submitted a letter which stated: We would like to submit this bid on an all- or-nothing basis as specified in paragraph four of the cover letter to the bid. For an estimated cost of $3,391.84. The quotation sheet and quotation schedule submitted by M&O did not reflect the all-or-nothing bid amount. Instead, the quotation sheet and quotation schedule showed a total bid of $3,738.24 when calculated by location. Based on the bids submitted by each bidder as shown on the quotation sheet add quotation schedules, Kelly Services was low bidder on five locations (Callaway, Tyndall, Waller, Southport, and Cedar Grove) ; Argus was low bidder on six locations (Parker, Hiland, Haney, Mosley, Beach and Merritt Brown); and M&O was low bidder on two locations (West Bay and the District Maintenance Department). Prior to the deadline for submitting bids, John Harrison, Purchasing Agent for the Board, responded to an inquiry from M&O by advising M&O that it could submit two bids, one as specified in the Bid Request by location and one as an all-or- nothing bid. No other bidders were advised that they could submit two bids. At the bid opening, M&O did not submit a quotation sheet or schedule for its all-or-nothing bid. A bid which did not have a breakdown per dump per container per facility would not be acceptable to the Board and does not meet the specifications in the Bid Request. The breakdown per dump per container per location is necessary to verify proper invoicing for specific locations on months when there is a change in the number of dumps or containers at that location. After opening the bids, the Board compiled the low bid for each location and then totaled that list. That total of $3,606.09 was greater than the all-or-nothing bid by M&O. Because M&O's all-or-nothing bid failed to meet the specifications by not having a location breakdown the Board contacted M&O to determine if its "estimated" bid was firm and to request a breakdown on the quotation schedule form for the all- or-nothing bid. On June 15, 1988, two days after the bid opening, M&O submitted a letter to the Board clarifying that its all-or- nothing bid was a firm bid for each location and M&O submitted a quotation schedule for each location per dump per container (see page 7 of Joint Exhibit 1 and the last page of Joint Exhibit 2). The charge for each location in this quotation schedule is different than the quotation schedule submitted by M&O at the bid opening and is for the most part lower per location than either M&O's first quotation schedule or the low bids taken from the quotation schedules submitted at the bid opening. Based on the letter and all-or-nothing quotation schedule filed by M&O on June 15, 1988, the Board determined to award the bid for garbage collection services to M&O for the all- or-nothing bid of $3,391.84.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law it is RECOMMENDED that The School Board of Bay County enter a Final Order rejecting all bids and readvertising the bid request for garbage collection services as specified in Bid Request No. 89-23. DONE and ENTERED this 13th day of September, 1988, in Tallahassee, Florida. DIANE K. KIESLING 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 13th day of September, 1988. APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 88-3768BID The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on the proposed findings of fact submitted by the parties in this case. Specific Rulings on Proposed Findings of Fact Submitted by Petitioner, Kelly Services: 1. Each of the following proposed findings of fact are adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 1-3(1-3); 4-6(3); 7-11(7-11); and 12 (9) Specific Rulings on Proposed Findings of Fact Submitted by Respondent, School Board of Bay County: Each of the following proposed findings of fact are adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 1(2); 3(10&11); and 5(8). Proposed findings of fact 6, 7, and 9 are irrelevant. The first sentence of proposed finding of fact 2 is unsupported by the competent, substantial evidence. The remainder of proposed finding of fact 2 is adopted in substance as modified in Finding of Fact 3. Proposed finding of fact 4 is rejected as being unsupported by the competent, substantial evidence. The last sentence of proposed finding of fact 5 is rejected as being argumentative, conclusory and unsupported by the competent, substantial evidence. Proposed finding of fact 8 is unnecessary. Specific Rulings on Proposed Findings of Fact Submitted by Intervenor, Argus Services, Inc.: Each of the following proposed findings of fact are adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 2-4(1-3); 6-8(5); 9 & 10(6) 11(3); and 12(11). Proposed findings of fact 1 and 5 are unnecessary. Proposed findings of fact 13-17 are rejected as constituting argument and not findings of fact. COPIES FURNISHED: Jeffrey P. Whitton Attorney at Law Post Office Box 1956 Panama City, Florida 32402 Franklin R. Harrison Attorney at Law 304 Magnolia Avenue Panama City, Florida 32401 Scott W. Clemons Attorney at Law Post Office Box 860 Panama City, Florida 32402 School Board of Bay County Post Office Drawer 820 Panama City, Florida 32402-0820 M&O Sanitation, Inc. 266 N. Star Avenue Panama City, Florida 32404
The Issue Whether Department of Transportation acted fraudulently, arbitrarily, capriciously, illegally, or dishonestly in issuing its intent to award RFP-DOT- 91/92-9012 bid to Trauner Consulting Services.
Findings Of Fact Public notice that DOT was seeking competitive bids was given, and DOT prepared a document entitled: Request for Proposal, which set forth in detail all of DOT's requirements. The purpose of the RFP was to inform all potential bidders of the minimum requirements for submitting a responsive bid, and the specific criteria by which the bids would be evaluated. Specific areas of importance to Respondent were as follows: All proposals were to be submitted in two parts; the Technical Proposal and the Cost Proposal. The Technical Proposal was to be divided into an Executive Summary, Proposer's Management Plan and Proposer's Technical Plan. The price proposal was to be filed separately. The RFP requested written proposals from qualified firms to develop and provide training on highway and bridge construction scheduling use as it pertains to Department of Transportation Construction Engineers. Proposals for RFP-DOT-91/92-9012 (hereinafter "RFP"), were received and opened by FDOT on or about December 14, 1992. Eleven companies submitted proposals. The technical portions of the proposals were evaluated by a three (3) person committee comprised of Gordon Burleson, Keith Davis and John Shriner, all FDOT employees. Gordon Burleson is the Engineer of Construction Training for FDOT. He administers the training for FDOT engineers and engineer technicians who work in FDOT's Construction Bureau. John Shriner is the State Construction Scheduling Engineer for FDOT. Keith Davis is the District 7, Construction Scheduling Engineer and Construction Training Engineer for FDOT. The Committee members evaluated the proposals individually then met as a group. The Committee established no formal, uniform evaluation criteria to be used by all committee members. The price proposals were not revealed to the Committee members until after the proposals were technically evaluated and scored. The price proposals were reviewed separately by Charles Johnson of the Contractual Services Office, Department of Transportation. The Committee evaluated the proposals based on the general criteria contained in the RFP. The RFP listed the criteria for evaluation to include: Technical Proposal Technical evaluation is the process of reviewing the Proposer's Executive Summary, Management Plan and Technical Plan for understanding of project qualifications, technical approach and capabilities, to assure a quality project. Price Proposal Price analysis is conducted by comparison of price quotations submitted. The RFP established a point system for scoring proposals. Proposer's management and technical plans were allotted up to 40 points each, 80 percent of the total score. The price proposed was worth up to 20 points, or 20 percent of the total score. Petitioner's proposal was given a total score of 90 points out of a possible 100. Trauner's proposal was given a total score of 92.04 points out of a possible 100. Petitioner's was ranked highest for price proposal, and received a total of 20 points for its proposed price of $18,060. Trauner's proposed price was $24,500, the next lowest after Petitioner and received 14.74 points. The technical portion of Trauner's proposal was given a total of 77.3 points, 38 for its Management Plan and 39.3 for its Technical Plan. The technical portion of Petitioner's proposal was given a total of 70 points, 36.7 for its Management Plan and 33.3 for its Technical Plan. Each plan was reviewed separately by the three Committee members, The individual, pre-averaged scores vary with committee member, Keith Davis' score varying the most from the others. The Committee members did not discuss the proposals until after they had individually reviewed and scored them. The Committee members had discussed the criteria prior to receiving and evaluating the proposals. There was insufficient evidence to show that Committee members scores were determined by fraud, or were arbitrary, capricious, illegal, or dishonest.
Recommendation Based on the foregoing findings of fact and conclusions of law, the evidence of record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is RECOMMENDED that Respondent, Department of Transportation enter a Final Order dismissing the protest filed herein by Petitioner, Systems/Software/Solutions and awarding RFP-DOT-91/92-9012 to Trauner Consulting Services. DONE and ENTERED this 12th day of March, 1992, in Tallahassee, Florida. DANIEL M. KILBRIDE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 12th day of March, 1992. APPENDIX Respondent's Proposed Findings of Fact: Accepted in substance: paragraphs - 1,2,3,4,5,6,7,8, 9,10,11,12,13,14,15,16,17,18,19,20,21 Petitioner's Proposed Findings of Fact: Accepted in substance: paragraphs - 1,5,11(in part) Rejected as not supported by the greater weight of evidence or irrelevant: paragraphs 2,3,4,6,7,8,9,10,11(in part),12 COPIES FURNISHED: Donald F. Louser, Qualified Representative Systems/Software/Solutions 657 Sabal Lake Dr, #101 Longwood, Florida 32779 Susan P. Stephens, Esquire Assistant General Counsel Department of Transportation 605 Suwannee Street, MS-58 Tallahassee, Florida 32399-0458 Ben G. Watts, Secretary Department of Transportation Attn: Eleanor F. Turner, MS-58 Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32399-0458 Thornton J. Williams, Esquire General Counsel Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32399-0458
The Issue The issue in this case is whether the bid specifications, together with other applicable authority, require that a bid, in order to be responsive, contain any written list of subcontractors.
Findings Of Fact On September 26, 1989, Respondent issued a document entitled, Specifications for Replacement of Air Conditioning, West Orange High School, Winter Garden, Florida, Engineers Project No. 89-016. As amended by three addenda, the above-described specifications shall be referred to as the "ITB." Respondent duly advertised for bids ore September 26, October 3, and October 10, 1989. The advertisement did not state that Respondent reserved the right to waive minor irregularities. In response to the ITB, Florida Mechanical, Inc. ("FMI") and B & I Contractors, Inc. ("B & I") timely submitted bids. For the base work and alternate 1, which Respondent ultimately decided to select, FMI bid $1,439,000, B & I bid $1,438,000, and a third bidder, S. I. Goldman, Company bid $1,621,000. These bids are recorded on a Bid Tabulation Sheet prepared by the engineer retained by Respondent for the project. The Bid Tabulation Sheet contains eight columns. Four columns record bid amounts for the base work and various alternates. The remaining columns are entitled, "Bidder," "Bid Bond," "Addenda," and "Subs." Each of the three bidders were named in one of the rows beneath the "Bidder," column. Each bidder had one "X" in its "Bid Bond" column and three "X"s in its "Addenda" column. However, only FMI and S. I. Goldman Company had "X"'s in their "Subs" columns. By resolution adopted on November 29, 1989, Respondent directed that all bids were rejected and that the Superintendent would correct any ambiguities and uncertainties in the ITB and solicit new bids. The resolution noted that Respondents staff had recommended that, if any bid were accepted, it should be that of B & I. However, [FMI] submitted with its bid a list of Major Sub-contractors of the form displayed in the [ITB], and B & I did not submit wish its aid a list of Major Sub-contractors[.] The resolution concluded that Respondent based on advice of staff and counsel, found that the [ITB is) ambiguous and/or uncertain as to whether or not a bidder must submit along with his bid a list of Major Sub-contractors, (b) that because of such ambiguity and/or uncertainty, it would be unfair and/or improper for [Respondent] to accept either of the bids received by it, and (c) that as a result thereof [Respondent] should reject all bids received by it for ,the Project and should solicit new bids for the Project as soon as is reasonably feasible after correction by [Respondents] staff of any ambiguity and uncertainty as aforesaid in the [ITB]. FMI and B & I each timely filed a notice of intent to protest and formal written protest of Respondent's decision to reject each company's respective bid. S. I. Goldman did not protest the decision and is not a party to the subject case. At a meeting on December 12, 1989, Respondent elected to refer the bid protests to the Division of Administrative Hearings for a formal hearing., At the beginning of the hearing, the parties filed a written stipulation, which stated that the only issue for determination was which Petitioner should be awarded the contract and not whether Respondent should seek further bids or award the contract to another bidder. The stipulation also stated that the Petitioners and Respondent agreed to abide by the recommendation of the hearing officer. At the hearing, the parties further stipulated that the sole issue for determination is whether the ITB, together with other applicable authority, required that the responsive bid contain any written list of subcontractors. In addition, the parties stipulated that both Petitioners had standing and the protests were timely and sufficient. The ITB requires that each bidder familiarize itself with all federal, state, and "Local Laws, ordinances, rules, and regulations that in any manner affect the work." Under the section entitled, "Preparation and Submission of Bids," the ITB states: "Each bidder shall use the Bid Form that is inserted herein, and may copy or reproduce the form on this own letterhead." Among other requirements, the ITB requires two bonds. The first is a "bid guarantee" of at, least five percent of the amount of the bid. The form of this guarantee may be cash or a Bid Bond." The other bond described in the ITB a 100% public construction bond. The surety on this bond must have been admitted to do business in Florida, must have been in business and have a record of successful continuous operation for at least five years, and must have at least a Bests Financial Rating of "Class VI" and a Bests Policyholder Ration of "A." The Bid Form contained in the ITB is two pages. Among other things, the Bid Form requires that the bidder receiving written notice of acceptance of its bid must provide the prescribed payment and performance bond and execute the contract within ten days after notification. The next document in the ITB is a single page entitled, "Form of Bid Bond." The provisions on this page identify the A.I.A. document to use and state that the Bid Bond "shall be submitted with the Bid Proposal Form." The next document in the ITB is a single page entitled, "List of Major Subcontractors." The List of Major Subcontractors states: Bidders shall list all major subcontractors that will be used if a contract is awarded. Additionally, bidders shall identify in the appropriate box whether or not that trade specialty is minority owned. Another paragraph defines minority ownership. The remainder of the form consists of ten rows for the "bidder" and nine major subcontractors, such as concrete, electrical, HVAC, and controls, and blanks where the bidder can indicate which of these entities are minority owned. The next document in the ITB is the Owner-Contractor Agreement, which is followed by tie Form of Construction Bond, General Conditions, and Supplementary General Conditions. Section 7.11 of the Supplementary General Conditions establishes certain requirements to be performed after the submission of bids. This section provides: Pre-Award Submittals: Before the Contract is awarded the apparent low bidder shall provide the following information to the owner. A copy of the Contractors current State of Florida General Contractor's or Mechanical Contractors License. Pre-Construction Meeting. After the Notice to Proceed and within eight (8) business days of the Owner [sic], the Contractor shall meet with the Owner, Engineer and Subcontractors that the Owner may designate... The Contractor shall provide the following to the Owner. * * * 2. A written list of all Subcontractors, material men and suppliers with such information as requested by the Owner or Engineer. * * * The remaining documents in the ITB are the technical specifications for the job. The three addenda supply additional technical information not relevant to this case. Respondent has promulgated rules with respect to the bidding process ("Rules"). The ITB does not refer to the Rules, which define and use many terms that are found in the ITB. For instance, Rule 1.1.25 defines the phrases, "Performance and Payment Bond," which is the same phrase used in the Bid Form in the ITB. The Rules define several other capitalized terms that are also used in the ITB, such as Bid Bond, Bid Guarantee, Bidder, and Contractor. Rule 4.1 similarly states that the bidder is familiar with federal, state, and "Local Laws, Ordinances, Rules and Regulations that in any manner affect the Work." Rule 6.1 describes the process by which a bidder is to prepare and submit bids and the Bid Guarantee in language similar to that contained in the ITB. Rule 6.2 discusses the listing of subcontractors. Rules 6.2.1 and 6.2.2 state: General Contractor shall include as an integral part of his bid a List of Subcontractors he proposes to use. The Bidder shall enclose this list in a 4" x 9" envelope, sealed and marked "List of Subcontractors" and identified ... The Bidder shall enclose said envelope with his bid proposal in the mailing envelope. The List of Subcontractors enclosed with tee Proposal of each Bidder will be examined by the ... Engineer before the Proposal is opened and read. In the event that the form is not properly executed and signed, the Proposal of that Bidder will be returned to him unopened... Rule 6.3 requires a Statement of Surety as another "integral part" of each bid. Rule 6.3.3 states: The Statement of Surety will be opened examined by the ... Engineer prior to the opening of the Proposal.... Although similar to Rule 6.2, Rule 6.3 lacks the warming that if the Statement of Surety is not "properly executed and signed, the Proposal of that Bidder will be returned to him unopened." Rule 19.1 sets forth the requirements, for the surety. These requirements are different than those set forth in the ITB. Rules 19.1.1 and 19.1.2 require, as does the ITB, that the surety be admitted to do business in the State of Florida and shall have been in business and have a record of successful continuous operations for at least five years. However, Rule 19.1.1 requires that the surety be represented by a reputable and responsible surety bond agency licensed to do, business in the State of Florida and have a local representative in the Orlando area. Rule 19.1.3 requires minimum Bests ratings of "A" in "management," and, as to "strength and surplus," "AAA+" in financial rating and $12,500,000 minimum surplus. Rule 19.1.3.3 also requires that the surety be listed on the U.S. Treasury Departments Circular 570. The bids of FMI and S. I. Goldman Company contained a completed List of Major Subcontractors. The bid of B & I did not. No bidder included a Statement of Surety with its bid.