The Issue Whether Respondent's action to reject all bids submitted in response to ITB 13-803-206, relating to the removal and replacement of the public address system at Pinellas Park High School, is illegal, arbitrary, dishonest, or fraudulent, as alleged in the Amended Petition.
Findings Of Fact On March 4, 2013, ITB was issued by Respondent for work related to the removal and replacement of the public address system at Pinellas Park High School in Largo, Florida. According to the Special Conditions portions of the ITB, the "scope" of the project is to "[p]rovide labor and materials to remove and replace the auditorium sound system as per plans and specifications by Keane Acoustics, Inc." The ITB was assigned bid number 13-803-206 by Respondent. Bids for the contract were to be submitted to Respondent by 3:00 p.m., April 11, 2013. Bids for the project were timely received from two companies. The first company, Becker Communications, Inc., d/b/a BCI Integrated Solutions (BCI), submitted a bid in the amount of $130,756.66. Petitioner submitted a bid in the amount of $116,000.00. There is a section of the ITB titled "special conditions." The special conditions provide in part that "[t]his is an ALL or NONE bid [and] [t]he entire contract shall be awarded to the lowest responsive and responsible bidder meeting the specifications." On April 22, 2013, Respondent posted a notice advising of its intent to award the contract to BCI. Although Petitioner submitted the lowest bid, Respondent determined that Petitioner's bid was non-responsive because the bid failed to include "proof of 5 years [of] experience with this type of work" as required by the special conditions of the ITB. Petitioner interpreted this provision as requiring five years of experience as a certain type of general contractor, which Petitioner had, whereas Respondent intended for the ITB to convey that five years of experience related to the removal and installation of audio equipment was the desired type of experience. Petitioner's failure to respond to the ITB in the manner contemplated by Respondent was a technical, nonmaterial irregularity.1/ Numbered paragraph six of the General Terms & Conditions of the ITB provides in part that Respondent "expressly reserves the right to reject any bid proposal if it determines that the . . . experience of the bidder, compared to work proposed, justifies such rejection." On April 24, 2013, Petitioner provided to Respondent a notice advising of its intent to protest the award of the contract to BCI. On May 3, 2013, Petitioner filed its formal protest challenging Respondent's intended action of awarding the contract to BCI. Petitioner's formal protest enumerated several grounds. Of particular concern to Respondent were Petitioner's assertions that the ITB was "inconsistent with Florida law since bidders [were] not required to submit a List of Subcontractors by the time of opening bid"2/ and that provisions of the ITB were ambiguous with respect to the type of experience required to qualify for bidding.3/ Prior to receiving Petitioner's protest, Respondent was unaware of the fact that its bid specifications governing the disclosure of subcontractors did not comply with Florida law. Upon consideration of Petitioner's grounds for protest, Respondent determined that the ITB, as alleged by Petitioner, failed to comply with section 255.0515, Florida Statutes (2012),4/ and that there was ambiguity in the language regarding the experience requirements for bidders.5/ Respondent refers to the problems with the ITB as "procedural errors." These procedural errors will be referred to herein as "irregularities" as this term is more in keeping with the nomenclature of this area of jurisprudence. Given the ITB's irregularities, Respondent decided to reject all bids. In explaining Respondent's rationale for rejecting all bids, Michael Hewett, Respondent's Director of Maintenance,6/ testified that "the [irregularities] were such that [they] potentially could give an unfair advantage to one bidder over another." As for the issue related to the requirements of section 255.0515, Mr. Hewett explained that neither of the two bidders submitted a listing of subcontractors. It would have been competitively disadvantageous to BCI if Petitioner were able to successfully argue that BCI should be disqualified for failing to provide a listing of subcontractors when Petitioner also failed to provide such listing. During the same approximate time that the ITB in the present case was issued, Respondent issued an ITB for nearly identical work to be performed at one of its other facilities (Palm Harbor). In all material respects, the Palm Harbor ITB was identical to the one at issue herein. Unlike the present case, BCI was the sole bidder for the Palm Harbor project and this distinguishing fact reasonably explains why Respondent did not reject BCI's bid for the Palm Harbor Project even though the ITB therein was plagued with the same irregularities found in the present case.7/
Recommendation Upon consideration of the above findings of fact and conclusions of law, it is RECOMMENDED: That the Pinellas County School Board enter a final order finding that the rejection of all bids submitted in response to ITB 13-803-206 was not illegal, arbitrary, dishonest, or fraudulent, and dismissing Tamco Electric, Inc.'s instant protest. DONE AND ENTERED this 16th day of October, 2013, in Tallahassee, Leon County, Florida. S LINZIE F. BOGAN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 16th day of October, 2013.
The Issue Whether the Department of Management Services acted arbitrarily, fraudulently, illegally or dishonestly in rejecting the bid proposed by Petitioner Stimsonite Corporation; and Whether the Department of Management Services' proposed award of a contract to Minnesota Mining and Manufacturing, Inc. was arbitrary, illegal, fraudulent or dishonest.
Findings Of Fact On or about October 30, 1995, DMS mailed to interested vendors ITB No. 20-550-590-A for Sign Material, Reflective Sheeting & Related Materials. Stimsonite and 3M were among the vendors who received copies of the ITB. After receiving the ITB, no interested vendor, including Stimsonite and 3M, requested that DMS clarify any of the ITB's general or special terms and conditions. Similarly, no one timely filed any protest to challenge any ITB terms or conditions. On or about December 28, 1995, DMS opened the bids submitted in response to the ITB. Thereafter, DMS evaluated the bids and determined which were responsive to the ITB requirements. Stimsonite and 3M were the only vendors to submit bid prices for ITB Item Nos. 13, 15, and 22, which pertain to reflective sheeting. DMS's bid tabulations reflect that 3M and Stimsonite offered the following bid prices, per square foot, for reflective sheeting under ITB Item Nos. 13, 15, and 22: Item No. 13 15 22 Stimsonite $3.5489 $3.2199 $3.2199 3M $3.588 $3.25 $3.25 On or about January 23, 1996, DMS posted the bid tabulations. DMS's bid tabulations specify an NAS (not as specified) code indicating reasons why it rejected certain bids. Stimsonite's bids on ITB Item Nos. 13, 15, and 22 were rejected as non-responsive with an indication of NAS Code 1. NAS Code 1 provides: "Vendor did not submit diskette as required by the bid." Stimsonite admittedly did not include a computer diskette with its 1995 bid. Because of the absence of the diskette, the Stimsonite bid had neither a price list nor a material list. No responding vendor, except 3M, included a computer diskette in response to the 1995 ITB. l3. DMS consistently rejected all bids submitted in response to its 1995 ITB which failed to include the required computer diskette(s). In evaluating the 1995 bids, DMS reviewed the material list information that 3M submitted with its bid in hard copy and on computer diskette. DMS posted its intent to award the bid to the only fully responsive bidder, 3M. Shortly after DMS posted the 1995 bid tabulations with its intent to award to 3M as the only responsive bidder, Stimsonite urged DMS to accept a materials list that Stimsonite had prepared on computer diskette. DMS refused to accept this diskette, which Stimsonite was offering nearly a month after the 1995 bid opening date. DMS rejected Stimsonite's late offering of the diskette because it was offered after bid opening, because it was offered after evaluation of bids, and because DMS's intent to award already had been posted. However, the greater weight of the evidence is that Stimsonite's after-offered diskette would not have met the 1995 ITB specifications even if it had been submitted simultaneously with Stimsonite's bid response. The after-offered diskette failed to offer the required size widths of reflective sheeting or the accessory items used with the sheeting such as process colors, inks, clears, and thinners. Stimsonite timely challenged the rejection of its 1995 bid as non- responsive and timely challenged DMS's intent to award the contract to 3M. Stimsonite contended, with regard to its failure to timely submit a