Findings Of Fact Prior to June, 1988, HRS determined that it needed 32,000 square feet of office space to house some of its indigent social services for southern Escambia County. Since the desired office space is greater than 2,000 square feet HRS was required to competitively bid lease number 590:1984. Towards that end, Respondent prepared an Invitation to Bid and a bid submittal package. The package contained various bid specifications, bid evaluation criteria and the numerical weight assigned to each of those criteria. Specific areas of importance to Respondent in the selection of its office space were: client safety one building to house all its units employee morale moving costs traffic flow within the building public access Many of the above areas were important to HRS since the agency would render indigent services to approximately 17,000 people a month, many of whom are handicapped or lack good mobility due to age or infirmity. Employee morale was important because of high employee burn out due to rendering aid to so many people who have so little and supplying a pleasant environment conducive to the work of the employees. Moving costs were important should HRS be required to find other space to operate in while necessary remodeling took place in the selected building, or be required to incur the expense of moving to a new building. 1/ All of the above areas were covered by one of Respondent's weighted bid evaluation criteria. The District Administrator of HRS, Chelene Schembera, is ultimately responsible for bidding, selection and leasing of all HRS facilities within District I, including Escambia County, Florida. In order to accomplish this task, Ms. Schembera appointed a bid evaluation committee to review and grade the responsive bids under the criteria established in the bid package, and to recommend to her the committee's choice of the lowest and best bid. Ms. Schembera's purpose in establishing the bid evaluation committee was to secure a cross section of input from people who had a variety of backgrounds and knowledge that would be material in evaluating the office space under the uses for which it was intended and the relative public worth of the work space. Ms. Schembera appointed individual who were familiar with the type of work to be done in the proposed space, as well as a persons familiar with the bid process. Ms. Schembera assigned to serve on the committee Charles Bates, Deputy District Administrator; Jim Peters, to provide a fiscal and overall administrative perspective as well as bid expertise; two citizens from the District Advisory Council to assure objectivity and to look at the properties from the perspective of a private citizen; Mamun Rashied, a program manager; Darlene McFarland, a program manager; Cherie Neal, a unit supervisor and program worker; and Stacey Cassidy, a clerical employee. Ms. Schembera did not personally know Cherie Neal or Stacey Cassidy. These staff members were designated by the supervisors upon Ms. Schembera's direction that she wanted persons who were both intelligent and respected by their peers. One private citizen member of the committee did not participate. The committee as constituted showed a great deal of thought on Ms. Schembera's part to ensure the objectivity of the bid process she was engaging in and to ensure the maximum amount of input from persons who had experience relevant to the overall review of the proposed real estate and to the decision they were being asked to make. The selection of the bid evaluation committee members was neither an arbitrary nor capricious act on Ms. Schembera's part. In fact, the evidence demonstrated the merit in constituting the committee as she did for the input she sought. The bid evaluation committee members, minus Mr. Bates, were briefed on their duties by Joe Pastucha, Facilities Services Manager. Mr. Pastucha is part of the staff responsible for the bid process at HRS. He provided these committee members with the weighted bid evaluation criteria found at page 15 in the bid package. He also gave the committee members a copy of Chapter 5 of the HRS manual containing guidelines for the bid process. His verbal instructions on specific procedures to follow in the evaluation process were limited since he did not wish to improperly influence the committee members. On July 20, 1988, HRS received three bids responding to its invitation to bid on Lease Number 590:1984. Bid A was submitted by Phillips and Company, the apparent second lowest bidder and Intervenor in this case. Its property consisted of one multi-story building located at 1740 North Palafox Street, Pensacola, Florida. Bid B was not responsive and therefore was not considered by HRS and is not a part of this litigation. Bid C was submitted by Petitioner Carmon S. Boone, and was the apparent low bid. Mr. Boone's property consisted of two buildings located at 401 and 411 North Baylen Street, Pensacola, Florida. The Boone property is the present location of Respondent's offices. Both Bid A and Bid C were within the mandatory geographical area designated in the bid package. Once the bids were received the bid evaluation committee began its work. The committee members, minus Mr. Bates, visited the Phillips property. However, the members did not visit the Boone property. There was no need. Four of the members currently worked at the Boone property and the other members had previously visited the Boone property on various other occasions. Mr. Bates was likewise already familiar with both properties. All members were sufficiently familiar with the cogent aspects of each property to allow them to make a rational decision. The bid evaluation committee, minus Mr. Bates, met as a group to evaluate each property in accordance with the weighted bid evaluation criteria. Each individual scored their sheets separately and the general consensus was supportive of recommending the Phillips property. Five committee members scored Mr. Phillips' property higher than the Boone property. The one exception was Mr. Peters who felt that HRS could not support a bid awarded for other than monetary reasons, i.e., he felt the lowest bid had to be accepted. Mr. Bates later reviewed all the bid synopsis sheets of the committee members and discussed the bid award with Mr. Peters and Mr. Pastucha. Mr. Bates felt that the Phillips property was the lowest and best bid. At about the same time, the staff responsible for providing technical assistance to the committee and the District Administrator were made aware that the general consensus of the committee was leaning towards the second lowest bidder, Phillips and Company, as the lowest and best bid. The staff members, one of whom was a bid committee member, disagreed with the award of the bid to Phillips and Company because the Boone property was the lower bid. The staff members sought to head off the committee's intended recommendation. The staff personnel held a meeting with some of the committee members in order to get them to join in a recommendation to Ms. Schembera of the Boone property. Mr. Boone was invited and attended the meeting. He was allowed to improperly bolster his bid by agreeing to convert the two buildings to one and other lesser additions. /2 The potential decision was discussed, but no committee member changed his or her mind. However, through a total lack of communication, a run away staff somehow rationalized themselves into a position of being authorized to submit a letter for Ms. Schembera's signature which awarded the Boone property the lease. Ms. Schembera became aware of her staff's attempt to subvert the bid process she had established. She refused to sign the letter submitted by the staff. She removed the staff member of the committee as a voting member. The staff member had supported the Boone property. She also removed a committee member who supported the Phillips property as a voting member. Ms. Schembera feared that her staff had improperly influenced this member to such an extent that his objectivity had been affected. Both members could still participate in committee discussions. Ms. Schembera thereby reasonably ensured the ongoing objectivity of the bid evaluation committee. The committee was reconvened, minus one member. It recommended the Phillips and Company property. Every reason given by the individual committee members for distinguishing and preferring one bid over another were rational and reasonable considerations and were covered by the bid evaluation criteria. Each individual member gave a rational and reasonable basis for the scoring he or she used on the bid synopsis score sheets. The scoring was done by each member after discussion of the two buildings and without influence from the other committee members. In essence, the committee felt that the Phillips property was the better property for the money. The Phillips property allowed working units to be located in one area with each such unit having its own access. It provided flat safe parking areas and sidewalks, bigger and more elevators, wide halls and windows which presented a bright, happy and pleasant working environment. The Boone property was in two buildings which could not accommodate co-located working units with their own access no matter how much remodeling took place. Parking and sidewalks are on a hill which is slippery when wet. It had one small elevator and narrow halls which did not adequately accommodate more than one wheel chair, and one ground floor where no windows could ever be remodeled into the building leaving a dark, dingy and unpleasant environment. Importantly, every committee member except for the staff member came to the conclusion that the Phillips and Company property was the lowest and best bid. There is no statutory or rule requirement that one scoring method be preferred over another. The only requirement is that the method be rational and reasonable especially where highly subjective, but legitimate criteria are involved in the selection of a particular piece of property. On these facts, the individual scoring methods used by the individual committee members were not arbitrary and capricious, but were very rational and reasonably related to the relative importance the committee members gave the above factors. After reviewing and considering information from the bid evaluation committee, the information on the bid synopsis sheet, and the oral recommendations of Mr. Bates, Mr. Peters and Mr. Pastucha, Ms. Schembera concluded that the Phillips property was vastly better, even considering costs. She found it to be materially superior in terms of construction, organization, client accessibility, handicap accessibility, repairability (in terms of walls), and maneuverability for clients and staff. She felt the Phillips' building's qualities would offer more "humanity" to the process of serving the Department's clients. Additional facts she considered when making her decision included the morale of the staff and their productivity; the ability of staff and clients to conduct their business in a reasonably pleasant, comfortable, safe, and easy to understand and comprehend environment; and the desire to provide a minimally adequate work space. In addition to other monetary costs, she considered energy costs and life cycle costs as reflected on the bid synopsis sheet. The bid synopsis sheet defined minimal energy and life cycle costs to be anything less than 55 BTU's per square feet per year. In this case, the Boone property reflected 39.5 BTU's per square feet and the Phillips property reflected 53.5 BTU's per square feet. Both properties were under the 55 BTU cutoff established by HRS. Translated into monetary figures (life cycle costs) the Boone property reflected a cost of $26,735.00 and the Phillips property reflected a cost of $41,160.00. It was the difference between the energy figures which caught Ms. Schembera's eye. In her layman's opinion, it was incomprehensible that the two buildings would have such a wide divergence of energy costs. /3 She learned from her staff that the information used to compute these costs was supplied by the bidders who had vested interests in the outcome. Ms. Schembera concluded the cost difference was minimal and not of overriding concern in relation to the physical characteristics of the two buildings and how they compared to each other. She quite correctly felt the two buildings were not comparable. In essence, the two buildings' differences in design location and construction rendered neither building comparable to the other building as a like facility under Section 255.254, Florida Statutes. 4/ Based on that information she gave the energy figures relatively little weight. More importantly, however, before the final bid award was made by HRS, the Division of General Services within HRS in its failsafe role in reviewing bids considered the life cycle cost figures of the two bids. The minimal language of Section 255.254, Florida Statutes, has been interpreted by HRS to mean that anything under 55 BTU's is minimal and except in one instance not applicable here, numerical differences under 55 BTU's are immaterial. The Division, without getting into the issue of the likeness of the facilities, concluded that both bids met the Department's interpretation of the "minimal" language of Section 255.254, Florida Statutes, and the relative numerical difference in the energy costs was immaterial. Ms. Schembera is entitled to rely on other more expert HRS Division staff to ensure a proper analysis of highly technical bid specifications such as the energy cost analysis required under Section 255.254, Florida Statutes. It does not matter that the review took place after Ms. Schembera had made her preliminary decision. What is important is that the review be made either personal or vicariously through staff before the final award is made. A proper review of energy costs was, therefore, made by Respondent before the final award was made. Likewise, Ms. Schembera's ultimate decision that the buildings were not comparable like facilities was a proper review of energy costs even though that conclusion was arrived at through a layman's unsophisticated, but more accurate intuition and common sense. To that extent, the energy cost data had no impact on the ultimate choice made by the District Administrator and were properly considered by the District Administrator. 5/ A letter for Ms. Schembera's signature adopting the committee's recommendation was drafted by Mr. Pastucha. The letter was signed and sent to the Department's Division of General Services for review. The District was requested to provide additional justification for its choice by the Department's Division of General Services. Mr. Rashied was directed to draft the response. He simply reorganized the original memorandum into a format more compatible with the Division's direction, clarified a few points and without significantly changing the content, submitted the response as directed. The Division acquiesced in Ms. Schembera's decision.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Department of Health and Rehabilitative Services enter a final order dismissing Case NO. 88-4900BID, and awarding lease number 590:1984 to Phillips and Company as the lowest and best bidder. DONE and ORDERED this 5th day of January, 1989, in Tallahassee, Florida. DIANE CLEAVINGER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 5th day of January, 1988.