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the School Board of Orange County enter a Final Order awarding the subject contract to Florida Mechanical, Inc. ENTERED this 15th day of February, 1990, in Tallahassee, Florida. ROBERT E. MEALE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 15th day of February, 1990. APPENDIX Treatment Accorded Proposed Findings of FMI All of FMI's proposed findings have been adopted or adopted in substance. Treatment Accorded Proposed Findings of B & I 1-4: adopted or adopted in substance. 5: adopted, except that the staff recommended that, if the bid was to be awarded, that it be awarded to B & I. 6: adopted in substance. 7: rejected as conclusion of law and, to the extent fact, subordinate. 8-12: rejected as subordinate. 13-16: adopted or adopted in substance. 17: rejected as subordinate. 18: rejected as unsupported by the greater height of the evidence. 19-21: rejected as subordinate. 22: rejected as beyond the scope of the issues and irrelevant in view of the stipulation. In the stipulation, the parties agreed that the issue to be addressed would not be whether the intended agency action of Respondent was lawful (i.e., not arbitrary, fraudulent, dishonest, or otherwise improper), but rather whether the ITB, together with other applicable authority, required that the responsive bid contain any written list of subcontractors. COPIES FURNISHED: James L. Schott, Superintendent The School Board of Orange County, Florida P.O. Box 271 Orlando, FL 32802 Charles Robinson Fawsett, P. A. Shutts & Bowen 20 North Orange Avenue Suite 1000 Orlando, FL 32801 James F. Butler, III Smith, Currie & Hancock 2600 Peachtree Center Harris Tower 233 Peachtree Street, N.E. Atlanta, GA 30043-6601 William M. Rowland, Jr., Esq. Rowland, Thomas & Jacobs, P.A. 1786 North Mills Avenue P.O. Box 305 Orlando, FL 32803
Findings Of Fact Based upon the documentary evidence received and the entire record compiled herein, I hereby note the following findings of fact: Notice and Invitation to Bid on State Project Number 72001-3448 (the project) was extended to various contractors by the Respondent, Department of Transportation, on August 1, 1985. Sealed bids on the project were opened August 28, 1985. The scope of the project involved cleaning and painting the structural steel of the Buckman Bridge over the St. Johns River in Jacksonville, Florida. (State Bridge Numbers 720249 and 720343). The bids were opened and Petitioner was the apparent low bidder on the project with a bid amount of $193,000. The Department of Transportation, on October 2, 1985, rejected all bids "due to error in quantities in plans." According to the contract plans and specifications utilized by the Department of Transportation for the project, the beams, girders, bracing and trusses were composed of 2,540 tons of structural steel. The plans were in error and the tonnage of structural steel was less than 2,540 tons. Petitioner, upon visiting the job site as required, immediately recognized that there was less steel in the bridge than shown in the plans. In submitting and formulating his bid, the Petitioner considered the amount of work and materials which would actually be required to complete the project. 6 Prior to the bids being posted on the project, the Department of Transportation discovered that the amount of structural steel noted in the plans was grossly overestimated. On October 2, 1985, the Department of Transportation notified bidders in writing that all bids submitted on the project were rejected and that the plans would be revised and the project relet.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is, RECOMMENDED that the petition of Industrial Enterprise Sandblast and Painting, Inc., protesting the rejection of all bids on State Project No. 72001- 3448, be dismissed. DONE AND ORDERED this 11th day of December 1985 in Tallahassee, Florida. W. MATTHEW STEVENSON Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 11th day of December 1985. APPENDIX Respondent's Findings of Fact FINDING RULING Accepted; see Recommended Order paragraph 1. Accepted; see Recommended Order paragraph 2. Accepted, but not included because subordinate. Accepted; see Recommended Order paragraph 4. Accepted; see Recommended Order paragraphs 3 and 6. Accepted; see Recommended Order paragraphs 3 and 6. Accepted; see Recommended Order paragraph 6. COPIES FURNISHED: HONORABLE THOMAS E. DRAWDY, SECRETARY DEPARTMENT OF TRANSPORTATION HAYDON BURNS BUILDING TALLAHASSEE, FLORIDA 32301 A. J. SPALLA, ESQUIRE GENERAL COUNSEL DEPARTMENT OF TRANSPORTATION 562 HAYDON BURNS BUILDING TALLAHASSEE, FLORIDA 32301 LARRY D. SCOTT, ESQUIRE DEPARTMENT OF TRANSPORTATION HAYDON BURNS BUILDING, M.S. 58 TALLAHASSEE, FLORIDA 32301-8064 INDUSTRIAL ENTERPRISE SANDBLAST & PAINTING, INC. P. O. BOX 1547 1502 FOX RUN DRIVE TARPON SPRINGS, FLORIDA 32486-1547
The Issue Whether Respondent Department of Transportation’s intended decision to conduct negotiations with Xerox State and Local Solutions, Inc., under ITN-DOT-13/14-8001-SM is contrary to the Department’s governing statutes, rules, or policies or to the solicitation specifications.
Findings Of Fact The ITN The Department is an agency of the State of Florida charged with planning, acquiring, leasing, constructing, maintaining, and operating toll facilities and cooperating with and assisting local governments in the development of a statewide transportation system. § 334.044(16)-(22), Fla. Stat. (2013).1/ The Department is authorized to enter contracts and agreements to help fulfill these duties. See §§ 20.23(6) and 334.044(7), Fla. Stat. FTE is a legislatively created arm of the Department and is authorized to plan, develop, own, purchase, lease, or otherwise acquire, demolish, construct, improve, relocate, equip, repair, maintain, operate, and manage the Florida Turnpike System. § 338.2216(1)(b), Fla. Stat. FTE is also authorized to cooperate, coordinate, partner, and contract with other entities, public and private, to accomplish these purposes. Id. The Department has the express power to employ the procurement methods available to the Department of Management Services under chapter 287, Florida Statutes.2/ § 338.2216(2), Fla. Stat.; see also Barton Protective Servs., LLC v. Dep’t of Transp., Case No. 06-1541BID (Fla. DOAH July 20, 2006; Fla. DOT Aug. 21, 2006). OOCEA (now known as the Central Florida Expressway Authority), MDX, and THEA are legislatively created or authorized agencies of the State with the power to fix, alter, charge, establish, and collect tolls, rates, fees, rentals, and other charges for the services and facilities system. §§ 348.0003(1)- .0004(2)(e), Fla. Stat. Each of these authorities has the power to enter contracts and to execute all instruments necessary or convenient for the carrying on of its business; to enter contracts, leases, or other transactions with any state agency or any other public body of the State; and to do all acts and things necessary or convenient for the conduct of its business and the general welfare of the authority in order to carry out the powers granted to it by law. § 348.0004(2)(g), (h), (k), Fla. Stat. On November 1, 2013, the Department advertised the ITN, soliciting proposals from vendors interested in participating in competitive negotiations for the award of a contract to provide a CCSS and associated operations and maintenance. The ITN was issued pursuant to section 287.057, Florida Statutes. The purpose of the ITN is to replace the existing customer service center systems of FTE, OOCEA, THEA, and MDX with a CCSS that can be expanded over time to include other tolling and transit agencies in the State of Florida. The CCSS is expected to process nearly all electronic toll transactions in Florida. The successful vendor will enter a contract directly with the Department. The Department will then enter agreements with the other authorities to address coordinated and joint use of the system. Generally, the ITN sets forth a selection process consisting of two parts. Part one involves: (a) the pre- qualification, or shortlisting, of vendors in order to determine a vendor’s eligibility to submit proposals; and (b) the proposal submission, evaluation, and ranking. Part two is the negotiation phase. The instant proceeding relates only to part one. Part two -- negotiations -- has yet to occur. The TRT and Selection Committee – The Evaluators Cubic alleges that “not all of the members of either [the Technical Review or Selection Committee] teams had the requisite experience or knowledge required by section 287.057(16)(a)1., Florida Statutes.” Accenture alleges that “the Selection Committee did not collectively have expertise in all of the subject areas covered by th[e] ITN.” Section 287.057(16)(a) provides in part that the agency head shall appoint “[a]t least three persons to evaluate proposals and replies who collectively have experience and knowledge in the program areas and service requirements for which commodities or contractual services are sought.”3/ In accordance with the requirements of section 287.057(16)(a), the ITN established a Technical Review Team (TRT) that would be “composed of at least one representative from each Agency and may include consultant (private sector) staff.” The ITN also provided for a Selection Committee that would be “composed of executive management at the Agencies.” Each agency executive director appointed two individuals from their agency to the TRT. Each agency director was familiar with the background and qualifications of their appointees, who had experience in various aspects of tolling operations including tolling, software, finance, and procurement. The following individuals were appointed to serve on the TRT. Bren Dietrich, a budget and financial planner for FTE, has an accounting degree and has worked at FTE for 12 years in budget and financial planning. Mr. Dietrich has been a technical committee member for seven or eight procurements. Mohamed Hassan, a senior operations manager for FTE, has been in information technology for nearly 40 years and with FTE for 22 years handling all aspects of software development and maintenance for the state’s largest tolling authority. Mr. Hassan’s expertise is in software development and maintenance. Mr. Hassan oversees staff that is responsible for maintaining the database application systems, hardware, communications coming in and going out of the customer service center, and any development projects such as transaction processing or account management system upgrades. Steve Andriuk is a deputy executive director for MDX and oversees all tolling operations within MDX’s jurisdiction. Mr. Andriuk’s tolling background goes beyond his tenure at MDX, as he previously was an executive director at Chesapeake Bay Bridge Authority. Jason Greene, MDX’s comptroller of financial controls and budget manager, has a background in finance and accounting and in project management. Mr. Greene has been with MDX for 11 years. Lisa Lumbard, who has been with OOCEA for 16 years, is the interim chief financial officer and previously was the manager of accounting and finance. Ms. Lumbard runs OOCEA’s finance and accounting office and has both procurement experience and substantial experience in the financial aspects of back- office tolling. David Wynne is the director of toll operations of OOCEA and is responsible for the overall collection of all tolls and for the violation enforcement process. Mr. Wynne has held some iteration of this position for approximately 11 years and worked for OOCEA for 16. He also has both procurement and substantial tolling experience. Robert Reardon, THEA’s chief operating officer, is responsible for THEA’s day-to-day operations, including tolls. Mr. Reardon has been with THEA for six years and has experience as a technical evaluator for public procurements. Rafael Hernandez is THEA’s manager of toll operations and oversees all toll operations within THEA’s jurisdiction. The TRT members collectively have the requisite knowledge and experience in tolling, software, finance, and procurement. The following individuals constituted the Selection Committee. Diane Gutierrez-Scaccetti has been FTE’s executive director since 2011 and worked for the New Jersey Turnpike Authority for over 20 years, the last two as executive director and the previous 14 as deputy executive director. Laura Kelley is OOCEA’s deputy director over finance administration and the interim executive director. Ms. Kelly has 30 years’ experience in transportation finance and management, 15 of which occurred at the Department and eight of which occurred at OOCEA overseeing information technology, finance, and procurement. Javier Rodriguez, MDX’s executive director, oversees all MDX operations, including planning, finance, operations, and maintenance functions. Mr. Rodriguez has been with MDX for seven years and was with the Department for over 15 years prior to his employment with MDX. Joseph Waggoner has been THEA’s executive director for approximately seven years. Prior to joining THEA, he was with the Maryland Department of Transportation for nearly 30 years, six of which were in tolling operations. ITN section 2.6.2 provides as follows: Following Proposal Oral Presentations by all short-listed Proposers (see section 2.25 Proposal Oral Presentations for additional details) the Technical Review Team members will independently evaluate the Proposals based on the criteria provided in Section 2.5.2 and will prepare written summary evaluations. There will then be a public meeting of the Selection Committee at the date, time and location in Table 1-2 Procurement Timeline. The Technical Review Team’s compiled written summary evaluations will be submitted to the Selection Committee. The Technical Review and Selection Committee will review and discuss the individual summary evaluations, and the Selection Committee will come to consensus about ranking the Proposers in order of preference, based on their technical approach, capabilities and best value. In addition to the Technical Review Team, the Selection Committee may request attendance of others at this meeting to provide information in response to any questions. The ITN is structured such that both the TRT and the Selection Committee have shared responsibility for evaluating proposals, with the Selection Committee having ultimate responsibility for ranking the Proposers for the negotiations stage of the procurement process. Combining the eight members of the TRT with the four members of the Selection Team means that there were a total of 12 individuals tasked with the responsibility of evaluating the proposals prior to the negotiations stage of the process. Pre-Qualification and Rankings In the pre-qualification portion of the ITN, interested vendors initially submitted reference forms to demonstrate that the vendors met the minimum project experience set forth in the ITN. Vendors meeting this requirement were invited to give a full-day Pre-Qualification Oral Presentation to the TRT in which each vendor was given the opportunity to demonstrate its proposed system. Under ITN section 2.6.1, A Technical Review Team will attend the Pre- Qualification Oral Presentations and will develop scores and written comments pertaining to the reviewed