conforming diskette, that the clear language of the 1995 ITB did not require the submission of a diskette for the items Stimsonite had chosen to bid on, and that submission of such a diskette could legitimately be made only by the successful bidder after bid opening. The 1995 ITB, which is at issue in this proceeding, contains the following Special Conditions directly related to a material list on Page 4: FORMAT FOR SUBMISSION OF BID On all bids which require any of the following documents: Manufacturer's or Dealer's Published Price Lists, Authorized Dealer's List Authorized Service Center Locations. Bidder shall provide these documents, with his bid, in a letter quality text response and with computer diskette media. The format for the computer diskette media shall be: WordPerfect 5.1 file format using an IBM Compatible Personal Computer, On 8-1/2" x 11" paper with portrait orientation, Margins: Left: minimum .3 inch; Right: minimum .8 inch, Top & Bottom: minimum .5 inch, Font: Courier 10 cpi, 3.5 or 5.25 inch diskette media, No landscape, No Tables or Columns, No Line Draw, No pictures, No strike- throughs and No Graphics allowed. These documents shall be submitted in hard copy as well as on 3.5 or 5.25 inch diskette media. [Failure to comply with this requirement will result in disqualification of your bid.] [Emphasis supplied] MATERIAL LIST A material list shall be provided on diskette formatted as specified in the Special Cond- ition "FORMAT FOR SUBMISSION OF BID" along with a print out of same for each item bid. The information must include product number for color, and size specified sheeting under the DMS thirteen (13) digit commodity number. If prices are included on the materials list they must be contract prices. [This list may be included on the same diskette as "Format for Submission of Bid" listed above.] (Emphasis supplied) Some other provisions of the 1995 ITB which affect the issues in this case are as follows: General Condition 4(b) on page 1 of the ITB specifies: ELIGIBLE USERS: Under Florida Law use of State contracts shall be available to political sub- divisions (county, local county board of public instruction, municipal or other local public agency or authority) and State Univer- sities, which may desire to purchase under the terms and conditions of the contract. General Condition 5 provides: ADDITIONAL TERMS AND CONDITIONS: No addition- al terms and conditions included with the bid response shall be evaluated or considered and any and all such additional terms and condi- tions shall have no force and effect and are inapplicable to this bid. If submitted either purposely through intent or design or inadver- tently appearing separately in transmittal letters, specifications, literature, price lists or warranties, it is understood and agreed the general and special conditions in this bid solicitation are the only conditions applicable to this bid and the bidder's autho- rized signature affixed to the bidder acknow- ledgment form attests to this. General Condition 7 states: INTERPRETATIONS/DISPUTES: Any questions con- cerning conditions and specifications shall be directed in writing to this office for receipt no later than (10) days prior to the bid opening. Inquiries must reference the date of the bid opening and the bid number. No interpretation shall be considered binding unless provided in writing by the State of Florida in response to requests in full comp- liance with this provision. . . General Condition 15 states: LEGAL REQUIREMENTS: Applicable provisions of all Federal, State, county and local laws, and of all ordinances, rules and regulations shall govern development, submittal and evalua- tion of all bids received in response hereto and shall govern any and all claims and dis- putes which may arise between person(s) hereto and the State of Florida, by and through its officers, employees and authorized represent- atives, or any other person natural or other- wise; and lack of knowledge thereof shall not constitute a legal defense against the effect thereof. General Condition 26 provides that: [THE SUCCESSFUL BIDDER(S) MUST PROVIDE: a copy of any product literature and price list, in excellent quality black image on white paper.] [Emphasis supplied] On the bottom of page 2, after the list of General Conditions, there is a note which states: [ANY AND ALL CONDITIONS AND SPECIFICATIONS ATTACHED HERETO WHICH VARY FROM THESE GENERAL CONDITIONS SHALL HAVE PRECEDENCE.] THIS SHEET AND THE ACCOMPANYING BID CONSTITUTE AN OFFER FROM THE BIDDER. IF ANY OR ALL PARTS OF THE BID ARE ACCEPTED BY THE STATE OF FLORIDA DEPARTMENT OF MANAGEMENT SERVICES, AN AUTHORIZED REPRESENTATIVE OF THE DIVISION OF PURCHASING OF THE DEPARTMENT OF MANAGEMENT SERVICES, SHALL AFFIX HIS SIGNATURE HERETO, AND THIS SHALL THEN CONSTITUTE THE WRITTEN AGREEMENT BETWEEN PARTIES. THE CONDITIONS OF THIS FORM BECOME A PART OF THE WRITTEN AGREEMENT BETWEEN THE PARTIES. [Emphasis supplied] Page 2A of the ITB contains a Vendor Bid Preparation Checklist. No. 16 thereof reminds all bidders to review the FORMAT FOR SUBMISSION OF BID for compliance with bid requirements. After the list of General Conditions, the Special Conditions begin on page 3 of the ITB. Among the Special Conditions of note in addition to the FORMAT FOR SUBMISSION OF BID and MATERIAL LIST, stated above, are: PURPOSE: ...to establish a 12 month contract by all State of Florida agencies and other eligible users ... TECHNICAL DOCUMENTATION: ... When technical documentation is required by this ITB, its pur- pose is to demonstrate compliance of the pro- duct bid with applicable technical require- ments of the ITB and to allow a technical evaluation of the product. [Failure to provide the required technical documentation with the bid submittal shall make the bidder nonre- sponsive], unless the Division of Purchasing, in its sole discretion and in the best inte- rest of the State, determines the accept- ability of the products offered through technical documentation available within the Division [as of the date and time of bid opening]. ... [Emphasis supplied] ACCESSORIES: [Inks, colors, clears, and thinners, required for use with non-perfor- ated commodities shall be included in the price per square foot bid price.] [Emphasis supplied] BALANCE OF LINE: [The bidder shall bid a balance of line which will include options and accessories at a fixed discount. Only vendors awarded specified sheeting items will be eligible for a balance of line award. Items in the balance of line which are dupli- cative of those specified will be deleted. The balance of line price list must be in effect on the date and time of the bid opening]. [Emphasis supplied] The Specification Summary and Bid Price Sheets for bidding items 13, 15, and 22 of the ITB are found on pages 25, 26, and 27 of the ITB and were as follows: SPECIFICATION SUMMARY AND PRICE SHEET COMMODITY NUMBER AND DESCRIPTION NET DELIVERED PRICE 550-590-350-0100 Sheeting, not perforated, reflective, Type IIIA, or Type IIIC sizes 1" through 48" by 50 yds, with a precoated pressure sensitive adhesive backing (Class I). Primer Not Required. Sheeting (Both Types) shall be available in no less than the following colors: blue, brown, green, yellow, and silver-white. Sheeting Manufacturer: Product No./Series: FDOT Qualified Products List Approval No. $ PER SQ. FT. (13 [Inks, colors, clears and thinners for use with non-preforated commodities shall be in- cluded in the per square foot price bid]. [Emphasis supplied] VENDOR: SPECIFICATIONS SUMMARY AND PRICE SHEET COMMOD- ITY NUMBER AND DESCRIPTION NET DELIVERED PRICE 550-590-350-0120 Sheeting, not perforated, reflective, Type IIIA, or Type IIIC sizes 1" through 48" by 50 yds, with a precoated pressure sensitive adhesive backing (Class I). Primer Not Required. Sheeting (Both Types) shall be available in no less than the following color: orange Sheeting Manufacturer: Product No./Series: FDOT Qualified Products List Approval No. $ PER SQ. FT. (15 [Inks, colors, clears and thinners for use with non-preforated commodities shall be included in the per square foot price bid.] [Emphasis supplied] VENDOR: SPECIFICATION SUMMARY AND PRICE SHEET COMMODITY NUMBER AND DESCRIPTION NET DELIVERED PRICE 550-590-760-2600 Reflective sheeting, construction barricade sheeting, Type IIA, or IIIA, or IIIB, or IIIC pressure sensitive adhesive backing (Class I). 