Findings Of Fact This case concerns what is called a "turnkey lease." The program was developed by the State of Florida in 1971. It encompasses a situation whereby agencies seeking space for their operation may, after a specific need is determined that cannot be filled by existing adequate space, solicit competitive bids from developers for the provision of land and the construction of a building there sufficient to meet the agency's needs, for lease specifically to the agency requesting it. The Bureau of Property Management within DGS was given the initial responsibility to develop the guidelines, promulgate the rules, and seek statutory authority for such a program. The Bureau's current role is to work with agencies requesting this program. The agency certifies the need to the Bureau, in addition to the fact that there is no available existing space present. The Bureau then determines agency needs and gives the agency the authority to solicit the bids for the turnkey project. Once the bids have been solicited and the preproposal conferences have been held, the bids are then received, evaluated, and a recommendation for an award is forwarded by the agency to the Department of General Services. DGS reviews the supporting documents required by the provisions of the Florida Administrative Code and either concurs or does not concur in the recommendation. If DGS concurs, the submitting agency is notified and is permitted to then secure the lease. Once the lease has been entered into, it is then sent back to DGS for review and approval, as to the conditions, and thereafter the plans and specifications for the building are also referred to DGS for review and approval as to the quality and adequacy of the plans and specifications and code compliance. Section 255.249 and Section 255.25, Florida Statutes, sets forth the requirement for soliciting and awarding bids for lease space in an amount in excess of 2500 square feet. This provision requires that an award of this nature be made to the lowest and best bidder, and DGS subscribes to that standard in evaluating and determining whether or not it will concur with an agency's recommendation. In the instant case, DHRS advertised for bids for the construction of office space in Palatka, Florida for its District III facilities. Before seeking to solicit bids, District III staff conducted a search for other possible existing space within a five mile radius of the downtown area and located no adequate facilities. Thereafter, a certification of need was processed for a solicitation of proposals and approval was granted by DGS to follow through with the solicitation. A preproposal conference was advertised and held on October 14, 1983 and after review by those present at the conference, bid opening date was set for November 22, 1983. Thirty-two bid packages were distributed and twelve bidders submitted proposals. The public bid opening was held as scheduled at 2:00 P.M. on November 22, 1983, in Palatka, Florida by Robert E. Litza, Facilities Service Coordinator for DHRS District III. Of the bids submitted by the twelve bidders, the lowest bid was rejected because of the failure of the bidder to comply with the requirements of the bid package. Of the remaining eleven bids, the four lowest were evaluated with the understanding that additional high bids would be evaluated if the four lowest were found to be unacceptable. Among the four bids considered were bids of Chuck Bundschu, Inc.; Kenneth McGunn, the Intervenor (Mr. McGunn submitted five price schedules for his bid and of these only one was considered); Elizabethan Development, Inc.; and TSU. A recommendation by the evaluation committee which met at DHRS District III that Intervenor's bid be selected was forwarded to DGS in Tallahassee through the Director of DHRS's General Services in Tallahassee on December 22, 1983. The terms of the successful bid and the reasons for its being considered lowest and best are discussed below. The successful bid for the lease in question, lease number 590:8030, was, upon completion of the committee's evaluation, also evaluated by Mrs. Goodman in the Bureau of Property Management of DGS. She also considered the McGunn bid as the lowest and best of the eleven non-disqualified bids. In that regard, not only Mr. McGunn's bid but all of the twelve bids received were considered and reviewed not only at the local level but at DHRS and DGS Headquarters as well. In her evaluation of the proposal and the bids, Mrs. Goodman considered the documentation submitted by DHRS. This included a letter of recommendation supported by a synopsis of all proposals, the advertisements for bids, and any information pertinent to the site selection process. The letter from DHRS dated December 22, 1983, which recommended award of the lease to Mr. McGunn, included Mr. Litza's December 21, 1983 analysis and recommendation letter which, itself, was attached to McGunn's primary bid documents. Her analysis did not include a prior award recommendation and analysis from Mr. Litza, dated December 8, 1983. It also did not include the site plan, the floor plan for the proposed building, or a survey of the site, but these areas are considered to be within the discretion of the leasing agency. Their absence is not considered to be particularly significant. In her analysis, Mrs. Goodman found that Petitioner's bid was also responsive. However, comparing it with Mr. McGunn's bid, she and her staff found that the latter was the lowest bid submitted. The determing factor in her decision was cost. In determining that McGunn's bid was the lowest as to cost of all bids, Mrs. Goodman compared the average rate per square foot per year for each. This did not take into consideration proration of costs per year, but strictly the average over the fifteen years of the term of the lease (10 year basic plus 5 year option) . According to Mrs. Goodman, this same method of calculating cost has been used in every lease involving a turnkey situation and in fact in every lease since 1958 - as long as she has been with DGS. This particular method, admittedly, is not set forth in any rule promulgated by DGS. However, the agencies are instructed by DGS to advertise and bidders to bid on an average square foot basis, the basis utilized by Mrs. Goodman and her staff in analyzing the bids submitted. In that regard, the request for proposals does not, itself, indicate how the calculation of lowest cost would be made by DHRS and DGS but it does tell prospective bidders what information to submit. This procedure has been followed exclusively in situations like this for many years and many of the bidders have bid before using this same system. While Mrs. Goodman is not certain whether TSU has ever bid before, using this system, she does not consider it to be unfair because all bidders are considered on the same footing in an evaluation. They are notified of what information to submit and if they do so, their information will be considered along with all other bidders. Further, anyone who inquires as to the basis for evaluation will be given a straight and complete answer as to the method to be used. In the instant case, DHRS followed procedure for solicitation and evaluation utilized in the past and DGS followed its own policy in evaluating the submissions. In short, the primary consideration for DGS is the price factor and all other factors are considered to be within the expertise of the requesting agency. In Mrs. Goodman's opinion, based on the fact that she worked with the Florida Legislature on the development of the controlling statute, and helped develop the existing rule within DGS, that was the intent of the Legislature. Consequently since the statute requires award to the lowest and best bidder, it can be said that in this case the term "lowest" falls within the purview of both DHRS and DGS but "best" is solely within the purview of DHRS. Therefore, utilizing the lowest and best criteria and accepting the fact that the lowest bid may not be the best bid, the determination of "non-best" should be based on the reasonable "end objective" of the agency and need not be based on a criterion which is set forth in the bid proposal. In other words, it is not necessary for the agency to set forth the manner of evaluation it will use or the factors it will consider, according to Mrs. Goodman. With regard to the bid and evaluation committee process, Mr. Litza, the facilities manager for DHRS in Gainesville, was involved in putting together the bid package along with Mr. George Smith from Tallahassee, Litza's predecessor in the job in Gainesville. He worked with Mr. Smith in order to take advantage of Smith's experience in evaluating bids for leases. So far as he knew, the bid package contained minimum standards for all parts of the bid, and the package was, in fact, approved by officials in Tallahassee before being released. While no particular factors were identified to prospective bidders as being significant, Mr. Litza did conduct a bid conference for them prior to the date the bid was due and was available to answer any questions that prospective bidders might have. He did not receive any questions regarding the significance of any particular factor from any bidder. The bids were advertised and when received, were opened and read properly in accordance with the terms of the solicitation. When the bids were received and opened, it was seen that Mr. McGunn had submitted five different bids for the same project. Litza had not been confronted with this situation before and asked Mr. Smith what to do about it. Mr. Smith's reply was to put all five McGunn bids in with the rest and extract the lowest five of all bids. When this was done, Mr. McGunn was shown to have submitted two of the lowest five bids. In determining which were the lowest five bids, Mr. Litza utilized the average cost per square foot formula utilizing therein the entire 15,772 square feet authorized for the project. Once the five lowest bids were determined, Mr. Litza selected an evaluation committee made up of local Palatka DHRS supervisors except for the fiscal member, Mr. Foust, Mrs. Shinholster, Litza's secretary and Litza himself. He gave each of the members a score sheet with point values for each area. Each member filled out the form independently. Though he gave very little briefing to the evaluation committee, he admits that he did, in advance, tell each member that Mr. McGunn was the lowest bidder and should be awarded the highest points for criteria number 1, which related to cost. There were several irregularities in Mr. Litza's processing of the evaluation committee's results. For example, on the evaluation of the file conducted by member Sheryl Dollar, regarding criteria number 2, which relates to the conformity of space offered to the specific requirements contained in the invitation to bid (with a weight of 25 points), Mr. Litza admitted he lowered Mrs. Dollar's point award in that area from 35 to 25 without first checking with her to insure that his action would meet with her approval. While this is irregular, it is of little or no consequence since - the maximum number of points that could be given for that particular item was 25 and Mr. Litza's actions did not reduce that member's award to less than the maximum allowable. He contends that his action was based on what he considered to be a mistake on her part. In another apparent irregularity, Mr. Litza prepared a recommendation letter based on his and the other committee members' evaluation of the files to DHRS Headquarters in Tallahassee on December 8, 1983. In that letter, be indicated that McGunn would provide gas heat for the proposed building for free. Though McGunn had not specifically stated this, he implied it from the energy features paragraph in the Intervenor's bid. On the other hand, the bid by TSU contained an express comment offering to pay the utility charges. This specific provision was overlooked and omitted from the evaluation and report to Tallahassee by Litza, who contends that this omission was merely an oversight. There are other discrepancies as well. In his testimony, Mr. Litza indicated Mr. McGunn proposed to build one building but his letter of December 8th and that of December 21, 1984, both reflect two buildings. Here again, Mr. Litza explains this as the result of his being confused. Nonetheless, this erroneous information was referred to Mrs. Goodman at DGS. This is significant in that at the evaluation committee meeting, when the forms were given out, several of the members expressed a preference for a two-building complex. After the award, Mr. Litza secured agreement from McGunn to build two buildings. Mr. Litza admits that much of this was done in an attempt to insure that McGunn, as the low bidder, got the award. Mr. Litza equated the lowest bid with the best and had Petitioner been the low bidder, he contends he would have done the same thing. In most areas, he would not, however, have given Petitioner's four-building concept a high score because of the increased heat and air requirements of four buildings. Mr. Litza also downgraded Petitioner on that bid criteria which relates to the proximity of offered space to the clients to be served because Petitioner's site, he contends, was too close to the clients to be served. In this case, a housing project for low income families which make up much of the clientele to be served by DHRS, was located across the street from the proposed site offered by the Petitioner. Mr. Litza contends that he was thinking of the potential damage to the building because of increased activity by virtue of the facility being so close. There were other questionable areas in Mr. Litza's testimony. For example, he testified that though Petitioner provided 15 more parking spaces than Intervenor, this would result in mud being tracked in from the adjacent dirt road 200 feet away in greater quantities than in Intervenor's proposal. He also considered positively that the Intervenor's proposed site was closer to a restaurant than that of the Petitioner. Though it was recommended by DHRS Headquarters in Tallahassee that only two of the committee members be from the Palatka office, Mr. Litza disregarded that advice because, he contends, there was a morale factor in that office and the people assigned there wanted to have a part in this decision. Because of this, he allowed Ms. Stouffenberg to put five extra members of her staff on the committee. Nonetheless, the evaluation committee serves only in an advisory capacity. Its recommendation is no more than an advisory opinion. The ultimate decision as to which of the bidders should be awarded the contract is made at DHRS Headquarters in Tallahassee. Ms. Shinholster, a Clerk IV in the DHRS Gainesville office, who works as a secretary to Mr. Litza and several others, was advised she would be on the committee for the evaluation at the same time she was given the bid file. She did not get an opportunity to meet with other committee members to talk about the standards to be used, nor was she given any standards by which to evaluate the files. All she was told by Mr. Litza was that McGunn was the lowest bidder. She cannot explain how she accorded points on her evaluation sheets except that she gave the low bidder the highest number of points. Mr. George Smith, a Senior Analyst with DHRS in Tallahassee, relied on Mr. Litza's input when he made his recommendation to his superiors that the award should be made to McGunn. He also formulated his own opinion, based on his own analysis of the bids. He resolved any dispute regarding cost in favor of Mr. McGunn on the basis of the average rental, and regarding space, in favor of McGunn on the basis of the number of buildings. Dr. Perry, an economist with the University of North Florida, testified to the Federal Government's policy regarding the desirability of using the present value of money methodology and the determination of an acceptable discount rate or index in calculating the actual cost of the bids. Both experts, Dr. Perry and Dr. Scott, who testified for DGS, agree that the present value methodology is valid and presents a more accurate analysis of cost than the average rental cost methodology which does not utilize this theory. The major difference between the two was primarily in the percentage to be utilized in applying the discount rate. Whereas Dr. Perry adopted the Federal policy and suggested a 10 percent discount rate, Dr. Scott testified that a more viable percentage rate in November, 1983, at the time the award was to be made, would have been 3.3 percent. If the 10 percent rate were used, then the Petitioner's bid would be the lowest of all submitted. On the other hand, if the 3.3 percent rate were used, Intervenor's bid would be the lowest. If a different discount rate, that of 5.7 percent were to he used, the bid of Elizabethan Development Corporation would be low. It is at about the 6 percent point and above that Petitioner's bid becomes the lowest. Nonetheless, the State has not adopted the present value of money theory and the policy followed by the State is not to consider that methodology in analyzing costs. State policy is to use only the average rental methodology. There are no written instructions (rules) on evaluating bids for leases of this nature. Oral instructions given by DGS to each agency are that the average rate per square foot is to be computed using, if the square footage is constant, for each year of the lease, the basic square footage requested, multiplied by the rental rate proposed for each year of the basic lease, divided by the number of years. If the square footage is not constant in every year of the lease, evaluators are directed to apply the rate per square foot proposed in each year to the square footage to be utilized in that year, total up the annual rentals, total up the square footage involved, and divide to arrive at the average rate per square foot per year. Utilizing one or the other of those two methods in evaluating both the McGunn and the TSU bids, it becomes clear that the McGunn bid results in an average of $8.86 cost per square foot per year and the TSU bid an average of $9.58 per square foot per year. Recalculation of DHRS' evaluation by DGS showed the DHRS' figures as stated above were correctly arrived at. This procedure is followed on all turnkey and non-turnkey leases in the State of Florida. The reason the State uses this process instead of the present value of money process is because it is easy. DGS statistics indicate that most landlords in the approximately $32,000,000 worth of leases presently existing with the State are "Mom and Pop" landlords. These people are not normally trained lease evaluators. By using the straight average rental rate method, there are no arbitrary variables. It has always worked because people can understand it and all agencies which lease property in the State of Florida follow this procedure. Also, this procedure does not require computer-based calculations, and it does not require economists to work with it. Both latter reasons are amplifications of the first. In Mrs. Goodman's estimation, if the present value of money system were to be adopted, her division would have to hire at least two $30,000 per year economists and buy an in-house computer to operate the system. This additional cost, she believes, would far outweigh the paper savings to be realized by utilizing the present value of money system. As of the hearing date, considering all the factors, in Mrs. Goodman's opinion, DGS would nonetheless still recommend Mr. McGunn's bid as the lowest and best bid.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore RECOMMENDED that DHRS lease Number 590:8030 be awarded to Kenneth R. McGunn. RECOMMENDED this 5th day of September, 1984, in Tallahassee, Leon County, Florida. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 5th day of September, 1984. COPIES FURNISHED: Donald E. Holmes, Esquire William E. Townsend, Jr., Esquire Post Office Drawer D Palatka, Florida 32078-0019 James A. Sawyer, Jr., Esquire District III Legal Counsel Department of Health and Rehabilitative Services 1000 Northeast 16th Avenue Gainesville, Florida 32609 Stephen J. Kubik, Esquire Department of General Services Room 452, Larson Building Tallahassee, Florida 32301 H. Allen Poll, Esquire 112 South Main Street Gainesville, Florida 32601 Linda C. McGurn, Esquire 1717 Northeast 9th Avenue Gainesville, Florida 32301 David H. Pingree, Secretary Department of Health and Rehabilitative Services 1321 Winewood Boulevard Tallahassee, Florida 32301 Ronald W. Thomas, Executive Director Department of General Services 115 Larson Building Tallahassee, Florida 32301
The Issue The first issue to be determined is whether the BOARD can reject all bids, with or without cause. The second issue is to determine if the BOARD is required to have cause, was there a sufficient basis for the rejection of all bids in Bid NO. 3996?
Findings Of Fact On December 14, 1987, the BOARD sent invitations to bid to a list of approved vendors in Bid NO. 3996. The purpose of the invitation was to obtain the lowest responsible bid on a purchase of one hundred and fifty typewriters. The bids were to be submitted prior to January 11, 1988 at 2:00 P.M.. They were opened by the BOARD on the same day. OFFICE did not receive an invitation to bid despite its request to be placed on the approved vendor's list in November of 1987. When OFFICE learned of the outstanding invitation to bid, its representative, Mr. Richard Foss, went to the BOARD's Purchasing Department and requested a bid package. The bid documents given to OFFICE mistakenly gave January 14, 1988 at 2:00 P.M. as the deadline for the bid submission. Because of the later date given by the BOARD to OFFICE, the company's bid was received after the opening of the bids. When the results of the bidding were made known at the public bid opening, NAPLES bid was the lowest received. On January 14, 1988, after 10:42 A.M., it was discovered by the BOARD that OFFICE's bid price was lower than the price submitted by NAPLES. At this time, NAPLES bid had not yet been accepted by the BOARD, and no formal announcement had been made awarding the contract to NAPLES. During the BOARD's Purchasing Department's bid analysis, a request was made to reject all bids in Bid NO. 3996. The reason given by Purchasing for the request for rejection was that the specifications were being revised. The bids were rejected on the same date. The written reason sent to the vendors on January 14, 1988 for the bid rejection was that one vendor had been given an incorrect opening date. Attached to the written notice to the vendors was a new bid invitation for Bid NO. 4013. The BOARD explained its mistake was unfair to the one vendor. A new bid opening date was given of February 1, 1988. On January 14, 1988, in addition to the required bid documents, OFFICE submitted a letter which listed additional offerings or incentives that OFFICE would give the BOARD if OFFICE was awarded the contract. These additional purchasing incentives were: wall charts and teacher/student manuals for each typing classroom in the county. OFFICE also informed the BOARD that one of the BOARD's own service personnel was already trained in the servicing of Swintec typewriters. The bid submitted by OFFICE did not meet either the weight or the print wheel specifications as set forth in Bid NO. 3996. The specifications as written in Bid NO. 3996 were not written to eliminate all other typewriters but the Brothers 511-11. Weight specifications required were below the Brother's minimum weight, and at least two other manufacturers provide protected drop-in cassette print wheels in electronic typewriters. The Invitation to Bid contained specific provisions which encouraged the bidding of typewriters other than the Brother 511-11, and set up procedures under which other typewriters, which substantially meet the specifications, could be reviewed on their merits. NAPLES was the lowest responsible bidder for the electronic typewriter contract in the prior school year. The BOARD had rejected all bids at that time because of the decision to consider a different brand of typewriter once bids were opened. A notice of protest was filed by NAPLES, and the BOARD agreed to honor NAPLES bid and award the company the contract. The BOARD revised its bid specifications from last year prior to its solicitations for bids in Bid NO. 3996. The protected drop-in cassette print wheel and the weight requirements were two new technical specifications. During the hearing, the BOARD was unable to determine whether the weight factor or the protected drop-in cassette print wheel requirement will continue to be included in future revisions of the specifications.
Recommendation Based on the foregoing, it is RECOMMENDED: That the BOARD reject the bid submitted by OFFICE as it was nonconforming and sought an advantage not enjoyed by the other bidders. Reinstate the bids which were rejected in Bid NO. 3996, consider the bids, and make an award of the contract to NAPLES. DONE and ENTERED this 30th day of March, 1988, in Tallahassee, Florida. VERONICA D. DONNELLY 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 30th day of March, 1988. COPIES FURNISHED: Stephen Emens, President Naples Business Equipment and Systems, Inc. 859 4th Avenue South Naples, Florida 33940 Harry A. Blair, Esquire 2138-40 Hoople Street Ft. Myers, Florida 33901 Richard Foss, Typewriter Sales Manager 8A-Del Prado Boulevard Cape Coral, Florida 33904 Karl Engel, Superintendent Lee County Public Schools The School Board of Lee County 2055 Central Avenue Fort Myers, Florida 33901
The Issue The issue in this case is whether the Department of Transportation's proposed award of a contract to Daniels Janitorial Service is contrary to the agency's governing statutes, the agency's rules or policies, or the specifications of the Invitation to Bid (ITB).