area(s) identified in Section 2.5.1. The Technical Review Team will be composed of at least one representative from each Agency and may include consultant (private sector) staff. The scores provided by each Technical Review Team member for each area of the Pre- Qualification Oral Presentations will be totaled and averaged with the scores of the other Technical Review Team members to determine the average score for an area of the Pre-Qualification Oral Presentation. The average score for each area of a Pre- Qualification Oral Presentation will then be totaled to determine a total Pre- Qualification Oral Presentation score. Each vendor’s Pre-Qualification Oral Presentation was then scored based on criteria set forth in ITN section 2.5.1. Any vendor that received a score of 700 or higher was “short- listed” and invited to submit proposals. Put differently, those receiving a score of at least 700 were deemed qualified to submit formal proposals. ITN section 2.5.1 provides that the “review/evaluation of the Pre-Qualification Oral Presentations will not be included in decisions beyond determining the initial short-list of Proposers to proceed in the ITN process.” Accordingly, the scores assigned in the pre-qualification phase were irrelevant after the short-listing. Six vendors submitted pre-qualifications responses, including Xerox, Accenture, and Cubic. On January 21, 2014, the Department posted its short-list decision, identifying that all six vendors, including Xerox, Accenture, and Cubic, were deemed qualified to submit formal written proposals to the ITN (the “First Posting”). As required by section 120.57(3)(a), Florida Statutes, the posting stated, “Failure to file a protest within the time prescribed in Section 120.57(3), Florida Statutes, or failure to post the bond or other security required by law within the time allowed for filing a bond shall constitute a waiver of proceedings under Chapter 120, Florida Statutes.” This posting created a point of entry to protest, and no vendor initiated a protest. After the First Posting, short-listed vendors submitted technical and price proposals and made Proposal Oral Presentations. ITN section 2.24 provides detailed instructions for technical and price proposal preparation and submission. ITN section 2.25 (as amended by Addendum 8) sets forth the process for short-listed vendors to make Proposal Oral Presentations to the TRT. Short-listed Proposers will each be scheduled to meet with the Technical Review Team for Proposal Oral Presentations of their firm’s capabilities and approach to the Scope of Work and Requirements within the time period identified in Table 1-2 Procurement Timeline. Short-listed Proposers will be notified of a time and date for their Proposal Oral Presentation. Proposal Oral Presentation sessions are not open to the public. The Selection Committee will attend these Presentations. In advance of the Proposal Oral Presentations Proposers will be given detailed instructions on what the format and content of the Proposal Oral Presentation will be, including what functionality shall be demonstrated. The Department may also provide demonstration scripts to be followed. Proposers should be prepared to demonstrate key elements of their proposed System and Project approach and to respond to specific questions regarding their Proposals. These Proposal Oral Presentations will be used to present the Proposer’s approach and improve understanding about the Department’s needs and expectations. The Technical Review Team will participate in all Proposal Oral Presentations. After each Oral Presentation, each individual on the Technical Review Team will complete a written summary evaluation of each Proposer’s technical approach and capabilities using the criteria established in Section 2.5.2 in order to assure the Technical Proposal and Oral Presentations are uniformly ranked. The evaluation will consider both the Technical Proposal and the Oral Presentations. ITN section 2.5.2 is titled “Best Value Selection” and provides as follows: The Department intends to contract with the responsive and responsible short-listed Proposer whose Proposal is determined to provide the best value to the Department. “Best value,” as defined in Section 287.012(4), F.S., means the highest overall value to the state, based on objective factors that include but are not limited to . . . . ITN section 2.5.2 goes on to delineate seven “objective factors,” or evaluation criteria, on which proposals would be evaluated: Company history Project experience and qualifications Proposed Project approach to the technical requirements Proposed approach to the Project plan and implementation Proposed approach to System Maintenance Proposed approach to Operations and performance Price ITN section 2.6.2 explains the process for evaluation of technical proposals and Proposal Oral Presentations and states that: Following Proposal Oral Presentations by all short-listed Proposers (see Section 2.25 Proposal Oral Presentations for additional details) the Technical Review Team members will independently evaluate the Proposals based on the criteria provided in Section 2.5.2 and will prepare written summary evaluations. There will then be a public meeting of the Selection Committee at the date, time and location in Table 1-2 Procurement Timeline. The Technical Review Team’s compiled written summary evaluations will be submitted to the Selection Committee. The Technical Review Team and Selection Committee will review and discuss the individual summary evaluations, and the Selection Committee will come to consensus about ranking the Proposers in order of preference, based on their technical approach, capabilities and best value. In addition to the Technical Review Team, the Selection Committee may request attendance of others at this meeting to provide information in response to any questions. Of the six short-listed vendors, five submitted proposals and gave Proposal Oral Presentations, including Xerox, Accenture, and Cubic. The Department then undertook a ranking using the evaluation criteria delineated in ITN section 2.5.2. To perform this ranking, TRT members individually evaluated the proposals and prepared detailed, written evaluations that tracked the evaluation criteria factors. The TRT’s evaluations, together with proposal summaries prepared by HNTB, were provided to the Selection Committee in preparation for a joint meeting of the TRT and Selection Committee on April 9, 2014. At the April 9th meeting, the TRT and Selection Committee members engaged in an in-depth discussion about the bases for and differences between the individual TRT members’ rankings and evaluations. Thereafter, the Selection Committee made its ranking decision. On April 10, 2014, the Department posted its ranking of vendors, with Xerox first, Accenture second, and Cubic third (the “Second Posting”). The Second Posting also announced the Department’s intent to commence negotiations with Xerox as the first-ranked vendor.4/ If negotiations fail with Xerox, negotiations will then begin with second-ranked vendor Accenture, then Cubic, and so on down the order of ranking until the Department negotiates an acceptable agreement. Accenture and Cubic each timely filed notices of intent to protest the Second Posting and timely filed formal written protest petitions and the requisite bonds. Negotiations are not at Issue ITN section 2.26 provides: Once Proposers have been ranked in accordance with Section 2.6.2 Proposal Evaluation, the Department will proceed with negotiations in accordance with the negotiation process described below. Proposers should be cognizant of the fact that the Department reserves the right to finalize negotiations at any time in the process that the Department determines that such election would be in the best interest of the State. Step 1: Follow the evaluation process and rank Proposals as outlined in Section 2.6 Evaluation Process. Step 2: The ranking will be posted, in accordance with the law (see Section 2.27), stating the Department’s intent to negotiate and award a contract to the highest ranked Proposer that reaches an acceptable agreement with the Department. Step 3: Once the posting period has ended, the Negotiation Team will undertake negotiations with the first-ranked Proposer until an acceptable Contract is established, or it is determined an acceptable agreement cannot be achieved with such Proposer. If negotiations fail with the first-ranked Proposer, negotiations may begin with the second-ranked Proposer, and so on until there is an agreement on an acceptable Contract. The Department reserves the option to resume negotiations that were previously suspended. Negotiation sessions are not open to the public and all negotiation sessions will be recorded by the Department. Step 4: The Negotiation Team will write a short plain statement for the procurement file that explains the basis for Proposer selection and how the Proposer’s deliverables and price will provide the best value to the state. Step 5: The Department will contract with the selected Proposer. As Accenture and Cubic protested the decision by the Department to enter negotiations with Xerox (and because of the automatic stay provision of section 120.57(3), Florida Statutes) the negotiation phase of the procurement never commenced. Thus, this proceeding concerns the Department’s actions up to the Second Posting, and not what may happen during future negotiations. Second Posting and Intended Award Section 1.2 of the ITN sets forth the procurement timeline for the CCSS project. The ITN originally indicated that the “Posting of Ranking/Intended Award” would occur on March 31, 2014. By addendum issued on February 13, 2014, the date for “Posting of Ranking/Intended Award” was changed to April 10, 2014. Section 1.3.1 of the ITN provides an agenda for the April 10, 2014, “Meeting to Summarize and Determine Ranking/Intended Award.” Section 2.27 of the ITN is labeled “POSTING OF RANKING/INTENDED AWARD.” Section 2.27.1, Ranking/Intended Award, provides that “[t]he Ranking/Intended Award will be made to the responsive and responsible Proposer that is determined to be capable of providing the best value and best meet the needs of the Department.” Section 2.27.2 is labeled “Posting of Short- list/Ranking/Intended Award” and provides in part that “[a]ny Proposer who is adversely affected by the Department’s recommended award or intended decision must . . . file a written notice of protest within seventy-two hours after posting of the Intended Award.” Joint Exhibits 10 and 12 are copies of forms used to announce the rankings of the Proposers. It is not clear from the record if these forms are a part of the ITN. Nevertheless, the forms are identical in format. Each form has three boxes that follow the words “TYPE OF POSTING.” The first box is followed by the word “Shortlist,” the second box is followed by the word “Ranking,” and the third box is followed by the words “Intended Award.” The form also has three columns that coincide with the three boxes previously referenced. The three columns are respectively labeled, “X indicates shortlisted vendor,” “ranking of negotiations,” and “X indicates intended award.” With respect to the last two columns, explanatory comments appearing at the bottom of the form read as follows: ** Ranking: The Department intends to negotiate separately and will award a contract to the highest ranked vendor that reaches an acceptable agreement with the Department. The Department will commence negotiations with the number one ranked vendor until an acceptable contract is agreed upon or it is determined an acceptable agreement cannot be reached with such vendor. If negotiations fail with the number one ranked vendor, negotiations may begin with the second-ranked vendor, and so on down the order of ranking until the Department is able to negotiate an acceptable agreement. *** Intended Award: “X” in the Intended Award column indicates the vendor whom the Department intends to award the contract to, but does not constitute an acceptance of any offer created by the vendor’s proposal or negotiations. No binding contract will be deemed to exist until such time as a written agreement has been fully executed by the Department and the awarded vendor. If irregularities are subsequently discovered in the vendor’s proposal or in the negotiations or if the vendor fails to submit required [b]onds and insurance, fails to execute the contract, or otherwise fails to comply with the ITN requirements, the Department has the right to undertake negotiations with the next highest vendor and continue negotiations in accordance with the ITN process, reject all proposals, or act in the best interest of the Department. On April 10, 2014, the Department issued a posting wherein the “Ranking” box was checked and the “Intended Award” box was not. According to Sheree Merting, it was a mistake to have only checked the “Ranking” box because the box labeled “Intended Award” should have also been checked. Petitioners contend that by not simultaneously checking both the “Ranking” and “Intended Award” boxes that the Department materially changed the process identified in the ITN. Protesters’ arguments as to this issue appear to be more related to form than substance. In looking at the plain language of the ITN, it reasonably appears that the Department intended to simultaneously announce the “Ranking” and “Intended Award.” The fact that the Department failed to combine these two items in a single notice is of no consequence because neither Cubic nor Accenture have offered any evidence establishing how they were competitively disadvantaged, or how the integrity of the bidding process was materially impaired as a consequence of the omission. In other words, Sheree Merting’s confessed error of not checking the “Intended Award” box contemporaneously with the “Ranking” box is harmless error. See, e.g., Fin. Clearing House, Inc. v. Fla. Prop. Recovery Consultants, Inc., Case No. 97-3150BID (Fla. DOAH Nov. 25, 1997; Dep’t of Banking & Fin. Feb 4, 1998)(applying harmless error rule to deny protest where agency initially violated provisions of section 287.057(15), Florida Statutes, by selecting two evaluators instead of three required by statute, but later added required evaluator). Sequential Negotiations As previously noted, section 2.26 of the ITN provides that following the ranking of the short-list proposers, the “Negotiation Team will undertake negotiations with the first- ranked Proposer until an acceptable Contract is established . . . [and] [i]f negotiations fail with the first-ranked Proposer, negotiations may begin with the second-ranked Proposer, and so on until there is an agreement on an acceptable Contract.” Petitioners assert that the Department has abandoned the sequential negotiation process set forth in section 2.26 and has announced “that it will conduct the procurement negotiations only with Xerox as the number one ranked proposer” and that the process of negotiating with only one proposer is contrary to the law because section 287.057(1)(c) “requires that the Department negotiate with all proposers within the competitive range.” Diane Gutierrez-Scaccetti testified as follows (T: 1119): Q: Now, you understand that as a result of the rankings that were posted on April 10th, negotiations under this ITN are to proceed with only a single vendor, is that right? A: I believe the ITN provided for consecutive negotiations starting with the first-ranked firm and then proceeding down until we reached a contract. Contrary to Petitioners’ assertions, the evidence establishes that the Department intends to follow the negotiation process set forth in section 2.26. Petitioners’ contention that section 287.057(1)(c) does not authorize sequential negotiations is a challenge to the terms, conditions, and specifications of the ITN and should have been filed within 72 hours after the posting of the solicitation as required by section 120.57(3)(b). Petitioners have waived their right of protest with respect to this issue. Petitioners’ waiver notwithstanding, section 287.057(1)(c) does not preclude the type of sequential negotiation process set forth in section 2.26 of the ITN. Section 287.057(1)(c) provides in part that “[t]he invitation to negotiate is a solicitation used by an agency which is intended to determine the best method for achieving a specific goal or solving a particular problem and identifies one or more responsive vendors with which the agency may negotiate in order to receive the best value.” (Emphasis added). Section 287.057(1)(c)4. provides that “[t]he agency shall evaluate replies against all evaluation criteria set forth in the invitation to negotiate in order to establish a competitive range of replies reasonably susceptible of award [and] [t]he agency may select one or more vendors within the competitive range with which to commence negotiations.” (Emphasis added). The opening paragraph of section 287.057(1)(c), which is essentially the preamble portion of the ITN provisions, expresses the purpose for which the ITN process was developed, to wit: “to determine the best method for achieving a specific goal or solving a particular problem.” In furtherance of the stated purpose, the Legislature instructs, in the preamble, that the process should “identif[y] one or more responsive vendors with which the agency may negotiate in order to receive the best value.” If the preamble is read in statutory isolation, then one could reasonably conclude that if the agency identifies more than one responsive vendor then the agency should negotiate with each of the vendors “in order to receive the best value.” Arguably, the preamble merely looks at vendor “responsiveness” as the guidepost for determining with whom the agency shall negotiate. Mere “responsiveness” however, is clearly not the only standard for selecting a vendor through the ITN process and illustrates why this portion