4" or 6" orange and white or orange and silver strips running diagonally across the sheeting at a 45 degree angle, size 12", 24" and 36" by 50 yds. Sheeting Manufacturer: Product No./Series: FDOT Qualified Products List Approval No. $ PER SQ. FT. (22 [Inks, colors, clears and thinners for use with non-preforated commodities shall be in- cluded in the per square foot price bid.] [Emphasis supplied] VENDOR: After the item-by-item specifications, the ITB provides a page (page 39) of specification summary and price sheet for bidding the "balance of line discount offered for directly related sign material, not specified on the Bid Price Sheet." That format requires that the bidder state a fixed percentage discount from the price list for balance of line items. "Balance of Line" as used by DMS in the ITB refers to any and all accessories that might be used with the individual Items that are bid. Stimsonite's bid supervisor claimed that Stimsonite's failure to submit a diskette containing a material list was a reasonable, and indeed a clear and unambiguous, reading of the 1995 ITB. He had read the ITB to provide that the three categories of list (a manufacturer's or dealer's published price list, authorized dealer list, or authorized service center location list) which were named under the Special Condition, FORMAT FOR SUBMISSION OF BID, on page 4 were required to be submitted on a diskette with the bid, but he also considered that the diskette was not required for the three items that Stimsonite bid upon (Items 13, 15, and 22 on pages 25, 26, and 27 at Finding of Fact 20 supra) because none of the categories of list under FORMAT were required specifically within those Item No. specifications on the subsequent specification pages. Apparently due to the admonition at the bottom of ITB page 2 of the General Conditions [see Finding of Fact 19(f)], he assumed that the Item No. instructions on the specifications and price summary sheets on pages 25, 26, and 27 took precedence over, i.e. supplanted, the Special Condition MATERIAL LIST paragraph requiring a material list for every item in both hard copy and on diskette which also included the requirement of including product numbers for color, size, and DMS commodity numbers. Stimsonite's bid supervisor also asserted that because the Special Condition MATERIAL LIST paragraph and the Item No. specifications of pages 25, 26, and 27 did not specifically reiterate that the material list diskette must be submitted with the bid, the material list diskette legitimately could be submitted after the bid award, as was attempted by Stimsonite. He ostensibly interpreted General Condition 26, applicable to successful bidders, to mean that only successful bidders must provide a price list and a material list. Accordingly, Stimsonite further argued in the alternative that even if the ITB could be construed to require submission of a material list on diskette, Stimsonite's failure to submit the diskette to DMS with the rest of its bid response was only a minor irregularity unworthy of being ruled unresponsive because DMS had no substantive need for the information on the material list diskette until it decided which bidder was going to be the successful bidder. The bid supervisor's perception that the information on the diskette was not needed for bid evaluation purposes was another reason he ostensibly did not timely submit a diskette. Stimsonite has not asserted that late submission was a waiveable irregularity. 1/ In fact and to the contrary, the diskette is used by DMS to evaluate bids for responsiveness. This evaluation technique was introduced in 1994. It allows the reviewer, in this case, Ms. Boynton, to use the material list on the diskette to determine if each bidder has actually bid everything DMS asked for in the item by item specifications. Without a diskette, the reviewer cannot confirm that a bid matches the ITB. DMS uses the bidder's material list on diskette to confirm that the bidder currently manufactures the full range of sheeting widths and sizes (1 inch through 48 inches by 50 yards), as the ITB requires, which is a nonstandard range in the reflective sheeting industry. Additionally, DMS uses the material list diskette to confirm that the bidder proposes to make the full range of required sheeting widths and sizes available to state and local government purchasers. (See General Condition (4)(b) ELIGIBLE USERS and Special Condition PURPOSE in the ITB) DMS also uses the material list diskette to ensure that the bidder will make the required range of inks, clears, colors, and thinners available at the bid price. After the bid has been awarded, Ms. Boynton also uses the diskette for dissemination to contract users for ordering purposes on the electronic contract system. The diskette system saves DMS the time and cost of wordprocessing data from hard copy and avoids transcription erors. This was one of the purposes behind DMS' decision to start requiring a diskette in 1994. It comports with General Condition 4(b) ELIGIBLE USERS and Special Conditions PURPOSE. The Stimsonite bid supervisor did not have a manufacturer's price list and was not offering any accessories other than those inks, etc. covered under the Special Condition ACCESSORIES paragraph and those stated on pages 25, 26, and 27. Therefore, he did not read the Special Condition BALANCE OF LINE paragraph saying duplicates listed on page 39 for balance of line would be disregarded by DMS as an indicator that DMS expected any balance of line bids to include more than just the inks, etc. listed under ACCESSORIES and on pages 25, 26, and 27. Because he could not conceive of any balance of line more extensive than the inks, etc. which seemed to him to be excluded by the language on the specifications summary and price sheets for each Item No. (ITB pages 25, 26, and 27) and the balance of line summary and price sheet (page 39), and because Stimsonite was offering these inks, etc. within the price per square foot of sheeting at no extra charge on pages 25, 26, and 27, Stimsonite's bid supervisor felt that the diskette was not needed to evaluate these prices. Therefore, when he showed a balance of line on the balance of line summary sheet (ITB page 39) he showed no discount and he submitted no material list or price list on diskette. The ITB required a discount if a balance of line was offered under Special Condition BALANCE OF LINE. According to DMS employees, a price list was only necessary if a balance of line was bid. If a balance of line was bid, then a price list was necessary. The result of Stimsonite's interpretation of the 1995 ITB was that Stimsonite submitted a bid without a diskette which therefore contained neither a price list nor a material list. The hard copy offered a balance of line with no discount from a price list. Responsiveness in bidding Item Nos 13, 15, and 22 in 1995 did not require that vendors submit an authorized dealer's list or service center location list. The ITB used the language "shall submit" with regard to bidding a balance of line, but according to Ms. Boynton, the evaluator, and Mr. Barker, Chief of DMS's Bureau of Procurement, submission of a balance of line was not mandatory. Ms. Boynton speculated that if DMS did not get a balance of line bid from a responding bidder, DMS "might possibly find it was a minor irregularity." Clearly, the ITB provided that if there were any duplications on the balance of line offering, the agency could unilaterally delete them. However, if a vendor did bid a balance of line, DMS would need a price list, since with a balance of line and no price list, there was no way to evaluate the bid because DMS then could not calculate what the percentage reduction would be based upon. Therefore, under this situation in 1995, Stimsonite's balance of line bid with no price list on diskette was rejected as nonresponsive. 2/ The greater weight of the credible evidence, particularly but not exclusively that of Ms. Boynton, Mr. Barker, and Mr. Johnson, is that allowing any bidder to turn in the diskette after bid opening and award would give that bidder the advantage of changing the balance of line prices. If permitted to submit the material list after award, the bidder could elect to offer only one size which would impose an additional cost on the contract users to provide labor and expertise to cut to size, thus lowering the bidder's cost. Under a scenario which required only successful bidders to submit a diskette, DMS would not have the opportunity to reject the bid if the information on the diskette was nonconforming to the bid specifications. The bidder who delayed or never submitted a diskette also could exclude cities and counties from the cost-saving electronic contract system and could take telephone orders from the Department of Transportation, one of the agencies eligible to tie-in to DMS's electronic contract. Requiring a diskette only after award might permit the successful bidder to limit the sizes and colors offered. By not submitting a diskette at all, even late, a bidder could even disqualify its bid and back out of the contract if that bidder unilaterally decided its bid was too low or if the price of raw materials increased. Experience with successful bidders who ultimately failed to submit a material list at all was another reason for DMS's decision to start requiring a diskette in 1994. Any of the foregoing situations creates an advantage to the bidder who files a diskette late or the bidder who never files a diskette. Any of the foregoing situations increases costs to the state agency and contract users. Factually, this is a material irregularity. Stimsonite alleged that 3M was unresponsive because its bid transmittal letter contained