Findings Of Fact Respondent, Joan B. Cross, is a registered real estate salesperson holding certificate number 0018497. On her application for registration in November, 1972, in answer to question 9 pertaining to having been arrested for or charged with the commission of an offense against the laws of the municipality or state, she answered "yes". She completed the "If yes, state details in full" question with "careless driving, 7-27-69 DWI 1970". Exhibit 2, Certified Copy of Court Record, shows that on May 6, 1965 Respondent was convicted of disorderly conduct and fined $15.00. Exhibit 3 and 4, Certified Records from the Criminal Court of Record, show that on June 9, 1969 Respondent was charged with, and found guilty of, unlawful possession of marijuana and of contributing to the dependency of minors. Adjudication of guilt was withheld and Respondent was placed on probation for 18 months. Testifying in her own defense Respondent acknowledged both offenses. With respect to the disorderly conduct charge, she stated she forgot to include that on her application. Following a lunch birthday party the group retired to a bar and when they became too noisy the police came and took them to the police station. With respect to the charges of possession of marijuana and barbiturates she testified that she was represented by counsel who advised her after the trial that she was not adjudicated and that she could forget the incident. She testified that she understood all record of this incident had been expunged, and that she could forget it. She also testified she didn't fully understand withholding adjudication of guilt. In this regard it is noted that she pleaded guilty to possession of marijuana and nolo contendere to the charge of contributing to the dependency of minors.
Findings Of Fact On March 19, 1985 petitioner, Michael Scott Symons, became employed as a financial manager with the brokerage firm of Easter Guthmann & Kramer Securities, Inc. (EGK) at 7200 West Camino Real Street, Suite 200, Boca Raton, Florida. In connection with his employment Symons filed an application for registration as an associated person of EGK with respondent, Department of Banking & Finance, Division of Securities (Division). The application was received by the Division on or about March 19, 1985 and was deemed to be complete on April 18, 1985. On that portion of the application entitled "Personal History" Symons gave 5700 Grillet Place, S.W., Fort Myers, Florida 33907 as his home address. He identified EGK's address as being 7200 West Camino Real, Suite 200, Boca Raton, Florida 33433. Although Symons signed the application he stated that EGK had actually submitted the application on his behalf since it was a common practice for brokerage firms to do administrative work on behalf of their employees. This is consistent with an agency rule (3E-600.02(3), F.A.C.) which requires that a securities dealer file and countersign the application for registration on behalf of an associated person. On March 24, 1985, or shortly after he began employment with EGK, Symons moved into an apartment at 6091 Boca Colony Drive, Boca Raton, Florida 33427. Approximately one month later, he began renting Post Office Box 3299 in Boca Raton. Symons did not inform the Division of these changes in address, or otherwise amend his application. On or about July 12, 1985 a Division bureau chief spoke by telephone with the chief financial officer of EGK and asked if EGK would voluntarily withdraw Symons' application. Later that same day, an EGK vice-president telephoned the bureau chief and advised him the firm would not withdraw the application. On July 16, 1985, the Division prepared and dated an Order Denying Application for Registration as an Associated Person. The next day a Division attorney sent a copy by certified mail to Symons' at 5700 Grillett Place, S.W., Fort Myers, Florida. Because Symons' wife had previously provided the post office with a change of address form the envelope containing the order was forwarded from Fort Myers to Post Office Box 3229 in Boca Raton. Certified mail notices were thereafter placed in the box on July 24 and July 31. However, the mail was never claimed. On August 8, 1985 the envelope was returned to the Division. It was received in Tallahassee on August 12, 1985. There is no evidence that Symons was aware the order had been mailed or that he deliberately failed to claim the letter. The agency attorney similarly assumed that Symons had not received a copy. Accordingly, it is found that at this point in time Symon had no knowledge that the July 16 order-was entered, and had been mailed to him in Fort Myers and Boca Raton. On August 19, 1985 the Division attorney again sent a copy of the July 16 order by certified mail to 7200 West Camino Real, Suite 200, Boca Raton. This was the address of EGK. According to the attorney, it was her intention to mail the order to Symons, and not his employer. The order contained the following pertinent language on page 5: Respondent is advised that Respondent may request a hearing to be conducted in accordance with the provisions of Section 120.57, Florida Statutes. A request for such hearing must comply with the provisions of Rule 28-5.201, Florida Administrative Code, and must be filed within twenty-one (21) days after receipt of this order. Otherwise, Respondent will be deemed to have waived all rights to such hearing. The certified mail receipt for the envelope containing the order was apparently signed for by Charlie Shields, an EGK employee. 1/ It eventually reached the desk of EGK's chief financial officer, James Weber, in an unopened envelope on August 23, 1985. Weber opened the envelope and read the enclosed order. He noticed on page five of the order that there was a twenty-one day time frame in which an appeal of the agency denial could be made. Believing that the twenty-one day time frame began on July 16, Weber erroneously concluded that the time to request a hearing had already expired. This was probably because he had never before seen a denial order, and was not familiar with the procedures under Chapter 120, F.S. Weber then showed the order to Edward Guthmann, a principal and vice- president of EGK. Guthmann telephoned an out- of-state attorney seeking advice on how to proceed, and sent a copy of the order to the attorney on August 23. The attorney did not take any action, and returned the order to Guthmann on an undisclosed dated between late August and the middle of September. On September 17 Weber "came to the realization" that under any interpretation of the order the time frame in which to request a hearing had run. He then contacted petitioner's present counsel on September 17 to discuss obtaining legal representation for Symons. Symons has continued using that counsel since that time. A petition for hearing was eventually filed with respondent on October 1, 1985. This petition was denied by agency order entered on October 16, 1985 on the ground Symons had "constructive receipt and notice of the Denial Order at the time of its delivery by U.S. Certified Mail to Respondent's personal address on July 24 1985, and furthermore, deems Respondent to have received actual notice. . . on August 25, 1985, when the Denial Order was claimed and signed for at EGK's address as listed on the application." Neither Weber or Guthmann informed Symons prior to September 15 that they had received the Division order, or that the document even existed. They also did not advise him that they had contacted an out-of-state attorney in August in an effort to obtain advice. In this regard, petitioner had not authorized them to take any action with respect to the denial order, or to seek the advice of an attorney. Symons was unaware of the existence of the denial order prior to September 20, 1985 when he was shown a copy of the order by his employer. Had he been aware of the order prior to September 15, he would have filed a request for a hearing. Even though he did not specifically voice an objection to his employer opening his mail, Symons did not expressly authorize his employer to accept the order or any other notices from respondent. Indeed, Symons considered certified mail to be "a personal thing," and something that "an employer has (no) right to open."
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered finding that petitioner timely requested an administrative hearing to contest respondent's denial of his application for registration as an associated person. DONE and ORDERED this 4th day of December, 1986 in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER 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 4th day of December, 1986.
Findings Of Fact Respondent Santaniello holds real estate broker license number 0186475, and was so licensed at all times relevant to this proceeding. Santaniello is the active broker for Respondent, Sunair Realty Corporation, which holds license number 0213030. Mr. Don M. and Mrs. Agnes C. Long own two lots in Port Charlotte which they purchased as investments. By letter dated June 8, 1981, Respondents forwarded a "Deposit Receipt and Contract for Sale and Purchase" on each of these lots to the Longs. The documents established that Anni Czapliski was the buyer at a purchase price of $1200 per lot. Respondent Sunair Realty Corporation was to receive the greater of $120 or ten percent of the felling price for "professional services." The letter and documents were signed by Respondent Santaniello. Anni Czapliski was Bernard Santaniello's mother-in-law at the time of the proposed sale. This relationship was not disclosed by Respondents and was not known to the Longs at the time they were invited to contract with Respondents for sale of the lots. The Longs rejected the proposed arrangement for reasons not-relevant here.
Recommendation From the foregoing findings of fact and conclusions of law it is RECOMMENDED that Petitioner enter a Final Order finding Respondents guilty of violating Subsection 475.25(1)(b), Florida Statutes (1979), and fining each $500. DONE and ENTERED this 16th day of April, 1982, in Tallahassee, Florida. COPIES FURNISHED: Salvatore A. Carpino, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Robert J. Norton, Esquire Suite 408 First National Bank Building Punta Gorda, Florida 33950 Mr. C.B. Stafford Executive Director Board of Real Estate Post Office Box 1900 Orlando, Florida 32801 Frederick Wilsen, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 R.T. CARPENTER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 16th day of April.