of the statute cannot be read in isolation. As previously noted, subparagraph four of section 287.057(1)(c), provides that the agency “shall . . . establish a competitive range of replies reasonably susceptible of award,” and once this is done, “[t]he agency may select one or more vendors within the competitive range with which to commence negotiations.” (Emphasis added). By using the word “may” in subparagraph four, the Legislature is authorizing agencies to exercise discretion when selecting vendors with whom to negotiate. In exercising its discretion, agencies can decide to negotiate with a single vendor or with multiple vendors. An agency’s exercise of its discretion is not absolute and the “check” on the exercise of its discretion, in the context of the instant case, is a bid protest whereby an unsuccessful bidder can attempt to prove that the procurement process was impermissibly tainted. Contrary to Petitioners’ allegations, the sequential negotiation process utilized by the Department in the present case does not run afoul of section 287.057. Petitioners forcefully argue that they have been shutout of the negotiation process because neither of them was ranked first. This assertion mischaracterizes the nature of the sequential negotiation process used by the Department. The evidence shows that if the Department fails to come to terms with Xerox, then negotiations may begin with the second-ranked vendor, and so on down the order of ranking until the Department negotiates an acceptable agreement. The truth of the matter is that neither of the protesters has been shutout of the negotiations. It is simply the case that neither occupies the preferred position of being the highest ranked, short-listed vendor. Petitioners also argue that the Florida Department of Transportation Commodities and Contractual Services Procurement Manual – 375-040-020, prohibits sequential negotiations. For invitations to negotiate, the manual provides: There are two general negotiation methods used: Competitive Method A – Vendors are ranked based on technical qualifications and negotiations are conducted commencing with the first ranked vendor. Competitive Method B – Vendor qualifications are evaluated and vendors may be short-listed. Negotiations of scope and price will be conducted with short-listed or all vendors. An award is made to the vendor with the best combination of proposal, qualifications, and price. According to Petitioners, the ITN does not comport with either Method A or Method B. Again, Petitioners failed to timely challenge the ITN specifications regarding sequential negotiations and thus have waived this argument. Even if the merits of the argument are considered, Petitioners’ argument fails. The methods described in the manual are not the only methods available to the Department; in fact, the manual, by stating that “there are two general negotiation methods used (emphasis added),” recognizes that the methods are subject to refinement or modification as the Department deems best to meet the perceived needs of a particular solicitation as long as the final method complies with section 287.057(1), Florida Statutes. Further, the procurement manager for the ITN, Sheree Merting, testified that the shell, or template, provided by the Department’s central office, and used when drafting an invitation to negotiate, contains a combination of the manual’s methods A and B, which is referred to as A/B. The order of negotiations provided for in the ITN and reiterated in the First and Second Postings is not, therefore, inconsistent with the Department’s policies or procedures. Best Value Decision Petitioners contend that the Department, via the Second Posting, has already (and improperly) determined which vendor will provide the best value to the State even though negotiations have not yet occurred. This contention is not supported by the evidence. ITN section 2.5.2 states the Department’s intent to contract with the vendor whose proposal is determined to provide the best value and sets forth the statutorily mandated objective factors, or criteria, on which proposals will be evaluated. ITN section 2.6.2 provides that the TRT and Selection Committee will review and discuss the TRT members’ individual summary evaluations and the Selection Committee “will come to consensus about ranking the Proposers in order of preference, based on technical approach, capabilities and best value.” The evidence reflects that the evaluation factors were applied during the evaluation process to formulate a best value ranking, but the question of which vendor ultimately provides the best value to the State will not be conclusively determined until after negotiations are concluded. See § 287.057(1)(c)4., Fla. Stat. (“After negotiations are conducted, the agency shall award the contract to the responsible and responsive vendor that the agency determines will provide the best value to the state, based on the selection criteria.”). As testified by Ms. Gutierrez- Scaccetti, “[t]he Selection Committee agreed upon the ranking of firms. It has not made an award.” This is consistent with the ITN and Florida law, which require award to the best value proposer after negotiations. Evaluation Criteria Properly Followed As explained above, ITN section 2.5.2 sets forth the evaluation factors that the TRT and Selection Committee were to use in evaluating proposals. Petitioners allege that the TRT and Selection Committee did not follow the ITN and based their evaluations and rankings on factors other than those listed in ITN section 2.5.2. The evidence establishes that the TRT did in fact use these factors, as evidenced by the detailed evaluation summaries prepared by each of the eight TRT members, which almost uniformly tracked these factors. Seven of these summaries are organized by headings that mirror the seven criteria of section 2.5.2. The remaining summary, prepared by TRT member Mohamed Hassan, was formatted in terms of pros and cons, but nonetheless addressed all of the section 2.5.2 evaluation criteria. Reflective of the TRT’s approach, TRT member David Wynne prepared detailed, typed proposal summaries that are four pages long and single-spaced for each proposal. Mr. Wynne’s summaries capture his deliberate thought process in ranking the proposals and include headings that directly tie back to the evaluation criteria in the ITN. His summaries include specific details from each proposal justifying his qualitative assessment of the proposals. For example, he discusses the benefits of Xerox’s Vector 4G tolling platform, Xerox’s proposed project schedule, and maintenance. Mr. Wynne even included a breakdown of the pricing and his thoughts on how the pricing compared to the other vendors. The other TRT members had equally detailed summaries. When read as a whole, these summaries demonstrate that the TRT engaged in a rational, deliberative, and thoughtful evaluation of the proposals based on the ITN criteria. Additionally, the TRT members testified that they applied the ITN section 2.5.2 factors in conducting their evaluations. Thus, the evidence demonstrates that the TRT members did as instructed in the ITN and evaluated proposals based on ITN section 2.5.2’s factors. There is no credible basis to find that the section 2.5.2 criteria were not the bases of the TRT’s evaluations, rankings, and narratives. The evidence also establishes that the Selection Committee applied ITN section 2.5.2 factors in reaching its decision. The Selection Committee reviewed the TRT summaries, along with a detailed notebook prepared by HNTB, the Department’s consultant. The HNTB notebook was a comprehensive summary of information compiled from the vendors’ voluminous proposals and organized in a digestible format to aid the Selection Committee’s review, including helpful summaries providing head-to-head objective comparisons of vendor pricing, software development, and vendors’ exceptions and assumptions. The HNTB notebook of materials objectively compiled the content taken directly from the vendors’ own proposals and included no editorial comments or opinions by the Department’s consultants. Moreover, the HNTB notebook contained a chart summarizing the TRT’s rankings by TRT member, along with copies of each TRT member’s detailed written summaries. It also contained a detailed, 36-page pricing summary that pulled price information directly from the vendors’ proposals and summarized the information in a manner that allowed for easy side-by-side comparison. The notebook also included a systems matrix summary that was prepared by taking proposed systems information directly from the vendors’ proposals and combining it in a format that could be easily processed. In fact, the notebook even included pages copied directly from the proposals. Armed with the comprehensive TRT summaries and the HNTB notebook, the Selection Committee then engaged the TRT in a thoughtful and detailed discussion and analysis of the qualitative merits of each vendor’s proposal -- all within the bounds of the section 2.5.2 criteria. Petitioners contend that during the TRT and Selection Committee’s discussions, issues such as risk were improperly considered. Although “risk” was not a separately labeled criterion under section 2.5.2 (“risk of solution” is, however, referenced as a sub-bullet), risk is inherently a significant consideration in each of the evaluation factors. Stated differently, the concept of risk is integral to the ITN section 2.5.2 factors, and the Department properly considered such risks. For example, a vendor’s prior project experience -- whether it has successfully completed similar projects before -- was a listed criterion, which is directly relevant to the risk the Department would take in selecting a vendor, that is, the risk that the vendor’s experience is or is not sufficient to assure a timely project completion and quality services under the ITN. Indeed, section 287.057(1)(c) requires that the Department consider prior experience. Another example of risk considered by at least one Selection Committee member was the potential that Accenture’s project manager would not be assigned solely to this project, but might be shared with Accenture’s Illinois tolling project (“local presence commitment” is referenced as a sub-bullet in section 2.5.2). The evidence shows that Accenture stopped short of saying without qualification that its project manager would be released from Illinois and solely assigned to CCSS. This uncertainty raised a risk concern whether the critical project implementation would be properly managed. Considerations such as these are rational and reasonable. There is a Reasonable Basis for the Department’s Ranking Petitioners further contend that there was no reasonable basis for the Department’s intended decision to begin negotiations with Xerox. However, as explained above, the evidence demonstrates the opposite as the TRT and Selection Committee collectively discussed and considered the evaluation criteria and the Selection Committee reached consensus on moving forward to negotiations with Xerox. Moreover, there is ample evidence that the Selection Committee’s decision was rational and reasonable. The TRT and Selection Committee’s discussion at the April 9, 2014, meeting where the ranking decision was reached, demonstrates the studied analysis by which the evaluations were conducted. At the meeting, the four Selection Committee members, who had already reviewed the TRT members’ individual rankings and evaluations, each questioned the TRT members about their assessments of the proposals. Selection Committee members asked about the bases for the differences between the individual TRT members’ evaluations, and the TRT members explained why they ranked the vendors the way they did. The discussion revolved around the top three ranked vendors, Xerox, Accenture, and Cubic, which one TRT member described as being “head and shoulders above the rest” -- that is, above the vendors ranked fourth and fifth. As noted above, the Selection Committee members’ primary focus in these discussions was on risk assessment -- the financial risks, operations risks, and information technology risks that the TRT members believed accompanied each proposal. Major Selection Committee items of discussion included modifications to the existing systems, proprietary versus off- the-shelf software issues, and the vendors’ proximity to Florida. Additional discussion points included the risk associated with Accenture’s use of multiple subcontractors and Cubic’s lack of experience with certain tolling systems. From these discussions, it appears that the overriding factor behind the Selection Committee’s ranking decision at the April 9 meeting was Xerox’s proven experience with other similar and large tolling projects, including some of the country’s largest tolling systems, which Accenture and Cubic simply did not possess.5/ As one Selection Committee member expressed, Xerox brought a “comfort level” that did not exist with Accenture and Cubic. Moreover, Xerox, with 78 percent, is the leader in the evaluative category that looks at the percentage of the company’s existing baseline system that meets the CCSS requirements -- more than Accenture’s and Cubic’s combined percentages. As the percentage of existing baseline system compliance increases, the implementation risks decrease. Selection Committee members Diane Gutierrez-Scaccetti and Joseph Waggoner expressed the importance of this based on their firsthand experience with existing tolling systems in use for their respective agencies. In sum, this analysis and assessment is a valid and reasonable basis for the Department’s decision. Cubic also contends that such analysis is improper because the ITN allowed transit firms to submit proposals, thus making tolling experience an irrelevant evaluative factor. This contention fails because by prequalifying transit firms to bid, the Department was not precluded from considering a vendor’s specific tolling experience as part of the evaluative process. Contrary to Cubic’s allegation, the factors listed in ITN section 2.5.2, including “Project Experience and Qualifications,” contemplate tolling experience as being part of the relevant analysis. Therefore, the Selection Committee was fully authorized under the ITN to consider the benefits of a proven commodity -- a firm with Xerox’s extensive tolling experience. The Selection Committee’s qualitative assessment that, on the whole, Xerox was the better choice for commencing negotiations was supported by reason and logic and was wholly consistent with the ITN specifications. Petitioners further argue that the Department’s ranking decision is inconsistent with the pre-qualification scoring, where Accenture and Cubic each scored slightly higher than Xerox. This argument fails as ITN section 2.5.1 expressly provides that the evaluations and scoring of the Pre-Qualification Oral Presentations will not be included in decisions beyond determining the initial short-list. Regardless, these three vendors were essentially tied in that scoring: Accenture’s score was 885.38, Cubic’s was 874.75, and Xerox’s was 874.00. Petitioners also contend that the Selection Committee’s ranking decision is inconsistent with the ranking decision of the TRT majority. The ITN is clear, however, that the Selection Committee would be the final arbiter of ranking. No Demonstrations Were Cancelled The procurement timeline in the original ITN allotted ten business days for Proposal Oral Presentations. The revised timeline in Addendum 8 allotted two days. Cubic asserts that this reduction in presentation time occurred because the Department, without explanation, cancelled planned vendor demonstrations that were to occur during Proposal Oral Presentations, thus placing Cubic at a disadvantage as it was unable to present its demonstrations to Selection Committee members. Cubic also asserts that the cancellation of demonstrations is an indication that the Department had already made up its mind to select Xerox. The ITN and the testimony are unequivocal that no demonstrations were “cancelled.” ITN section 2.25 contemplates that the Department may request demonstrations in the proposal evaluation phase but in no way states that demonstrations will be held. Section 2.25 also provides that if any demonstrations were to be held, they would be as directed by the Department. Thus, the ITN did not guarantee Cubic any presentation, as Cubic suggests. Moreover, all vendors were treated equally in this regard. Further, the evidence reflects that the decision to hold demonstrations only during the Pre-Qualification Presentations was made when the ITN was released and that the Department never planned to have vendor demonstrations at the Proposal Oral Presentations. Indeed, during the mandatory pre- proposal meeting, the Department informed all vendors of the planned process, to include one demonstration at the pre- qualification phase and an oral presentation and question-and- answer session during the proposal and ranking phase. In short, Cubic presented no credible evidence in support of its allegations regarding the alleged cancellation of the demonstrations or any resulting harm. Exceptions and Assumptions were properly considered The ITN required vendors, in their technical proposals, to identify assumptions and exceptions to contract terms and conditions. Significantly, the ITN states that the Department is not obligated to accept any exceptions, and further that exceptions may be considered at the Department’s discretion during the evaluation process. ITN Technical Proposal Section 9 provides, in its entirety: Technical Proposal Section 9: Exceptions and Assumptions If Proposers take exception to Contract terms and conditions, such exceptions must be specified, detailed and submitted under this Proposal section in a separate, signed certification. The Department is under no obligation to accept the exceptions to the