a paragraph on terms and conditions of sale and warranties. However, it appears that the warranty language in 3M's transmittal letter actually enhances its bid. Also, it is standard practice for DMS to ignore these letters pursuant to ITB General Condition 5, which states that transmittal letter variances are of no force and effect. Factually, since 3M's letter cannot be relied upon by 3M either to enhance or diminish its bid, and since all such letters are disregarded in the bid evaluation/tabulation, the transmittal letter is a minor, nondisqualifying irregularity as to the 3M bid. Stimsonite asserted that the 3M diskette was not responsive to the ITB specifications. There is no dispute that the diskette 3M submitted was in the wrong font. However, since font size can be customized by a "click" on a computer mouse, and since Ms. Boynton was able to use 3M's diskette for the purposes intended by the ITB specifications, the irregular font size of 3M's diskette is found factually to constitute an immaterial flaw not worthy of declaring 3M's bid nonresponsive. Finally, Stimsonite contended that because the 3M bid failed to answer an ITB question that requested information about why a vendor's price list was item by item higher or lower than previous years, the entire 3M bid was unresponsive. This contention was not acknowledged as viable by the agency witnesses. DMS, like 3M, viewed this question as only information gathering for some cost trend analysis by the agency apart from bid evaluation. The information requested could not alter the bid price offered by 3M and is not necessary to DMS's evaluation of its bid or comparison of its bid with other bids. It is a flaw systematically ignored by the agency in bid evaluation. There was no evidence that any bid has ever been rejected for such a flaw. The absence of such information does not affect the cost to the agency nor does its absence provide an advantage to 3M. Factually, it is a minor irregularity.
Recommendation Upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Department of Management Services enter a final order ratifying its award of ITB 20-550-590-A Item Nos. 13, 15, and 22 to Minnesota Mining and Manufacturing, Inc. and dismissing the bid protest Petition of Stimsonite. RECOMMENDED this 14th day of June, 1996, at Tallahassee, Florida. ELLA JANE P. DAVIS, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of June, 1996.
Findings Of Fact Based upon the oral and documentary evidence adduced at the final hearing and the entire record in this proceeding, the following findings of fact are made. On October 11, 1991, DOT's District Four office let out for bid district contracts E4551 and E4554. Contract E4551 calls for the mechanical sweeping of Interstate 95 in Broward County. Contract E4554 calls for the mechanical sweeping of Interstate 95 in Palm Beach County. At a mandatory pre-bid conference, the bidders for the Contracts were provided with a packet which included a Notice to Contractors and Standard Specifications. The Notice to Contractors is a four page document which is specific to each contract. The Standard Specifications are the same for all district contracts. Both the Notice to Contractors and the Standard Specifications to the bidders required bidders to submit proof of the ability to acquire a performance and payment bond in an amount equal to the contract bid price. Bidders could satisfy this requirement by submitting a bid guarantee of 5% of the bid, submitting a notarized letter of intent from a bonding company or by providing a Certificate of Qualification issued by Respondent. The Notice to Contractors for both Contracts provided as follows: Failure to provide the following with each bid proposal will result in rejection of the contractor's bid.... District contracts of $150,000 or less require the following as proof of ability to acquire a performance and payment bond: A notarized letter from a bonding company, bank or other financial institution stating that they intend to issue a performance and payment bond in the amount of your bid, should your firm be awarded the project; in lieu of a notarized letter the following may be substituted: (1) a bid guarantee of five percent (5%); or (2) a copy of the Contractor's Certificate of Qualification issued by the Department. (No emphasis added) Similarly, the first Standard Specification provides: 1.1 Bidders (contractors) A contractor shall be eligible to bid on this contract if:... (2) Proof of ability to acquire a performance and payment bond in an amount equal to the contract bid price is provided to the District Contract Administrator with the bid proposal. As such proof all bids must be accompanied by a notarized letter from a bonding company, bank or other financial institution stating that they intend to issue a bond in the amount of your bid, should your firm be awarded the project.... The requirement to submit proof of the ability to acquire a performance and payment bond has been imposed on the Districts by DOT Directive 375-00-001-a (hereinafter the "Directive".) This Directive was in place at all times material to this proceeding. Section 3.2.2 of the Directive provides: A contractor shall be eligible to bid if: ...Proof of ability to acquire a performance and payment bond in an amount equal to the contract bid price is provided to the minicontract administrator with the bid proposal. As such proof all bids must be accompanied by a notarized letter from a bonding company, bank or other financial institution stating that they intend to issue a bond in the amount of the bid, should the firm be awarded the project. A bid guaranty as specified above may substitute as proof of ability to obtain a performance and payment bond. This applies to bids amount over or under $150,000. A copy of the Contractor's Certificate of Qualification issued by the Department may be substituted in lieu of a notarized letter for those contracts not requiring a bid bond. The bids for the Contracts were opened on October 11, 1991 in Fort Lauderdale, Florida. Bids were received from four bidders: CPM, SCA, Florida Sweeping, Inc. and P. F. Gomez Construction Co., Inc. In its bid proposals, SCA included executed bid bonds in an amount sufficient to cover the amount of each bid proposal. Each bid bond cost $55.00. CPM did not submit executed bid bonds with its proposals. Instead, CPM submitted letters from Mark A. Latini dated September 25, 1991. Those letters were provided on the stationery of Bonina-McCutchen-Bradshaw, Insurance and indicate that Mr. Latini is the "bond manager." The letters provide as follows: Amwest Surety Insurance Company is the surety for the above-referenced contractor and stands ready to provide the necessary performance and payment bond for the referenced bid should Certified Property Maintenance, Inc., be low and awarded the referenced contract. All bonds are subject to normal underwriting requirements at the time of the bond request.... The letters submitted by CPM with its bid proposals were not notarized and were not binding obligations to issue bonds since they were conditioned upon meeting certain unspecified underwriting requirements at the time of the bond requests. The submitted bids were reviewed by the District Four Contractual Services Office. The bids submitted by CPM were the lowest for each contract. Its bid for Contract No. E4551 was $109,343.97. Its bid for Contract No. E4554 was $30,312.63. SCA's bids for the Contracts were $139,442.14 and $44,100.00, respectively. During the initial review of the bid proposals, the Contractual Services Office rejected CPM's bids for failure to have its bonding company "letters of intent" notarized. In addition, the bid proposals submitted by Florida Sweeping, Inc. were rejected for failure to note a required addendum and the bids submitted by P. F. Gomez Construction Co., Inc. were rejected because the "proposal bond was not of proper character". On October 18, 1991, DOT posted its Notice of Intent to Award the Contracts to SCA, the only bidder for the Contracts whose proposals had not been rejected. CPM timely filed protests of the proposed awards to SCA on October 22, 1991. The protests filed by CPM argued that its bids should not have been invalidated simply because the bonding company's letters did not include notary seals. At this point, the sole basis for the disqualification of CPM's bids was the failure to have the bonding company letters notarized. Respondent contends that, except for the absence of the notary seal, the letters submitted by CPM met the requirements of the Notice to Contractor and the Standard Specifications cited above. However, those letters are equivocal and do not evidence a binding commitment to issue a bond upon award of the contract. The DOT officials admit that they do not know what "normal underwriting requirements" would or could be required by CPM's bonding company. This conditional language makes it uncertain whether CPM could obtain the necessary bond. Therefore, it is concluded that those letters do