Findings Of Fact Carmine Amato is a real estate broker holding license number 0110690, and is the broker for Wise Realty in Broward County, Florida, which he wholly owns. Amerigo DiPietro is a real estate salesman holding license number 0326813. At all times in question, DiPietro was employed by Wise Realty, and Amato was his supervising broker. In August, 1980, DiPietro took a sales contract from Charles and Jennie Conroy for the sale of their home in Broward County, Florida, described as Lot 3, Block 5 of Margate Estates, Section 3. DiPietro suggested to the Conroys that they could afford a larger home by selling their present house and using the equity to put a down payment on a new house. The Conroys subsequently contracted to buy a larger and more expensive house in Broward County from the Hocenics, said house described as Lot 13, Block 8 of Kimberly Forrest. DiPietro found buyers, the Meads, for the Conroys' house; however, the Meads were unable to qualify, and the contract did not close. The Conroys were anxious to close on the Hocenics' house and, as a result, sought a loan from Security Pacific Finance Company, said loan being referred to as a "swing" loan. The Conroys used this swing loan to close on the Hocenics' house, and this loan was secured by a security interest in their old home and the Hocenics' home. The Conroys were not induced in any manner by the Respondents to seek this swing loan. Having obtained the loan, the Conroys closed on the Hocenics' house, moved out of their old house and into the Hocenics' house, and assumed financial responsibility for both homes. Because the Conroys were short $2400, DiPietro took a note from the Conroys payable from the proceeds of the sale of their house. This represented money due DiPietro, which the Conroys could not pay at closing. DiPietro continued to attempt to sell the Conroys' old home and found another buyer, the La Serras. The La Serras qualified, but the Conroys could not raise $3400 needed to pay off their obligation at the closing of the sale of their old home. Because of this, the La Serra transaction did not close. In an effort to save the deal and close the La Serra contract, DiPietro made every effort, even agreeing to take a note for the commissions due to Wise's sales people, who represented both buyer and seller. The Conroys refused to close. With the swing loan almost due, Mrs. Conroy asked DiPietro if he and Amato would buy their old house outright. Eventually, DiPietro and Amato agreed to buy the house and accept financial responsibility for the first mortgage if the Conroys would agree to certain conditions. DiPietro indicated from the outset that neither he nor Amato had sufficient cash to purchase the house outright, and that financing would have to be arranged. DiPietro also advised the Conroys that, if this financing could not be arranged, the swing loan would have to be extended, and that it would be necessary for the Conroys to work with Amato and him to arrange for the extension of this loan. The specific conditions which the Conroys would have to meet were as follow: (a) the Conroys would give Amato and DiPietro a quit claim deed to their old house; (b) the Conroys would do those things necessary to extend the swing loan another six months; and (c) DiPietro and Amato would assume immediate financial responsibility for the house and, during the six months' period, sell it or arrange for long-term financing. The Conroys concurred in this agreement and executed a quit claim deed to their old house to the Respondents. DiPietro tried three different companies, seeking substitute financing for the house. When he failed in this, DiPietro contacted Mr. Conroy about renewing the swing loan. Mr. Conroy accompanied DiPietro to Security Pacific to renew the swing loan. DiPietro attempted to get Security Pacific to substitute any of a number of pieces of property owned by Amato and him for the Conroys' new house and to release its security interest in said house. Because of Security Pacific's excellent equity position in this new house, Security Pacific was unwilling to release its encumbrance on the Conroys' house. Security Pacific said it would release its interest in the Conroys' house only if the amount of the loan was paid down to an amount that the old house could secure. Neither Amato, DiPietro nor Conroy could afford to do this. Security Pacific said it would renew the loan only upon the Conroys' reapplication. Lastly, Security Pacific made clear that it still looked to the Conroys and to their new house as primary security on the swing loan. During all this time, the Conroys' old home was vacant. It had been vandalized and had suffered significant damage which decreased its value. In addition, no yard maintenance had been performed during the period since the Conroys had moved out. To be salable, substantial repairs and maintenance had to be performed by DiPietro and Amato. The revelation that Security Pacific looked to him and his wife for payment of the loan secured by their new house frightened Mr. Conroy. The Conroys were already financially strapped, having been responsible for the payments on both houses during this time. With the swing loan nearly due, and envisioning the loss of both houses and being left with an unsatisfied $28,000 debt, Conroy went to an attorney. The attorney advised Conroy not to join with DiPietro and Amato in extending the swing loan. When the swing loan was not extended, Security Pacific commenced foreclosure proceedings. Amato and DiPietro kept up the payments on the first mortgage, although Mrs. Conroy had to complain at first when these payments were late. The first three payments (July, August and September) were delayed following transfer from the Conroys to Amato and DiPietro. DiPietro and Amato did not promise to assume sole responsibility for the swing loan. DiPietro's representation was that they would try to refinance the property, and that if they could not refinance it they would assume primary responsibility for payment of the swing loan if the Conroys would join with them in extending the swing loan. Respondent Amato never saw or spoke to the Conroys and never made any promises which he did not fulfill. When the foreclosure action commenced, DiPietro stepped up his effort to sell the Conroys' old house and, approximately six to eight weeks later, sold it after substantial repairs were completed. The sales price was $57,000. At the time of the sale, approximately $32,000 was owed on the house to Security Pacific, and approximately $21,000 was owed to Heritage Mortgage Company on the first mortgage. Respondent Amato had put approximately $2,000 into repairs on the house, and Wise Realty was owed a note of approximately $2400 representing commission on the Hocenic/Conroy sale.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, the following is recommended: That the charges against the Respondent, Carmine Amato, be dismissed, it having been found that he had no contact with the Conroys, could not have made any representations to them, and is not guilty of Violating Section 475.25(1)(b), Florida Statutes; and That the charges against the Respondent, Amerigo DiPietro, be dismissed, it having been found that he made no misrepresentations to the Conroys and therefore did not violate Section 475.25(1)(b), Florida Statutes. DONE and RECOMMENDED this 14th day of April, 1983, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of April, 1983. COPIES FURNISHED: Fred Langford, Esquire Florida Real Estate Commission 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Lawrence F. Kranert, Jr., Esquire 1000 South Federal Highway, Suite 103 Fort Lauderdale, Florida 33316 David F. Hannan, Esquire 3300 Inverrary Boulevard, Suite 200 Lauderhill, Florida 33319 Harold Huff, Executive Director Florida Real Estate Commission 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Frederick Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 William M. Furlow, Esquire Florida Real Estate Commission 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802
The Issue Whether Respondent's real estate broker's license should be disciplined for fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence and breach of trust in any business transaction, pursuant to Section 475.25(1)(b) Florida Statutes(1983).
Findings Of Fact At all times pertinent to the charges, Respondent Thomas F. Steffan Jr. was a licensed real estate salesman having been issued license number 0402257. Respondent has since been issued a license as a real estate broker, same license number. Mr. and Mrs. Walther Ellis were the owners of certain property located on Windsor Road, Bonita Springs, Florida. Mr. and Mrs. Ellis listed their property for sale with Wesley Brodersen of Gulder Real Estate, Inc. in Bonita Springs, Florida. The Respondent was employed at Gulder Real Estate, Inc. during the time that the Ellises listed said property with Gulder Real Estate, Inc. On or about May 23, 1984, the Respondent solicited and obtained a Catherine A. Griffin as a prospective purchaser of the Ellis' property. Mrs. Griffin submitted a contract for sale and purchase, witnessed by Respondent, which contract for sale and purchase the Respondent in turn submitted to the Ellises. Pursuant to the terms of the May 23, 1984 contract for sale and purchase, Mrs. Griffin had placed down a total deposit of $5,000.00. The Ellises rejected the terms of sale (offer) as expressed in the May 23, 1984 contract for sale and purchase. Thereafter, Mrs. Griffin, as buyer, along with her husband, Donald Griffin, who is not a buyer in the transaction but was intimately involved in the negotiations, continued to express an interest in the property and the Ellises continued to express an interest to sell the property. In July, 1984, contract negotiations were once again begun and Mr. Griffin informed the Respondent what terms would be acceptable to his wife, Catherine A. Griffin. Mr. Griffin further requested that the signatures of Mr. and Mrs. Ellis be obtained first on a new contract for sale and purchase setting out the terms he had dictated to Respondent. Somewhere during this time period, Mr. Griffin directed Respondent to have completed a survey of the property at the Griffins'expense. Respondent next communicated with Mr. Ellis and a new contract for sale and purchase was prepared by the Respondent and signed by Mr. Ellis personally and signed by Mr. Ellis for Mrs. Ellis with Mrs. Ellis' express consent and permission. Subsequent thereto, the Respondent brought the new contract for sale and purchase to the Griffins. In the presence of Mr. and Mrs. Donald Griffin the Respondent presented the offer. Mr. Griffin immediately signed the new contract for sale and purchase in the presence of both Respondent and Mrs. Griffin on the line indicating he was signing as a witness to the buyer's signature/execution. However, as this contract (offer) was physically handed by Mr. Griffin to his wife for formal execution, it was further reviewed by Mr. Griffin, who became aware that the terms of purchase contained in the new contract for sale and purchase were not as he had dictated them to the Respondent. Mr. Griffin advised his wife not to accept the offer, instructed her not to sign, and, in fact, the new contract for sale and purchase was not signed or accepted by Mrs. Griffin. Respondent requested that the Griffins think about the offer for a while longer and they agreed to do so over an extended vacation. While the Griffins were on vacation, the Respondent, apparently believing the offer contained in the second contract for sale and purchase would eventually be accepted, notified Mr. Ellis that the offer had already been accepted. Believing that the offer had been accepted by a bona fide purchaser, Mr. Ellis requested a copy of the signed contract. Due to the fact that the Respondent did not have a contract signed by a bona fide buyer (Catherine A. Griffin) but believing that one would be obtained in the very near future because Donald Griffin had signed the second contract and because Donald Griffin had indicated that he could