stated Contract terms and conditions. Proposers shall not identify any exceptions in the Price Proposal. All exceptions should be noted in the certification provided for in Proposal Section 9. Proposers shall not include any assumptions in their Price Proposals. Any assumptions should be identified and documented in this Section 9 of the Proposal. Any assumptions included in the Price Proposals will not be considered by the Department as a part of the Proposal and will not be evaluated or included in any Contract between the Department and the Proposer, should the Proposer be selected to perform the Work. Failure to take exception in the manner set forth above shall be deemed a waiver of any objection. Exceptions may be considered during the Proposal evaluation process at the sole discretion of the Department. Petitioners allege that the ITN did not clearly set forth how vendors’ exceptions and assumptions would be treated and that the Department accordingly failed to consider such exceptions and assumptions. This is a belated specifications challenge and therefore has been waived. Regardless, the evidence demonstrates that both the TRT and Selection Committee did, in fact, consider the exceptions and assumptions in the evaluation and ranking of proposers. The TRT and Selection Committee were instructed to consider exceptions and assumptions and to give them the weight they deemed appropriate subject to staying within the confines of the ITN’s section 2.5.2 criteria. Consistent with these instructions, some TRT members included comments regarding exceptions and assumptions in those members’ evaluation summaries, reflecting that exceptions and assumptions were considered during the evaluation process. Other TRT members considered the exceptions of minimal significance given that the Department would address them during negotiations and was not bound to agree to any. Indeed, the evidence was that it was the Department’s intent to sort out the exceptions and assumptions in the negotiation process and, again, that the Department need not agree to any exceptions initially set forth by the vendors. Thus, the Department acted rationally and within the bounds of the ITN and its discretion when considering exceptions and assumptions. The Selection Committee Reached Consensus Accenture alleges that the Selection Committee failed to carry out its duty to reach a “consensus” in ranking vendor proposals. The evidence establishes the exact opposite. The ITN provides that the Selection Committee will come to “consensus” about ranking the vendors in order of preference, based on technical approach, capabilities, and best value. A consensus does not require unanimity. According to the testimony of Selection Committee member Javier Rodriguez, who was the only Selection Committee member who voted for Accenture as his first choice, “at the end, Xerox got three votes from the Selection Committee; Accenture got one. So for me, consensus meant: Are we in consensus to move forward with Xerox? And as I said at the selection meeting, I didn’t object. So from a consensus standpoint, we’re moving on to starting negotiations with Xerox, and that was the intent.” Therefore, the unrebutted evidence is that the Selection Committee did, in fact, reach consensus. Subject Matter Experts Accenture contends that the TRT and Selection Committee made use of subject matter experts in the course of the evaluation and ranking in violation of Florida statutory requirements and governing procurement policies. The record, however, is void of any substantial competent evidence in support of these allegations. Tim Garrett is the tolls program manager for HNTB under the General Engineering Consulting contract for FTE. Mr. Garrett was the overall project manager assigned to support FTE in the development and execution of the ITN. He and other HNTB employees, such as Wendy Viellenave and Theresa Weekes, CPA, provided support to both TRT and Selection Committee members in regards to summarizing proposals and defining the process. There is no evidence that any employee of, or sub-consultant to, HNTB communicated qualitative assessments or opinions about any of the competing proposals to TRT or Selection Committee members. Rather, the evidence shows that HNTB facilitated the TRT’s and Selection Committee’s evaluation work by presenting to the committee members data in the form of summaries, charts, and recapitulations pulled from the voluminous technical and price proposals submitted by the five competing vendors. Other than the support provided by HNTB, the record is essentially devoid of evidence that proposal evaluators made use of subject matter experts.6/ But in any event, neither Petitioner has made a showing that the use of subject matter experts is proscribed by governing statutes, rules, policies, or the specifications of the ITN. Although the use of subject matter experts was not addressed in the ITN itself, the Department, before the Pre- Qualification Oral Presentations in early January 2014, issued written “Instructions to Technical Review Committee.” These instructions authorized TRT members to confer with subject matter experts during the procurement process on specific technical questions and subject to certain additional parameters, as follows: Subject Matter Experts Subject matter experts are authorized to support the TRC on specific technical questions that the TRC members may have throughout the procurement process. Subject matter experts may respond to questions on any aspect of the procurement or proposal, but may not be asked to, nor will they support, the evaluation of proposals, which is the responsibility of each TRC member. A subject matter expert can discuss the specific elements of the ITN and a vendor’s proposal with a TRC member, but they cannot meet with more than one TRC member at a time, unless in a public meeting – subject to the Procurement Rules of Conduct stated above. The subject matter experts are fact finders. A subject matter expert cannot disclose the specific questions asked by another TRC member. No evidence has been presented to establish that the Instructions to Technical Review Committee, as to the use of subject matter experts, violated Florida law or the terms of the ITN, or that any subject matter expert -- whether affiliated with HNTB or not -- failed to perform within the parameters set forth in the Instructions.7/ Both Petitioners devoted significant hearing time to the FTE consultancy work of John McCarey, McCarey Consultants, LLC, and John Henneman, an employee of Atkins Engineering, Inc., and sub-consultant to HNTB. There has been no showing by Petitioners that either Mr. McCarey or Mr. Henneman served as a subject matter expert to any member of the TRT or Selection Committee or that either had improper contacts in regards to the evaluation or ranking of the vendors. The undisputed evidence is that Mr. McCarey did not serve as a subject matter expert for any of the evaluators. As for Mr. Henneman, although one TRT member testified in deposition that he “believe[d]” Mr. Henneman was a technical expert or considered one of the subject matter experts, there is no evidence that Mr. Henneman served as a subject matter expert for any of the evaluators -- TRT or Selection Committee. In sum, there is simply no evidence that any of the subject matter experts had any improper influence on the TRT or Selection Committee members.8/ No Improper Contacts, Attempts to Influence, or Bias Cubic alleges that there was improper contact between the Department and Xerox during this protest that violates the statutorily imposed “cone of silence” for procurements. Cubic also asserts that there were attempts by Xerox to influence the evaluations or rankings based on the Department’s, or the other agencies’, past or existing relationships with Xerox or Xerox’s acquired entities. There simply is no record support for the assertions that there was any improper contact or any attempt by any person to influence the Department’s evaluations or rankings based on past or existing relationships between the Department and Xerox or Xerox’s acquired entities. Xerox’s counsel did not have any contact with the TRT or the Selection Committee prior to the filing of the protests and the attendant “stop” of the procurement process pursuant to section 120.57(3)(c), Florida Statutes. The only contact Xerox’s counsel had with TRT or Selection Committee members was as a participant with the Department’s counsel in pre-deposition meetings with some witnesses designated by Petitioners -- all in the context of ongoing litigation following the filing of Accenture’s and Cubic’s protest petitions. This contact is essentially no different than Petitioners’ contact with Department personnel in depositions and the trial, as well as during the section 120.57(3)(d)1., Florida Statutes, settlement conference with the Department. Furthermore, all such contact was after both the TRT’s and the Selection Committee’s work under the ITN was completed and the said contact was of no import to the procurement process. In short, there is no evidence of attempts by Xerox to influence the process, improper contact between Xerox and the Department, or Department bias in favor of Xerox. Responsiveness of Xerox’s Proposal The evidence, at best, is that the Department has yet to fully vet the representations made in the proposals by the respective Proposers, including Xerox. Protesters suggest that such a full vetting is a condition precedent to negotiations. Such an argument, however, ignores ITN section 2.12, which has to be reconciled with ITN section 2.9.1 b). ITN section 2.9.1 b) provides in part that “[t]he Proposer shall have Key Team members with the following experience at the time of Proposal submission.” The section then goes on to list several positions that fall within the “Key Team Personnel” category. Petitioners contend that the Contract Project Manager, Quality Assurance Manager, and Human Resources Manager proposed by Xerox fail to meet the “Qualifications of Key Team Personnel” set forth in ITN section 2.9.1 b), thus rendering the Xerox proposal nonresponsive. ITN section 2.12 provides in part that “[a]fter the Proposal due date and prior to Contract execution, the Department reserves the right to perform . . . [a] review of the Proposer’s . . . qualifications [and that] [t]his review will serve to verify data and representations submitted by the Proposer and may be used to determine whether the Proposer has an adequate, qualified, and experienced staff.” Xerox’s omission, at this point in the process, amounts to a non-material deviation from the ITN specifications given that ITN section 2.12 reserves in the Department the right to review key personnel representations made by Xerox, and any other short-listed Proposer, at any time “prior to Contract execution.” Cubic also contends that Xerox and Accenture submitted conditional Price Proposals rendering their proposals non- responsive under ITN section 2.16. The analysis turns on the provisions of Technical Proposal Section 9: Exceptions and Assumptions, which provides a detailed description of how exceptions and assumptions are to be provided by vendors, and explains that “[e]xceptions may be considered during the Proposal evaluation process at the sole discretion of the Department.” As provided by the ITN, all vendors included a detailed listing of exceptions and assumptions in their Technical Proposal. Consistent with the discretion afforded to the Department under ITN Technical Proposal Section 9 to consider listed exceptions during the Proposal evaluation process, the Department then made the following inquiry of each of the Proposers: Please identify whether your price proposal is based on the Department’s acceptance of the Exceptions in Section 9 of your technical proposal? Please identify whether your price proposal is based on the Department’s acceptance of the Assumptions in Section 9 of your technical proposal? Xerox responded to both inquiries as follows: “The Xerox price proposal is based on the assumptions and general risk profile created by the inclusion of Section 9. We assume the parties will reach mutual agreement on the issues raised in Section 9 without a material deviation in the price proposal.” In addition to providing written answers to the questions, the vendors also addressed these issues in the Proposal Oral Presentations in response to questions by the Department. By the end of the Proposal Oral Presentations, all three vendors had made clear to the Department that resolution of exceptions and assumptions would not affect the proposed price. For example, Xerox’s senior executive in charge of the procurement, Richard Bastan, represented that there is no financial implication to any of the exceptions and that Xerox would honor the terms and conditions and the scope of services in the ITN for the price set forth in the Price Proposal. Accordingly, none of the proposals were improperly conditioned, and Xerox, Accenture, and Cubic were treated equally. Cubic also contends that Xerox’s proposal was nonresponsive as Xerox allegedly failed to meet the stated experience minimums for transactions processed and accounts maintained. There is, however, no credible evidence to support this contention. Indeed, the evidence is that the Department, through its consultant HNTB, verified these requirements by calling the referenced projects. Moreover, Xerox met or exceeded the stated minimums with its New York project reference. The Department’s decision that Xerox was responsive on this issue is logical, reasonable, and supported by the evidence. Price Proposals ITN section 2.5.2 lists “price” as a factor to consider in determining “Best Value.” The vendors’ price proposals were presented to the TRT members for purposes of conducting their evaluations. Price was also an appropriate factor for consideration by the Selection Committee. Accenture argues that “[t]he ITN does not indicate how pricing will be considered by FDOT during the selection process.” Accenture’s contention that the ITN failed to disclose the relative importance of price is a challenge to the terms, conditions, and specifications of the ITN and should have been filed within 72 hours after the posting of the solicitation, as required by section 120.57(3)(b). Accenture has waived its right of protest with respect to this issue. Conflict of Interest Accenture complains that “[n]either Mr. Henneman nor Mr. McCarey submitted conflict of interest forms as required under the Department’s Procurement Manual . . . [because both] were present during the oral presentations made by the vendors in connection with this procurement.” Accenture also complains that Wendy Viellenave never disclosed that her husband works for TransCore, a company that is a subcontractor for Xerox. Ms. Viellenave’s husband currently works for TransCore as a maintenance and installation manager in California and has not worked in Florida in nearly twenty years. There is no credible evidence that Ms. Viellenave, through the relationship with her husband, has any “significant” direct or indirect -- financial or otherwise -- interest in TransCore that would interfere with her allegiance to the Department. The fact that Ms. Viellenave is married to an individual that works for a Xerox subcontractor is insufficient, in itself, to establish a real or potential conflict of interest. Jack Henneman currently runs the back office operation for FTE at its Boca Raton facility. His future role for the CCSS is as project manager for the implementation of the CCSS. Mr. Henneman became aware of the CCSS procurement through his work on a Florida Transportation Commission Report that culminated in 2012. This report documented the cost efficiencies for all of the tolling authorities in Florida. Mr. Henneman attended some of the Pre-Qualification Demonstrations as his schedule would permit because he is the “go-forward” project manager for the CCSS implementation. Mr. Henneman formerly worked for ACS from 2002 – 2009, and met Ms. Gutierrez-Scaccetti during his employment with the company. Mr. Henneman was the transition manager for the transfer of the back office operation of the New Jersey Turnpike from WorldCom to ACS. Mr. Henneman did not have any contact with Ms. Gutierrez-Scaccetti from approximately 2009 to 2012. In his capacity as the “go-forward” project manager, Mr. Henneman reviewed the technical proposals submitted by the vendors in the instant proceeding but he did not have any discussions with the TRT members or the Selection Committee members about the proposals. He reviewed the technical proposals for the purpose of educating himself so that he would be better prepared to carry out his functions as the “go-forward” project manager. John McCarey is a sub-consultant to FTE general engineering contractor, Atkins. Mr. McCarey has a future role as being a part of the negotiations group for the CCSS. Mr. McCarey formerly worked for Lockheed for approximately 25 years and then spent 5 years working for ACS. Mr. McCarey was the chief financial officer for ACS’s State and Local Solutions Group at one time. Mr. McCarey left the employment of ACS in 2006. Mr. McCarey currently assists with various functions, including work on issues with the consolidation of the back office systems of OOCEA and FTE. For approximately 10 years before becoming a sub-consultant, Mr. McCarey had not had any contact with Ms. Gutierrez-Scaccetti. As it relates to the CCSS project, there is no persuasive evidence that Mr. McCarey provided recommendations to the TRT or the Selection Committee.
Recommendation Based on the Findings of Fact and Conclusions of Law, it is recommended that Petitioners’ protests be dismissed. DONE AND ENTERED this 4th day of September, 2014, in Tallahassee, Leon County, Florida. S LINZIE F. BOGAN 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 4th day of September, 2014.