not meet the requirements of the Notice to Contractors, the Standard Specifications or the Directive. A hearing on CPM's protest was not held. CPM's president, Raymond Hanousek, who prepared CPM's bid and attended the pre-bid meeting, called DOT's District office the day the bids were opened and was informed that his company's bid was low, but was rejected because its bond commitment letter was not notarized. Mr. Hanousek spoke with Joseph Yesbeck, the District's Director of Planning and Programs. After their conversation, Mr. Yesbeck reviewed the file and met with Teresa Martin, the District's contract administrator for construction and maintenance contracts, and other members of the contracting staff. Ms. Martin explained why CPM's bid had been disqualified, and the matter was thereafter discussed with the District and Department attorneys. After reviewing the situation, Mr. Yesbeck determined that the failure to submit notarized letters should be considered a non-material deviation and the bids submitted by CPM should be accepted and considered the low responsive bids. Mr. Yesbeck concluded that the absence of the notary seal did not give any competitive advantage to CPM and that defects of this nature are routinely allowed to be cured. Therefore, he reversed the contract administrator's decision to disqualify CPM on both Contracts. The District secretary concurred in the decision reached by Mr. Yesbeck to repost the award of the Contracts. Mr. Yesbeck prepared a joint letter of reposting which removed CPM's disqualification and declared CPM to be the low bidder for both Contracts. At the time Mr. Yesbeck made his decision, he had not reviewed the Directive from the Assistant Secretary's office stating that there must be a notarized letter showing proof of ability to obtain a performance and payment bond. Mr. Yesbeck did not review the Directive until his deposition was taken one week prior to the hearing in this case. According to Ms. Martin, the option to provide a notarized letter from a bonding company as an alternative to the posting of a 5% bid guarantee or obtaining prequalification was designed to promote participation in state contracting by small business and minority business enterprise applicants. While DOT was apparently trying to make it easier and cheaper for companies to bid by not requiring a bond to be posted, the DOT Directive and the bid documents still clearly required unconditional proof that a bid bond would be issued if the contract was awarded to the bidder. CPM was not prequalified nor did it post a bond. Thus, in order to meet the requirements of the Notice to Contractors and the Standard Specifications, CPM's only option was to submit a notarized letter showing proof of ability to obtain a performance and payment bond. DOT was never provided with any proof that CPM had been prequalified by the bonding company for a bond and/or that a bond would unconditionally be issued if CPM was awarded the Contracts. Because the letters stated they were "subject to normal underwriting requirements at the time of the bond request", there was some possibility CPM would not be able to obtain a bond. Such a condition was not permissible under the bid doucments. The decision to accept CPM's bid was contrary to the DOT Directive, the Notice to Contractors and the bid specifications which require that a bidder demonstrate proof of ability to obtain a performance and payment bond. Consequently, it is concluded that DOT's decision to accept the conditional, unnotarized letters submitted by CPM was arbitrary and capricious. There is some indication that other DOT Districts have, on occasion, waived the notarization requirement for the bond letter. However, it is not clear whether the language in the bid documents was the same or similar in those cases and/or whether the bond letters were conditional. In the past, whenever District Four has gotten a bid without a notarized bond letter, the bid was rejected. Apparently, there has never been a protest based on such a denial in District Four. Under Section 337.18, DOT does not need to require notarized, unconditional bond letters on contracts under $150,000. Indeed, there was a suggestion that some DOT Districts have dropped the requirement for certain contracts under $150,000. However, the bid documents in this case clearly required some proof that the bidder could acquire a performance and payment bond upon award of the Contracts. It was incumbent for all bidders to meet this requirement. It was arbitrary to delete this requirement after the bids were submitted.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a Final Order finding the bids submitted by CPM to be non-responsive and rejecting those bids. Petitioner should enter into negotiations with SCA regarding the award of the contract. In the absence of a favorable negotiation, Petitioner should enter a Final Order rejecting all bids and opening the Contracts up for new bids. DONE and ENTERED this 24th day of March, 1992, at Tallahassee, Florida. J. STEPHEN MENTON 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 24th day of March, 1992.
The Issue Whether the Petitioner was the lowest responsive bidder in Bid No. 88-030, and therefore entitled to the contract award.
Findings Of Fact The invitation to bid in Bid No. 88-030 contains specifications for two separate pieces of equipment which are to be used in the Respondent's print shop. These two items are: a) an offset duplicator with a "swing away," second color printing unit, and b) a camera/platemaker capable of processing silver masters. The Petitioner timely submitted bids on both items. On June 14, 1988, when the bids were opened, the Petitioner was the low bidder upon the equipment. The Petitioner's bids were disqualified by the Respondent, because the equipment offered did not meet the minimum specifications set forth in the bidding documents. A comparison of the minimum specifications for the duplicator and the manufacturer's specifications for the A.B. Dick #9850 duplicator that was bid by the Petitioner reveals the following differences: The specifications require the bidder to provide the Respondent with a duplicator that contains a 1 horsepower, D.C., drive motor. The A. B. Dick #9850 duplicator contains a 3/4 horsepower, A.C., drive motor. A 1/2 horsepower pump motor is required by the specifications. The literature attached to the Petitioner's bid does not reveal whether the A.B. Dick #9850 duplicator contains a pump motor. During the administrative hearing, Charles K. Hill testified that the A. B. Dick #9850 duplicator does have a pump motor. However, the size of the pump motor was not given. The specifications require a conveyor board with a jogging registration system. The A.B. Dick #9850 duplicator does not contain that type of paper feed system. Instead, the Petitioner's duplicator has a direct feed with a registration board. The paper travels only one-half of an inch in the duplicator so a conveyor board and joggers are not needed. Grippers accurately control the paper during the short travel distance. The Respondent specifically chose to require a conveyor board with a jogging registration system on a duplicator because the Respondent wants to have all of the controlling mechanisms it is possible to obtain on a duplicator within a certain price range. The conveyor board with a jogging registration system is a feature that is provided on duplicators in addition to a gripper margin adjustment and feeder bar system. The failure to provide this additional system is an omission as opposed to an alternate provision of a comparable system. The Petitioner submitted a bid upon a duplicator that did not conform in all material respects to the minimum bid specifications. The Petitioner' substituted a less expensive product with fewer features that ran on a different electrical current than the product sought in the invitation to bid. The comparison of the minimum specifications for the camera/platemaker and the A.B. Dick #148 camera manufacturer's specifications reveals the following differences: The specifications state that a reduction range of 60 percent and a magnification range of 125 percent are required. The A. B. Dick #148 camera has a reduction range of 64 percent and a magnification range of 105 percent. The specifications require a copy size of 20 1/2" x 33". The A. B. Dick #148 camera has a copy size of 23 1/2" x 26". The Petitioner submitted a bid upon a camera that did not conform in all material respects to the minimum bid specifications. The Respondent seeks a camera with a greater, and consequently more expensive, resizing range than the one bid upon by the Petitioner. The invitation to bid was liberal enough in its minimum bid specifications to allow competitive responsive bidding on comparable products from various vendors for the equipment and features sought by the Respondent. The bid posted by the Respondent from Standard Graphics, Inc., the apparent responsive low bidder, conforms in all material respects to the invitation to bid.