Findings Of Fact In April 2004, DOT issued ITB-DOT-04/05-5002-PDW (the ITB) seeking to contract for janitorial services at two state office buildings in DeLand, Florida. The ITB included a "bid blank," upon which vendors were directed to submit their cost proposals. The bid blank was titled "MONTHLY JANITORIAL SERVICES PER SCOPE OF SERVICES." The bid blank included three spaces where each bidder was to provide cost information. The three spaces were titled as follows: "MONTHLY CLEANING - BUILDING 5000 - X 12 MONTHS," "MONTHLY CLEANING - BUILDING 5001 - X 12 MONTHS," and "TOTAL YEARLY AMOUNT BOTH BUILDINGS." In response to the ITB, DOT received 18 bids. The bids were opened at 3:00 p.m. on April 29, 2004. The lowest bid was $5,185.76, submitted by Daniels Janitorial Service, including: $4,895.76 for "MONTHLY CLEANING - BUILDING 5000 - X 12 MONTHS," $200.00 for "MONTHLY CLEANING - BUILDING 5001 - X 12 MONTHS," and $5,186.76 identified as "TOTAL YEARLY AMOUNT BOTH BUILDINGS." The second lowest bid was $10,686.00, submitted by Jan-Pro Cleaning Systems, including: $9,971.00 for "MONTHLY CLEANING - BUILDING 5000 - X 12 MONTHS," $715.00 for "MONTHLY CLEANING - BUILDING 5001 - X 12 MONTHS," and $10, 686.00 identified as "TOTAL YEARLY AMOUNT BOTH BUILDINGS." The third lowest bid was $67,777.77, submitted by the Petitioner. The remainder of the bids ranged between $69,600.00 to as much as $201,464.64. At the time of the opening, Diane Warnock, a DOT District Contract Specialist and Purchasing Agent in charge of the bid opening, observed that two of the bids (the Daniels Janitorial Service and the Jan-Pro Cleaning Systems bids) appeared to be very low in relation to the other bids. Ms. Warnock believed that the two lowest bids submitted were likely set forth on a monthly basis rather than annual amount, and that the bidders had failed to extend the monthly charges to an annual cost. Ms. Warnock contacted David Callaway, a DOT Procurement Analyst with statewide contract responsibilities, to discuss her observations. Mr. Callaway advised Ms. Warnock that she could contact the two low bidders and ascertain whether the bids submitted reflected a monthly or an annual cost. Ms. Warnock separately contacted each of the individuals responsible for submitting the low bids and inquired as to whether the bids reflected a monthly cost or an annual cost. Ms. Warnock learned that each vendor had submitted a monthly bid amount. Ms. Warnock multiplied the monthly amounts submitted by the two vendors by 12 to arrive at an annual cost. On the bid tabulation form, Ms. Warnock included the bid amount submitted by each bidder. For the two bidders who submitted monthly cost information, Ms. Warnock included the monthly costs submitted and the annual cost figures she had calculated. Based on annual costs, the lowest vendor was Daniels Janitorial Service with an annual bid amount of $62,229.12. Section 13.2 of the ITB provides as follows: 13.2 RESPONSIVENESS OF BIDS Bids will not be considered if not received by the Department on or before the date and time specified as the due date for submission. All bids must be typed or printed in ink. A responsive bid is an offer to perform the scope of services called for in this Invitation to Bid in accordance with all requirements of this Invitation to Bid. Bids found to be non- responsive will not be considered. Bids may be rejected if found to be irregular or not in conformance with the requirements and instructions herein contained. A bid may be found to be irregular or non-responsive by reasons that include, but are not limited to, failure to utilize or complete prescribed forms, modifying the bid requirements, submitting conditional bids or incomplete bids, submitting indefinite or ambiguous bids, or executing forms or the bid sheet with improper and/or undated signatures. Section 13.4 of the ITB provides as follows: 13.4 WAIVERS The Department may waive minor informalities or irregularities in bids received where such is merely a matter of form and not substance, and the correction or waiver of which is not prejudicial to other bidders. Minor irregularities are defined as those that do not have an adverse effect on the Department's interest and does not effect the price of the bid by giving a bidder an advantage or benefit not enjoyed by other bidders.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Transportation enter a final order awarding the contract for ITB-DOT-04/05- 5002-PDW to Daniels Janitorial Service. DONE AND ENTERED this 25th day of August, 2004, in Tallahassee, Leon County, Florida. WILLIAM F. QUATTLEBAUM 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 25th day of August, 2004. COPIES FURNISHED: C. Denise Johnson, Esquire Department of Transportation 605 Suwannee Street Tallahassee, Florida 32399-0450 Anthony Payne 1031 Eagles Forrest Drive Apopka, Florida 32712 James C. Myers, Clerk of Agency Proceedings Department of Transportation 605 Suwannee Street Haydon Burns Building, Mail Stop 58 Tallahassee, Florida 32399-0450 Pamela Leslie, General Counsel Department of Transportation 605 Suwannee Street Haydon Burns Building, Mail Stop 58 Tallahassee, Florida 32399-0450
Findings Of Fact In February 1994 the School Board, by and through its design consultants, W. R. Frizzell Architects, Inc., and, more particularly, its project architect, Byron Tramonte, issued plans, specifications, and related contract documents associated with additions, remodeling, and reroofing of John F. Kennedy Middle School, Palm Beach County, Florida. At a pre-bid conference conducted at the project job site attended by representatives of the School Board, its consultants, as well as representatives of Petitioner, Respondent, and Intervenor, among others, Petitioner's Greg Hill questioned the sufficiency of the drawings with respect to the earth work requirements associated with Alternate 1. As a result of this inquiry, the owner's design consultant issued Addendum 2 (including an as-built drawing) dated February 23, 1994, which was ". . . made available for grading estimates." The drawing attached to Addendum 2 had two sets of elevation numbers on it. One set of elevation numbers were underlined. The clearest of the underlined numbers were difficult to read. Many of the underlined numbers were impossible to read. The other set of elevation numbers on the subject drawing were boxed. The boxed numbers were all clear and legible. In view of the purpose for which the drawing was attached to Addendum 2, the most logical interpretation of the drawing was that the boxed elevation figures represented the existing elevations. The drawing attached to Addendum 2 also included some circled handwritten information. In large letters the circled information read: "JFK MIDDLE SCHOOL AS BUILT EXIST. ELEV." Immediately below in smaller letters it read: "Note: The 2 softball fields were not constructed. 2/23/94." The circled handwritten information was to some extent ambiguous. But it was an ambiguity that could be resolved by careful site inspection. Careful site inspection would have revealed that the boxed numbers corresponded to existing site conditions and that the underlined numbers, to the extent they were legible, did not. Petitioner's Vice President Greg Hill was primarily responsible for the preparation of the portion of the Petitioner's bid relating to Alternate 1. Greg Hill visited the job site during the prebid conference and also visited the job site on one other occasion after receiving Addendum 2, but before submitting the Petitioner's bid. Greg Hill is an experienced estimator with respect to matters involving the type of work encompassed by Alternate 1. In spite of his experience and in spite of his two pre-bid site visits, Greg Hill misinterpreted the architect's intent and used the underlined elevations on the drawing attached to Addendum 2 as a basis for estimating portions of the work associated with Alternate 1. As a result of this mistake Greg Hill reached erroneous conclusions about the amount of fill that would be required and substantially overestimated the amount of fill. This mistake caused the Petitioner's bid for Alternate 1 to be somewhat higher than it would have been if Greg Hill had based his estimates on the boxed elevation numbers. A similar mistake was made by CSR Heavy Construction-North, Inc., a company that was seeking work as a subcontractor on Alternate 1. On the last day for submitting bids on the subject project, the Intervenor received an unsolicited bid from CSR Heavy Construction-North, Inc., to perform some or all of the work encompassed by Alternate 1. CSR's bid was much higher than the Intervenor's proposed bid for that work, which caused the Intervenor's President to become worried that perhaps he had misinterpreted the drawings attached to Addendum 2. Intervenor's President called the School Board Architect and asked for confirmation of his interpretation to the effect that the bidders should base their estimates on the boxed elevation numbers on the drawing attached to Addendum 2. The architect confirmed that the Intervenor's President had correctly interpreted the drawing. The architect did not call any other potential bidders to tell them they should use the boxed numbers because he thought it was obvious that all potential bidders should use the boxed numbers. The bids for the subject project were opened on March 3, 1994. The Petitioner was the apparent responsive low bidder for the base bid. The Intervenor was the apparent responsive low bidder taking together the base bid and the bids on Alternates 1 and 2. The School Board published notice of its intent to award a contract to the Intervenor for the base bid and Alternates 1 and 2. The Instructions To Bidders portion of the subject bid specifications included the following provisions: BIDDER'S REPRESENTATIONS: Each Bidder, by making his Bid, represents that he has read and understands the Bidding Documents. Each Bidder, by making his Bid, represents that he has visited the site and familiarized himself with the local conditions under which the Work is to be performed. BIDDING PROCEDURES: * * * 3.11 Familiarity with Laws: The Bidder is assumed to be familiar with all Federal, State and Local Laws, Ordinances, Rules and Regulations, that in any manner affect the Work. Public Contracting and Purchasing Process Florida Statute, Section 287.132-.133 (Public Entity Crimes) is applicable. Ignorance on the part of the Bidder will in no way relieve him from responsibility. * * * AWARD OF CONTRACT: The Contract, if awarded by the Owner, will be awarded to the lowest bona fide responsible Bidder; provided the Bid is reasonable and it is in the interest of the Owner to accept the Bid. The method of determining the lowest bona fide Bid from Bidders shall be the Base Bid price plus or minus Alternate Prices listed on the Bid Proposal Form which are accepted by the Owner. Alternates will be considered for acceptance by the Owner as set forth in the Alternate section of the Specifications, Division One-General Requirements, Section 01030-Alternates. * * * BID PROTEST PROCEDURES: * * * 10.02 The Bid Documents/"Advertisement tol Bid" will be posted in the office of thel Department of Capital Projects at the time of the solicitation to Contractors. Any person who is affected adversely with respect to the Bid Documents shall file a notice of protest in writing within seventy-two (72) hours after the receipt of the Bid Documents, and SHALL FILE A FORMAL WRITTEN PROTEST WITHIN TEN (10) DAYS AFTER THE DATE HE FILED THE NOTICE OF PROTEST. Failure to file a notice of protest or failure to file a formal written protest shall constitute a waiver of proceedings under Chapter 120. It is important to the proper functioning of the public works bidding process that all bidders be treated alike. To this end, important information furnished to one potential bidder should be furnished to all other potential bidders.
Recommendation On the basis of all of the foregoing, it is RECOMMENDED that the School Board enter a Final Order in this case dismissing the protest of the Petitioner and awarding a contract to the Intervenor for the base bid and Alternates 1 and 2. DONE AND ENTERED this 17th day of May 1994 in Tallahassee, Leon County, Florida. MICHAEL M. PARRISH 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 17th day of May 1994. APPENDIX The following rulings are the specific rulings on all proposed findings of fact submitted by all parties: Findings submitted by Petitioner. Paragraphs 1 through 5: Accepted in whole or in substance. Paragraph 6: Rejected as not completely accurate. The practices described are common, but not universal. Drawings usually have a legend to explain the difference between existing elevations and elevations to be achieved. Paragraph 7: The first sentence of this paragraph is rejected as contrary to the greater weight of the evidence. The remainder is accepted in substance. Paragraph 8: The first sentence of this paragraph is rejected as constituting subordinate and unnecessary details. The last sentence of this paragraph is rejected as constituting inferences or arguments not supported by the greater weight of the evidence. Paragraphs 9, 10, and 11: Accepted in substance, but with some modifications in the interest of clarity and accuracy. Paragraph 12: Rejected as contrary to the greater weight of the evidence. Paragraph 13: Accepted in part. Accepted that if the Petitioner had used the boxed elevation numbers, it's proposal on Alternate 1 would probably have been substantially lower. The remainder of this paragraph is rejected as speculation Paragraph 14: Rejected as not fully supported by competent substantial evidence and as, in any event, subordinate and unnecessary details. Paragraph 15: Rejected as constituting primarily argument, rather than proposed findings of fact. To the extent the material in this paragraph purports to be factual, it tends to be contrary to the greater weight of the evidence. The greater weight of the evidence is to the effect that there were no ambiguities in Addendum 2 that could not have been resolved by careful site inspection. Paragraph 16: Accepted in substance. Paragraph 17: Rejected as constituting subordinate and unnecessary details. Paragraph 18: Rejected as contrary to the greater weight of the evidence; careful site inspection would have confirmed that the boxed numbers represented the existing elevations. Paragraph 19: Accepted. Paragraph 20: Rejected as speculative and as not supported by persuasive competent substantial evidence. Paragraph 21: Rejected as constituting a proposed ultimate conclusion of law, rather than a proposed finding of fact, and as, in any event, a conclusion that is not warranted by the evidence. Findings submitted by Respondent. Paragraphs 1 through 8: Accepted in whole or in substance. Paragraph 9: Rejected as constituting subordinate and unnecessary details. Paragraph 10: Accepted in substance. Paragraph 11: Rejected as constituting subordinate and unnecessary details. Paragraph 12: Rejected as constitution a proposed ultimate conclusion of law, rather than a proposed finding of fact. (The conclusion is warranted, but it is a conclusion nevertheless.) Findings submitted by Intervenor: (No separate proposals; the Intervenor adopted the proposed findings of the Respondent.) COPIES FURNISHED: Robert A. Rosillo, Esquire School Board of Palm Beach County 3318 Forest Hill Boulevard, Suite C-302 West Palm Beach, Florida 33406-5813 Alan C. Brandt, Jr., Esquire Leiby, Ferencik, Libanoff and Brandt Suite 400 150 South Pine Island Road Fort Lauderdale, Florida 33324 Richard B. Warren, Esquire Kelley, Aldrich & Warren, P.A. 801 Spencer Drive West Palm Beach, Florida 33409 Dr. C. Monica Uhlhorn, Superintendent Palm Beach County School Board 3340 Forest Hill Boulevard West Palm Beach, Florida 33406-5869
The Issue The issue is whether the Department of Corrections (DOC) acted fraudulently, arbitrarily, illegally or dishonestly when it decided to award the contract under Bid Number 94-CO-6355, for Inmate Pay Telephones and Long Distance Service (the Contract), to the number two-ranked bidder, North American Intelecom, Inc. (NAI).