finance the entire operation by himself, the Respondent caused a photo copy of the signature of Catherine A. Griffin to be placed onto the second contract without the permission , consent, or knowledge of either Donald Griffin or Catherine Griffin. The altered copy of the second contract is apparently no longer in existence and did not come into evidence. The only real point of contention in the parties' respective proposed findings of fact and conclusions of law is concerning what representation was made by Respondent to Mr. Walther Ellis concerning who had accepted the second contract. Respondent admits he represented to Mr. Ellis that Mr. Griffin, controlling the transaction for buyers, had accepted the second contract. Mr. Ellis maintained that Respondent represented to him that the second contract had been accepted on his terms but he is not clear·whether Respondent told him Mrs. Griffin accepted it or who accepted it. (Walther Ellis Deposition Page 22). Mrs. Ellis's testimony presents no independent confirmation of any of this as her information in all respects is second-hand. Mr. Brodersen's testimony is that the Respondent's representation to him was that "the Griffins" had accepted the second contract for purchase and sale and that Respondent told Mr. Ellis the same thing in Brodersen's presence and also told Brodersen that the last copy of the signed contract had been mailed to Mr. Ellis by Respondent the day previous to this three-way conversation. Mr. Brodersen thought Mr. Ellis never got the fraudulent contract but testified further that Respondent later admitted to Brodersen that he had altered this copy of the second contract so as to fraudulently reflect Mrs. Griffin's signature and further admitted to Brodersen that he, Respondent, had mailed that fraudulent copy to Mr. Ellis. Mr. Brodersen never saw the fraudulent contract. Mr. Ellis testified to receiving in the mail a copy of the second contract with a suspicious-looking set of signatures which he turned over to his attorney. The parties stipulated the attorney does not now have the contract copy. By itself, the testimony of Investigator Jacobs that Respondent by telephone admitted falsifying Mrs. Griffin's signature onto a copy of the second contract for purchase and sale and further admitted destroying one copy of the fraudulent contract would fail as not having the proper predicate for voice identification. However, in light of Mr. Ellis's and Mr. Brodersen's testimony, Mr. Jacobs' testimony on Respondent's creation of the fraudulent document is accepted as corroborative pursuant to Section 120.58 Florida Statutes. The remainder of his testimony is rejected. At no time did Catherine A. Griffin and/or Donald Griffin as her agent or on his own behalf accept the Ellis' offer contained in the second contract for sale and purchase nor did Catherine A. Griffin nor Donald Griffin ever execute the second contract as a buyer. The transaction was never closed and Mrs. Griffin was returned her deposit money when she requested it in September 1984. Mr. Ellis admits having told Respondent he was not anxious for the deal to close and did not care if the deal failed to go through. Mr. Griffin spoke at length and with considerable feeling at the hearing of his desire that Respondent not receive a permanent record as a result of a single mistake committed while under stress from Respondent's father's medical condition. That Respondent was under such stress when all this occurred was confirmed by Mr. Brodersen.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That a final order be entered whereby Respondent Thomas F. Steffan Jr.'s licenses as a real estate salesman and broker be suspended for a period of one year and that he pay an administrative fine of $1,000.00. DONE and ORDERED this 8th day of October, 1985, in Tallahassee, Florida. ELLA JANE P. DAVIS Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 8th day of October, 1985. COPIES FURNISHED: James T. Mitchell, Esquire Staff Attorney Department of Professional Regulation-Legal Division of Real Estate 400 West Robinson Street Orlando, Florida 32802 Thomas F. Steffan Jr., Pro Se 18645 Sandpiper Road Ft. Myers, Florida Harold R. Huff, Director Department of Professional Regulation-Legal Division of Real Estate 400 West Robinson Street Orlando, Florida 32802 Fred Roche, Secretary 130 North Monroe Street Tallahassee, Florida 32301
Findings Of Fact Petitioner is the state agency responsible for regulating insurance and insurance related activities in Florida. Petitioner is the agency responsible for regulating any licensed or unlicensed person engaged in activities prohibited under Chapter 626, Florida Statutes. 1/ Respondent is licensed as an independent adjuster. Respondent's license number is 289505173. Gilmore Wimberly & Associates, Inc. (GWA) is a Florida corporation engaged in the business of insurance adjusting. GWA's principal place of business is 1033 Oak Street, Jacksonville, Florida 32204. All billing for independent adjusting services is processed in the Jacksonville office. However, GWA maintains branch offices to adjust claims throughout the state. One of the branch offices is located at 251 Maitland Avenue, Suite 110, Altamonte Springs, Florida 32701 (the "Altamonte office"). In March and April, 1994, Respondent was employed by GWA as an independent adjuster in charge of operating the Altamonte office. Respondent supervised one secretary and an appraiser. Respondent issued five unauthorized invoices to GWA clients in the aggregate amount of $2,329.92. Respondent altered the address on the face of the invoices so that payment would be made to the Altamonte office rather than the home office in Jacksonville (the "altered invoices"). 2/ Respondent received payment for the altered invoices on drafts or checks ("checks") from insurance companies that employed GWA to provide adjusting services. Each check was made payable to GWA. Respondent endorsed the checks on behalf of GWA. Respondent had no authority to endorse the checks. Respondent endorsed the checks to himself. Respondent then deposited the checks to his personal bank account. 3/
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a Final Order finding Respondent guilty of the charges in the Administrative Complaint and revoking Respondent's license. RECOMMENDED this 29th day of September, 1995, in Tallahassee, Florida. DANIEL MANRY 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 29th day of September, 1995.
Findings Of Fact Louis S. Wooten, Sr. is a registered real estate broker holding license No. 0098381. Louis S. Wooten, Sr. did business at the times involved in the administrative complaint as Lou Wooten Realty. Adequate notice of this hearing was given Louis S Wooten, Sr. in the manner required by Chapter 120 and Chapter 475, Florida Statutes. Evidence was received concerning deposits and withdrawals by Louis S. Wooten, Sr. from the Louis S. Wooten, Sr. escrow account in Peoples First National Bank, Miami Shores, Florida, between August 1, 1975 and November 10, 1975, when this account was closed. These records were identified by John Fortnash, vice president of the bank. These records included the ledger for this account from May, 1975 to November, 1975, (Exhibit 1), the ledger from November, 1975, until November 1976, (Exhibit 2), the signature card showing Louis S. Wooten to be the only person authorized to draw on the account, (Exhibit 3), and sixteen (16) individual deposit slips received as Composite Exhibit 4. These records show no activity in the account subsequent to December 23, 1975, when this account had a balance of $22.00. Thereafter, the balance of this account decreased by $2.00 per month, a service charge, until November 10, 1976, when the balance reached zero and the account was closed. Concerning Count 1, Yvard Jeune and Rosita Jeune contracted on or about September 26, 1975, to purchase certain real property from Eddie Silver for $28,500. The Jeunes paid $100 as an initial deposit to Lou Wooten, Sr., and agreed to pay an additional $1,900 for a total deposit of $2,000. This additional $1,900 was paid to Lou Wooten Realty by manager's check on or about September 30, 1975. This manager's check was identified by Barry Eber, chief savings and loan officer for First Savings and Loan of Miami, and received as Exhibit 5. The Jeune contract was contingent upon FHA financing for the Jeunes. FHA financing was not approved, and the Jeunes requested return of their $2,000 in accordance with the terms of the contract. The Jeunes never received their money from Louis S. Wooten, even though they eventually brought suit against Wooten and obtained a judgment against him. The records of Wooten's escrow account do not show the deposit of the $1,900 received from the Jeunes. Regarding Count 2, on or about October 19, 1975, Emma Crockett made an offer to purchase certain real property and paid an earnest money deposit to Lou Wooten Realty in the amount of $1,000 which was receipted for by Mollie Johnson. Mollie Johnson identified the receipt signed by her and testified that this money was duly delivered to Lou Wooten. Subsequently, Crockett's offer of $29,500 was rejected by the seller, and on December 24, 1975, a demand was made for return of the deposit. The cancellation mark on the check, identified by Crockett and received as Exhibit 24, indicates that it was received by Wooten Realty. Crockett's deposit was never returned to her by Wooten. As noted above, the Lou Wooten escrow account was closed with a zero balance. Regarding Count 3, George D. Pratt, Jr. and his wife, Eloise, contracted to purchase certain real property from Gladys P. Smith on or about December 5, 1975. The Pratts paid an initial deposit of $100 to T.F. Chambers and subsequently paid an additional $665 in the form of a manager's check to Lou Wooten Realty. This manager's check was identified by Barry Eber, chief savings and loan officer, First Federal Savings and Loan of Miami, and received as Exhibit 6. Harriet Pooley, an employee of Lou Wooten Realty, identified a receipt to George D. Pratt, Jr. and Eloise in the amount of $665 which was received as Exhibit 18. A review of the ledgers of the Louis S. Wooten, Sr. escrow account indicates no deposits were made to this account subsequent to November 26, 1975. Regarding Count 4, Bettye Green paid Lou Wooten Realty a deposit of $150 on a transaction in which she and her husband offered to purchase real property owned by the Fidlers. The Greens defaulted on the contract, and were advised by their salesman, T.F. Chambers, that their deposit would be forfeited. No evidence was introduced by the Florida Real Estate Commission regarding any demand on the Fidler's behalf for the money. Regarding Count 5, Mary Redfield, a friend and representative of Goldie Brown and Bernard Brown, identified a copy of a manager's check earlier identified by Barry Eber, chief loan officer of First Federal Savings and Loan of Miami and received as Exhibit 7, as a copy of an original check for $1,500 given to her by Goldie Brown which was deposited to Wooten's escrow account. Redfield also identified a contract, Exhibit 16, and a closing statement, Exhibit 17, as documents given to her by Goldie Brown. T.F. Chambers was the salesman who handled this contract. Chambers appeared at closing, after having purchased Lou Wooten Realty from Louis S. Wooten, Sr.Chambers stated that the Wooten escrow account lacked sufficient funds to permit closing the transaction and that he had personally paid for a cashiers check in the amount of $680, the amount necessary to close the purchase. Chambers identified this check which, as a part of Exhibit 21, was received into evidence. Regarding Count 6, Alladar Paczier, counsel for Istvan and Julia Beres, identified a deposit receipt contract for a bar and restaurant (Exhibit 26) and a receipt for a $3,500 deposit signed by Louis Wooten (Exhibit 27). Paczier represented that Wooten failed to produce the deposit money at closing, and that when demand was made by Paczier of Wooten for the deposit, Wooten stated to him that he did not have the money.