Findings Of Fact During the summer of 1994, the Department of Management Services (DMS) began to develop an invitation to bid (ITB), to establish a state contract for the purchase of client server systems. The contract included microcomputers, network/file servers, workstations, workstation servers, and peripherals. The future contract would replace the current state contract between AmeriData and DMS. The process utilized by DMS to establish the ITB included meetings with state users and representatives of the microcomputer vending community. In particular, the pricing methodology for the ITB was developed from user conferences, vendor meetings and pre-bid conferences. DMS had many goals it wished to achieve under the new ITB for computers. These goals included making a wider range of products available to the user agencies, obtaining computer products at better prices than under the current contract, making a more diverse line of commodities available, obtaining the participation of third party vendors and making third party vendor products available. In particular, DMS wanted to enable agencies to purchase integrated "computer systems" consisting of computers with standard and upgradable components at the same discount price as a computer alone when those components are simultaneously purchased with the computer as a system or as computer system bundles. This effort resulted in the drafting of an Invitation to Bid dated September 26, 1994, which was circulated to known vendors for question and comment. The ITB of September 26, 1994 called for bids for statewide support levels I and II for microcomputers, desktop, deskside and portable (Tables 2.1 and 2.2) and for network/file servers (Table 3.0). These items were to be bid as percentage mark-up from dealer cost. Workstation and workstation servers (Table 4.0) and peripherals, (monitors, printers, plotters, network cards, etc.) (Tables 5.1 through 5.9) were to be bid as percentage discounts from the manufacturer's suggested retail price (MSRP). Additionally, if vendors desired to submit a price list for the balance of a vendor's product line, such "balance of line" peripherals were to be offered under the same pricing schedule (a single whole number discount from the MSRP) as the peripherals category (monitors, printers, etc.) which described the balance of line item. The term "balance of line" as used in the ITB was intended to allow a product line vendor to submit a price list on the manufacturer's line of peripherals as well as third party peripherals. In other words, a vendor offering the IBM line of microcomputer systems under tables 2.1, 2.2 and 3.0 could submit a price list for the IBM line of peripherals (monitors, printers, plotters, etc.) under a balance of line price list for tables 2.1, 2.2 and 3.0, and submit a price list for third party peripheral products (Epson printers, Samsung monitors, etc.), under tables 5.1 through 5.9. The initial ITB generated many questions. DMS prepared written responses to the questions it received from various prospective bidders. On November 9, 1994, DMS held its Client/Server System Pre-Bid Conference. The conference was attended by various company representatives who were prospective bidders. The prospective bidders included representatives John Reneger and Lytt Noel from Vanstar Corporation, Dale Kennedy from AmeriData, and Mark Holt and Roy Wade from IBM. At that Pre-Bid Conference the attendees were given 41 pages of questions and the responses to those questions that had been prepared by DMS. Based on questions and comments raised at the November 9, 1994, Pre-Bid Conference, DMS issued Addendum number 2 on November 21, 1994. Addendum number to the ITB contained the bid specifications, attached copies of the pre-bid attendance list, copies of the pre-bid questions and answers, and a list by item of ITB changes. It also contained a document entitled Complex Issues for Follow-up. Later, Addendum number 3 was issued on December 21, 1994, and Addendum number 4 was issued January 10, 1995. Addendum number 3 added two more eligible bidders of products. Addendum number 4 changed the bid opening date to January 11, 1995. On January 11, 1995, the bids were opened. Later the bid tabulation with proposed awards was posted. Vanstar bid two percent cost plus on the product line for IBM microcomputers and offered twelve percent cost plus as its prices for balance of line peripherals. AmeriData bid four percent cost plus for the IBM product line of microcomputers and offered four percent cost plus as its prices for balance of line peripherals. Because Vanstar was the low bid for IBM microcomputers, DMS proposed to award the contract to it. Addendum number 2 was the final substantive addendum to the initial ITB. For purposes of this case, Addendum number 2 was virtually identical to the initial ITB. However, Addendum number 2 changed the pricing methodology for the balance of line items in Paragraph 2.0, on page 19 of the Specifications for the Client Server Systems from discount off manufacturer's suggested retail price to "the same pricing schedule (cost plus) as the microcomputer systems," for that product line. In this case, the microcomputer systems were for the IBM product line. The ITB clearly stated that the balance of line price lists would not be considered in the evaluation or award of the bids. In fact, in response to a specific question on balance of line, DMS in Section T-1, page 25, stated that balance of line items would not be used for evaluation purposes. The ITB specified that DMS intended to negotiate the balance of line items if the price submitted by the vendor was determined to not be competitive. The ITB generally stated how the negotiations would take place. However, the ITB did not define what competitive prices were. On the other hand, it was clear that a contract for balance of line items may not be awarded. The ITB provided on page 10 of the Special Conditions, under balance of line: The Balance of Line price list provisions of this bid/contract are provided for the convenience and benefit of the contract users as well as the awarded vendors. The Division of Purchasing will review and compare balance of line price lists to determine if prices are competitive. Should it be determined by the Division of Purchasing that the balance of line price lists of the awarded contractor are not competitive, the contractor will be given an opportunity to resubmit a negotiated competitive price list. If the contractor is unable or chooses not to reduce prices for Balance of Line products, the Balance of Line will not be awarded. The above language in the ITB was intended to serve as a Notice of Intent to Negotiate. However, DMS did not post the Notice of Intent to Negotiate in the office of the Division of Purchasing as required in Rule 60A- 1.018(2), Florida Administrative Code. Additionally, the evidence did not show compliance with any of the other provisions of the Rule 60A-1.018(2), Florida Administrative Code. The procedure of negotiating the balance of line item with the awarded contractor was further clarified in the question and answer section of Addendum No. 2. On page 19, at P-6, in response to a question requesting explanation of the balance of line items, DMS stated that the Division of Purchasing would review and compare balance of line items to determine whether they were competitive and, if the prices were not competitive, DMS could negotiate with the contractor who was awarded the bid on the microcomputers. At page 8, question E-1, DMS further stated in part that "if the Balance of Line price list submitted as part of Sections 2.1 and 2.0 as specified is not competitive for similar items bid in Section 5.0, then "Balance of Line" prices will be negotiated or excluded from the award for that bidder." Moreover, if the negotiations, should fail, no negotiations will be conducted with any other bidder and no contract for the balance of line items would be entered into. There was no requirement in the ITB that a vendor submit balance of line price lists. The ITB at page 9 stated in part "vendors who bid and are awarded microcomputer systems may offer a Balance of Line." (Emphasis supplied). In short, the balance of line price list was not a bid under the ITB but served to supply information to DMS on the prices of peripherals which would most likely be used for comparison with other bidder's prices on the same peripherals. The award of any balance of line/peripheral contract was not part of the award of ITB 9-250-040-B, but was to be part of a separate process involving negotiation with a specific vendor. AmeriData was aware that submitting a price list for balance of line items was optional and, if it submitted a price list for balance of line items, the information would not be used to evaluate the winning bid for microcomputers under the ITB. The type of negotiations for balance of line identified in the ITB is unique and has never been attempted by DMS in the past. DMS admitted that in selecting this method it did not consider the fact that approximately ten to eleven million dollars out of twenty million dollars in sales or about 50 percent of the sales volume for IBM products from the 1994 contract