Findings Of Fact Respondent, St. Johns Water Management District, is a special taxing district authorized by law to perform various water resource duties and is empowered to hire and terminate employees. As an employer, the District has developed an employment policy which states in pertinent part: VII. ACTS OF MISCONDUCT AND WORK STANDARDS VIOLATIONS FOR DISTRICT EMPLOYEES The following acts of misconduct and violation of work standards will subject an employee of the District to disciplinary action: 15. Insubordination - An employee may not willfully or deliberately refuse to comply with a direct order or any established work assignment of an immediate supervisor or higher level supervisor unless such order or assignment would result in an immediate danger to the health and safety of the employee or others. STANDARDS OF DISCIPLINARY ACTION The following standards are established to insure the District is consistent in taking disciplinary actions against employees involved in similar situations. The recommended disciplinary action is normally the penalty which should be imposed. However, circumstances may make a greater or lesser action more appropriate than the one suggested. Realizing that some of the offenses and deficiencies listed will be more serious and more frequent in certain cases, the District shall utilize good judgement in light of all available facts in each case. Secondary and subsequent offenses have a cumulative effect and justify greater penalties. An offense need not be similar in nature to an earlier offense in order to have such cumulative effect. The disciplinary action should be based on an overall evaluation of conditions and severity of the violations. The standard of discipline for the first occasion of insubordination is a written reprimand, suspension up to three days or dismissal. The standard for the second event of insubordination is dismissal. Teresa Brun was employed by the District from July of 1988 to February 25, 1992. From April 1989 to February 25, 1992, Ms. Brun held the position of contract administrator in the water resources section of the District. As a contract administrator, she, along with four other contract administrators, oversaw various purchasing contracts for the District which the District was in the process of letting out for bid. Ms. Brun had also been assigned to work on drafting a new contracts policy manual and drafting standard forms for the new manual. Performance of clerical duties associated with the various purchasing contracts assigned her were not part of Petitioners established work assignment. Ms. Brun's supervisor was Mr. Jadwin, the contract supervisor. The water resources contract section had a secretary who, during the time period relevant to this proceeding, was Betty Anderson. Ms. Anderson had limited experience in the water resources section since she had been employed in the section since October or November 1990. Ms. Anderson's function was to perform clerical duties for the section's supervisor and contract administrators, including Ms. Brun. In essence, Ms. Anderson was supposed to work with the contracts administrators and perform the secretarial functions of the office as instructed by the contracts administrators. Her duties included, among other things, working with the bid files, maintaining a list of bidder's addresses (bidders' list), and typing and preparing bid tabulation sheets. Ms. Brun as well as other contract administrators did take materials to Ms. Anderson and instruct her how to prepare various materials and bid documents required by the contracts office. Ms. Anderson was a slow learner and was difficult to get along with. However, Ms. Brun felt that since Ms. Anderson had been employed for approximately three months, it was time for Ms. Anderson to learn to utilize the bid files and computer files containing bidder's addresses in order to gather the information she needed to prepare bid documents and materials without being spoon fed the information. In short, Ms. Brun legitimately expected Ms. Anderson to perform as past section secretaries had performed. On Friday, January 25, 1991, Ms. Anderson received a note from Ms. Brun asking Ms. Anderson to prepare a standard "Notice of Intent" to issue a contract on a particular bid which was to go before the Board for adoption. A "Notice of Intent" includes a cover letter, bid tabulation sheet and a Notice of Rights. The complete package is then mailed to the bidders who expressed an interest in the bid. Ms. Brun prepared the cover letter and standard Notice of Rights and requested Ms. Anderson to mail the Notice of Intent to all the bidders. Ms. Brun informed Ms. Anderson that the bid tabulation sheet was in the bid file. Ms. Anderson wrote a note back to Ms. Brun requesting that she furnish the "pertinent information" needed to complete the assignment. Ms. Anderson's request for information appears to refer to the bid tabulation sheet and the addresses of interested bidders to whom the Notice of Intent should be sent. 1/ The note from Ms. Anderson was deposited in Ms. Brun's in-basket. On Monday, January 28, Ms. Brun saw Ms. Anderson's note and responded with a note telling Ms. Anderson that the information she sought was in the bid file and she should get it herself. Following the note exchange, Ms. Brun and Ms. Anderson talked over the problem of preparing the Notice of Intent and bid addresses in a meeting initiated by Ms. Anderson about problems with the addresses for this bid. Ms. Brun told Ms. Anderson to go into her contract files and secure the information. Ms. Anderson refused to go into the bid files to find the bid tabulation sheet and refused to print out an address list from her computer file. Ms. Anderson's reply was that if she had to get the information, it would not get done and that she would wait and talk to Mr. Jadwin. Ms. Anderson left the file on Ms. Brun's desk and would not, as instructed by Ms. Brun, take it with her. Ms. Anderson made her refusal in front of another contracts manager, Cindy Gilmore. Ms. Anderson's refusal to comply with the requests of Ms. Brun were only explained as "territorial concerns." However, Ms. Anderson did eventually learn that part of her job was to get information out of the bid files and to utilize the address information she maintained in her directory. Following this impasse, Ms. Anderson went to Mr. Jadwin, who was the mutual supervisor of both Ms. Brun and Ms. Anderson. Mr. Jadwin agreed with Ms. Anderson's position and, told Ms. Anderson that he would talk to Ms. Brun. However, Ms. Anderson asked if she could work it out herself because she wished to develop effective working relationships with the contract administrators. Mr. Jadwin agreed and Ms. Anderson returned to Ms. Brun and asked to speak about the needed materials. Ms. Anderson informed Ms. Brun that Mr. Jadwin thought it was fair that Ms. Brun get the bid tabulation sheet out of the file and give it to Ms. Anderson. Ms. Brun still angry over Ms. Anderson's refusal to perform her secretarial duties refused to discuss the matter further and told Ms. Anderson to "just write in a memo what you will do and what you will not do." Mr. Jadwin later asked Ms. Anderson how her meeting with Ms. Brun had gone. She replied things had not gone well and she was writing the memo requested by Ms. Brun. Mr. Jadwin told her not to write the memo and that he would "take care of it." Ms. Anderson then got the bid file for the first time, went through it, and could not find the bid tabulation sheet. The yellow cards with the bidder's addresses as well as green cards from bidders who had submitted bids were in the file. Ms. Anderson then took the file to Mr. Jadwin and he searched for the bid tabulation sheet and could not find it. The bid tabulation sheet had been removed from the bid file and had been placed in a standard information-packet to the Board. This packet was known as Board back-up. Ms. Brun was unaware that the bid tabulation sheet had been removed from the bid file. On the other hand, the information to recreate the bid tabulation sheet was in the file. Additionally, the bid tabulation sheet was readily findable by any thinking secretary or individual who had become familiar with office procedures. On January 31, 1991, Mr. Jadwin approached Ms. Brun. 2/ This was the first time in these events that an immediate supervisor had addressed Ms. Brun on the bid tabulation sheet and address list. The meeting took place in Ms. Brun's office which was next to Ms. Anderson's desk. Ms. Anderson was seated at her desk and could hear the conversation. All the witnesses agree that Mr. Jadwin asked Ms. Brun if Ms. Anderson had typed a certain bid tabulation sheet. Ms. Brun replied affirmatively. Mr. Jadwin then informed Ms. Brun for the first time that neither he or Ms. Anderson could locate the bid tabulation sheet in the file. Mr. Jadwin asked Ms. Brun to help Ms. Anderson out and give Ms. Anderson the information to type another bid sheet. Ms. Brun said she would. Mr. Jadwin then began to broach the subject of the addresses. He said, 'About the address,' "We've had some problems with the address on that." Ms. Brun replied that she was "not the only person who makes problems with the bids." Mr. Jadwin started to say something else and Ms. Brun cut him short and said, "Why don't you just address everything that you need to me in a memo." Mr. Jadwin again began to say something else but Ms. Brun stated "Bob, I'm not going to argue with you," got up, put the bid file in the file cabinet and walked out of her office. Clearly, Ms. Brun terminated Mr. Jadwin''s conversation with her. Whether the termination was abrupt and cut short what Mr. Jadwin wanted to say, depends on the particular witnesses point of view. However, Mr. Jadwin did not object to the conversation's termination and did not ask or order Ms. Brun to stay. No instructions were given to Ms. Brun in regards to the addresses because she exited her office. However, Ms. Brun's behavior while rude and perhaps contemptuous toward Mr. Jadwin was not insubordinate conduct on her part. That afternoon Ms. Brun learned for the first time that some bid packages had been returned because the party to whom they had been addressed was not located at the address to which the packages had been mailed. Ms. Brun took the returned packages to Mr. Jadwin. Later that same afternoon, Ms. Brun furnished the bid tabulation sheet to Ms. Anderson. Ms. Anderson retyped the bid tabulation sheet which had caused so much trouble. After typing the bid tabulation sheet, Ms. Anderson came into Ms. Brun's office and asked where the bidder's list was. Ms. Brun told Ms. Anderson the list was in the file. Ms. Anderson replied that the list "just won't get done," and threw the bid file on Ms. Bruns desk. Ms. Brun put the file back in Ms. Anderson's work tray. Ms. Anderson said the file would "just stay there." The following day, Ms. Brun sent out a partial Notice of Intent. On Friday, February 1, approximately 2 days after Mr. Jadwin's conversation with Ms. Brun, Mr. Jadwin wrote Ms. Brun a note. The note states: To: Teresa From: Bob Subject: Notice of intended award Walkways - Clay Island Date: 2-91 I have asked you to supply Betty with the list of addresses to which to send the above Notice. Betty has had to re-type the Bid summary sheet that was lost from your file. 3/ If you choose to continue to refuse this request please explain your reasons immediately to Mr. Payton. As of Monday, 2/4/91, your refusal has held this 'Notice' up for one week. Please do not delay in getting this done. Bob The note was placed in Ms. Brun's in-basket on February 1. However, she did not receive Mr. Jadwin's note until Monday morning, February 4. Ms. Brun stated she did not give Ms. Anderson the list of addresses upon receiving the note because the note was in error about being instructed to furnish the addresses to Ms. Anderson and because her interpretation of the note was not as a directive to produce the addresses but as an option of going to Mr. Payton because she would in essence be doing Ms. Anderson's job for her. Ms. Brun decided to go to Mr. Payton. Given the inaccuracies in the note and its tenor, Ms. Brun's interpretation was reasonable under the circumstances of this case. Ms. Brun printed out a copy of Ms. Anderson's directory which included the file for the bidder's list and immediately went to Mr. Payton. There is conflict in the testimony over what occurred at this meeting. Ms. Brun's version is that Mr. Payton sided with her and told her to go back to Ms. Anderson and tell her that the file was in the computer and explain the file to her. Mr. Payton denies this version, saying that he had discussed the matter during the previous week with Mr. Jadwin after the walkout and that he (Mr. Payton) then told Ms. Brun to provide the address list to her supervisor without getting upset and to go and ask Ms. Anderson what information she needed and provide that information. Except as set forth Ms. Brun's hearing testimony that Mr. Payton sided with her against her immediate supervisor is deemed not credible. Ms. Brun returned from Mr. Payton's office and told Ms. Anderson that Mr. Payton had directed her (Ms. Brun) to tell Ms. Anderson what she was to do with the file for the addresses and that the address file was in the computer. Mr. Jadwin overheard the conversation with Ms. Anderson and intervened because it was not consistent with what had been previously told to him by Mr. Payton. Mr. Jadwin then directed Ms. Anderson to complete the matter as best she could and have Ms. Brun verify the addresses. The address list was finally produced and Ms. Brun did satisfactorily verify the addresses. During the time Ms. Brun worked for the District, she was evaluated on an annual basis and never received any evaluation below the "above satisfactory" category. Her only prior disciplinary history was a reprimand for insubordination which she received in December, 1990. A reprimand is the least severe form of discipline at St. Johns River Water Management District.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That a final order be entered by the Governing Board reinstating the Petitioner's employment with the District. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 2nd day of September, 1992. DIANE CLEAVINGER 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 2 day of September, 1992.
The Issue Whether Respondent acted contrary to the agency's governing statutes, rules or policies, or the bid specifications in its proposed decision to award a contract to Intervenor Xerox Corporation pursuant to Request for Proposal ("RFP") No. 07-015- 040-RFP.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing and on the entire record of the proceeding, the following findings of fact are made: On December 15, 2006, PCS issued the 2007 RFP, entitled "Copier Program--Request for Proposals." The 2007 RFP was intended to provide a comprehensive copier program for the entire Pinellas County School District from the award date of the bid, then anticipated to be February 20, 2007, through June 30, 2012. The purpose of the 2007 RFP was stated as follows in Section 3.1 of the General Information section: [PCS] requests proposals from experienced and qualified vendors to provide a comprehensive copier program countywide which fulfills the priorities and needs expressed by district focus groups. PCS wishes to partner with a qualified vendor who will continue to improve information sharing, right size number of assets, and reduce the number of device types while lowering the district's cost. Vendors may propose whatever program they feel best meets the district's needs and are not restricted in any way other than to meet the basic equipment specifications, terms and conditions outlined in this bid. . . . (Emphasis added) A statement of the 2007 RFP's "scope" set forth in the Special Conditions similarly provided: [PCS] requests proposals from experienced and qualified vendors to provide a comprehensive copier program countywide which fulfills the priorities and needs expressed by district focus groups. Vendors may propose whatever program they feel best meets these needs and a district evaluation committee made up of participants from the focus groups will evaluate proposals and make the selection it feels best meets these needs based upon a set of criteria published in this document. . . . [Emphasis added] The 2007 RFP provided for proposals to be received no later than January 18, 2007, at 3:00 p.m. The 2007 RFP contained General Terms and Conditions, setting forth the standard boilerplate terms common to all PCS procurements, and Section 1 of "Special Conditions" particular to this contract.1 These were followed by: Section 2, "Personnel Matrix"; Section 3, "General Information"; Section 4, "Program Specifications"; Section 5, "Equipment Specifications"; Section 6, "Cost Proposal"; and Section 7, "Contractor Response." PCS has adopted the General Terms and Conditions as rules, codified in Part A of the PCS Purchasing Handbook. Paragraph 1(g) of the General Terms and Conditions, "Freight Terms," provided: All items are to be bid FOB destination with all transportation charges prepaid and included in the bid prices and title transferring to the district at the time of delivery, unless otherwise stated in bid invitation. Any exceptions to these freight terms taken by the bidder must be clearly stated in the bidder's proposal. The purchasing department will evaluate any such exceptions and determine if the exception constitutes grounds for rejection of the bidder's proposal. [Emphasis added] Paragraph 3 of the General Terms and Conditions, "Acceptance and Withdrawal of Bids," provided: A bid (or amendment thereto) will not be accepted by the purchasing department after the time and date specified for the bid opening, nor may a bid (or amendment thereto) which has already been opened in public be withdrawn by the bidder for a period of sixty (60) calendar days after the bid opening date and time, unless authorized by the purchasing department. By written request to the purchasing department, the bidder may withdraw from the bid process and ask to have their sealed bid proposal returned at any time prior to the closing date and time for the receipt of bid proposals. Paragraph 14 of the General Terms and Conditions, "Variance to Bid Documents," provided: For the purpose of bid evaluation, bidders must clearly stipulate any or all variances to the bid documents or specifications, no matter how slight. If variations are not stated in the bidder's proposal, it shall be construed that the bid proposal submitted fully complies in every respect with our bid documents. Paragraph 30 of the General Terms and Conditions, "Errors and Omissions," provided: In the event an error or obvious omission is discovered in a bidder's proposal, either by the purchasing department or the bidder, the bidder may have the opportunity of withdrawing their bid, provided they can produce sufficient evidence to document that the error or omission was clerical in nature and unintentional . . . This privilege shall not extend to allowing a bidder to change any information contained in their bid proposal; however, in the event of a minor omission or oversight on the part of the bidder, the purchasing department (or designee) may request written clarification from a bidder in order to confirm the evaluator's interpretation of the bidder's response and to preclude the rejection of their bid, either in part or in whole. The purchasing department will have the authority to weigh