Findings Of Fact Background On or about August 12, 1994, the DOC issued Invitation to Bid Number 94-CO-5355, Inmate Pay Telephones and Long Distance Service. Michael H. Johnson, a General Services Specialist, prepared the ITB at the direction of Jim Morris, Chief of the DOC's Bureau of General Services. Johnson developed the evaluation criteria and point allocations in Section 8.0 of the ITB. The document was reviewed and approved by Morris, Jim Biddy, Chief of the DOC's Bureau of Finance and Accounting, and Max Denson of the DOC's Operations Office. Inmate pay telephone and long distance service requires more than just the installation of pay phones in correctional facilities. The service vendor must also provide a means of blocking inmate telephone calls and, when calls are authorized, preventing inmates from making harassing calls to members of the public. Additionally, the ITB includes a provision requiring some means for monitoring and automatically recording inmate telephone calls, and for deactivating the automatic recording function when an inmate calls his or her attorney. A requirement is also included in the ITB that the system limit the length of inmate calls and generate monthly call detail reports. Other mandatory, no cost features to be provided under the Contract include a Personal Identification Number ("PIN") system capability, a three-way call detection and cutoff feature, a pilot site to test the call monitoring/recording system, on-site administrators to free facility staff from all tasks associated with the inmate phone system, and a semi-annual audit to ensure that the provider is meeting all technical and service requirements. The specifications in the ITB for provision of inmate pay telephone and long distance service are some of the most comprehensive in the country, requiring state-of-the-art hardware, software, and service in order to implement specified mandatory system features. Security concerns are prominent among reasons for having adequate service and support for the inmate pay telephone and long distance service. PIN-Driven System One of the primary features specified in the ITB is a PIN-driven system for blocking inmate calls. The PIN system requires each inmate to be assigned his or her own personal identification number for use with the telephone system. An inmate must key in his or her personal identification number before dialing an outgoing call. The system must automatically screen the telephone number dialed to ensure it is one which has received prior authorization for accessibility by the PIN. A PIN-driven system is labor-intensive and requires on-site administration to facilitate assignment of inmate PIN numbers and constant input and modification of each inmate's list of numbers for authorized outgoing calls. Project Staffing The DOC specifically requested the inmate phone system vendor to provide sufficient on-site administrators for a number of reasons including, but not limited to, support for proper administration of the PIN system. Noting that on-site administrators are to relieve DOC staff of all responsibilities relating to the inmate phone system, the DOC stated in the ITB that it did not want its staff to be involved with time-consuming service and maintenance problems. The DOC expressed a preference in the ITB for one on-site administrator being assigned to each major facility, except in those circumstances in which a single individual may cover several facilities in close geographic proximity to one another. Support services are important to maintain the proper functioning of the type of inmate phone system requested by the DOC. The ITB, taken as a whole, is a solicitation for an integrated telecommunications system, encompassing not only hardware, but systems software, service and project support. The ITB did not simply solicit manufacturers and models for various pieces of hardware; it contained a comprehensive description of functional requirements that had to be met. As a consequence, any determination that one bidder's "equipment" is identical to that offered by any other bidder must take into consideration proposed support and service, as well as proposed hardware and software applications. Bid Evaluation Procedure Specified in the ITB As established at final hearing by the unrebutted testimony of MCI's expert in telecommunications service bid response preparation, DOC's ITB differed from those in many other states. Unlike the instant ITB, many ITBs from other jurisdictions provide for a determination that bids meet specified minimum requirements and then dictate the award of a contract to the responsive bid with the lowest price. Conversely, DOC's ITB specified a detailed procedure to be followed in evaluating the bids, including evaluation criteria, points to be assigned to each criterion, and an evaluation committee to conduct the evaluation of bids. Johnson, the DOC employee responsible for the preparation of the ITB, understood that the Contract would be awarded to the bidder with the highest number of points allocated in accordance with the evaluation scheme described in Section 8.0 of the ITB. The DOC includes in its ITB both general and special conditions and specifications. The ITB, by its own terms, provides that special conditions and specifications shall have precedence over general conditions. The ITB contains numerous special conditions and specifications, including the bid evaluation procedures under Section 8.0. The bid evaluation criteria which are described by these special conditions and specifications identify the areas of the state's interest which must be addressed by the bids, as well as the weight to be assigned to each. Section 8.3 of the ITB emphasizes that any information gleaned from post bid demonstrations will not be used to change bid responses. The bid evaluation scheme specified in the ITB provided for points to be awarded to each bid using the following weighted criteria: CRITERIA POINTS CORPORATE QUALIFICATIONS 15 REFERENCES 10 PROPOSED PROJECT STAFF 5 COMMISSION RATE 70 TOTAL POSSIBLE POINTS 100 The points awarded for "commission rate" were to be determined by using a formula specified in the ITB which initially gave 70 points to the bidder proposing the highest commission rate, with all other bidders receiving a lesser number of points, depending on how close they came to the highest proposed commission rate. The points awarded for all of the other criteria were to be determined by a seven-member Evaluation Committee, members of which were selected by Assistant Secretary Kronenberger for their experience with management and actual operation of inmate phone systems, both from the institutional perspective and the regional office perspective. Each bid was required to be independently evaluated. The DOC issued two addenda to the ITB. The first addendum was issued August 23, 1994, and advised potential bidders of a change in location for the pre-bid conference scheduled for September 7, 1994. At the pre-bid conference, the DOC explained the award process to potential bidders. Johnson, the DOC representative, advised potential bidders at the pre- bid conference that the contract award would not be determined solely on the strength of the commission rate quote. On September 22, 1994, the DOC issued Addendum Number Two to the ITB which, among other things, changed the evaluation procedure by adding a new criterion and re-allocating the weight among the expanded criteria as follows: CRITERIA POINTS CORPORATE QUALIFICATIONS 10 REFERENCES 10 PROPOSED PROJECT STAFF 5 TECHNOLOGICAL ENHANCEMENTS 10 COMMISSION RATE 65 TOTAL POSSIBLE POINTS 100 The addition of "technological enhancements" was made at the request of Deputy Secretary Thurber, who wanted to be sure that the DOC had an opportunity to see what features above and beyond the minimum features specified in the original ITB were available for an inmate pay telephone system. When technological enhancements were added as an evaluation criterion, the weight to be given the commission rate in the evaluation scheme was lowered from 70 to 65 points. The DOC officials who reviewed and approved Addendum Number Two determined that the reduced weight for proposed commission rates was appropriate. At 65 percent of the available points, the reduced weight for the proposed commission is still higher than the 45 percent to 50 percent weight typically given by the DOC to the revenue side of a bid. Bidder Preparation MCI relied on the representation in the ITB and assurances of DOC's representative, Michael H. Johnson, at the bid conference that DOC's decision would not be made solely on the basis of cost. As a consequence of DOC representations, MCI prepared its bid to address the specifications in the ITB and thereby maximize its overall points under the ITB's evaluation scheme, as opposed to submission of a bid package concerned solely with scoring the highest possible points for "commission rates." Bid Opening and Initial Review On October 21, 1994, bids were submitted to DOC by MCI, NAI, AT&T, TEI, Robert Cefail & Associates (RC&A), 21st Century, RC&A/21st Century, and LDDS Metromedia. At the Bid Opening, Johnson again explained the award process to bidders on behalf of the DOC, and advised bidders that the bid tabulation was strictly for the purpose of documenting responses and that nothing was to be inferred from the proposed commission rates. Bidders were again advised that commissions would be only one aspect of the award. Johnson's understanding at the time of the Bid Opening was that the Contract would be awarded based on points awarded pursuant to the bid evaluation scheme specified in the Section 8.0 of the ITB. Johnson participated in an initial review of the bids, reading each of the proposals to determine whether the mandatory requirements were satisfied. Of eight bids received, five, including the bids submitted by MCI and NAI were determined by the DOC to satisfy the mandatory requirements. The Evaluation Committee As required in the ITB, the DOC formed an Evaluation Committee to evaluate the bids. Selected by Assistant Secretary Kronenberger, members of the Evaluation Committee were: Jim Biddy, Chief of the Bureau of Finance and Accounting; Jerry Pilcher, Chief of Regional Administrative Services for Region II; Kermit Kerley, Superintendent of the Hardee Correctional Institution; Stan Czerniak, Superintendent of the North Florida Reception Center; Charles Mask, Superintendent of the Corrections Mental Health Institution; Charles Dennard, Business Manager for the Polk Correctional Institution; and Robert Sandal, General Services Manager for Region I. Members of the Evaluation Committee were selected from the DOC's business managers and superintendents on the basis that their participation would provide an overall perspective with respect to management and actual operation of the inmate phone system. Evaluation Committee's Recommendation All five of the bids determined by the DOC to be responsive were thoroughly reviewed by Evaluation Committee in accordance with the bid evaluation procedures specified in the ITB, including Addendum Number Two, in an almost day-long session in the DOC's Central Office on January 5, 1995. The total points awarded by each Committee member for all of the four evaluation criteria were averaged to establish each bidder's total Evaluation Points. Every member of the Evaluation Committee scored MCI's bid as their number one or number two choice. NAI was ranked no higher than third by anyone on the Committee and was ranked fourth by five of the Committee's members. No member of the Committee gave NAI a higher score than MCI on any of the evaluation criteria. Comments on a majority of the evaluation forms of the seven members of the Evaluation Committee reflect a general concern for the adequacy of NAI's proposed project support. Specifically, Mr. Biddy noted that "[p]roposed project staff consisted of only 17 people [and that it was] questionable whether this would be sufficient for site administration as well as contract management." Similarly, Mr. Kerley noted on the NAI bid evaluation form that "17 staff may not be enough to support [the] system." Mr. Pilcher's comments indicated that "[p]roject support was not as I expected or not explained very well." Mr. Dennard indicated that NAI's bid provided "no breakdown of [the] 17 staff to support [the] contract [and] no mention of site administrators." The NAI bid indicates that a total of 17 personnel will be made available to support the Contract with more to be "added if the schedule so indicates." NAI's bid does not specifically identify the number of persons to be involved in on-site administration. However, NAI has committed only 17 people in support the Contract as a whole, ten of whom are expressly identified as performing tasks other than on-site administration. While NAI's bid indicates provision of additional personnel if required by the schedule, ambiguity about whether NAI would expand the number of on-site administrators for the entire term of the contract is evident. The "installation requirements" described in the ITB refer to time-limited activities necessary to initiate operation of the inmate telephone system, as opposed to the ongoing nature of the commitment necessary for on-site administration. In its bid response, NAI also agreed to cooperate with the DOC "to insure the proper distribution of on-site administrators." This offer does not suggest, however, that the number of on-site administrators committed in support of the Contract will be augmented by NAI. Such assurance relates to location and not number of on-site administrators. Testimony of NAI presented at final hearing that additional on-site administrators will be provided is not credited, inasmuch as such testimony constitutes an impermissible attempt by NAI to modify its bid after the bid opening. Based upon the substantial disparity in the proposed levels of customer service, the MCI and NAI bids cannot be considered to be identical. NAI's assertion at hearing that its bid included other system features which do not appear on the face of its written proposal constitutes a prohibited post-bid-opening modification. Such modifications included PCs, keyboards, printers and color monitors at each facility. These items are included on the face of the MCI bid. MCI offered 28 personnel in support of the Contract, including an express commitment for 20 on-site administrators. MCI's proposal to provide 20 on-site administrators is one of the highest number of on-site administrators offered by any bidder and a very costly aspect of MCI's bid since all employee salary and benefits must be covered for each on-site administrator dedicated to the project. The assignment of points for each bidder's proposed commission rate (Commission Points) was based on a scale which assigned 65 points to the bid with the highest commission rate quote. A lesser number of points was assigned to all other bids pursuant to a formula specified in Section 8.2 of the ITB, as amended by Addendum Number Two. The highest commission rate quoted by any bidder was proposed by NAI at 56 percent. NAI was accordingly assigned 65 Commission Points. NAI was also awarded 22.143 Evaluation Points, which, when combined with NAI's 65 Commission Points, produced a total of 87.143 points. MCI proposed a 53 percent commission rate and, in accordance with the formula set forth in the ITB, earned 61.51 Commission Points. MCI was also awarded 30 Evaluation Points which, when combined with MCI's 61.51 Commission Points, produced a total of 91.51 points. When the Evaluation Committee's other scores were combined with the scores for commission rates obtained by applying the formula in the ITB, MCI's point total was higher than that received by any of the other bidders. The DOC officials later involved in the decision to award the Contract to NAI indicated that they had no reason to question the work of the Evaluation Committee. After reviewing the bid evaluation forms produced by the Evaluation Committee, and based on his continuing understanding that the Contract would be awarded to the bidder receiving the highest number of points under the evaluation scheme specified in the ITB, Michael H. Johnson prepared a memorandum for signature of his supervisor, Mr. Morris, to Assistant Secretary Kronenberger. Dated January 31, 1995, the memorandum recommended award of the Contract to MCI. Morris signed the January 31, 1995 memorandum and forwarded the same to Assistant Secretary Kronenberger. At prehearing deposition in this case on April 13, 1995, Kronenberger denied having received any recommendation from anyone regarding which company should be awarded the contract. Later at the final hearing following Johnson's testimony that he, Johnson, had been instructed to destroy the signed document by Morris (his supervisor), Kronenberger finally admitted that he had told Morris "we ought to pull that memo." These instructions were followed by Morris, who directed Mr. Johnson to destroy the January 31, 1995 memorandum recommending award of the Contract to MCI. Significantly, neither Morris, Kronenberger, nor Thurber--all DOC officials involved in the contract award decision--mentioned the existence of this document prior to Mr. Johnson's revelation on the witness stand that it had been destroyed. After-The-Fact Evaluation In a February 22, 1995 memorandum to Deputy Secretary Thurber, Kronenberger, after acknowledging that MCI received the highest number of points, formally recommended that the Contract be awarded to NAI. This memorandum was drafted by Morris at the direction of Kronenberger. Before making the recommendation to award the contract to NAI, Kronenberger had not read the ITB, the addenda to the ITB, or any portion of the bids. Morris was the only member of his staff with whom Kronenberger consulted. Kronenberger's decision was approved by Deputy Secretary William Thurber. Neither Kronenberger, Morris, nor Thurber read the bids at any time prior to the DOC's issuance of the notice of intended award to NAI. Kronenberger based his decision to recommend award of the Contract to NAI on his belief that NAI and MCI proposed to install "identical equipment," and that at least $1.1 million in additional revenue would be generated by the 3 percent higher commission rate offered by NAI over the three-year base term of the Contract. Although the February 22, 1995 Kronenberger memorandum states that the DOC could find no correlation between the proposed commission rates and equipment capabilities, the DOC officials who made the decision to award the Contract to NAI (Morris, Kronenberger and Thurber) performed no analysis of the proposals, did not complete a score sheet, did not talk with any of the members of the Evaluation Committee, and were unaware of the specific content of the bids and the proposed differences in staffing offered by the two bidders. In contrast to the assertion of the Kronenberger memorandum, the proof establishes a direct inverse correlation between the total average scores awarded by the Evaluation Committee to the top three bids and the commission rates offered in those bids. This inverse correlation proves that the bidders had to balance the cost of the hardware, software and support personnel aspects of their bids against the commission rate they could offer and that the cost of each hardware, software and support personnel aspect of a bid has a direct impact on the commission rate which could be offered. This balancing is precisely what is required by the ITB since all of these aspects of the bid were assigned specific weights in the specified evaluation scheme. Kronenberger's assumption, as set forth in his memorandum recommending award of the contract to NAI, that both NAI and MCI proposed to install identical "equipment" ignores the fundamental premise of the solicitation--that hardware, software and support were needed to provide a fully functioning, secure inmate phone system, as well as the fact that the vendors offered different approaches in responding to this requirement. System hardware proposed by MCI and NAI includes the Telequip System Automatic Call Processor ("ACP") 4000, a Dictaphone recording and monitoring system, and Philips & Brooks/Gladwin phone instruments. However, with regard to all aspects of the hardware offered, MCI's bid was more detailed and specific as compared with the NAI bid which generally identified system capabilities by referencing attached brochures. At best, NAI's bid is ambiguous as to whether it offered the same hardware component features. NAI's general references to the brochures in its bid failed to specify which features of a piece of equipment was being affirmatively offered. NAI's after-the-fact assertion at the final hearing regarding features to be provided cannot be credited since such constitutes an impermissible attempt to modify its bid after the bid opening. Software jointly developed by MCI and Telequip would permit operation of the attorney exception capability utilizing the Telequip ACP-4000 with the proposed Dictaphone recorder systems. Until MCI requested development of the necessary software, the attorney exception capability, which deactivates the automatic recording function when an inmate calls his or her attorney, was not available with the Telequip ACP-4000 when used in conjunction with the Dictaphone recorder. Software jointly developed by MCI and Telequip was also necessary to provide an international call capability because the standard Telequip ACP-4000 ordinarily utilizes a debit system to process international calls, and "the debit system is inherently incompatible with the PIN system and the allowed calling list feature that are requirements in the . . . ITB." The MCI bid offers more technological enhancements at no cost to the DOC, than does the NAI bid. Further, the items identified on MCI's list of technological enhancements do not appear anywhere on the face of the NAI bid. NAI's omission of the enhancements listed in the MCI bid adds further credence to the finding that the DOC had no reasonable basis to conclude that it would be getting those enhancements under the NAI bid at the time it was submitted. Moreover, the DOC's own synopsis of technological enhancements shows that it was aware of differences in the bids. Differences in the hardware, software and services offered in the MCI and NAI bids preclude a determination that the two bids offered "identical equipment." Monetary Considerations Revenue figures used by the DOC to project a $1.1 million difference in commissions were drawn from a period of time in late 1994 and early 1995 when the DOC's own summary reports indicate that NAI's billing exceptions range from 41 percent to 49 percent of all calls. Billing exceptions are the number of calls which exceed AT&T rates or could not otherwise be reviewed in monthly call detail reports. NAI's customer overcollections for telephone calls from inmates in the correctional facilities presently served by NAI provide an additional basis for uncertainty regarding the reliability of the projected $1.1 million difference in commissions. While the overcollections have not yet been quantified, NAI has admitted to the Florida Public Service Commission overcollections from customers receiving telephone calls from inmates under its current contract with the DOC in the amount of $394,318. Notwithstanding the ongoing PSC inquiry and reports of extensive billing exceptions under its existing contract with NAI, the DOC has no apparent incentive to closely scrutinize overcollections inasmuch as the more revenues billed by NAI, the greater the amount of commissions received by the DOC. Thus, while there is a 3 percent difference in the proposed commission rates between the two bidders, it cannot be determined from this record with any degree of certainty how that difference will translate into actual dollars to the DOC. In any event, the revenues generated by the contract for inmate pay telephones are placed in the Inmate Welfare Trust Fund, which does not support essential correctional facilities or services. Notice of Award and Protest On March 2, 1995, the DOC issued an intent to award the Contract to NAI. On March 8, 1995, within 72 hours of receipt of DOC's notice of intent, MCI timely filed a Notice of Protest. On March 20, 1995, within ten days of filing its Notice of Protest, MCI timely filed a Formal Written Protest pursuant to Section 120.53(5) and 120.57, Florida Statutes, and Rule 33-20.005, Florida Administrative Code. With its Formal Written Protest, MCI delivered to the DOC a cashier's check in the amount of $5,000. On April 10, 1995, the DOC served its Motion to Dismiss MCI's protest, alleging that MCI has no right to a formal administrative hearing on the award of the Contract. On April 12, 1995, the undersigned Hearing Officer, after consideration of the parties' pleadings and oral argument, ruled that MCI is entitled to a formal administrative hearing under Chapter 120, Florida Statutes, to determine whether the DOC's decision to award the contract to NAI was arbitrary, illegal, fraudulent, or dishonest. MCI has requested reasonable attorneys' fees and expenses pursuant to Section 120.57(1)(b)5, Florida Statutes, for costs incurred in responding to the DOC's Motion to Dismiss. The Hearing Officer has ruled on the motion by order issued concurrently with this recommended order.