were for IBM peripherals. Additionally, because the process is new, DMS at the time of hearing, had not decided the specifics of how the negotiations would be conducted, but believes there will be more steps and methodology involved in the actual negotiations, if it occurs, with the successful bidder than are actually documented in the ITB. DMS believes that any negotiations must be in compliance with Rule 60A-1.018(2), Florida Administrative Code, Negotiations After Bid which establishes parameters on the procedures for negotiating contracts for the purchase of commodities or contractual services. However, DMS also believes that the negotiations, if they occur, will be a more informal process than the negotiations mandated under Rule 60A-1.018(2), Florida Administrative Code. In any event, whatever negotiations DMS proposes should comply with Florida Statutes and Rules beginning with the posting of Notice in the office the Division Rule 60A-1.018(2)(b), Florida Administrative Code, the development of a vendor list with rankings Rule 60A-1.018(2)(c), Florida Administrative Code, etc. Given the preliminary status of the negotiation procedure, its brief outline in the ITB and the posting of the ITB cannot form the basis of an intent to negotiate. DMS did not receive any written objections to DMS's plan to award the contract on the bids received for microcomputers under 2.1 without regard to the price list for balance of line items. Likewise, DMS did not receive any written objections to the proposal to negotiate balance of line items with the winning bidder on the microcomputers. However, since the balance of line price lists were not a bid and were not "specifications" in a bid which enable a bidder to receive the bid award, the 72 hour protest time for bids does not apply. On the other hand, since the negotiation procedure is separate from the bid award, the procedure is not properly part of a bid protest under Section 120.53, Florida Statutes. Additionally, protestations of the negotiation procedure should comply with Rule 60A-1.018(2)(b), Florida Administrative Code, which permits protests of the agency's decision to negotiate once a Notice of Intent is posted. The Notice has not yet been posted. Therefore, consideration of the scanty and tenuous plan for negotiations outlined in the ITB is not ripe for consideration. Throughout the ITB, there are predominantly two pricing schemes utilized for microcomputers, peripherals and balance of line items. The two pricing schemes are calculated as a percent discount from the manufacturer's suggested retail price or as a percent discount from the dealer's cost. For example, in the section of the bid, on pages 24 and 25 relating to printers, DMS requires that a person submitting a bid for balance of line items be bid "at the same discount or greater discount rate as the printers." In Section 5.5 relating to input devices, DMS likewise requires that the balance of line be submitted "at the same discount or greater discount rate." In the portion of the ITB relating to microcomputers in Sections 2.0 and 2.1, the ITB requires that the balance of line be offered under the same pricing schedule (cost plus) as the microcomputer systems category of the bid. Under tables 5.2 and 5.5 of the ITB the price lists for balance of line are to be computed using the same percentage rate. In short, the language permits a different percentage mark-up to be submitted on balance of line items as on microcomputers as long as the same pricing scheme or schedule is used, i.e., cost plus as opposed to discount off MSRP. However, Roy Wade, the IBM segment owner for government in the State of Florida, who attended the pre-bid conference and worked with AmeriData on its bid, had several conversations with AmeriData about whether the same percentage had to be used for both microcomputers and balance of line. In fact, there was a difference of opinion in the IBM office as to whether you could use the same or different percentages on the balance of line items and the microcomputers. Mark Holt, in the IBM office and who also attended the pre-bid conference, was of the opinion that a bidder could use different percentages in the balance of line items and the microcomputers. Roy Wade was of the opinion that the same percentage had to be used. Mr. Wade, at the request of AmeriData, met with Mr. Melvin of DMS at Mr. Melvin's office to seek oral clarification regarding pricing of the balance of line items. Mr. Wade testified that Mr. Melvin told him the same percentage mark-up had to be bid. However, Mr. Melvin did not recall making such a statement to Mr. Wade, and did not remember meeting with Mr. Wade during that time period. The normal procedure for visitors to the DMS Division of Purchasing is to sign in. The sign in log does not show any entry for Mr. Wade for this period. In fact, the only date, relevant to this proceeding, for which Mr. Wade signed in was January 5, 1995. During the hearing Mr. Wade stated that it was not uncommon for him to fail to sign in. However, in his deposition Mr. Wade stated that during this time period he visited DMS 5 to 10 times, but failed to sign in on only "a couple" of occasions. Mr. Wade stated that after his meeting with DMS, he again discussed the percentage issue with AmeriData. Mr. Wade relayed what Mr. Melvin had allegedly told him. Mr. Wade encouraged AmeriData to get verification directly from DMS. After this conversation, AmeriData met with DMS personnel on December 21, 1994, on another issue. AmeriData did not ask any questions regarding whether the same percent mark-up had to be used for balance of line and microcomputers. Later around January 5, 1995, AmeriData had a telephone conversation with Mr. Comer of DMS. During the conversation, Mr. Comer allegedly told AmeriData that the same percentage had to be bid. However, Mr. Comer has no recollection of such a statement. Mr. Comer also testified that he was not aware of the percentage issue in January, 1995. Given the discrepancies in the testimony regarding these oral conversations, these oral conversations are simply too vague to credit any alleged statements made by DMS personnel during those conversations, especially since IBM, which entered a separate bid on products under Section 4.0 of the specifications through Mark Holt, bid a separate percentage for balance of line items. Moreover, as indicated earlier, the ITB contains no language specifically stating that the same percentage must be used for balance of line items as for items contained in Tables 2.1, 2.2 and 3.0. While there is language that states that bidders must bid a single whole number percentage mark-up (cost plus) on page 18, the language referring to the balance of line items states only that "such balance of line peripherals shall be offered under the same pricing schedule (cost plus) as the microcomputer systems category of this bid/contract." (Emphasis supplied) However, even if the alleged oral statements by DMS personnel are given credit, the ITB, as provided in all DMS bids, also contained a set of general conditions, Paragraph 7 of which states as follows: Any questions concerning conditions and specifications shall be directed to this office for receipt no later than ten (10) days prior to the bid opening. Inquiries must reference the date of bid opening and bid number. No interpretation shall be considered binding unless provided in writing by the State of Florida in response to requests in full compliance with this provision. (Emphasis supplied) AmeriData, was aware of this provision, but never submitted a written question to DMS regarding the ITB in question. Likewise, at no time did Mr. Wade or AmeriData seek any written clarification from DMS. In short, any oral statements made by DMS regarding the percentage issue is not binding. AmeriData was not justified in relying on such oral statements and should have sought written clarification from DMS. Finally as indicated earlier, the price lists for balance of line items were not part of the bid evaluation process. Therefore, it is irrelevant whether the percent mark-up for balance of line should be the same. The balance of line percent mark-up does not play a role in the award of ITB 9-250-040-B. The information only goes to the negotiation procedure which is separate from the award of ITB 9-250-040-B. Such optional information submitted for a separate procedure cannot be used to invalidate the award of a bid where that optional information plays no role in the bid evaluation process. As indicated earlier, with regard to regular items bid under Tables 2.1, 2.2 and 3.0, bidder's were to bid a percentage mark-up from dealers cost. Page 11 of the ITB under the hearing Format for Submission of the Bids stated that bidders had to supply manufacturer's published price lists as well as an authorized dealer's list. It also stated that the bidders should provide the documents in letter quality text as well as with a computer diskette. In response to the provision relating to the format in which the bids were to be received, a question was submitted to the Department on this issue. At page 10 of the question and answers under Question H-2 the following question appeared: "Are the price