Recommendation Based upon the foregoing findings of fact and conclusions of law, the Hearing Officer recommends that the Florida Real Estate Commission revoke the registration of Louis S. Wooten, Sr. DONE and ORDERED this 17th day of January, 1978, in Tallahassee, Florida. STEPHEN F. DEAN Hearing Officer Division of Administrative Hearings Room 530 Carlton Building Tallahassee, Florida 32304 COPIES FURNISHED: Joseph A. Doherty, Esquire Florida Real Estate Commission 400 Robinson Avenue Orlando, Florida 32801 Louis S. Wooten, Sr. 743 Fairlawn Drive Sebring, Florida 33870
The Issue Whether Respondent violated Sections 475.25(1)(b),(e),(k), and Section 475.42(1)(b), Florida Statutes, and Rule 61J-14.009, Florida Administrative Code, and if so, what penalty should be imposed.
Findings Of Fact Respondent, Tam N. Shigley (Shigley) was provided notice of the final hearing in this case by Notice of Hearing by Video dated December 6, 1996. The final hearing was scheduled to commenced at 9:00 a.m. on January 31, 1997. The Administrative Law Judge and counsel for Petitioner waited until 9:15 a.m. to commence the hearing, but Shigley did not appear. Shigley did not advise either the Division of Administrative Hearings or the Petitioner that she would not be appearing at the final hearing. Shigley is now and was at all times material to this proceeding a licensed Florida real estate salesperson, issued license number 0465639. On March 27, 1994, Shigley was employed by First Nationwide Mortgage. She negotiated a contract between Bich Hue and Minh Huynh (hereinafter Buyers) and Lois A. Hopwood (hereinafter Seller) for the purchase of a house located in Sunrise, Florida. Shigley was listed as the contract escrow agent on the contract. Shigley received a check for $5,500 from the Buyers as a deposit to be held in escrow until the closing. Shigley cashed the check and did not deposit the proceeds of the check in an escrow account. Shigley’s employer was unaware that Shigley had accepted the check, had cashed the check, and had not deposited the check in the escrow account. At the closing of the real estate transaction, Shigley did not have the $5,500 which she had received from the Buyers and stated that she had lost the money. On May 23, 1994, Shigley entered into an agreement with the seller in which she agreed to pay the Seller the $5,500 within six months and that if she did not repay the money within the specified time that the Seller would report Shigley’s actions to the Real Estate Board. Shigley did not repay the money to the Seller. Michael Millard filed a complaint with the Broward County Sheriff’s Department in March, 1995, alleging that Shigley had absconded with $1350 which he had given her as a deposit on a lease. On March 14, 1995, Harvey Kosberg filed a complaint with the Department of Business and Professional alleging that Shigley, while registered as a salesperson with Rainbow Realty had acted as a broker and took and kept money in her name. The Department undertook to investigate the allegations of Mr. Kosberg and was unable to locate Shigley. She did not have a telephone listing, and the post office did not have a forwarding address for her.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered finding that Tam N. Shigley violated Sections 475.25(1)(b),(e),(k), and 475.42(1)(b), Florida Statutes, and Rule 61J2-14.009, Florida Administrative Code and revoking her license as a real estate salesperson. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 11th day of March, 1997. SUSAN B. KIRKLAND Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 11th day of March, 1997. COPIES FURNISHED: Geoffrey T. Kirk, Senior Attorney Department of Business and Professional Regulation/Division of Real Estate 400 West Robinson Street, Suite N-308 Orlando, Florida 32801-1772 Tam N. Shigley 5834 Autumn Ridge Road Lake Worth, Florida 33463 Henry M. Solares, Division Director Department of Business and Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900 Lynda L. Goodgame, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street, Northwood Centre Tallahassee, Florida 32399-0792
The Issue Whether Petitioner should be granted an equitable adjustment to increase the contract price in the amount of $337,714 for a mistake in bid on project No. BR-7702/8701, Library/Auditorium, Florida International University.
Findings Of Fact In April 1974, Respondent advertised for bids for the construction of a library-auditorium building at Florida International University, Miami, Florida, State Project No. B.R. 7702/8701. Respondent's representative for this project was the architectural firm of Ferendino/Grafton/Spillis/Candela, Coral Gables, Florida. The advertisement for bids specified that sealed bids would be received until 2:00 p.m. on May 16, 1974, at which time they would be publicly opened and read aloud. In fact, the advertised time period was extended until the same hour on May 23, 1974. The advertisement provided that bids must be submitted on the proposal form furnished by the architect/engineer and be accompanied by a bid bond or an equivalent cash amount in a sum not less than five per cent of the amount of the base bid as a guarantee that the bidder would enter into an agreement with the owner if this bid was accepted. It further provided that the bid would remain in force for thirty (30) days after the time of opening. The advertisement also contained the following statement: "The Department of General Services reserves the right to reject any and all bids and to waive informalities in any bid whenever such rejection or waiver is in the interest of the State of Florida." (Exhibit 1a, testimony of Williams) In preparing its bid on the project, Petitioner utilized two company forms. One included columns for the various portions of the work with blocks opposite each portion for the insertion of the names of subcontractors and the amounts of their bids. The other form was a recapitulation of the low subcontractors' bid by the various segments of the contract, and the form also included spaces and amounts for the work to be accomplished by the contractor itself. The normal procedure followed by Petitioner in this and prior projects was to enter subcontractors' bids on the subcontractor's bid tabulation form when received over the telephone and, when all such bids had been received shortly before the deadline for submission of bids by the prime contractors on the project, to enter each low subcontractor bid on the recapitulation form. This would then be totaled to arrive at Petitioner's bid to be submitted to Respondent. (Testimony of Kearns). The subcontractor tabulation form for the instant project listed an item for "PRECAST STRUCTURAL." Opposite this entry in blocks on the form had been printed the names of subcontractors from whom Petitioner expected to receive bids, including Pre-Stressed Systems, Inc. (P.S.I.), Meekins, Stresscon, and Houdaille. However, since there were two different pre-case structural items called for under the specification, i.e., joists under section 3-B and pre-case panels under section 3-C, the words and figures "3B Joists" and "3C panels" were penciled in above and below the printed words "PRE-CAST STRUCTURAL" to show the need for entering bid figures for both items. However, there was no separation of these items in the various blocks for subcontractor's bids. (Exhibits 1b, 1c, Testimony of Kearns) Usually bids of major subcontractors were not received until the morning of the final day for submission of the total bids, and many were not received until immediately prior to the time the bid must be tallied and submitted. On the morning of May 23, 1974, the day for bid opening, Petitioner's employee, Edward A. Kearns, Jr., an estimator, was responsible for preparing Petitioner's bid. The only bid Petitioner had received for precast joists was that submitted by P.S.I. in the base amount of $460,000. This sum was entered on the bid tabulation from in pencil under the printed name P.S.I. Bids for the pre-cast panels were received from two of the subcontractors whose names were printed on the form an the amounts were entered in pencil as follows: "Meekins - 399,800, Stresscon - 400,00." No bid was entered for Houdaille. About 11:00 a.m., a telephonic bid on the panels was received from Cast-Crete Corporation of Kissimmee. This bid was considerably lower than that of Meekins and, because Petitioner had not heard of or dealt with Cast-Crete in the past, it asked all three bidders on the panels to verify the requirements and prices. While awaiting the return of this information, the Cast-Crete bid was not entered on the bid tabulation form. Thereafter, Cast-Crete informed Petitioner that it was raising its bid somewhat and this information was placed on a separate subcontractor bid form for cast-Crete, but not entered on the tabulation form containing all bids. The final Cast-Crete bid was in the amount of $337,714. By this time, Petitioner's office was quite hectic in that other bids were coming in at a fast pace and the phone was ringing continuously. Many bidders sought clarification on items or had to give their bids to Kearns which was time-consuming. As the time for submission by Petitioner to Respondent drew near, Kearns took the low subcontractor bids from the bid tabulation form and transferred them for each category of work to the recapitulation form. On this form, there was a single line for "Precast structural" and, on that line, Kearns entered the bid that had been received from P.S.I. for precast joists, but forgot to include any bid for the precast panes. Since no breakdown for joists and panels was shown on the recapitulation form, he assumed that bids for all portions of the work hand been included. All items on the recapitulation form were added and Petitioner arrived at a total base bid of $3,999,259, which did not include the bid for precast panels in the amount of $337,714. (Testimony of Shafer, Sr., Kearns, Exhibits 1b, 1c, 1f) Petitioner's employee, Ron Shafer, Jr., previously had been sent to the place of bid opening at Florida International University with the formal bid letter with the amounts left blank. Shortly before 2:00 p.m., Petitioner provided him by telephone with the amounts to place on the be bid form and submit to the Respondent's representative. He submitted the formal bid just prior to the deadline. The bids were thereafter opened and, although Ron Shafer, Jr., noted that Petitioner's bid was some $400,000 lower than the next lowest bidder, he was unaware of the circumstances of the mistake and returned to the office. The representative of Respondent had opened the bids and an officer of the architectural firm, Freeman J. Williams, was also present. Nothing was said at the time concerning the large disparity between Petitioner's bid and the other bids, and Williams saw no need to ask Petitioner to verify its bid at that time. (Testimony of Shafer, Jr., Williams, Exhibits 1d, 1v) Meanwhile, after Kearns had tallied the final bid figures and they had been called in to the employee at Florida International University, Petitioner's personnel sat around the office and discussed the job for several minutes. They then started to gather up all the sub-bids to put in a folder when they discovered a "subcontractor's bid form" for Cast-Crete Corporation and realized that it had not been included on the tabulation sheet or on the final recap sheet. Immediate attempts were made to telephone the architect about the mistake. When Williams was reached at his office some thirty minutes after he had left Florida International University, Petitioner requested that its bid be withdrawn after explaining the circumstances. Williams suggested that Petitioner immediately send a telegram to Respondent explaining this situation. Petitioner did so in the following language: "In