Conclusions The Department adopts the Conclusions of Law contained in its Proposed Order, except for paragraph 189. The Hearing Officer's Conclusions of Law are also adopted, to the extent they do not conflict with the Department's. The following additional Conclusions of Law are now adopted into this Final Order. Service and personnel support were clearly part of the ITB, and were scored accordingly. Although Mr. Kronenberger considered service and support by recognizing the work already performed by Intervenor under its existing contract, sufficient consideration was not given for the $394,318 overcharge which Intervenor admitted to at the hearing. Since this overcharge was admitted to the Public Service Commission and not the Department, oversight is understandable. However, at this time the overcharge cannot be ignored. Certainly the significant amount of this overcharge has an impact on service provided. Although the Department still believes the equipment bid by Petitioner and Intervenor are "identical," service can no longer be considered the same due to the overcharge. Therefore, the award of the contract pursuant to the ITB should be made to Petitioner, MCI Telecommunications Corporation. RULING ON INTERVENOR'S EXCEPTIONS TO RECOMMENDED ORDER Intervenor's exceptions to paragraphs 46-50 of the Recommended Order are accepted by the Department and incorporated into this Final Order. Intervenor's exceptions to paragraph 51 are denied. Although the equipment are "identical," the Department does not, and did not at the hearing, maintain that the bids of Petitioner and Intervenor are identical in terms of support and service. Intervenor's exception to paragraph 70 of the Recommended Order is accepted by the Department and incorporated into this Final Order. Intervenor's exception to paragraph 71 of the Recommended Order is denied. The Hearing Officer is merely reciting the terms of the ITB, that service and support are also an important part of the bid. Mr. Kronenberger never denied the importance of service and support. Intervenor's exceptions to paragraphs 73-77 of the Recommended Order are accepted by the Department and incorporated into this Final Order. Intervenor's exceptions to paragraphs 79 and 81 of the Recommended Order are accepted by the Department and incorporated into this Final Order. Intervenor's exception to paragraph 80 of the Recommended Order is denied to the extent it rejects the finding of fact that Intervenor admitted to an overcharge of $394,318. Intervenor did admit this fact. Intervenor's exception to paragraph 82 of the Recommended Order is accepted by the Department and incorporated into this Final Order. RULINGS ON PETITIONER'S FILINGS No response is provided to the Petitioner's Response to Intervenor's Exceptions. There is no provision for filing such response under Chapter 120, and the Department is not required to respond to such pleadings. The Department has reviewed Petitioner's Request for Official Recognition and Enforcement of Ex Parte Communications Prohibitions. No Department employee who has testified or been deposed in this matter has discussed the merits of this action with the agency head. However, the Department does not agree with Petitioner's contention in its Request for Recognition that section 120.66, Florida Statutes, prohibits the agency head from conversing with the Department employees listed therein. This order may be appealed within thirty days by filing a notice of appeal with the agency and the district court of appeal. Except in cases of indigence, the court will require a filing fee and the agency will require payment for preparing the record on appeal. For further explanation of the right to appeal, refer to Section 120.68, Florida Statutes, and the Florida Rules of Appellate Procedure. DONE AND ORDERED this 17 Day of July, 1995 in Tallahassee, Florida. HARRY K. SINGLETARY, JR, SECRETARY Department of Corrections 2601 Blairstone Road Tallahassee, Florida 32399-2500 (904) 488-2326 COPIES FURNISHED: Carloyn Raepple (via certified mail) Hopping Green Sams & Smith 123 South Calhoun Street Tallahassee, Florida 32314 Hume Coleman (via certified mail) Holland & Knight 315 South Calhoun Street Suite 600 Tallahassee, Florida 32302 Steven S. Ferst Department of Corrections Assistant General Counsel 2601 Blairstone Road Tallahassee, Florida 32399-2500 Mike Johnson Department of Corrections 2601 Blairstone Road Tallahassee, Florida 32399-2500 Don W. Davis, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 Filed in the official records of the Department of Corrections on this 17th day of July, 1995. LORETTA L. LATSON, Agency Clerk
Recommendation Based on the foregoing, it is hereby RECOMMENDED that a final order be entered which declines the award to NAI and takes into account the foregoing findings of fact and conclusions of law when deciding the future course of awarding the contract for hardware, software and support needed to provide a fully functioning, secure inmate telephone system. DONE AND ORDERED this 15th day of June, 1995, in Tallahassee, Leon County, Florida. DON W. DAVIS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 15th day of June, 1995. APPENDIX In accordance with provisions of Section 120.59, Florida Statutes, the following rulings are made with regard to purposed findings of fact submitted by the parties. Petitioner's Proposed Findings: 1.-30. Adopted. 31.-32. Adopted in substance. 33.-49. Adopted. 50.-54. Adopted in substance. 55.-58. Adopted. 59-63. Adopted in substance. 64-70. Adopted. 71. Rejected, unnecessary to result reached. 72.-82. Adopted. 83. Rejected, unnecessary. 84.-85. Adopted. Adopted in substance. Rejected, unnecessary to result. 88-92. Adopted. 93. Incorporated. 94.-96. Subordinate to HO findings. Respondent's Proposed Findings: Adopted. Rejected, unnecessary. 3.-5. Adopted. Adopted, not verbatim. Adopted. Rejected, redundant. Adopted. 10.-12. Rejected, subordinate. 13.-17. Adopted. 18.-22. Rejected, argumentative and subordinate. 23. Rejected, unnecessary. 24.-25. Rejected, weight of the evidence. 26. Rejected, subordinate. 27.-35. Rejected, weight of the evidence. 36.-43. Rejected, argumentative, weight of the evidence. 44.-52. Rejected, redundant, argumentative, subordinate. 53.-54 Rejected, argumentative, subordinate to HO findings. 55.-58. Rejected,Relevancy, weight of the evidence. 59.-63. Rejected, subordinate, weight of the evidence. Accepted. Rejected,Relevance. Rejected, weight of the evidence. Rejected, stands for proposition that an agency is not bound by terms of ITB at all, argumentative. Rejected,Relevance. Rejected, argument. 70.-71. Rejected, weight of the evidence. 72.-76. Rejected, argument. 77.-78. Rejected, argument, weight of the evidence. Adopted. Rejected, subordinate, authority is to award within perimeters of legality and the ITB. Rejected, comment on testimony. 82.-83. Rejected, subordinate to HO findings. 84. Rejected, legal conclusion. 85.-89. Rejected, subordinate to HO findings. 90.-91. Rejected,Recitation of documents. 92.-95. Rejected, argumentative. Rejected, subordinate. Rejected, recitation of documents. Rejected, relevance. 99.-107. Rejected, subordinate to HO findings. Intervenor's Proposed Findings: 1.-10. Accepted, though not verbatim. 11. Rejected, no record citation. 12.-14. Rejected, subordinate to HO findings. 15. Adopted, not verbatim. 16.-21. Rejected, subordinate to HO findings. 22. Rejected, no record citation. 23.-24. Rejected, subordinate. 25. Rejected, no record citation. 26.-29. Rejected, subordinate to HO findings. Adopted by reference. Rejected, subordinate. 32.-40. Rejected, subordinate to HO findings. 41. Accepted except for last sentence which is rejected on basis of relevance. 42.-43. Rejected, subordinate to HO findings. COPIES FURNISHED: Carolyn S. Raepple, Esquire Cheryl G. Stuart, Esquire Hopping Green Sams & Smith, P.A. 123 South Calhoun Street Tallahassee, FL 32301 Linda P. Armstrong, Esquire MCI Telecommunications Corporation 1133 19th Street, N.W. Washington, D.C. 20036 Steve Ferst, Esquire Florida Department of Corrections 2601 Blair Stone Road Tallahassee, FL 32399-2500 Hume F. Coleman, Esquire Holland & Knight 315 South Calhoun Street Tallahassee, FL 32302 Harry K. Singletary, Jr., Sec. Dept. of Corrections 2601 Blairstone Rd. Tallahassee, FL 32399-2500 Louis A. Vargas, Esq. Dept. of Corrections 2601 Blairstone Rd. Tallahassee, FL 32399-2500
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 Contract No. T1285 to Intervenor Kamminga & Roodvoets, Inc. ("K & R").
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 May 14, 2008, the Department released its bid solicitation for Contract T1285. The proposed contract was for the construction of a one-way pair through Lake Alfred, including new construction, reconstruction, milling and resurfacing, widening, drainage improvements, lighting, signalization, signing and pavement marking and landscaping on State Road 600 (U.S. 17/92). Polk County, the location of the project, lies in the Department's District 1. Qualified contractors, including Mid-State and K & R, received an electronic disk containing the solicitation, bid blank, plans and specifications for Contract T1285. The letting date for this project was June 18, 2008. Bids were to be submitted on or before that date via Bid Express, the electronic bidding system used by the Department. No party submitted a protest of the terms, conditions, and specifications contained in the solicitation pursuant to Subsection 120.57(3)(b), Florida Statutes. The work to be performed on Contract T1285 included the installation of limerock road base to be paid for in accordance with line item 0175, Optional Base Group 09 ("Base Group 09"). The bid documents included a set of "Supplemental Specifications." Section 6 of the Supplemental Specification was titled "Control of Materials." Subsection 6-3.3, titled "Construction Aggregates," provided as follows: "Aggregates used on Department projects must be in accordance with Florida Administrative Code Rule 14-103."2 Under the heading "Developmental Specifications" is a February 15, 2008, revision to the Construction Aggregates subsection that provides: Subarticle 6-3.3 (Page 54) is expanded by the following: 6-3.3.1 Department Directed Source for Aggregates: For this Contract, obtain aggregates for use in limerock base from the following vendor: Vulcan Construction Materials LP. Upon award of the Contract, provide the vendor and the Department a schedule of project aggregate needs. Once a schedule has been provided to both the Department and vendor, the Engineer will issue written authorization, with a copy to the vendor, for the purchase of aggregates from the vendor. This authorization is required before aggregates will be released by the vendor. Pick up the required aggregate such that the project schedule will be maintained. Payment to the vendor by the Contractor will be due upon receipt of the materials pursuant to the Department's Vendor Contract No. BDH50. This rate is the unit price agreed upon by the Department and the vendor and will be made available to bid proposal holders at the time of bid at http://www.dot.state.fl.us/construction/aggregate /aggregate.htm. The Department will make payment to the Contractor for the aggregates on progress estimates as a part of the bid unit price for the appropriate pay items. The rate is subject to change and adjustments for such changes will be made to the bid unit price of the appropriate pay items. Disputes with the vendor concerning aggregate supply will not be cause for Contract time adjustments, time suspensions or monetary adjustments to the Contract amount. The Contractor will be solely responsible for providing the necessary advance notice to the vendor and other coordination to obtain timely aggregate supply for the project. The import of Developmental Specification 6-3.3.1 was that all bidders would be required to obtain the limerock needed for Base Group 09 from a single vendor, Vulcan Construction Materials LP ("Vulcan"). The winning bidder would agree to pay Vulcan in accordance with a separate contract negotiated between Vulcan and the Department. The hyperlink provided in Developmental Specification 6-3.3.13 led to a document called "Aggregate Guidance" produced by the Department's State Construction Office. The front page of the Aggregate Guidance document contained "Bidder Information" consisting of a spreadsheet setting forth the Vulcan price per ton for limerock base and limestone coarse aggregate, with the price varying depending on the date and port of delivery. Between January and June 2008, the Vulcan price per ton for limerock base from both the Port of Tampa and Port Canaveral was $16.93. The Aggregate Guidance page contained additional hyperlinks with the following titles: "Aggregate Vendor Contract Usage," "Aggregate Vendor Contract," "Aggregate Vendor Projects List," "Aggregate Vendor Authorization Letter," "Aggregate Vendor Contract Frequently Asked Questions," and "Aggregate Price Adjustment Sheet." Alvin Mulford is the vice-president of Mid-State who, along with his estimator, put together his company's bid for Contract T1285. Mr. Mulford testified that his company has been bidding on Department work, and that he has never before seen a provision similar to Developmental Specification 6-3.3.1. Mr. Mulford directed his estimator to obtain clarification from the Department, to be sure that the bidders were required to purchase the limerock base from Vulcan. One reason for Mr. Mulford's concern was the "exorbitant" rate charged by Vulcan in comparison to other vendors. The restriction to a single supplier was so abnormal, and that supplier's rate was so out of line with the market, that Mr. Mulford decided to seek guidance from the Department through the question and response internet bulletin board provided by the Department for its projects. The question posed by Mid-State was as follows: Does the contractor have to use Vulcan materials for the limerock base at a rate of $16.93 per ton as stated in the Developmental Specifications 6-3.3.1? If so from which location is the material to be picked up? Is it also true that payment to the vendor (Vulcan Materials) will be due immediately upon receipt of the materials? I wanted to clarify this issue as it is unusual for the contractor to be limited to the use of only one vendor. The Department's response was as follows: The unit rate for the Material can be found at the following website: http://www.dot.state.fl.us/construction/ Aggregate/Aggregate.htm Pickup locations for the Material can be found at the following website: http://www.dot.state.fl.us/construction/ Aggregate/Aggregate.htm Payment should be issued by the Contractor to the Vendor (Vulcan Construction Materials LP) upon receipt of the materials as defined in Developmental Specification 6-3.3.1. Because the Department's response did no more than redirect him to the Department's website, Mr. Mulford decided to look at the website in more detail. He investigated the hyperlinks, including the Vulcan contract with the Department. When he clicked on the hyperlink titled "Aggregate Vendor Contract Usage," he found a document that provided as follows, in relevant part: Aggregate Vendor Contract Usage by Districts With the execution of the contract with Vulcan Construction Materials LP, contract number BDH50, Vulcan has committed to provide aggregate in the types and quantities defined in the contract (attached). The process for this contract in Districts 1, 5, and 7, is as follows: Include in the projects identified in the attached spreadsheet the appropriate special provision beginning with the July 2007 lettings. The District Specifications Engineer and District Construction Office will need to coordinate this effort. There are two special provisions for the purpose of notifying construction contract bidders of the Department's intention toward the aggregate. The first special provision is the mandatory version that will direct the bidder to obtain aggregates for the specified work from Vulcan. The second special provision provides the bidder an option to obtain its aggregates from Vulcan. * * * After these projects have been awarded, the contractor is required to notify FDOT and Vulcan a schedule of its aggregate needs for the project. After receiving this schedule, FDOT's Resident Engineer will issue written authorization to the contractor, with copy to Vulcan. This authorization is required before Vulcan will release aggregate to the contractor. Payment to Vulcan will be from the contractor. FDOT will pay cost of aggregate on progress estimates as part of the contractor's bid price for the work. The contractor is required to include in its bid price for the work the cost of the aggregate at the Vulcan rate. The Vulcan rate will be posted on the FDOT State Construction Website showing the rate. When adjustments are made to the Vulcan rate, FDOT will make adjustments in the construction contract unit price. . . . (Emphasis added.) Mr. Mulford testified that he understood the underscored language in the hyperlinked document to be a directive to the bidders and therefore a mandatory requirement of the bid specifications. He did not ask the Department for further clarification because he believed the requirement was clearly stated in the hyperlinked document. David Sadler, the director of the Department's office of construction, testified that the hyperlinked document was developed by his office to offer guidance to the districts as to the concept behind and use of the aggregate vendor contract. The document was not a part of the bid solicitation document. Mid-State's bid price was $7,429,398.44. Mid-State's price for Base Group 09 was $619,645.80, or $19.30 per square yard. This price reflected the Vulcan rate for limerock base of $16.92 plus tax and Mid-State's costs for the work associated with Base Group 09. 