the severity of the infraction and determine its acceptability. Paragraph 31 of the General Terms and Conditions, "Basis of Award of Bids," provides: "A Bidder who substitutes its standard terms and conditions for the district's, or who qualifies its bid in such a manner as to nullify or limit its liability to the district will be considered nonresponsive." The standard form cover sheet to both the 2006 and 2007 RFPs contained a "Note to Bidder" that stated: "A signed bid submitted to the School Board obligates the bidder to all terms, conditions and specifications stated in this bid document, unless exceptions are taken and clearly stated in the bidder's proposal." (Emphasis added) The Special Conditions of the 2007 RFP included a provision titled "Acceptance of Vendor Responses," which stated: "The purchasing department reserves the right to accept proposals from multiple vendors, and to accept or reject portions of a proposal based upon the information requested. Vendors may be excluded from further consideration for failure to fully comply with the requirements of this RFP solely at the purchasing department's discretion." (Emphasis added) The Special Conditions of the 2007 RFP also included a provision entitled "Integrity of Bid Documents," which stated: Bidders shall use the original Bid Proposal Forms provided by the Purchasing Department and enter information only in the spaces where a response is requested. Bidders may use an attachment as an addendum to the Bid Proposal form if sufficient space is not available on the original form for the bidder to enter a complete response. Any modifications or alterations to the original bid documents by the bidder, whether intentional or otherwise, will constitute grounds for rejection of a bid. Any such modifications or alterations that a bidder wishes to propose must be clearly stated in the bidder's proposal response and presented in the form of an addendum to the original bid documents. Both Xerox and IKON timely submitted proposals in response to the 2007 RFP. Evaluations of the responses to the RFP were based on a two-step procedure. First, a focus group of individuals from the Pinellas County School District would analyze the bids and award points based on the specifications and the Proposal Evaluation Form set forth in the RFP. The maximum award was 100 points, with 80 points constituting the threshold for further consideration. Second, those vendors which met the 80-point threshold would compete solely on price. Those bidders who did not score 80 points in the first stage would not have their price bids opened. By January 24, 2007, the focus group had finalized its evaluations, and the cost proposals were to be opened on January 26, 2007. Both IKON and Xerox scored above the 80 point level. IKON received a score of 87 points from the focus group and Xerox received a score of 81 points. Xerox's proposal included, among 15 unnumbered appendices, an appendix titled "Xerox Clarification Addendum to the RFP." This Addendum contained four "clarifications" of portions of the General Terms and Conditions, seven "clarifications" regarding the Program Specifications portion of the Special Conditions, and 12 items under the heading "Other Xerox Service Terms" that purported to set forth contractual provisions regarding service, personnel, risk of loss, limitations on liability, payment schedules, and other standard contract terms. PCS's purchasing department conducted a responsiveness review of the proposals prior to sending them to the focus group for substantive evaluation, but did not notice the Xerox Addendum. Mark Lindemann, the director of purchasing for PCS, testified that it is not customary for bidders to submit such an addendum, and, therefore, his staff was not looking for it when conducting their responsiveness review. On January 30, 2007, after the focus group had performed its evaluation of all the bids, and the cost proposals had been opened and the bid tabulations had been posted on the PCS website, Colin Castle of IKON brought to the attention of the PCS purchasing department the presence of the Xerox Addendum. Geri Pomerantz is the Xerox employee responsible for public sector solicitations in the Southeast United States. She is responsible for understanding the terms and conditions of a solicitation, for pricing the solution based on the customer's requirements, and for ensuring that Xerox submits a responsive proposal. Ms. Pomerantz signed and submitted Xerox's proposal in response to the 2007 RFP. Ms. Pomerantz believed that the Xerox Addendum complied with the "Integrity of Bid Documents" provision of the Special Conditions, quoted above. By submitting the Addendum, Xerox sought to clarify areas of the RFP, to explain how Xerox was meeting the requirements of the RFP, and to propose new items where Ms. Pomerantz believed the RFP was silent on important terms. Ms. Pomerantz testified that, to comply with the "Integrity of Bid Documents" provision, Xerox included the proposed clarifications in the body of its proposal, where that was possible, then further called them to the attention of PCS by placing them in the Addendum. Though unnumbered, the Xerox Addendum is clearly identified in the Table of Contents at the front of the Xerox proposal and on a separate tab on the side of the proposal. Xerox incorporated its clarifications in the body of its proposal in those places where the 2007 RFP requested a response from the vendor, i.e., Section 4, the Program Specifications portion and Section 5, the Equipment Specifications portion. Xerox incorporated clarifications to the following Program and Equipment Specifications: Section 4.3.1-–Equipment Build Status; Sections 4.3.4, 5.3.2 and 5.3.13 –-Price Offering; Sections 4.7.4 and 4.7.5-–Inspection and Acceptance; Section 4.10.2-–Response Time; Section 4.10.3-– Uptime; Section 4.10.4--Electronic Meter Reads; and Section 4.17–-Insurance Specifications for Contractors. The General Terms and Conditions did not call for a vendor response, and Xerox's clarifications or proposed modifications to those were made only in the Addendum. The introduction to the Xerox Addendum provides as follows: We have reviewed your Invitation to Bid ("Bid")[2] for a Copier Program, and have prepared a proposal that we believe addresses your requirements. However, some of the Board's requirements require that we make some limited clarifications to the terms and conditions included in your Bid. These clarifications are set forth below and are part of our Proposal. In addition, we have included some additional terms and conditions, which are also included as part of our Proposal. Should there be a conflict between the terms and conditions of the various documents the order of precedence will be this Addendum, followed by your Bid. Please note that if any of the terms or clarifications are inconsistent with Florida law or otherwise unacceptable to you, Xerox agrees to negotiate a reasonable alternative that is acceptable to both parties. Our team is also prepared to discuss the Xerox Proposal in greater detail and, if required, adjust our offering based on your final requirements, which may include a modification to our proposed equipment, support services, terms and conditions, and/or price offering. The Xerox Addendum expressly proposed clarifications or modifications to four provisions of the General Terms and Conditions. Paragraph 1(g), set forth in full above, contains PCS's standard freight terms and describes the process by which a vendor may take exception to those terms: exceptions must be clearly stated in the proposal, and the purchasing department will determine whether the exceptions constitute grounds for rejecting the vendor's proposal. The Xerox Addendum proposed to transfer to PCS the cost of any "non-standard delivery or removal expenses, such as additional costs where additional time or resources are required to disassemble equipment due to lack of adequate facility access, or the need to use stair creepers or cranes to deliver equipment to upper floors of buildings.3 Ms. Pomerantz justified this variance by asserting that the 2007 RFP was silent regarding the issue of "non- standard delivery", and that Xerox was merely offering a clarifying solution to this problem. Mr. Lindemann believed this clarification to be salutary, based on disputes PCS has had with its current vendor, IKON, regarding unusual delivery issues. Paragraph 1(g) of the General Terms and Conditions specifically allowed the vendor to propose exceptions to the standard freight terms, provided those exceptions were clearly stated and the vendor understood that its exceptions could be grounds for rejection of its proposal. Thus, it is found that the Xerox Addendum did not materially deviate from the provisions of the RFP as to this variance. The Xerox Addendum also proposed modification of paragraph 11 of the General Terms and Conditions, which states that PCS has "sole and exclusive property" rights to any discovery, invention or work product produced under the contract. Xerox proposed that any work developed under this contract would be of a generic nature and would remain the sole property of Xerox. Mr. Lindemann reasonably opined that this was not a material deviation because there was no intellectual property involved in this RFP. The Xerox Addendum did not materially deviate from the provisions of the RFP as to this variance. The Xerox Addendum proposed modification of paragraph 41 of the General Terms and Conditions. Paragraph 41 provided that unless otherwise specified in the Special Conditions, all items requested "must be new, the latest model manufactured, first quality, carry the manufacturer's standard warranty and be equal to or exceed the specifications" listed in the RFP. In this instance, the Special Conditions did provide otherwise. Section 4.3.1 of the Program Specifications provided, in relevant part, that vendors "may propose all used, all new or a combination of new and used equipment, but all equipment must meet the minimum standards outlined later in this section. To assure ease of operation for end users, if used equipment is proposed it should all be of the same brand and model within any given Group of copiers, within any given facility." The Xerox Addendum simply provided clarification regarding the company's terminology for its equipment. The equipment provided by Xerox would be either "Newly Manufactured," "Factory Produced New Models," or "Remanufactured," internal Xerox distinctions regarding the use of new, reconditioned or recycled components, and Xerox disclaimed any intent to use reconditioned, recycled, refurbished or used equipment as defined by industry standard. In this instance, Xerox submitted a clarification that did not deviate from or attempt to modify the Program Specifications. The Xerox Addendum proposed modification of paragraph 44 of the General Terms and Conditions, the limitation of liability provision, which provided: The bidder guarantees to save [PCS], its agents and employees, harmless from liability of any nature or kind for use of any copyrighted or non-copyrighted materials, secret process, patented or unpatented inventions, articles or appliances, furnished or used in performance of the contract for which the contractor is not the patentee, assignee or licensee. The Xerox Addendum to paragraph 44 provided as follows: Xerox agrees that it will indemnify the Board from all copyright and patent information that is included in Xerox- branded equipment/software. However, Xerox will not indemnify the Board, its directors, officers, employees, volunteers, and agent [sic] for any patent infringement caused by complying with the Board's requirement to use, or the Board's use of, the Xerox- branded/supplied equipment with equipment or software not provided by Xerox. Mr. Lindemann testified that this modification of the limitation of liability provision would most likely require PCS to purchase additional contingent liability insurance, which would be a cost essentially passed on from Xerox to PCS. It is found that the Xerox Addendum materially deviated from the provisions of the RFP as to this variance. The Xerox Addendum proposed a second limitation of liability provision in the section titled "Other Xerox Service Terms," which was essentially a list of standard terms and conditions that Xerox proposed to take precedence over similar provisions in the 2007 RFP. This second limitation of liability proposal provided as follows: Excluding personal injury (including death), property damage, and intellectual property indemnification on Xerox branded equipment, Xerox will not be liable to you for any direct damages in excess of $100,000 or the amounts you've paid to Xerox, whichever is greater. Neither party shall be liable to the other for any special, indirect, incidental, consequential or punitive damages arising out of or relating to this Agreement, whether the claim alleges tortious conduct (including negligence) or any other legal theory. Any action you take against Xerox must be commenced within two (2) years after the event that caused it. Ms. Pomerantz testified that when she read the RFP she focused on the indemnification language in paragraph 44 of the General Terms and Conditions regarding copyright and patent issues. She thought the RFP was silent on broader indemnification issues, and she sought to clarify it with this proposed language. Mr. Lindemann testified that the $100,000 limitation of liability could result in costs to PCS in the event of a judgment against PCS and might require the purchase of additional liability insurance. Mr. Lindemann believed this proposed limitation on liability was a material deviation and formed the basis for his request to Xerox to withdraw the Addendum. Paragraph 31 of the Standard Terms and Conditions states: "A Bidder who substitutes its standard terms and conditions for the district's, or who qualifies its bid in such a manner as to nullify or limit its liability to the district will be considered nonresponsive." (Emphasis added) It is found that the Xerox Addendum materially deviated from the provisions of the RFP as to this variance. 34. Sections 4.3.4, 5.3.2, and 5.3.13 of the Program/Equipment Specifications related to the vendors' cost proposals provide: 4.3.4 Whatever type of pricing methodology is proposed, it shall include all costs associated with the administration of the service, including, but not limited to: all imaging devices, any peripheral equipment (file servers, etc.), delivery, removal, installation, training, dedicated technician(s), all supplies needed to operate the imaging devices except paper, delivery of supplies and removal of the equipment upon termination of this contract. * * * 5.3.2 Pricing should include all costs associated with the administration of the service, including, but not limited to all imaging devices, delivery, removal, installation, training, certified technicians and all supplies except paper needed to operate the imaging devices. * * * 5.3.13 Pricing must include all costs associated with the administration of the service, including, but not limited to all copier devices, delivery, removal, installation, training, certified technician(s), all supplies except paper, end-user training and semi-annual customer satisfaction surveys. The three quoted provisions state that price proposals must include all costs associated with the administration of the service in question, except for paper, delivery of supplies, removal of equipment upon contract termination, end user training, and customer satisfaction surveys. The Xerox Addendum sets forth a monthly minimum and cost-per-copy charge that would cover standard equipment, supplies, maintenance, delivery and removal, installation and user training, but would require PCS to pay for "optional accessories," "non-standard operating supplies," "excess rigging" needed due to inadequate site access or the need to use stair creepers or cranes to install or remove equipment,4 overtime service coverage, and expenses associated with site preparation. The Xerox Addendum attempted to vary the quoted Special Conditions that require the vendor's price to include all costs associated with delivery, removal, and installation and, thus, materially deviated from the provisions of the RFP. Sections 4.7.4 and 4.7.5 of the Program Specifications required the vendor to "provide and pay for all material, labor, tools, transportation and handling, and other facilities necessary for the furnishing, delivery, assembly plus inspection before, during and after installation of all items specified herein." The Xerox Addendum to Sections 4.7.4 and 4.7.5 attempted to limit Xerox's obligation to inspect the devices by stating that they are "deemed accepted" upon installation unless PCS specifically requires an inspection. It is found that the Xerox Addendum materially deviated from the provisions of the RFP as to this variance. Section 4.17.1 of the Program Specifications required acceptance testing for each imaging device and accessory, including a period of four consecutive business days, each containing seven hours of operational use time, in which the equipment maintains a 95 percent level of performance. The Xerox Addendum to Section 4.17.1 attempted to limit Xerox's obligation to inspect the devices by stating that they are "deemed accepted" upon installation unless PCS specifically requires an inspection. It is found that the Xerox Addendum materially deviated from the provisions of the RFP as to this variance. Section 4.10.2 of the Program Specifications provided requirements regarding service calls and response times. This condition defines "response time" as the interim between the user's call to the repair office and the appearance of a certified technician on-site who is prepared to effect repairs. Section 4.10.2 provides that the response time cannot exceed four hours. PCS would have the option of charging the contractor $50.00 per failure to meet this four-hour response time requirement. The Xerox Addendum proposed that service response times be averaged quarterly according to a formula by which "target response time" would be divided by "average service response time," which is measured by dividing the sum of all service call response times during the quarter by the total number of service calls. Xerox proposed that the $50.00 charge be imposed based upon Xerox's failure to meet "the 90-day 4 hour average unit response time commitment." IKON also proposed to calculate the response time using a quarterly average, providing for an average response time "of 2 to 6 hours for all customer service calls located within 30 miles of an IKON service center, and 4 to 8 hours for all customer service calls located 30 miles or more from an IKON service center." IKON's proposal did not clearly state how far IKON's nearest service center is located from any Pinellas County school site. Another section of IKON's proposal discusses the company's recent consolidation of its "customer care centers," which "provide direct customer support" and house "the field service call center and inside sales function for a geographical region," into four central locations, the closest to Pinellas County being in Atlanta, Georgia. In this instance, both Xerox and IKON have proposed material deviations from the RFP requirement. Section 4.10.2 of the Special Conditions set forth a simple response time requirement that PCS itself could monitor and enforce without input from the vendor. Both Xerox and IKON attempted to substitute complex formulas arriving at quarterly averages