reviewing our bid, we discovered we had omitted the cost of precast panels manufacturers bid from our tabulation sheet, in the amount of $282,714. We, therefor, regretfully must with- draw our bid on the FIU library and auditorium building. We could, however, accept award of contract if this amount could be added to either of our base bids. Please advise. SHAFER AND MILLER, INC. R C Shafer" In the telegram, an additional mistake was made by using the figure of $282,714 which did not include the erection of the panels in the amount of $55,000 that had been the subject of a separate bid by Cast-Crete. After receipt of the telegram, Respondent's representatives requested that Petitioner come to Tallahassee with their pertinent documents relating to the bid to discuss the matter. They did so and thereafter heard nothing further until June 5, 1974, at which time a letter was received from the Department of General Services, dated May 31, 1974, advising that, subject to final approval by the Governor and the Cabinet, it was propose to recommend acceptance of Petitioner's low bid and award the contract to it in the amount of $4,122,000 for Base Bid 1 and Priority 1 Alternate A, Priority 2, Alternate C, and Priority 3, Alternate D. The meeting of the Cabinet at which the award was to be recommended was stated in the letter to be held on June 4, 1975. Since Petitioner did not receive the letter until June 5, it had no opportunity to be present at the time matter was considered. By separate letter of May 31, 1974, the Department of General Services enclosed four copies of a standard form of agreement and performance and payment bond to be executed and returned. (Testimony of Williams, Shafer, Sr., Kearns, Exhibits 1e, 1g, 1h) Petitioner contacted legal counsel, James E. Glass, on June 5. He checked into the matter and found that the contract had already been awarded on June 4 by the Cabinet. He then telephoned Arnold Greenfield, General Counsel for the Department of General Services, and asked if the state could rebid the job at which time Petitioner would submit its original intended bid. Greenfield stated that the project was critical from a budget standpoint and that the state would not rebid it, and insisted that the Petitioner proceed or else forfeit its bid bond and be subject to suit for any excess costs of performance. Glass reminded Greenfield that Petitioner proceed or else forfeit its bid bond and be subject to suit for any excess costs of performance. Glass reminded Greenfield that Petitioner could seek injunctive relief in the matter, and the latter then stated that if Petitioner would proceed with the contract, Respondent would acknowledge its right to claim a modification of the contract. This conversation was confirmed in a letter from Greenfield to Glass, dated June 7, 1974, wherein it was stated "We further understand that your client may wish to seek a modification of such contract, after execution." Glass, in a return letter dated June 12, returned the executed contracts and bonds, stating that Petitioner was doing so in order to act "equitably and in good faith", and was fully reserving its rights to contest the erroneous bid by judicial action for equitable relief. Thereafter, Petitioner received notice to proceed with the work and in due course satisfactorily completed the contract within the required period. This was evidenced by a certificate of acceptance of the building by the using agency, which was approved by Respondent on December 4, 1975. (Testimony of Glass, Exhibit 1e, 1g, 1h, 1i, 1j, 11, 1m, 1s) In December, 1974, Petitioner had submitted its claim for an equitable adjustment in the amount of $337,714 which was the amount of the omitted Cast- Crete bid. During the ensuing year Petitioner submitted audits of its expenses on the job to Respondent and in January, 1976, further audit information was provided at the request of Respondent. On May 6, 1976, Respondent informed Petitioner that it would not approve any increase in the contract amount. Thereafter, on June 11, Petitioner filed its petition herein seeking an equitable adjustment in the amount of $337,714. The petition was referred to the Division of Administrative Hearings by the Respondent on August 2, 1976, and the undersigned Hearing Officer was assigned to conduct the hearing therein. (Exhibit 1r, 2, 4, 5, 6) By a Motion to Abate, dated August 23, 1976, Respondent requested that the matter be held in abeyance pending the submission of the petition to the project architect and his rendering of a determination indicating whether the relief should be granted or denied, as a "condition precedent to the contractor obtaining consideration of said petition in any proceeding authorized by Chapter 120, Florida Statutes." Respondent stated in its motion that the contract clearly provided that nay and all claims or disputes should be first submitted to the architect for determination, and that thereafter, either party could obtain administrative review of the determination by filing a written appeal to the Department of General Services within thirty days. The motion further stated that since this prerequisite had not been accomplished, there was no basis for an administrative appeal at that time. On the same date, Respondent advised the architect of the situation and requested expeditious consideration of the matter. On August 27, the architect issued its determination stating "From our personal knowledge of the events during the bid opening process, and the subsequent events that led to the awarding of the bid, we concur in the contractor's request." In November 1976, Respondent's general counsel advised the Hearing Officer that settlement efforts were in progress but requested that the matter be scheduled for hearing nevertheless. Notice of hearing was issued on December 15, 1976, and the case was heard on January 27, 1977. (Exhibits 1t, 1u, Pleadings) Petitioner's intended total bid, including alternates, amounted to $4,459,714. A change order of $194 was issued during the course of the work, amounting to a total of $4,459,908. Petitioner's direct costs on the project were $4,094,890. Overhead was computed at 2.85 per cent of direct costs in the amount of $116,705, for a total cost of $4,211,595. Overhead was computed based on the ratio of total general and administrative expense to total direct costs incurred on all of Petitioner's jobs in process for the year ending May 31, 1975. However, the audit reports included payment in the amount of $335,634 to Cast-Crete Corporation. The actual amount paid to that firm was $325,234 - difference of $10,400, making Petitioner's actual costs $4,201,195. During the course of the contract, Respondent paid Petitioner $4,122,194, resulting in a net loss to Petitioner of $79,001. An anticipated profit for performance of the contract was computed on the basis of the average profit on other jobs of 4.4 per cent, amounting to the sum of $180,377. The latter two sums total $259,378, and it is found that figure is the reasonable amount of Petitioner's claim. (Exhibits 2-5)
Recommendation That Petitioner's claim for equitable adjustment under Project No. BR- 7702/8701 be granted and that a change order be issued increasing the contract price by $259,378.00. DONE and ENTERED this 21st day of March, 1977, in Tallahassee, Florida. THOMAS C. OLDHAM Hearing Officer Division of Administrative Hearings Room 530 Carlton Building Tallahassee, Florida 32304 (904) 388-9675 COPIES FURNISHED: Donna H. Stinson and Daniel S. Dearing, Esquires Post Office Box 1118 Tallahassee, Florida 32302 James E. Glass, Esquire 2600 First Federal Building 1 Southeast 3rd Avenue Miami, Florida 33131 John A. Barley, Esquire General Counsel Department of General Services Room 110 Larson Building Tallahassee, Florida 32301
The Issue Whether the Respondent's determination that the proposal the Petitioner submitted in response to the Revised Request for Proposal No. 98/99-010/G was non-responsive is arbitrary or capricious. Whether the Respondent's determination that it would initiate contract negotiations with the only company submitting a responsive proposal in response to the Revised Request for Proposal No. 98/99-010/G and that it would award a contract to that company if the negotiations were successful is contrary to the applicable statutes, rules or policies, or the proposal specifications.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made: The Department of the Lottery is the state agency responsible for operating the state lottery authorized by Section 15, Article X, Florida Constitution. Section 24.104, Florida Statutes (1999). The Department is authorized to "[e]nter into contracts for the purchase, lease, or lease- purchase of such goods and services as are necessary for the operation and promotion of the state lottery " Section 24.105(17), Florida Statutes (1999). Bellsouth Communication Systems, Inc., is a corporation authorized to do business in the State of Florida. In 1987, Bellsouth was awarded the contract to install and maintain the Department's telecommunication system. This contract expired in 1993, and Bellsouth and the Department entered into a second contract that expired in 1999. Bellsouth is currently maintaining the Department's telecommunications equipment pursuant to the Second Extension of Agreement for Maintenance of Telephone Equipment and Software, and Miscellaneous Data Processing and Telecommunications Equipment and Software, which was executed on September 29, 1999. This extension commenced on October 1, 1999, and "shall continue until the execution and implementation of a new contract, . . . not to exceed six(6) months." The services that Bellsouth is currently providing to the Department are similar to the services specified in the Revised Request for Proposal. Revised Request for Proposal and Department's Revised Notice of Responsiveness and Responsibility. On February 8, 1999, the Department issued Request for Proposal Number 98/99-007/G, Request for Proposal for Maintenance of Telecommunications Equipment and Software, and Miscellaneous Data Processing Equipment and Software for the Florida Lottery ("Request for Proposal"). The Department received three proposals in response to Request for Proposal Number 98/99-007/G, including one submitted by Bellsouth. The proposals were opened on March 2, 1999. At 4:30 p.m. on March 29, 1999, the Department posted a Notice of Responsiveness and Responsibility, Notice of Rejection of All Proposals for Request for Proposal Number 98/99-007/G. The Department rejected all proposals because it determined that all three proposals were non-responsive. 2/ On April 27, 1999, the Department issued Request for Proposal Number 98/99-010/G - Revised, Revised Request for Proposal for Maintenance of Telecommunications Equipment and Software, and Miscellaneous Data Processing Equipment and Software for the Florida Lottery. The provisions of the Revised Request for Proposal were similar in many respects to the original Request for Proposal Number 98/99-007/G, but some of the original requirements were substantially modified. For the convenience of those responding to the Revised Request for Proposal, those portions of the Revised Request for Proposal in which there were major substantive changes were indicated in bold print, underlined and italicized. 