19. K & R's bid price was $7,370,505.24, or $58,893.20 lower than the bid price of Mid-State. K & R's price for Base Group 09 was $256,848.00, based on a stated unit price of $8.00 per square yard for limerock base. K & R's price for Base Group 09 was $362,797.80 lower than that of Mid-State, accounting for more than the differential between the overall bids of Mid-State and K & R. Marcus Tidey, Jr., K & R's vice president in charge of its Florida division, testified that K & R was well aware that the Vulcan price for limerock base was $16.93, and that K & R understands its obligation to pay that price to Vulcan should K & R be awarded Contract T1285. Mr. Tidey testified that at the time of bid submission, he cut K & R's bid price to $8.00 per square yard as a competitive strategy to win the contract. Mr. Tidey made a conscious decision that K & R would absorb the difference between $8.00 bid price and the Vulcan price of $16.93. Mr. Tidey testified that K & R needed to win this job in order not to have its crews and equipment sit idle during the economic downturn, and therefore decided to take all of its markup, roughly $250,000, out of the bid. He could have made the $250,000 cut on any item or items in the bid, but decided on Base Group 09 because the limerock base was a big item and therefore easy to cut by a large amount. Mr. Tidey also testified that the contract provides a $400,000 incentive payment for early completion of the job, meaning that K & R will be able to work "faster and smarter" and make up for the price reduction at the end of the job. Mr. Tidey testified that he obtained the Vulcan prices from the Department's website as instructed by Developmental Specification 6-3.3.1. He did not click on the hyperlinks, which appeared to reference the contract between the Department and Vulcan and therefore was of no concern to him. The Department and K & R dispute Mid-State's assertion that the underscored language of the hyperlink set forth in Finding of Fact 15 was a requirement of the bid specifications, based on Mr. Sadler's direct testimony and the underlying illogic and unfairness of requiring bidders to seek out hidden specifications. The Department and K & R concede that if the bid specifications did in fact require the bidders to include in Base Group 09 the full costs associated with obtaining the limerock base from Vulcan, then K & R's bid is nonresponsive. Developmental Specification 6-3.3.1 directed bidders to the Department's webpage for the purpose of obtaining the current Vulcan rate quote. It did not instruct the bidders to investigate the hyperlinks or to assume that the information contained therein was mandatory. Absent an instruction to bidders to review the information contained in the hyperlinks, the Department could not make such information mandatory without placing less curious bidders at a competitive disadvantage. The Department had no intent to play hide-and-seek with the bid specifications in the manner suggested by Mid-State. In addition, K & R points to three line items of the bid specifications in which the Department eliminates competition, instructing the bidders not to bid and inserting a fixed unit price and bid amount for all bidders as to those items. K & R reasonably asserts that the Department was fully capable of treating Base Group 09 in the same fashion, had it intended to require the bidders to pass through to the Department all the costs associated with obtaining the limerock base from Vulcan. However, the Department supplied the bid quantity (31,106 square yards) and left it to the bidders to determine the price per unit they would bid. K & R's bid was responsive. Nothing in the bid specifications prevented K & R from absorbing part of the cost of the Vulcan limerock base and passing the savings on to the Department, or required bidders to pass on to the Department the full costs of complying with the bid specifications regarding Base Group 09. The sole remaining issue is whether K & R's bid, though facially responsive, was materially unbalanced. The Department routinely conducts reviews of bid line items that appear "unbalanced," i.e., for which there appear to be significant differences between the price bid and the Department's cost estimate, in order to determine whether the price difference is due to a quantity error by the bidder. The Department's review confirms that the bid quantity specified on the bid blank is accurate. If a quantity error is found, the bids are recalculated using the bidders' unit prices and the correct quantities to determine whether the bid rankings would change. A bid for which there is a discrepancy between the bid and the Department's estimate is termed "mathematically unbalanced." A mathematically unbalanced bid that affects the ranking of the low bid is "materially unbalanced." A mathematically unbalanced bid is acceptable, but a materially unbalanced bid affords the bidder an unfair competitive advantage and must be rejected. The Department followed its usual procedure in analyzing the K & R bid to determine whether it was unbalanced. Philip Gregory Davis, the Department's state estimates engineer, testified that there were some unbalanced items in the K & R bid, but no quantity errors that would have changed the ranking of the bids. Richard Ryals, the project designer who conducted the unbalanced bid review, testified that the quantities were correct for Base Group 09. As noted above, K & R's low bid for Base Group 09 was an intentional strategy, not the result of a quantity error. K & R's current bonded capacity qualification with the Department is $258 million in contracts at any one time. K & R posted a bid bond, and has more than enough capacity to comfortably perform this contract. There is no economic danger to the Department in accepting K & R's low bid.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is RECOMMENDED that the Department of Transportation enter a final order dismissing Mid-State's formal written protest and awarding Contract T1265 to K & R. DONE AND ENTERED this 9th day of January, 2009, 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 9th day of January, 2009.
Findings Of Fact During March 1988, the Respondent issued an Invitation to Bid by which it sought to lease 17,973 net usable square feet of office space to be located within a specified geographic area in Tampa, Florida, under a nine year lease with two additional three year option periods. This Invitation to Bid is referred to as Lease Number 590:1927. Three bids were received in response to the Invitation to Bid, and they were opened on May 13, 1988. Bids were received from the Petitioner, 8900 Centre, Ltd., and the Allen Morris Management Company. All bidders were determined to be responsive to the Invitation to Bid. Despite the fact that petitioner submitted the lowest bid, Respondent notified Petitioner by letter dated June 10, 1988, of its intent to award Lease Number 590:1927 to 8900 Centre, Ltd., as the lowest and best bidder. Petitioner has timely filed its protest seeking review of that decision. It is undisputed that Petitioner submitted the lowest bid. For the first year of the lease, Petitioner bid $7.85 per square foot, while 8900 Centre bid $7.95 per square foot. Thereafter, Petitioner proposed a yearly increase of 50 cents per square foot, reaching $11.85 per square foot in the ninth year of the lease, while 8900 Centre proposed annual increases of approximately 75 cents, reaching $14.00 per square foot in the ninth year. This equates to an actual dollar difference over the nine year term of approximately 185,000. However, using a present value methodology and a present value discount rate of 8.81 percent referred to on page 17 of the bid submittal form, the present value difference in these two bids is approximately $1,000 per month, which would result in a present value difference between Petitioner and 8900 Centre of approximately $108,000 over the nine year period. Neither the Invitation to Bid, bid specifications, nor the actual bids were offered into evidence. One page of the bid submittal form, designated as page 17 of 18, was offered and received in evidence. This portion of the bid submittal form states that the "successful bid will be that one determined to be the lowest and best." It also sets forth evaluation criteria, and assigns weights to each criteria. The evaluation criteria include associated fiscal costs (35 points), location (40 points) and facility factors (25 points) . A synopsis of bids was also offered and received in evidence showing the points awarded to each bidder by the Respondent's bid evaluation committed. Out of a possible 100 points, 8900 Centre received 95.17 points, while Petitioner received 82.25 points and the Allen Morris Management Company received 70.67 points. Petitioner asserts that the members of the evaluation committee were not qualified or knowledgeable in basic construction, design and engineering principles, and therefore could not competently evaluate the bids submitted. However, Petitioner did not offer competent substantial evidence to support this contention. Only the chairperson of the committee, Susan Jennings, was called to testify, and she appeared thoroughly knowledgeable in the bid process, the needs of the agency, the bid requirements and the representations made to the committee members by each bidder, including Petitioner, when the committee made its site visit to each location. Since the actual Invitation to Bid, bid specifications, and evidence about the other committee members were not introduced, it is not possible to know what the specific duties of the committee were, how they were to carry out their duties their qualifications and training, and whether they failed to competently carry out these duties, as alleged by Petitioner. Despite Petitioner's lower bid, Respondent awarded this lease to 8900 Centre, Ltd., based upon the evaluation committee's determination assigning 8900 Centre the highest number of evaluation points. Out of a possible 35 points for fiscal costs, Petitioner received 34 and 8900 Centre received 31.5. Thus, Petitioner's status as low bidder is reflected in the points awarded by the committee. Since neither the bid invitation or specifications were introduced, no finding can be made as to whether the difference between these two bidders comports with any instructions or directions provided by the agency to potential bidders, or whether this difference of 2.5 points on this criteria reasonably reflects and accounts for the dollar difference in these two bids. Petitioner received 34.75 points out of a possible 40 points on the general evaluation criteria "location," while 8900 Centre received the full 40 points. Within this criteria, there were three subcategories, and on the first two subcategories (central area and public transportation) there was an insignificant difference of less than one-half point between Petitioner and 8900 Centre. The major difference between these two bidders which accounts for their significant difference on the location criteria, was in the subcategory of environmental factors, in which Petitioner received 15.17 points and 8900 Centre received the full 20 points. Petitioner did not present competent substantial evidence to discredit or refute the committee's evaluation in the subcategory of environmental factors. To the contrary, the only testimony from a committee member was that of Susan Jennings, and according to her, Petitioner failed to explain the availability of individual air conditioning and heating controls, or the possibility of separate program entrances, which could be made available under its bid. Although Petitioner sought to explain at hearing that these desires of the agency could be accommodated in its bid, there is no evidence that such an explanation was provided in its bid or during the bid process when the evaluation committee visited the Petitioner's site. The committee was aware, however, that 8900 Centre would provide individual heating and air conditioning controls, as well as separate outside entrances for the three programs which would occupy the leased space. Additionally, the committee was concerned, according to Jennings, that parking areas at Petitioner's facility were more remote and removed from the building entrance than at 8900 Centre, and were somewhat obscured by trees and shrubbery, thereby presenting a potential safety concern for employees working after dark. Finally, every employee would either have a window or window access at 8900 Centre, while it was not explained that Petitioner's site would offer a similar feature. Thus, Petitioner failed to establish that the evaluation committee erred in assigning a significantly greater number of points for environmental factors to 8900 Centre than to Petitioner. The evidence reflects a reasonable basis for this difference. The other significant difference between these two bidders was in the subcategory for layout and utilization under the evaluation criteria "facility." Petitioner received 13.67 points while 8900 Centre received a full 20 points. Jennings explained that the separate outside entrances leading directly into the three programs that would occupy this space was preferred to a single reception area for all three programs. Petitioner offered the single reception area in its bid and site visit presentation, while 8900 Centre made it clear that each program would have its own entrance. Since these programs do not have a receptionist position, and none wanted to give up a secretarial position to serve as receptionist for all three programs, the committee did not consider the single reception area entrance to be desirable. Additionally, Petitioner's facility was a two-story building, while 8900 Centre is a single story facility. Jennings explained that the committee considered a ground level facility to be preferable to a two story building, particularly since the Medicaid program was to occupy the major portion of this space. The Medicaid program would have to be split up at Petitioner's facility, either in two separate buildings or on two levels of the same building, while at 8900 Centre, Medicaid could be accommodated in one, single story building, with the other two programs in a second, single story building. Finally, parking at 8900 Centre was directly next to, and outside the entrance of the building, while Petitioner offered to make assigned spaces available in a general parking area which serves its entire 100,000 square foot complex. The parking offered by Petitioner is more remote than that offered by 8900 Centre, and would be less secure at night due to a greater distance from the building entrances and the parking lot. Thus, Petitioner failed to establish that the committee erred in assigning a significantly greater number of points for layout and utilization to 8900 Centre than to Petitioner. There is a reasonable basis for this difference, according to the evidence in the record.
Recommendation Based upon the foregoing, it is recommended that Respondent enter a Final Order dismissing Petitioner's protest to Lease Number 590:1927. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 9th day of December 1988. DONALD D. CONN Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1050 Filed with the Clerk of the Division of Administrative Hearings this 9th day of December 1988. APPENDIX (DOAH Case Number 88-3765 BID) Rulings on Petitioner's Proposed Findings of Fact: Adopted, in part, in Finding of Fact 1, but Rejected in Finding of Fact 10, and otherwise as not based on competent substantial evidence in the record. Adopted in Finding of Fact 5. 3-5. Adopted in Finding of Fact 4, but Rejected in 7. 6-7. Rejected in Finding of Fact 8. Rejected in Finding of Fact 10, and otherwise as not based on competent substantial evidence in the record. Rejected in Findings of Fact 9 and 10, and otherwise as not based on competent substantial evidence. Rulings on the Respondent's Proposed Findings of Fact: Adopted in part in Finding of Fact 1, but otherwise rejected as not based on competent substantial evidence. Adopted in Finding of Fact 4. 3-4. Adopted in part in Findings of Fact 5 and 6, but otherwise rejected as not based on competent substantial evidence in the record of this case. Adopted In Findings of Fact 5, 7-10. Adopted in Finding of Fact 5. Adopted in Finding of Fact 7. Adopted in Finding of Fact 8. Rejected as irrelevant and unnecessary since the point difference in this subcategory is insignificant. Adopted in Finding of Fact 9. 11-12. Adopted in Finding of fact 10. COPIES FURNISHED: Michael V. Giordano, Esquire 7821 North Dale Mabry Suite 100 Tampa, Florida 33614 Jack Farley, Esquire W. T. Edwards Facility 4000 West Buffalo Fifth Floor, Room 520 Tampa, Florida 33614 Sam Power, Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Gregory Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 John Miller, General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700
The Issue The issue for consideration in this matter is whether Respondent's intended award of a lease for office space to Intervenor, Anthony Abraham Enterprise, is arbitrary and capricious and whether the proposal of the Petitioner, Adlee Developers, the current lessor, is responsive.