for response time. IKON's proposal further attempted to make its compliance with the four hour response time requirement contingent upon the location of IKON's service centers. Section 4.10.3 of the Special Conditions requires a guaranteed uptime of 95 percent per machine for any 90-day period, and further requires that machines failing to maintain 95 percent uptime must be removed and replaced with an identical or comparable model at no cost to PCS. The Xerox Addendum announced an uptime objective of maintaining an average 95 percent equipment uptime performance based on a three-month rolling average, a variation in the wording of Section 4.10.3 that does not materially change the RFP requirement. Xerox also offered slight variations in the definition of "downtime" that are in the nature of clarifications rather than amendments to Section 4.10.3. The Xerox Addendum also contained 12 "Other Xerox Service Terms," essentially Xerox's standard terms and conditions dealing with service guarantees, personnel, substitution of equipment or software, risk of loss for equipment, treatment of confidential information, compliance with laws, vendor liability for customer-supplied items, the limitation of liability provision discussed above, force majeure, payment upon 45 days of invoice, breach of contract and remedies thereto, and a procedure for amendment of the contract. The 2007 RFP's General Terms and Conditions contain requirements for breach of contract, limitation of liability, standards of conduct for vendor personnel, and equipment substitution. Thus, the Xerox Addendum violated the following language in paragraph 31 of the Standard Terms and Conditions: "A Bidder who substitutes its standard terms and conditions for the district's, or who qualifies its bid in such a manner as to nullify or limit its liability to the district will be considered nonresponsive." In summary, the Xerox Addendum materially deviated from the requirements of the 2007 RFP in the following ways: it varied from the limitation of liability requirements of paragraph 44 of the General Terms and Conditions; it offered a cost proposal that was not all-inclusive, in contravention of Sections 4.3.4, 5.3.2, and 5.3.13 of the Program Specifications; it attempted to limit inspections after installation and acceptance testing, in contravention of Sections 4.7.4, 4.7.5, and 4.17.1 of the Special Conditions; it varied from the response time requirements of Section 4.10.2 of the Special Conditions; and it attempted to substitute several of Xerox's standard terms and conditions for those of PCS, in violation of paragraph 31 of the General Terms and Conditions. After learning of the Xerox Addendum from Mr. Castle on January 30, 2007, PCS reviewed the Addendum and concluded that it included material deviations to the terms and conditions of the RFP solicitation and that either the Addendum or Xerox's bid must be withdrawn. Negotiations commenced between PCS and Xerox. On February 2, 2007, Xerox offered PCS a revised Addendum. PCS rejected the revised Addendum and informed Xerox that the Addendum must be withdrawn in its entirety. On February 5, 2007, Xerox notified PCS by letter that it was withdrawing the Addendum from its proposal. Also on February 5, 2007, PCS posted its notice of intent to award the contract to Xerox. IKON's protest complained that Xerox's letter did not accomplish a complete withdrawal of the deviations included in the Xerox Addendum, because many of those deviations remained in the main body of the Xerox proposal. As noted above, Xerox incorporated its clarifications in the main body of its proposal in those places where the 2007 RFP requested a response from the vendor. These clarifications were included in Section 7.1.4 of the Xerox proposal, "Proposed Work Plan, Transition Plan." When Xerox withdrew its Addendum, it did not also submit a revised proposal that deleted the Addendum provisions from those places where they had been incorporated into the main body of the proposal. Nevertheless, both Xerox and PCS understood that withdrawal of the Addendum accomplished the complete withdrawal of the materials included in the Addendum, including where they were incorporated into the main body of the Xerox proposal. This understanding was reasonable under the circumstances. However, IKON raises a related objection that is more pertinent. Xerox was allowed to withdraw its Addendum, and then was awarded the contract. Thus, the winning proposal is different than the proposal that was reviewed and scored by the PCS focus group. IKON argues that it is very likely that Xerox would not have passed the 80-point threshold without the Addendum provisions that were incorporated into the main body of the proposal. Mr. Lindemann of PCS believed that Xerox's score would probably have been higher without the Addendum provisions. The salient point is that both sides are free to speculate about what the score of the winning bid might have been, because PCS proposes to award a contract on a proposal that was never reviewed or scored in the manner prescribed by the 2007 RFP. PCS argues that the withdrawal of the Xerox Addendum was entirely in keeping with the RFP, citing paragraph 3 of the General Terms and Conditions, quoted in full above and relevant portion of which provides: A bid (or amendment thereto) will not be accepted by the purchasing department after the time and date specified for the bid opening, nor may a bid (or amendment thereto) which has already been opened in public be withdrawn by the bidder for a period of sixty (60) calendar days after the bid opening date and time, unless authorized by the purchasing department. [Emphasis added] PCS contends that the emphasized language grants the purchasing department authority to allow a bidder to withdraw a portion of its bid after the bids have been opened. This is correct, if the portion in question is a timely submitted amendment to the original bid.5 In their arguments, both PCS and Xerox equate the terms "amendment" and "addendum," and assume that the Xerox Addendum could be withdrawn as an "amendment" to the Xerox proposal. However, the Xerox Addendum was not an amendment to the Xerox proposal; it was an integral part of that proposal. The Addendum did not amend anything contained in the Xerox proposal; rather, it attempted to "amend" the terms of the RFP. The underscored portion of paragraph 3 anticipates the late withdrawal of an entire bid or an amendment to a bid, not a wholesale grant of authority to the purchasing department to allow a bidder to save a nonresponsive proposal by withdrawing the objectionable provisions. PCS argues that Xerox was given no economic or competitive advantage in being allowed to submit and then withdraw its Addendum. Ms. Pomerantz testified that none of the items in the Addendum would have affected the price bid by Xerox, because they were essentially items of overhead that Xerox cannot "cost out" to include in a price proposal. However, the testimony by Mr. Lindemann convincingly made the point that some of the variations from RFP terms offered by Xerox would affect PCS's costs regardless of their impact on Xerox's price proposal. Passing on costs to the agency that have been absorbed by IKON and the other vendors in their proposals works to Xerox's economic advantage and to the detriment of PCS. Xerox had an obvious competitive advantage in being granted the opportunity to amend its proposal after the substantive proposals were opened and evaluated and the price proposals had been opened and posted. Xerox was also granted the option, afforded to no other bidder, of simply declining to withdraw its Addendum and thereby walking away from the procurement after submitting a proposal that, under the terms of the RFP, is supposed to bind the vendor for a period of 90 days. Subsection 120.57(3)(f), Florida Statutes, provides, in relevant part: In a protest to an invitation to bid or request for proposals procurement, no submissions made after the bid or proposal opening which amend or supplement the bid or proposal shall be considered. . . . The PCS rules and RFP provisions, correctly understood, do not contravene this statutory requirement. They grant the purchasing department the flexibility to allow a bidder, under special circumstances, to withdraw from a given procurement after submitting a bid, and they allow PCS to waive slight variations or minor irregularities in a bid. To the extent that PCS interprets its rules and RFP to allow Xerox to substantially amend its proposal after the opening,6 as occurred in this procurement, then PCS has violated its governing statutes in a fashion that is clearly erroneous, contrary to competition, arbitrary, or capricious. PCS argues that even if the Xerox Addendum contained material deviations, the RFP and PCS's rule permitted bidders to submit addenda with material deviations. PCS based this argument on that portion of Section 3.1 of the Special Conditions stating that bidders "may propose whatever program they feel best meets the district's needs and are not restricted in any way other than to meet the basic equipment specifications, terms and conditions outlined in this bid." When read within the context of the Special Conditions in their entirety, this language clearly contemplates allowing the vendors to offer creative solutions within their field of substantive expertise, i.e., the establishment of a comprehensive copier program countywide. It was rational for the drafters of the RFP to assume that a company such as Xerox enters the process in possession of more knowledge and experience in the field of copier installation, service, and repair than the school district possesses. PCS conducted focus groups to determine the top priorities of the school personnel who use the copiers and presented the bidders with specifications broad enough to allow maximum flexibility in crafting proposals responsive to the listed priorities. However, there are rarely "creative solutions" to boilerplate RFP terms such as shipping, limitation of liability, the requirement that cost proposals be all-inclusive, inspection of equipment prior to acceptance, and response time for repairs. These are areas in which the purchasing department of PCS may be presumed to have at least as much expertise as Xerox or IKON. Variations from the RFP's requirements proposed by a bidder regarding these items are likely to be self-serving efforts to protect the bidder's interests or pass on costs to the agency. Paragraph 31 of the General Terms and Conditions recognizes this reality by stating that a bidder that substitutes its standard terms and conditions for those of PCS will be considered nonresponsive.7 PCS is correct that the "Integrity of Bid Documents" paragraph of Section 1 of the Special Conditions of the 2007 RFP allows bidders to submit addenda that clearly state "modifications or alterations that a bidder wishes to propose." However, contrary to PCS's treatment of Xerox in this procurement, the RFP does not state that the bidder may propose modifications of the RFP terms without risk.8 The cited paragraph clearly warns bidders that proposed modifications or alterations constitute grounds for rejection of a bid. The paragraph does not, and under Subsection 120.57(3)(f), Florida Statutes (2006), could not, state that bidders will be given the opportunity to withdraw those portions of their proposals deemed nonresponsive after bid opening. PCS also emphasizes the first sentence of the "Acceptance of Vendor Responses" paragraph of the Special Conditions: "The purchasing department reserves the right to accept proposals from multiple vendors, and to accept or reject portions of a proposal based upon the information requested." However, the next sentence of that paragraph states that the remedy is not after-the-fact withdrawal of the rejected portion of the proposal, but rejection of the proposal: "Vendors may be excluded from further consideration for failure to fully comply with the requirements of this RFP solely at the purchasing department's discretion." Both PCS and Xerox raised the issue of the 2006 RFP in an effort to show that IKON was now attacking a process from which it earlier benefited. In the 2006 procurement, IKON was allowed to withdraw portions of an addendum after a competitor filed a protest. PCS ultimately rejected all of the 2006 Proposals because of confusion on the part of the bidders, partly related to the fact that IKON was allowed to withdraw its addendum but a competitor was not given the same opportunity. PCS then issued the 2007 RFP in December 2006 to procure the same copy services sought by the 2006 RFP. The 2006 RFP is relevant only to show that PCS has allowed the withdrawal of amendments in at least one previous procurement, a moot point because PCS has freely stated its position that it has the authority to reject an addendum without rejecting the entire proposal. Xerox's original proposal, including the Addendum, was nonresponsive for the reasons set forth above. PCS's effort to save Xerox's low bid by allowing it to withdraw the Addendum violated Subsection 120.57(3)(f), Florida Statutes (2006), as well as the terms of the RFP. The remaining question is whether IKON's proposal was responsive and may therefore be awarded the contract. As already found above, IKON's proposal materially deviated from Section 4.10.2 of the Special Conditions by substituting a complex formula for the simple response time requirement of the RFP and by making compliance with the four- hour response time requirement contingent upon the location of IKON's service centers.9 Section 7.1.3 of the Contractor Response portion of the 2007 RFP, "Proposed Models and Equipment Configurations," provides the following: The respondent must provide a comprehensive description of its proposed standard models and equipment configurations for each of the various grade levels (elementary, middle, high school). Consideration should be given to the stated needs of the focus groups (Section 3), particularly "ease of operation", "accessibility" to machines and "reliability". Vendors should provide detailed, technical product literature for each piece of equipment proposed including all options. The respondent should also describe what flexibility will be allowed for adding or deleting equipment as program needs change and how that will effect the amount billed according to the cost proposal plan proposed. [Emphasis added] Section 7.1.7 of the Special Conditions, "Cost Proposal," provides the following: Respondent must include a complete, detailed cost proposal which encompasses all costs associated with the proposed program. The cost proposal must allow for flexibility to add or delete equipment as program needs change. The district will not entertain any proposals to purchase or lease any equipment. [Emphasis added] IKON's proposal contained the following paragraph within its response to Section 7.1.3 of the Special Conditions: As requested by PCS in Section 7.1.7 of the Invitation to Bid, IKON's cost proposal allows for flexibility. IKON will permit PCS to add or delete equipment as PCS' needs change by permitting PCS to upgrade or downgrade equipment at the beginning or at the end of its fiscal year. Under this program, PCS may replace upgraded or downgraded equipment with additional equipment that addresses PCS' needs. Specifically, IKON will permit PCS to identify up to [three] percent of the overall equipment fleet value procured by PCS from IKON, including models and specifications that are representative of the entire fleet population, as flexible equipment that may be upgraded or downgraded at the beginning or at the end of the fiscal year, while all other equipment may be canceled only in the event of a non- appropriation or termination for cause. The flexible equipment may also be relocated or otherwise used to facilitate a rightsizing program, as directed by PCS. PCS may utilize this flexibility program in its own discretion. In no event shall either party be liable to the other party for any indirect, special or consequential damages. Xerox contends that by limiting PCS to a three percent change in the overall equipment fleet value, IKON's proposal materially deviates from Sections 7.1.3 and 7.1.7 of the Special Conditions, which required that PCS have the flexibility to increase or decrease the size of the copier fleet to meet its needs. However, Section 7.1.3 did not prescribe the amount of "flexibility" required in the vendors' bids; rather, it expressly requested the vendors to "describe what flexibility will be allowed for adding or deleting equipment." IKON's bid described the allowed flexibility as three percent of the overall equipment fleet value and was thus responsive on its face. The evidence presented at hearing was insufficient to determine whether a three percent limit would be so restrictive of PCS's needs to add or delete equipment as to render IKON's proposal nonresponsive. More problematic is the last sentence of the quoted paragraph: "In no event shall either party be liable to the other party for any indirect, special or consequential damages." Xerox cogently argues that if its own proposed limitation of liability is a material deviation, then this similar limitation of liability included in the IKON bid must also be found a material deviation. IKON responds that it is clear from the context that this limitation of liability provision, unlike that in Xerox's proposal, applies only to Section 7.1.3. For this reason, IKON contends, PCS determined that IKON's bid was responsive. IKON argues that its own limitation of liability provision is implicated only in the event that PCS requires additional equipment and that it does not limit any direct liability of IKON to PCS and concerns only a distinct class of damages: indirect, special or consequential damages. The position of the quoted sentence, at the end of the final paragraph of IKON's response to Section 7.1.3 of the Special Conditions, supports IKON's contention that the limitation of liability applies only to that section. However, the wording of the sentence ("In no event . . .") indicates a broader intended application. IKON also failed to explain why the requirement of additional equipment, and only the requirement of additional equipment, raised concerns within IKON that indirect, special or consequential damages might be claimed by either party to the contract. At best, this provision is ambiguous in the scope of its application and, in any event, seeks to limit the liability of IKON beyond the limits provided by the RFP. If Xerox's limitations of liability constitute material deviations, then so must IKON's. IKON's proposal thus contains two material deviations from the RFP, one regarding response time and one regarding limitations of liability. IKON's proposal is nonresponsive.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is RECOMMENDED that PCS enter a final order that (a) declares Xerox's bid to be materially nonresponsive and, accordingly, rescinds the proposed award to Xerox; and (b) declares IKON's bid to be materially nonresponsive and, accordingly, rejects the same. Because the choice of remedies for invalid procurement actions is ultimately within the agency's discretion, the undersigned declines to make a recommendation as to whether PCS should award the contract to the next-lowest responsive bidder or reject all bids and start over. DONE AND ORDERED this 10th day of May, 2007, in Tallahassee, Leon County, Florida. S LAWRENCE P. STEVENSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 10th day of May, 2007.