3/ Two addenda to the Revised Request for Proposal were issued, one on May 19, 1999, and one on May 21, 1999. The responses to the Revised Request for Proposal were opened on June 4, 1999, and the Department posted a notice that stated that it had received three proposals, all of which were non-responsive. It subsequently withdrew this notice and posted a Revised Notice of Responsiveness and Responsibility, Notice of Intent to Negotiate, Notice of Contract Award, 98/99-010/G, Request for Proposal for Maintenance of Telecommunications Equipment and Software and Miscellaneous Data Processing Equipment and Software for the Florida Lottery ("Revised Notice") at 9:30 a.m. on September 7, 1999. In the Revised Notice, the Department stated that it had received four proposals and that three had been found to be non-responsive. The Department found Bellsouth's proposal non- responsive for the following reason: Responses to the following sections were conditional: Section 2.10 Section 2.22E Section 2.22H Section 3.3A Section 3.6 The Department also found the proposals of GTE Florida Incorporated and Sprint non-responsive. The Department announced in the Revised Notice: A fourth response which was received timely was inadvertently omitted from the responsiveness and responsibility review. The following Respondent submitted a responsive proposal: GTE Communications Corporation No Respondent was determined to be non- responsible. * * * The Florida Lottery will evaluate GTE Communications Corporation's proposal for acceptability. If the proposal is determined to be acceptable, the Lottery intends to initiate contract negotiations and, subject to completion of successful negotiations, intends to award a contract. Award is contingent upon successful completion of negotiations. Should the Florida Lottery fail to successfully negotiate a contract with the responsive firm, the Lottery will score the technical and price proposals of the non- responsive firms using the criteria set forth in the Request for Proposal. Negotiations will then begin with the firm who receives the highest ranked score. If the Florida Lottery is unable to negotiate a satisfactory contract with that firm, negotiations will continue with the next highest ranked firm. Failing accord with the second highest ranked firm, the Secretary or designee will continue negotiations with the third highest ranked firm. Should the Secretary or designee be unable to negotiate a satisfactory contract with any of the selected firms, additional firms may be selected in accordance with Rule 53ER97-39, Florida Administrative Code, or negotiations may be reinstated following the original order of priority. The Florida Lottery will award a contract to the Respondent offering the terms and conditions which best meet its needs. Although the cost proposals submitted by the four companies submitting proposals to the Revised Request for Proposal had not been opened as of the date of the final hearing, it is undisputed that the value of the contract exceeds $25,000. The Revised Request for Proposal and Bellsouth's proposal. In Section 1.1 of the General Information section of the Revised Request for Proposal, the purpose of the Revised Request for Proposal is explained in pertinent part as follows: This Request for Proposal ("RFP") has been issued by the Florida Department of the Lottery ("Lottery") to obtain sealed proposals from respondents qualified to provide maintenance of the Florida Lottery's statewide telecommunications equipment and software, and miscellaneous data processing equipment and software. This RFP, and all other activities leading toward the execution of a contract per this RFP, are conducted under the Lottery policies set forth in Rule 53ER97-39, Florida Administrative Code, and Chapter 24, Fla. Stat. The Lottery considers it in the best interest of the State of Florida to acquire the commodities and/or services described herein through a competitive formal Request for Proposal process. Bellsouth's response to the Revised Request for Proposal was prepared by a group of employees located in Alabama and was coordinated by the sales executive who has been handling the current Bellsouth contract with the Department. The group was headed by V. Carol Moore, a bid support manager for contracts, whose duties are to "review incoming RFPs and commercial proposals for terms and conditions of compliance in relation to our company's policies." 4/ Ms. Moore was the person primarily responsible for preparing those portions of Bellsouth's proposal that did not involve purely technical information regarding maintenance and pricing. Her area of responsibility included those sections of the Revised Request for Proposal that were deemed conditional by the Department. In preparing the proposal, Ms. Moore was guided by her interpretation of the description of mandatory requirements of the proposals in Section 2.1 of the Revised Request for Proposal and her interpretation of the evaluation review process described in Section 5.2 of the Revised Request for Proposal, as well as by Bellsouth's business practices and policies. Ms. Moore particularly noted the Department's failure to expressly provide in the first paragraph of Section 2.1 that deviation from the mandatory requirements of the proposal, defined as those requirements containing the words "shall," "must," and "will," would be grounds for rejecting a proposal. She also particularly noted the Department's announced intention in Section 5.2 to negotiate "fair, competitive, and reasonable" conditions and prices with those responding to the Revised Request for Proposal. Ms. Moore assumed that the clarifications and modifications included in Bellsouth's proposal would be considered alternatives to the requirements included in the Revised Request for Proposal and that the clarifications and modifications would be subject to negotiations with the Department once the bid process entered the contract negotiation phase. 5/ Section 2.10 of the Special Conditions section of the Revised Request for Proposal provides: 2.10 Proposal Tenure All Proposals are binding until execution of a contract. Bellsouth included in its proposal the following statement: 2.10 Proposal Tenure Bellsouth Response: Read and Agreed, with the clarification that Bellsouth's proposed pricing is valid for 90 days after bid submission, to allow sufficient time for evaluation and award. Extensions may be mutually agreed if the situation warrants. Bellsouth included the clarification limiting the tenure of its pricing proposal for the following reason: It was a business decision in that with these kinds of RFPs the process can take an extensive amount of time sometimes. And we don't generally hold our pricing open for longer than 90 days and that's because whatever stipulations we get from our manufacturers we have to live with in those bounds also. And so we felt like it was appropriate to put a time frame on the pricing only, but realizing of course these kinds of acquisitions though municipalities and governments sometimes take longer than 90 days, we did give them an avenue for extending it for whatever circumstances that might warrant that particular extension. 6/ It is Bellsouth's practice to include such language in virtually all of its responses to requests for proposals because the prices Bellsouth obtains from manufacturers are subject to change, and Bellsouth cannot guarantee its prices indefinitely. Section 2.22E of the Special Condition section of the Revised Request for Proposal provides: 2.22 Contents of Contract In addition to the terms and conditions referenced above, the Contract between the Lottery and the Contractor shall also include at least the following provisions: * * * E. Subcontracting - The Contractor may enter into written subcontracts for performance of work under the Contract with prior written approval of the Lottery. All subcontractors shall be subject to the approval of the Lottery. The Lottery shall have the continuing right throughout the term of the Contract to disapprove subcontractors if such disapproval would be in the best interest of the Lottery. The Lottery shall have the right to inspect and acquire copies of any of the subcontractor documents executed between the Contractor and the subcontractor. Bellsouth included in its proposal the following statement: 2.22 Contents of Contract * * * E. Subcontracting Bellsouth Response: Read and Agreed. Rejection of Bellsouth's subcontractor(s) shall be reasonably applied and approval not unreasonably withheld. The extent of "copies of any of the subcontractor documents executed between the Contractor and the subcontractor" shall be as mutually agreed and only to the extent required under Florida law. Bellsouth included the final sentence to give notice to the Department that, in the event Bellsouth decided to use subcontractors, it wanted the opportunity to sit down with the Department and discuss the documents that the Department required, as well as the law applicable to their disclosure. Bellsouth was concerned that the Department would require it to provide unlimited access to documents executed between it and a subcontractor because some of the documents might contain proprietary information, such as "specific internal pricing methodologies and profit margins and things like that." 7/ Section 2.22H of the Special Condition section of the Revised Request for Proposal provides: 2.22 Contents of Contract In addition to the terms and conditions referenced above, the Contract between the Lottery and the Contractor shall also include at least the following provisions: * * * Indemnification - Contractor shall act as an independent contractor and not as an employee of the Lottery in the performance of the tasks and duties which are the subject of the Contract. Contractor shall be liable, and agrees to be liable for, and shall indemnify, defend, and hold the Lottery, the state of Florida, its officers and employees harmless from all claims, suits, judgments, or damages (including litigation costs and reasonable attorney's fees) arising from Contractor's performance of the tasks and duties which are the subject of the Contract, including: Claims for the unauthorized use of name or likeness of any person, libel, slander, defamation, disparagement, piracy, plagiarism, unfair competition, idea misappropriation, infringement of copyright title, patent, slogan or other property rights and any invasion of the right of privacy; and Claims arising from contracts between the Contractor and third parties made pursuant to the Contract. Bellsouth included in its proposal the following statement: 2.22 Contents of Contract * * * H. Indemnification Bellsouth Response: Read and Agreed with the following clarifications: (i) to the maximum extent allowed by applicable Florida law, indemnification is reciprocal and applicable only to each parties' negligent or wrongful acts or omissions arising under each others' performance under the contract; and (ii) with respect to the intellectual property aspects of section H.1., Bellsouth substitutes section 24 of the enclosed Master Agreement located in Tab 8 of this response. 8/ Bellsouth included this language for the following reason: The indemnification provision itself was staffed through our corporate attorneys who chose to put this particular language in there. We had just gone through another quasi-state agency bid which eventually ended up having this particular kind of language in it so that the indemnification allowed between the parties would be to the point of complying with Florida law and that's what our attorney felt like was appropriate here with an eye on the fact that the lawyers would sit down at contract award time and negotiate this particular provision. 