Findings Of Fact The parties agreed that on April 7, 1991, the Department issued an Invitation to Bid entitled, "Invitation To Bid For Existing Facilities State Of Florida Lease Number 590:2286, Dade County" This procurement was for the provision of 30,086 net rentable square feet to be used for office space in Dade County. A 3% variance was permitted. The facility was to house the District's Aging and Adult Services office which has been a tenant in Petitioner's building for several years and remained there during the pendancy of this protest process. According to the published advertisement, a pre-proposal conference was to be held on April 22, 1991, with all bids due by the bid opening to be held at 10:00 AM on May 30, 1991. The pre-bid conference was conducted by Philip A. Davis, then the District's facilities service manager and included not only a written agenda but also a review of the evaluation process by which each responsive bid would be examined. Petitioner asserts that the potential bidders were told, at that conference, that annual rental increases for the ten year lease period could not exceed five per cent (5%) and claims that Abraham's bid exceeded those guidelines. Thorough examination of the documentary evidence presented and the transcript of the proceedings, including a search for the reference thereto in Petitioner's counsel's Proposed Findings of Fact, fails to reveal any support for that assertion as to an increase limitation. The ITB for this procurement, in the section related to the evaluation of bids, indicated that pursuant to the provisions of Sections 5-3 and 5-11 of HRSM 70-1, dealing with the procurement of leased space, the responsive bids would be reviewed by an evaluation committee which would visit each proposed facility and apply the evaluation criteria to it in order to determine the lowest and best bidder. The evaluation criteria award factors listed in the ITB defined a successful bid as that one determined to be the lowest and best. That listing of evaluation criteria outlined among its categories associated fiscal costs, location, and facility. As to the first, the committee was to look at rental rates for both the basic term of the lease and the optional renewal period. The rates were to be evaluated using present value methodology applying the present value discount rate of 8.08% and rates proposed were to be within projected budgeting restraints of the Department. The total weight for the rental rate category was to be no more than 40 points with 35 points being the maximum for the basic term and 5 points for the option. Evaluation of the location was to be based on the effect of environmental factors including the physical characteristics of the building and the area surrounding it on the efficient and economical conduct of the operations planned therefor. This included the proximity of the facility to a preferred area such as a co-location, a courthouse, or main traffic areas. This item carried a maximum weight of 10 points. Also included in location were the frequency and availability of public transportation, (5 points); the proximity of the facility to the clients to be served, (5 points); the aesthetics of not only the building but the surrounding neighborhood, (10 points); and security issues, (10 points). The third major factor for evaluation was the facility itself and here the committee was to examine the susceptibility of the offered space to efficient layout and good utilization, (15 points), and the susceptibility of the building, parking area and property as a whole to possible future expansion, (5 points). In that regard, the Bid Submittal Form attached to the ITB called for the successful bidder whose property did not have appropriate zoning at the time of award to promptly seek zoning appropriate to the use classification of the property so that it might be used for the purposes contemplated by the department within 30 days. In the event that could not be done, the award could be rescinded by the department without liability. The committee could award up to 100 points. The basic philosophy of this procurement was found in paragraph 1 of the Bid Award section of the ITB which provided: The department agrees to enter into a lease agreement based on submission and acceptance of the bid in the best interest of the department and the state. After the bid opening, three of the four bids received, excluding Petitioner's which was initially determined to be non-responsive, were evaluated by the Department's bid evaluation committee according to the above point system which allowed no discretion or deviation from the formula in comparing rental rates between bidders. Once Petitioner's bid was thereafter determined to be responsive, it, too was evaluated by the committee. At this second evaluation session, relating to Adlee's bid only, the committee scored the bid and added its scores to the original score sheets upon which the other three bidders' scores had been placed. Abraham had the lowest rental rates for the basic term of the lease and received the maximum award of 35 points for that category while Adlee received points. Abraham received an additional 2.29 points for the optional period rates while Adlee got 0. In the other categories, "location" and "facility", which comprised 60% of the points, Adlee's facility was routinely rated superior to Abraham's except for the area related to susceptibility for future expansion in which Abraham was rated higher by a small amount. Overall, however, Adlee was awarded 620.41 points and Abraham 571.03 points and as a result, Adlee was rated by the committee to be the lowest and best bidder. RCL, another bidder, was rated second, with Abraham third and DCIC fourth. Thereafter, the committee chairman, Mr. VanWerne, forwarded the new (and complete) evaluation results to the District Administrator on June 14, 1991 by an addendum dated June 27, 1991 which recommended award of the bid to Petitioner, Adlee Developers. No award was made at the time. Several factors not pertinent to the issues here caused that delay. Among the major of these was pending legislation which would have transferred the operation needing this space to another agency. This transfer was never consummated, however. On or before March 20, 1992, the new District Administrator, Mr. Towey, who had been appointed to his office in December, 1991, and who was made aware that this procurement had not been finalized, requested all available material on it so that he could study it and make his decision based on his own review of the submission. As a part of his determination process, he visited and inspected both the Adlee and the Abraham sites. One of the factors he considered was what appeared to be the significant monetary discrepancy between the two pertinent bids. Initial calculations indicated that Abraham's bid was approximately $835,000.00 lower than Adlee's over the ten year basic term of the lease. This amount was subsequently determined to be somewhat lower but the discrepancy is still significant. Nonetheless, because of that difference, Mr. Towey called a meeting with the members of the evaluation committee which had evaluated the bidders and had recommended Adlee. His stated reason for calling that meeting was to allow him to hear their reasons for rating the submissions as they had done and to take that information into consideration when he made his final decision. None of the committee members who testified at the hearing at Petitioner's behest indicated any feelings of pressure or intimidation by Mr. Towey. During his meeting with the committee members, Mr. Towey went over several of the evaluation criteria award factors to determine the committee's rationale. Of major importance was the issue of cost, of the availability of the facility to transportation to and from the building, employee security and the ability to control access to the facility, and the availability of on-site parking without cost to both employees and clients. It appears the Adlee facility is a multistory building with some parking available on site and would be easier to control. In addition, it is closer to public transportation access points. There is, however, some indication that on-site parking for clients would not be free and the closest free parking is some distance away. According to Adlee's representative, this matter would not be a problem, however, as adequate, free on site parking, which apparently was not initially identified as a problem, could be provided in any new lease. The Abraham facility is a one story building surrounded by on-site parking. In that regard, however, at hearing, Petitioner raised the claim that the Abraham site did not, in actuality, provide adequate parking because the zoning requirements of the City of South Miami, the municipality in which the facility is located, did not permit the required number of parking spaces to accommodate the prospective need. Petitioner sought and received permission to depose the Building and Zoning Director for the city, Sonia Lama, who ultimately indicated that the Abraham site was grandfathered in under the old zoning rule and, thereby, had adequate parking available. In any case, had this not been true, under the terms of the ITB, any zoning deficiencies could have been corrected after award, or the award rescinded without penalty to the Department. After the meeting with the committee, Mr. Towey indicated he would probably go against the committee's recommendation. One of his reasons for doing so, as he indicated to them, was the appearance certain amenities in the facility would give. In the period between the time the committee met and Mr. Towey was ready to decide, there were several newspaper articles published in the Miami area which were negative in their approach to Department leasing policies and this publicity had an effect on him. In his response to a reporter's question, in fact, Mr. Towey indicated he would not permit the lease of any property which contained such amenities while he was District Director. There is some evidence that the wet bar referred to here was a sink and counter used by agency employees to make coffee. However, before making his decision, Mr. Towey also met with Herbert Adler of Adlee. Mr. Towey advised him he was concerned about the fact that the Adlee property provided a wet bar, a private bathroom and some other amenities in that suite of offices occupied by the Department. Mr. Towey was adamant in his public and private pronouncements on the subject that there would be no such amenities in HRS offices in his District while he was in charge. At the meeting in issue, Mr. Adler made it very clear he was willing to remove all the offending amenities to bring the space into conformity with Mr. Towey's standards. Mr. Towey obviously took Adler at his word as he did not consider this matter to be an issue when he evaluated the bids. Based on his independent evaluation of the proposals, and considering all the pertinent factors, Mr. Towey decided not to concur with the committee's recommendation and instead recommended to the Department's Office of General Services that the bid be awarded to Abraham. Because his recommendation differed from that of the evaluation committee, under the provisions of Section 5-13, HRS Manual 70-1, he was required to forward additional justification for his position. In his forwarding memorandum dated March 20, 1992 to Mr. King Davis of the Department's Office of General Services, Mr. Towey listed as his reasons for disagreement with the committee's recommendation, (1) the lower term cost of Abraham's bid, (2) his opinion that the one story floor plan of Abraham was more convenient and accessible to clients, and (3) the provision for ample free parking at the Abraham site as opposed to the limited parking at the Adlee building. Petitioner claims that Mr. Towey's justification for disagreement was improper because, (a) the rental difference he cited was not based on the ITB formula and did not consider the difference in square footage offered; (b) the rental rate comparison compared a proposed lease with an existing lease, not with a proposal; and (c) the reference to on-site parking referred to the situation under the existing lease with Adlee and not to what could occur under a new lease. The major factor in Mr. Towey's decision was the price differential between the two offerings. While the difference may not have been as great as presented initially by the department staff, even taken in its most conservative light of about half that amount, and considering the appropriate figures, the difference was still considerable and significant. In the continuing period of budgetary austerity under which state operations have been and must continue to be conducted, the financial consideration loomed large in his thinking. As for the parking situation, no change for the better was provided for in Adlee's proposal and even if it were, it was but one of several factors. When Mr. Towey's March 20, 1992 memorandum in justification of his disagreement was evaluated at the Office of General services, it was determined that his decision was rational and objectively justified. Thereafter, by letter dated April 2, 1992, the Office of General Services authorized District 11 to award the lease to Abraham and this decision was transmitted to all responsive bidders by letter dated April 7, 1992. It was this action which prompted Petitioner's protest.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that a Final Order be entered dismissing the protest by Adlee Developers, Inc., of the award of procurement No. 590:2286 to Anthony Abraham Enterprises. RECOMMENDED this 10th day of July, 1992, in Tallahassee, Florida. ARNOLD H. POLLOCK, 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 10th day of July, 1992. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 92-2798 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. FOR THE PETITIONER: - 4. Accepted and incorporated herein. Accepted. Accepted that the pre-bid conference was held but reject the finding that a 5% limit was mentioned. Accepted and incorporated herein. Accepted. Accepted and incorporated herein. & 11. Accepted and incorporated herein. 12. - 14. Accepted and incorporated herein. 15. - 19. Accepted and incorporated herein. Accepted and incorporated herein. Accepted. Accepted except for the next to last sentence which is rejected. Accepted. Accepted and incorporated herein. Accepted but not probative of any material issue. Accepted and incorporated herein. Accepted. Accepted and incorporated herein. & 30. Rejected. - 33. Accepted and incorporated herein. FOR THE RESPONDENT AND INTERVENOR: & 2. Accepted and incorporated herein. 3. - 5. Accepted. Accepted and incorporated herein. Accepted and incorporated herein. Accepted and incorporated herein. - 16. Accepted and incorporated herein. 17. - 19. Accepted and incorporated herein. 20. & 21. Accepted and incorporated herein. Accepted and incorporated herein. - 25. Accepted. COPIES FURNISHED: Melinda S. Gentile, Esquire Ruden, Barnett, McClosky, Smith, Schuster & Russell 200 East Broward Blvd. P.O. Box 1900 Fort Lauderdale, Florida 33302 Paul J. Martin, Esquire Department of Legal Affairs The Capitol - Suite 1501 Tallahassee, Florida 32399-1050 Peter W. Homer, Esquire Greer, Homer & Bonner, P.A. 3400 International Place 100 S.E. 2nd Street Miami, Florida 33131 John Slye General Counsel Department of Health and Rehabilitative Services 1323 Winewood Blvd. Tallahassee, Florida 32399-0700 Sam Power Agency Clerk DHRS 1323 Winewood Blvd. Tallahassee, Florida 32399-0700
Findings Of Fact The College realized that it needed a new telecommunication system about three years ago, when it began to renovate some of its buildings. On June 8, 1992, the College issued an Invitation To Bid, No. 3656, to eight vendors to replace its fifteen-year-old AT&T Dimension Private Branch Exchange (PBX) System and install a voice and data communications network among the College's four campuses. The bids were to be opened at 2:30 p.m. on July 29, 1992. The College believed replacement of the existing PBX system would result in lower operating costs, permit the system to serve more functions and permit the system to expand as the College's needs grew. Two vendors, NEC and AT & T, submitted bids. The College already has gone through two prior bids for the new PBX system, which did not result in contracts with any of the bidders. AT&T had submitted a bid in response to each of those attempts to let a contract for replacement of the College's communications system. The process of developing the bid specifications was initiated by the College's Vice President for Business Affairs, Dr. Clinton Hamilton, who asked those who would be using the communications system (the Registrar, the Learning Resources Department, the Provost, and others) to explain their needs so they could be incorporated in the new system. He also asked College employees familiar with information systems and telecommunication systems to help draft the bid documents to incorporate the functions the users desired. The College received assistance from a committee made up of representatives of the State's Department of General Services, Division of Communications; the State Department of Education; Miami Dade Community College; Nova University; and the School Board of Broward County. These groups reviewed the proposed bid specifications before each of the College's three attempts to let a contract and advised the College on them. The College made a careful effort to craft its specifications to ensure it would purchase the most appropriate communications system for its needs. The College currently has separate and independent voice and data communications systems. For data, each of the College's locations (South campus, Central campus, North campus and the College's administrative center in Fort Lauderdale) use more than one data circuit (AT&T Exhibit 5; Bid page D-1). For example, the eight controllers at the South campus are connected to the Fort Lauderdale Center by a pair of data circuits. The 15 controllers at the Central campus are linked to the Fort Lauderdale Center by four data circuits. If the controllers associated with one data circuit should go down for some reason, those connected to the other data circuits at campus will continue to operate, and the campus will only suffer "partial paralysis." The bid at issue seeks a single "voice and data T-1 network" to link each of the campuses to Fort Lauderdale Center in a unified system, which eliminates the need for separate voice and data systems. The new system is designed so that controllers at each campus will communicate with the mainframe computer at Fort Lauderdale Center through T-1 trunk lines, the same lines connecting the voice telephone system at each campus. Each campus will have its own PBX system, and the T-1 lines will allow users at each campus to place telephone calls to extensions at all campuses internally, i.e., without leaving the College's own network. They can also use the local Southern Bell network to place calls if all internal lines are in use, just as the Southern Bell network is used to place calls to numbers outside the College's campuses. Connection of the voice system (the PBX equipment) and data terminals at each of the College's three campuses to the Fort Lauderdale Center requires the use of multiplexors, devices which improve efficiency in networks by concentrating and combining signals and switching them over connecting links (i.e., the T-1 circuits) to other locations or devices. The bid solicitation document requires a multiplexor known as a "40- Series" multiplexor at each campus to perform the concentrating and combining role. The bid solicitation document also specifies a single multiplexor of a more complex type, a "45-Series" multiplexor, at the Fort Lauderdale Center. This multiplexor performs the switching function to redirect signals from one location to another. The bid solicitation document instructs bidders to supply a Comsphere 6800 Network Management System, which is a type of software to operate the hardware components. Comsphere is manufactured by a wholly owned subsidiary of AT & T, known as "AT&T Paradyne." This software manages the entire network, and allows remote troubleshooting of any problems on the network, Comsphere's system can automatically dial out to the AT&T Paradyne Center in Largo, Florida, so that a technician can investigate and often solve problems without the need to send anyone to a campus to perform maintenance. On July 7, 1992, the College held a bidders conference to explain the bid documents and their requirements, in order to insure that the bids the College received would be accurate and complete. During that conference, the vendors were told: (1) any price corrections must be initialed or the bid would be disqualified; (2) all pages of the bid documents which contain signature lines had to be signed; (3) bidders could not modify the general conditions or special conditions of the bid documents; and (4) any questions about the specifications would be answered only by written addendum. The same instructions can be found in text of the bid solicitation document (AT&T Exhibit 4). The College issued Addendum One to its bid documents on July 9, 1992, Addendum Two on July 14, 1992, and Addendum Three July 22, 1992. Addendum Two is the source of the dispute here. As is the College's practice, all bids were opened publicly after the hour for the receipt of bids had passed on July 29, 1992. Each bid submission had two parts. The first was a bid summary sheet containing a required format for the vendor's price. The second part of the submissions were bound volumes explaining how the vendor would satisfy each of the specific requirements in the bid specifications. During the bid opening, a College employee opened the sealed envelopes containing the vendor's bid summary sheet, and read aloud the prices found on each bidder's summary sheet. Page 13, paragraph 19.6 of the Bid Specifications told bidders that the bid summary sheets must recite the total bid price for the entire system, which had to include any upgrades to the standard features of the vendor's equipment so that the equipment provided would meet the College's specifications. When the bids were opened, representatives of AT & T, AT&T Paradyne, and NEC were present. As the bid summary sheets were opened and the prices announced, no one from AT&T objected to the prices read out or contended there was an error in AT&T'S pricing. The College's Director of Purchasing, Janet Rickenbacker, and the senior buyer handling the acquisition, Susan Kuzenka, then reviewed the extensive responses to the specifications submitted by the two bidders. They determined that NEC was the low responsive bidder. The amount AT&T bid based on the bid summary sheet found in its sealed bid was $1,558,836.57, NEC's bid was $1,549,895.15. 