9/ Bellsouth understood that the reciprocal indemnification provision would require each party to the contract to be responsible for its own misconduct, and Bellsouth anticipated that the precise language of the indemnification clause would be worked out during contract negotiations. Section 3.3A of the Scope of Services section of the Revised Request for Proposal provides: SCOPE OF SERVICES Contractor will be required to provide the following services: Maintenance Maintenance is defined as the service necessary to keep equipment and software in or return the equipment and software to good working order. The term includes, but is not limited to, preventative maintenance, adjustments, and replacement or exchange of parts and equipment necessary to remedy and repair all errors or malfunctions of equipment and software, and provision of all software modifications and improvements provided by the Licensor on a priority basis and provision and installation of all engineering orders/field change orders to upgrade the hardware issued by the manufacturer of the equipment. Contractor will be required to provide services in the cities listed on Attachment B. A guaranteed response time for each site listed on Attachment B will be set forth in the Contract. The Contractor will be required to provide maintenance service for additional items of equipment and software added to the Lottery's inventory, either through the contract resulting from the Request for Proposals or otherwise acquired, for the same unit cost as stated on Attachments C1 - C15 (Equipment and Software Maintenance Cost Proposal Forms) of this RFP. The maintenance period for new items purchased will begin at the end of the product's warranty period and will automatically be added by Contractor to any and all occurrences in the Contractor's maintenance tracking database(s) to avoid any lapse in coverage. (Underlining and italics in the original; deleted provisions omitted.) Bellsouth included in its response the following statement: SCOPE OF SERVICES Maintenance Required Bellsouth Response: Read and Agreed, with clarification. * * * Bellsouth maintains one of the most comprehensive proactive preventive maintenance programs in the industry. Bellsouth agrees to provide maintenance service for additional items of equipment and software added to the Lottery's inventory, as long as the equipment/software is either provided by or certified by Bellsouth (through a separate certification process). Please also see Bellsouth Response to Section 4.6 for specific response times. The Department requested that Bellsouth amplify this statement with a description of its certification process. Bellsouth provided the following explanation: Bellsouth Certification Process Should The Florida Lottery install or have installed equipment supplied by companies other than Bellsouth, Bellsouth will certify the equipment - to be added to any existing maintenance/warranty term - on a Time and Materials basis at Bellsouth's then-current rates. These rates may be different from the rates quoted in the bid response because the time of implementation cannot be pre- determined. Should the Lottery decline Certification, the subject part will not be covered by any extended warranty and the Lottery will be liable for any repair cost associated with installing the non-certified part. In some instances, depending upon the part, the existing warranty provided by Bellsouth (if any) may be adversely affected. Generally, the Certification process involves visual inspection, and after installation, complete system diagnostics may be performed. Routine tests as recommended by the system manufacturer as well as the part manufacturer may be performed. The type and amount of testing, diagnostics, and/or repairs are entirely dependent on the individual part. Bellsouth included its clarification to the provisions of Section 3.3A because it wanted the Department to be aware that it had a process for certifying equipment and software purchases from third parties to make sure that the equipment met Bellsouth's standards and would not have a detrimental effect on any of the other equipment Bellsouth was maintaining for the Department. In addition, Bellsouth was concerned that the Department would buy a piece of equipment that was not listed on Attachments C1 - C15 and expect Bellsouth to maintain it for the same price as it would maintain a similar piece of equipment listed in the attachments. Bellsouth wanted to make sure that the Department understood that the prices it provided for the equipment listed in the attachments was for that equipment only, not for similar equipment. It also wanted the Department to understand, first, that additional pieces of equipment certified by Bellsouth would not be maintained at the bid price but at its then-current prices and, second, that the Department would be liable for the costs of maintenance of any additional equipment which was not certified by Bellsouth. Any additional equipment the Department purchased from Bellsouth would be maintained under the terms of the contract. Section 3.6 of the Scope of Services section of the Revised Request for Proposal provides: 3.6 PRICE PROVISIONS The Contractor must provide all labor, commodities and service required to meet the provisions of the Contract. The price proposal must reflect the total cost for maintenance and support services required by the RFP. This includes but is not limited to maintenance, parts and training as specified in Section 3.3. Unless approved in writing by the Lottery, all maintenance costs must be billed monthly in arrears in accordance with Section 215.422, Florida Stat. The monthly billing shall include charges for only those items actually in the possession of the Lottery for the time period maintenance is being charged. There shall be an annual advanced payment discount option which either meets or exceeds the current earnings rate of the State Treasurer. Pricing for maintenance and support service shall not be increased during the first year of the contract. The Contractor may request one (1) price increase per year for the remaining four (4) years of the contract. If the Contract is renewed, Contractor may request one (1) price increase per renewal period to be negotiated by both parties. The request must be supported by documentation acceptable to the Lottery that demonstrates that the Contractor's costs for providing commodities and/or services have increased by at least the percentage of the requested increase; in no event shall the increase exceed the percentage increase in the CPI during the corresponding period. The third paragraph of Section 3.6 of the original Request for Proposal was deleted in its entirety from the Revised Request for Proposal. Bellsouth included in its proposal the following statement: 3.6 PRICE PROVISIONS Bellsouth Response: Read and Agreed. Please see Tab 1 of the Cost Proposal response submitted with this response. The monthly prices quoted for each site are based upon the products outlined in Attachments C1-C15 only (items currently in the possession of Florida Lottery). Monthly maintenance prices quoted for items still under warranty are listed as information only. Once the initial warranty period is over, the equipment will be added to the Florida Lottery's maintenance agreement and Bellsouth's then-current maintenance prices will apply. Bellsouth offers a 5% (five- percent) annual advanced payment discount option. Bellsouth will adjust maintenance prices, not to exceed the CPI, prior to the beginning of the next renewal term, and based on the existing inventory at a particular location. This adjustment shall be automatic as allowed by the contract and not subject to additional documentary justification. Bellsouth included the final sentence because it wanted to make it [price adjustment process] automatic at the time so that it would be a less administrative burden for both parties. And after working with the government, I know what it is to go back in and do price adjustments to contracts. And it is easier if you do know at the onset what it's going to be and how it's going to be adjusted and just do a carte blanche adjustment at that particular point. We wanted to make it easier for everyone to do that. It was certainly a suggestion or an alternative of how they might do it under price and provisions. We also stated that it would be automatic as allowed by the contract. Assuming, of course, that this was going to be a negotiated contract. 10/ Bellsouth specifically included in its proposal the provision that no "additional documentary justification" would be required to support the automatic price adjustment because it was concerned that the Department might require documents containing confidential or proprietary information to support the price increases: [I]t was unknown at that particular point in time when we answered this what kind of additional documentation they [the Department] would be requiring. They could very well have left quite a bit of the company open to their inspection when it didn't have to deal with this particular contract. Not that we tried to hide that particular information, it was just that I didn't -- the company did see the relevance of it. 11/ The Department's determination that Bellsouth's proposal was non-responsive. In Section 1.2 of the General Information section of the Revised Request for Proposal, "responsive proposal" is defined as "[a] timely submitted proposal which conforms in all material respects to the RFP." Sections 2.1 and 2.2 of the Special Conditions section of the Revised Request for Proposal provide in pertinent part: MANDATORY REQUIREMENTS The Lottery has established certain mandatory requirements which must be included as part of any proposal. The use of the terms "shall," "must" or "will" (except to indicate simple futurity) in this RFP indicates a mandatory requirement or condition. The words "should" or "may" in this RFP indicate desirable attributes or conditions, but are permissive in nature. Deviation from, or omission of, such a desirable feature will not by itself be cause for rejection of a proposal. NON-RESPONSIVE PROPOSALS, NON- RESPONSIBLE RESPONDENTS Proposals which do not meet all material requirements of this RFP or which fail to provide all required information, documents, or materials will be rejected as non- responsive. Material requirements of the RFP are those set forth as mandatory, or without which an adequate analysis and comparison of proposals is impossible, or those which affect the competitiveness of proposals or the cost to the State. The Lottery reserves the right to determine which proposals meet the material requirements of the RFP. Section 2.14 of the Revised Request for Proposal provides in pertinent part: The Contract shall incorporate this RFP, addenda to this RFP, and the Contractor's proposal as an integral part of the Contract, except to the extent that the Contract explicitly provides to the contrary. In the event of a conflict in language among any of the documents reference above, the provisions and requirements of the contract shall govern. In the event that an issue is addressed in the proposal that is not addressed in the RFP, no conflict in language shall be deemed to occur. . . . Nothing in the Revised Request for Proposal instructed those submitting proposals to respond to any of the mandatory requirements of Section 2.22, which specify the contents of the contract, or to any of the mandatory requirements of Section 3, which specify the scope of services to be provided under the contract. The Department generally considers no response to the provisions of these sections, and responses such as "read and understood" or "read and agreed", to indicate acquiescence to the mandatory provisions included in requests for proposals. Section 5.2 of the Revised Request for Proposal describes the evaluation review process as follows: The Secretary shall appoint an Evaluation Committee. All responsive technical proposals submitted by responsible Respondents will be reviewed and scored by the Evaluation Committee. The cost and CMBE proposals will thereafter be publicly opened and evaluated in accordance with the formula set forth in Section 5.4. The issuing Officer shall rank the Respondents based on the total scores of the technical, cost and CMBE proposals. Thereafter, the Lottery shall commence negotiations with the most highly ranked Respondent. Should the Lottery be unable to negotiate with that Respondent the conditions and price that the Florida Lottery deems to be fair, competitive, and reasonable, negotiations with that Respondent shall be terminated. The Florida Lottery shall then undertake negotiations with the second most highly ranked Respondent. Should the Florida Lottery be unable to negotiate a satisfactory Contract with that Respondent, the third and lower ranked Respondents may be selected to participate in this negotiation process or negotiations may be reinstated with the highest ranked Respondent. Negotiations shall continue until an agreement is reached or all proposals are rejected. An award of this RFP does not guarantee execution of a Contract. (Underlining and italics in original.) The "conditions and price" referred to in Section 5.2 of the Revised Request for Proposal include the mandatory requirements of Sections 2.22 and 3. In the course of contract negotiations, the Department can agree to include in the contract provisions different from those contained in these sections of the Revised Request for Proposal. The Department is not, however, required to negotiate or accept alterations to any of the mandatory requirements for the contents of the contract or for the scope of services. In conducting the responsiveness review of Bellsouth's proposal, the Department reviewed only the information contained in the proposal. The Department noted that Bellsouth had included clarifications and modifications to a number of the mandatory requirements of the Revised Request for Proposal, from which it could be inferred that Bellsouth found those mandatory requirements unacceptable. Members of the Department's purchasing office and legal office reviewed the substance of the clarifications and modifications included in Bellsouth's proposal, and some deviations were waived as minor. However, the members of the Department's purchasing office and legal office determined that the clarifications and modifications contained in Sections 2.10, 2.22E, 2.22H, 3.3A, and 3.6 of Bellsouth's proposal constituted material deviations from the mandatory requirements of the Revised Request for Proposal which, by the terms of Section 2.2 of the Revised Request for Proposal, rendered Bellsouth's proposal non-responsive. The Department concluded that Bellsouth's statement in Section 2.10 of its proposal that its pricing proposal would remain valid for only ninety days, with extensions subject to mutual agreement, was a material deviation from the Revised Request for Proposal. Section 2.10 of the Revised Request for Proposal unequivocally states that pricing proposals submitted in response to the Revised Request for Proposal would be "binding until execution of a contract." The Department interprets this requirement as a statement of fact, which would not, under any circumstances, be subject to modification or negotiation. If the Department waived this deviation and accepted Bellsouth's proposal as responsive, Bellsouth could, prior to execution of a contract, unilaterally alter its price proposal. This would not only give Bellsouth a significant advantage over the other companies submitting proposals, it could adversely affect the Department. The Department's legal office reviewed Bellsouth's proposal with respect to the clarifications and modifications included in Sections 2.22E, 2.22H, 3.3A, and 3.6 and concluded that, if the Department waived the deviations from the mandatory requirements in these sections and accepted Bellsouth's proposal as responsive, the Department might be legally bound to accept the clarifications and modifications as part of any contract it might negotiate with Bellsouth. As a consequence, the Department could be precluded from negotiating conditions and prices that it considered "fair, competitive, and reasonable" should Bellsouth's proposal be the most highly ranked and the Department enter into negotiations with Bellsouth. The Department would be adversely affected if it were required to accept Bellsouth's clarifications and modifications to Sections 2.22E, 2.22H, 3.3A, and 3.6: Specifically, Bellsouth would not have an obligation to submit documentation to support price increases; Bellsouth would have the option of refusing to maintain equipment purchased by the Department during the contract period if Bellsouth failed to certify such equipment, with the Department being liable for the cost of maintaining such equipment; Bellsouth would have a more restrictive indemnification obligation than that specified in the Revised Request for Proposal; and Bellsouth could withhold documentation relating to subcontractors to which the Department would be entitled under the mandatory provisions of the Revised Request for Proposal. A document entitled "RE: RFP NO. 98/99-010/G DOCUMENTATION OF CIRCUMSTANCES OF LOTTERY DETERMINATION THAT A THIRD CALL FOR BIDS WOULD NOT BE IN THE BEST INTEREST OF THE LOTTERY," was signed by the Department's Purchasing Supervisor on October 15, 1999. The document provides: THIS DOCUMENT is being created pursuant to Florida Lottery Rule 53ER97-39(5)(f) [Florida Administrative Code] and documents the circumstances of the Lottery's determination that it would not be in the Lottery's best interest to issue a third call for bids in this procurement. The Lottery issued RFP 98/99-007/G for Maintenance of Telecommunications Equipment and Software, and Miscellaneous Data Processing Equipment and Software on February 8, 1999, Of the three responses received to that RFP, none was responsive. Consequently, on March 29, 1999, the Lottery posted its Notice of Responsiveness and Responsibility and Notice of Rejection of All Proposals. As a result of receiving no responsive proposals to the above referenced RFP, the Lottery issued a new revised Request for Proposals, RFP 98/99-010/G for the same services and equipment. This RFP was issued on April 27, 1999. Vendors received a cover sheet with the second RFP titled "Important Notice and Instructions to Respondents" drawing their attention to certain changes in the RFP and encouraging a complete review. Of the responses received to the second RFP, three were not responsive. The Lottery inadvertently overlooked a fourth response, initially, to the revised RFP. While still thinking that only three non-responsive proposals had been received, a Notice of Responsiveness and Responsibility and Notice of Intent to Negotiate and Notice of Contract Award was posted on August 30, 1999. This Notice advised of the Lottery's intended procedure for negotiating and awarding a contract. Subsequent to posting the Notice referred to in paragraph 4, the Lottery discovered that a fourth response had been received under the revised RFP. That response was accordingly reviewed for responsiveness and responsibility using the same criteria as had been applied under the RFP for the first three responses. The fourth response was found to be responsive and responsible. Consequently, the Lottery issued a Revised Notice of Responsiveness and Responsibility and Notice of Intent to Negotiate and Notice of Contract Award under RFP 98/99-010/G. This Notice was dated September 7, 1999. It advised of the Lottery's intent to evaluate the one responsive proposal and, if acceptable, to initiate contract negotiations with the responsive Respondent and, pending the outcome of the negotiations, to award a contract to that Respondent. The foregoing facts and circumstances were all taken into account in making the decision not to issue a third RFP, as provided in Rule 53ER97-39(5)(f). The Lottery considered, for example, that after having issued two Requests for Proposals, with a combined total of seven responses, only one responsive proposal had been received. After having made these two attempts, the Lottery had no reason to believe that additional attempts would prove to be more successful. Further, the Lottery considered the fact that its then current contract for these services was scheduled to expire on September 30, 1999, and that, therefore, there was a need to reach a successor agreement on an expedited basis, if possible. Based on all the foregoing circumstances, it was determined to be in the Lottery's best interest to proceed without issuing yet another Request for Proposal. Although it was drafted over a month after the Department made its decision, this document accurately reflects the factors taken into consideration by the Department in deciding to initiate contract negotiations with GTE. Summary The evidence presented by Bellsouth is not sufficient to establish with the requisite degree of certainty that the Department's determination that Bellsouth's proposal was non- responsive was arbitrary or capricious. Rather, the evidence establishes that Bellsouth chose to include in its proposal clarifications and modifications to mandatory requirements of the Revised Request for Proposal even though those who submitted proposals were advised in Section 2.14 of the Revised Request for Proposal that a proposal would be rejected as non-responsive if it failed to "meet all material requirements of this RFP," where "material requirements" are defined as "those set forth as mandatory." In the absence of anything in the proposal to indicate that Bellsouth intended to put forward these clarifications and modifications simply as negotiating points, the Department could reasonably interpret Bellsouth's responses as conveying its refusal to accept the mandatory requirements of the Revised Request for Proposal. The evidence further establishes that the Department evaluated Bellsouth's proposal during the responsiveness review and determined that, if it were to accept Bellsouth's proposal as responsive, the clarifications and modifications included in Bellsouth's responses to Sections 2.10, 2.22E, 2.22H, 3.3A, and 3.6 could adversely impact the Department and inhibit its ability to negotiate the best terms and conditions were it to enter contract negotiations with Bellsouth. The evidence presented by Bellsouth is not sufficient to establish that the Department reached this conclusion without considering the factors relevant to a determination of responsiveness or that the Department's interpretation of the provisions of the Revised Request for Proposal was irrational or unsupported by facts or logic. Similarly, the evidence submitted by Bellsouth is not sufficient to establish that the Department's decision to initiate contract negotiations with GTE rather than to solicit proposals for a third time was inconsistent with its governing statutes, rules, or the provisions of the Revised Request for Proposal. The Department's contract with Bellsouth for the maintenance of its telecommunications equipment has twice been extended. The Department has twice solicited proposals and received only one proposal that it determined to be responsive. Under these circumstances, it is not unreasonable for the Department to conclude that it would be in its best interests to proceed with contract negotiations with the company submitting the only responsive proposal to the Revised Request for Proposal. The Department is not bound to enter into a contract with GTE unless the Department is able to negotiate the conditions and price that it considers "fair, competitive, and reasonable." Section 5.2, Revised Request for Proposal.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of the Lottery enter a final order Denying the bid protest of Bellsouth Communication Systems, Inc.; Dismissing the Amended Formal Written Protest and Petition for Formal Administrative Hearing filed by Bellsouth Communication Systems, Inc. ,and Denying Bellsouth's request for an award of attorneys' fees and costs. DONE AND ENTERED this 13th day of December, 1999, in Tallahassee, Leon County, Florida. PATRICIA HART MALONO 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 13th day of December, 1999.