1/ After the bid opening, Mr. Zinn of AT&T had two conversations with Ms. Kuzenka about the AT&T bid. These conversations focused on the conflict in the entry for system maintenance on the bid summary sheet for AT&T which had been opened and read aloud on July 22, 1992, and the backup data for the system maintenance figure found in a section of AT&T'S bid response documents. On the bid summary page, AT&T had listed its "four-year maintenance totals M[onday] through F[riday] 8 a.m. through 5 p.m." as $755,536.16. But on page 53 of its bound bid response, AT&T listed the "total maintenance" cost as $530,204.00. This lesser figure is consistent with other maintenance price information found on page 61 of the AT&T bound bid documents, which set out total monthly maintenance costs for Monday through Friday maintenance from 8:00 a.m. to 5:00 p.m. for all four college locations as $11,045.92 per month. If this monthly figure is multiplied by the maintenance term (48 months) the sum is the $530,204.00 shown on page 53. During his first conversation, however, Mr. Zinn told Ms. Kuzenka that the higher figure of $755,536.16 was correct, because AT&T had neglected to add in the maintenance for the AT&T Paradyne multiplexor in the entries in the bound bid documents at pages 53 and 61. During a second conversation, Mr. Zinn reversed his position and indicated that he had added the maintenance for the multiplexor twice, which resulted in an erroneously high figure of $755,536.16 on the bid summary sheet, and that the $530,204 figure on page 53 was correct. One week after the bid opening, on August 5, 1992, AT&T sent a fax letter to Ms. Kuzenka, which confirmed Mr. Zinn's second conversation, and stated that the correct maintenance price was the $530,204.00 found on page 53 of the AT&T bid, rather than the $755,536.16 figure found on its bid summary sheet. Ms. Kuzenka had not asked anyone from AT&T to submit this price change to its bid, and it was not accepted by the College, under its standard policy that price changes will not be accepted once a sealed bid has been received and opened. The College has consistently adhered to this practice through the entire term of Ms. Kuzenka's employment. While a lower maintenance price can be found in one portion of the voluminous response of AT&T to the Bid Specifications, the figure on the bid summary sheet controls. See the "Special Instructions" found at page 5 of the bid solicitation documents (AT&T Exhibit 4). A bidder should not be permitted to look for ambiguities in the supporting documentation to contradict clear entries of price components found on its bid summary sheet. Use of the bid summary sheet permits the College to rely on a specific portion of the bid submission, which will be comparable from bidder to bidder, and to avoid wading through voluminous and perhaps internally inconsistent submissions to try to determine exactly what the bidder's price is. The "Special Instructions" state: "Bidder must use bid pages provided by the College and submit bid in the order issued; failure to do so will result in rejection of your bid" (AT&T'S Exhibit 4). Over and above the maintenance price differential, the College staff found the submission by AT&T to be materially non-responsive to the Invitation to Bid. Ms. Kuzenka found five problems with the AT&T submission, which led her to conclude that the response submitted by AT&T failed to meet the bid specifications: (1) AT&T qualified or modified the terms and conditions of the specifications; (2) price corrections were not initialed by AT & T; (3) the maintenance contract was partially assigned to another vendor; (4) the bid was not signed by AT&T on all pages which have required signature lines; and (5) AT&T failed to provide a qualification statement. Modification of terms and conditions The College's bid document stated in paragraph 54.1 that the terms and conditions of the bid and purchase order constitute the contract and "no other terms and conditions apply" (Tr. 157). The maintenance agreement, titled "Product Agreement," which is appended to the AT&T Service Offerings and Support Plan is a standard AT&T form (College Exhibit 6). It contains a provision in paragraph 20G., which states "THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LOCAL LAWS OF THE STATE OF NEW JERSEY" (emphasis in original). The general conditions of the bid required that the contract be governed by Florida law (Tr. 152). AT&T argues that the standard product agreement it attached to its bid response had not been signed by a representative of AT & T, and that the College had the right to accept or reject the terms of the Service Offerings and Support Plans and the attachments to it. This is true, but the inclusion in its bid response of the New Jersey choice of law provision certainly creates an ambiguity over the applicable law, if AT&T'S bid were accepted. This ambiguity would be completely avoided had it not been proposed by AT & T, in contravention of the bid's general conditions. Paragraph 2 of the Product Agreement states "Terms and conditions on any non-AT&T order form shall not apply." Fairly read, AT&T was attempting to have its duties under its standard Product Agreement governed by the laws of New Jersey, not the laws of Florida. As a matter of sovereignty, Florida agencies do not subject themselves to foreign law. The College acted within its legitimate range of discretion when it rejected the choice of law provision as inconsistent with its bid documents. The same problem is caused by similar language in paragraph 12F of the AT&T Service Agreement (College Exhibit 5). The AT&T Product Agreement also has an integration clause, Paragraph 20H, stating that it constitutes the entire agreement of the parties, and supersedes any other oral or written agreements. This provision also attempts to modify the terms and conditions of the bid specifications to give the terms of AT &T's Service Offerings and Support Plan priority over the specifications. The College was entitled to reject this as inconsistent with the bid specifications. The same problem is presented by similar language in paragraph 12G of the AT&T Service Agreement (College Exhibit 5). The Service Offerings and Support Plan also contained a provision allowing AT&T to assign the agreement, which violates the anti-assignment provisions of paragraph 56.1 of the bid specifications. AT&T'S bid response stated that the College would be required to pay the cost for installing any additional cable. The bid specifications required vendors to inspect existing facilities at the College during a pre-bid walk- through, so that bidders could determine whatever cabling would be needed, and incorporate all necessary cable in their bid price. AT&T'S attempt to make the College liable for any cabling over and above that estimated by AT&T when submitting its bid is inconsistent with the bid specifications. The AT&T submission includeds a statement that the College was obligated to pay for the cost of a site survey to be performed by the project manager before the execution of the contract. Yet a site survey had already been performed, and the bidder's price was to have been inclusive of a total system, with no additional cost to the College for items such as surveys. Finally, the AT&T Service Offerings and Support Plan required the College to provide, at the College's expense, a secured and protected area for storage of tools and equipment near the equipment room, which was not part of the bid specifications. At the walk-through, AT&T should have determined whatever its security needs were and included those costs in its bid price. In essence, AT&T submitted preprinted forms without tailoring them to the carefully crafted requirements of the College's bid specifications. It cannot now disavow the contents of its forms which violate or fail to conform to these specifications. The time to review the company's standard forms was before they were submitted in its bid response, not afterward. Price correction There is a price correction on page 48 of the AT&T bid which is not initialed. The bid specifications require that "all corrections, manual or written or white-out must be initialed by the person signing the bid" (Bid Specifications, page 63, paragraph C). This was not done. The specifications stated "Failure to initial price corrections will result in the rejection of your bid" (AT&T Exhibit 4, page 5, numbered paragraph 2). Assignment provisions There was also confusion in the AT&T bid arising from the attachment of two proposed maintenance agreements, one from AT&T itself, another from AT&T Paradyne. The two maintenance contracts are not identical. 2/ College personnel believed that one contract was for part of the equipment, while the other contract was for another block of equipment. The College had been concerned about the difficulty in having to deal with different companies; it had drawn its specifications so that the bidder would be the single entity responsible to the College for maintenance. The submission of a proposed maintenance contract from an entity other than the bidder was inconsistent with the bid specifications. Signature Not all pages with signature lines had been signed by AT&T'S representative. These included page D1, which had a bearing on the equipment allowance being provided for the existing system traded in by the College. While AT&T regards these failures as trivial, the College went to pains to require bidders to sign pages with signature lines. Page 5 of the Bid Specifications stated: "Failure to sign all pages with a signature line will result in the rejection of your bid" (AT&T Exhibit 4, page 5, numbered paragraph 3). It is not arbitrary for the College to insist that these requirements be followed or to enforce the penalty stated in the specifications. Qualifications statement The special conditions for the bid required that vendors submit a qualifications statement listing similar work done for others (Tr. 168; Bid Specifications Section 25.1 at page 25). The College intended to consult those listed to determine whether they were satisfied with the equipment the vendor installed and the service it provided. AT&T did not provide that list, but rather provided an annual report which contains no customer references. This was not responsive to the bid. The College had experience with AT&T'S fifteen- year-old Dimension system, but not with the new equipment AT&T bid. The failure to submit the qualifications statement deprived the College of the opportunity to check with entities which had purchased the equipment AT&T had bid, something it had been careful to require of bidders. Deciding how to treat these inadequacies is a matter of discretion. Staff recommended rejection of the AT&T bid for genuine instances of noncompliance with specific requirements of the bid specifications the College had carefully crafted. This action cannot be characterized as arbitrary. The College's decision The College's purchasing department recommended to Dr. Hamilton that the bid be awarded to NEC as the low responsive bidder. A bid tabulation was posted on August 7, 1992, awarding the contract to NEC and rejecting AT&T'S bid. The protest AT&T filed a Notice of Protest, and later a Formal Written Protest on August 18, 1992, which dealt with a number of technical aspects, but did not claim that NEC's rival submission failed to conform to the bid specifications. Dr. Hamilton advised the College's president that, to be fair to both bidders, an outside consultant should be retained to evaluate the issues raised by AT&T in its Formal Written Protest. This was done, and the College retained Technology Associates for $8,600 to report to the College on the issues raised by AT & T. Technology Associates found that AT&T did not meet the emergency 911 requirements outlined in the College's bid documents. Southern Bell requires that when 911 calls are made from the College, the telephone system be capable of identifying to the police dispatcher which campus, which room and which extension number originated the emergency 911 call. The consultant also found that NEC's system met this requirement. AT&T did not attempt to refute this determination at the final hearing. The consultant found that AT&T'S proposed system was "over designed," in that it included elements not required by the bid documents. AT&T argues that Addendum Two, issued on July 14, 1992, 14 days before the bid opening, was so ambiguous with respect to necessary redundancy that the two bidders were bidding on fundamentally different systems, so that the matter should be bid for a fourth time. The portion of the addendum at issue states: The College requires two additional T-1 lines; not one as previously stated, to be added to diagram D-2 to ensure redundancy. A T-1 line is to connect North Campus with Central Campus and an additional T-1 line is to connect Central Campus with South Campus. (Tr. 85) Addendum Two explains that these lines are required to "ensure the ability to redirect calls if required, enabling the system to be fully redundant" (Tr. 86- 87, emphasis added). The addendum directed only the addition of two T-1 lines. This can be done, as NEC proposed, by connecting additional T-1 lines, one from the PBX at the North Campus to the PBX at the Central Campus and the other from the PBX at the Central Campus to the PBX at the South Campus. AT&T chose to feed each of the PBX installations at the North Campus, Central Campus and South Campus first into its own additional 45-Series multiplexor (the complex multiplexor, see Finding 10 above) so that a 45-Series multiplexor will handle T-1 connections from North Campus to a 45-Series multiplexor at Fort Lauderdale center, and to a 45-Series multiplexor at Central Campus. The PBX at Central Campus, because it has its own 45-Series multiplexor, then can be connected by T-1 lines to the 45- Series multiplexors at North Campus, South Campus and Fort Lauderdale Center. The PBX at South Campus, through its 45-Series multiplexor, then can connect to the 45-Series multiplexors at Central Campus and Fort Lauderdale Center (this configuration is shown on the final page of AT&T Exhibit 5). This is a more complex way to provide the T-1 connections between North and Central Campus and Central and South Campus than the addendum required, and uses four 45-Series multiplexors rather then one. AT&T argues its more complex solution was necessary so that both voice and data systems would be redundant, thus meeting the requirement in the addendum that the system be "fully redundant." The problem with the approach taken by AT&T is that it fails to follow the language of Addendum Two. There is no reference to alternative routing or redundancy for data, the redundancy is required to redirect calls, i.e., PBX or voice components. See the final quotation in Finding 40, above. Redundancy for data transmissions, something the AT&T solution provides, was not required. AT&T'S solution is overdesigned. This is not a pivotal issue, however, because for the reasons stated in the foregoing findings, the submission by AT&T was properly rejected by College staff as non-responsive to the terms of the Invitation to Bid. NEC is the low responsive bidder. Software certification AT&T argues in pages 16 through 20 of its proposed recommended order that the bid of NEC fails to conform to the requirements of the Invitation to Bid. AT&T had not raised the issue of whether the bid of NEC was responsive in its Formal Written Protest, and the attempt to do so at the beginning of the final hearing was rejected. As a result, this is not an issue which should have been addressed in the proposed recommended order. Nonetheless, it may be easily disposed of. The bid documents require that each bidder provide the College with a certification that the bidder: [O]wns, leases or controls the software it offers in response to this bid. If the bidder does not own the software, their certificate must include the source from which the software shall be obtained, and that the bidder has a right to sell or lease this software (Bid Specifications at 26, AT&T Exhibit 4.) The bidder also must certify that it is "eligible to maintain and support the software." (Id.) In its certification, NEC stated: NEC is the manufacturer of the NEAX2400 IMS that has been proposed to Broward Community College. As the manufacturer, we developed all software utilized on the NEAX2400. NEC owns all the rights to the software and has over 600 software engineers in Dallas dedicated to maintain and support the software. (AT&T Exhibit 4, final page) AT&T objects that this certification goes only to NEC's hardware, and does not constitute a certification that NEC has the rights to convey to the College the software necessary to operate the Comsphere 6800 Network Management System, which is a product of AT&T Paradyne. When reviewing the submissions of both bidders, the College staff found that their software certifications were equivalent. Both companies certified that they had the right to sell the software to operate the system each offered to the College. The College is entitled to rely on the certification given to it by NEC. If NEC is wrong, and does not have the right to provide the necessary software because AT&T or AT&T Paradyne will refuse to permit it to use that software, NEC may be liable in damages for failure to meet its contractual obligations to the College. NEC did not offer at the hearing evidence on why it believes it is entitled to use the software for the Comsphere 6800 Network Management System, because AT&T's attempt to raise this issue had been rejected when AT&T's motion to amend its Formal Written Protest of August 18, 1992 was denied.
Recommendation It is RECOMMENDED that a final order be entered by the Board of Trustees of Broward Community College awarding Bid No. 3656, the rebid of the College-wide PBX system, to NEC for a bid price of $1,549,895.15. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 9th day of March 1993. WILLIAM R. DORSEY, JR. 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 9th day of March 1993.