lists detailing the systems and individual items bid to be in the original manufacture's format or retyped by the bidder and submitted into Wordperfect format?" The Department answered this question in this manner: "Yes, manufacturer's suggested retail price (MSRP) list of manufacturer's costs list supplied by the manufacturer to each dealer/resaler must accompany the submitted document in hard copy. They are not required in Wordperfect disk format. However, the format for the bid/price sheets including product description and percentage mark-up or discounts should be submitted in Wordperfect format on diskette. The bid requirements as clarified in the question and answer required that the manufacturer's price list be submitted with the bid in "hard copy" but there was no similar requirement that the accompanying diskette be likewise, supplied in hard copy. Section 6.0 of the ITB provides that inclusion of unacceptable products would result in a bid being declared non-responsive. While operating system software was to be included in the bids, application software was not. Vanstar's bid contained certain items of application software which was included as part of the manufacturer's price lists included with its bids. Likewise, AmeriData's bid included items of application software, contrary to the terms of the ITB. The purpose of these lists was to identify the products being bid. Vanstar submitted an unsanitized hard copy of the dealer's price and the manufacturer's suggested retail price and also submitted in diskette format an additional list of items that had been sanitized to included only those items contained in the bid as well as additional information relating to items that were included in the balance of line. The evidence did not demonstrate that inclusion of non-bid items in the manufacturers price list created any confusion as to the items being bid or had any material impact on the bid process. Therefore, these discrepancies from the ITB do not invalidate an otherwise legitimate bid award. The evidence was clear that DMS intended the term "microcomputer," as used in the ITB to mean a "configured computer system" such that when purchasing peripherals as part of the purchase of a complete microcomputer system, the price for the configured system so purchased would be at the price the winning vendor bid for Table 2.1 microcomputers. Under DMS's interpretation a "microcomputer" would include the central processing unit (CPU), keyboard, disk drive, operating system, monitor and other peripherals purchased simultaneously with the computer. On the other hand at least two vendors, AmeriData and Vanstar, interpretated the term "microcomputer" to include the CPU with an operating system, storage device and an input device such as a keyboard but no monitor or other peripherals. The term "microcomputer" or "computer" does have a common meaning in the industry and refers to the CPU, input device, storage device and operating system in a self-contained box. Items which might be connected to the industry defined computer would be peripherals, such as, monitors, fax/modems, network cards, printers, sound cards, video boards, etc. The evidence demonstrated that there is some question whether the term "microcomputer system" or "computer system" has a commonly understood meaning in the industry. The lay persons definition of the term "computer" and "microcomputer" varies depending on whether "system" is equated with the term "computer." To further obfuscate terminology, none of the above terms reflect the current state of marketing of computer systems, including IBM products, as basic integrated or bundled systems with components that can be upgraded, downgraded or added to for certain adjustments in price. It is this confusion in terminology that DMS found itself dealing with when it drafted the ITB at issue in this case and which continued throughout this proceeding. The specifications in the first paragraph under Section 2.0, page 18, state under the heading REQUIREMENTS PROVISIONS, MICROCOMPUTERS -- DESK-TOP, DESK-SIDE, AND PORTABLE: Components (such as monitors, keyboards, mouse and trackball, expansion boards, network interface cards, internal modems, multimedia, and storage devices purchased with and integrated with the microcomputer system prior to delivery) will carry the same support level, requirements and provisions as the microcomputer system. Support level does not refer to the components' status as part of a microcomputer system, but only to a components' guarantee of service or maintenance. This section was not viewed as definitional by DMS. However, the concept is important, since potential purchasers were used to ordering configured, or bundled systems and desired the peripherals to carry the same level of service as the CPU. The questions and answers contained in the ITB seem to confuse matters further. In response to a question asking whether monitors would be required to be purchased from Table 5.1, DMS specifically stated that "(N)o, they can be included as part of the system configuration, part of "balance of line" for the awarded vendor, or can be included in Monitors Section 5.1. (Emphasis supplied) On the other hand, the answer to Question P2, submitted when balance of line was to be bid at a discount from MSRP, stated that full functioning systems are submitted on the bid sheets/price lists as cost-plus or percentage (mark-up) over manufacturer's cost, indicating that monitors, when bought as part of a full functioning system, were to be at the same price as the CPU. Throughout the bid process, vendors were encouraged to offer standard computer system configurations for the benefit of the potential purchasers. However, the ITB did not specify what had to be included in the configured systems and did not define configured system, bundled systems, microcomputer systems microcomputer, computer or computer system. The reason no precise definitions were developed in the ITB was that each manufacturer had different types of configured or bundled systems and it was up to each manufacturer to determine what was to be supplied with any particular system. Similarity and comparability between bids was achieved by requiring each vendor to bid by product line using the same manufacturer's product list and wholesale price. Both Vanstar and AmeriData understood the term "microcomputer" not to include a monitor or other peripheral devices. However, both vendors were bidding the IBM product line and did not include any special vendor bundled systems. The IBM price list literature included with their bids sets forth what was included in the particular microcomputer system configuration being offered. For instance, the IBM product line includes the IBM VALUEPOINT PERFORMANCE SERIES SYSTEM. The Valuepoint Performance System includes: One 3.5" 1.44 MB diskette drive standard, 4MB or 8MB parity memory standard, 1MB video RAM standard, external L2 "write Back" cache capability (standard external L2 cache on select models), SelectaBus ISA/VESA Local Bus or ISA/PCI Bus technology, VESA Local Bus SVGA video, Advanced power management on all systems Most SpaceSaver and Desktop systems meet EPA Energy Star requirements for power processors based on Pentium technology, three year warranty, choice of 270MB, 364MB, or 527MB hard files, multimedia standard on many desktop units, two serial ports (9-pin); one parallel port, enhanced keyboard and point device ports and IBM mouse. The IBM PC 300 Series includes similar items but also includes certain items of installed software. The IBM PC 700 Series includes audio capability. No monitors are included as part of these computer configurations. The IBM Thinkpad (laptop) series contains monitors as well as pre-installed software. Some configured systems include network cards. Some configured systems include CD-Rom drives. IBM's standard computer configurations are quite varied. Under Section 2.1 of the ITB, a purchaser could purchase a system that is fully configured by the manufacturer and that has devices that are needed in order to do multi-media. Some of the IBM systems include the bare minimum and some include items that would otherwise be considered extras. A person ordering computers off of the manufacturer's price list could order different size processors, various diskette hard drives, various optical storage devices and keyboard options, without regard to the balance of line as long as those options were part of the manufacturer's standard configuration. Items not included in those standard configurations such as monitors in the Valuepoint performance line, would not be part of this bid award because they would fall under balance of line items. In this case, there would normally be no problem since both bidder's bid the same product line with the same standard configurations. However, as indicated earlier DMS' intended definition of microcomputer goes beyond the specifications of this bid. DMS desires to include items under table 2.1 which are not part of IBM's standard configurations. For instance DMS believes monitors should be included as part of the Valuepoint performance series if a purchaser purchases the monitor simultaneously with the Valuepoint system. In fact, DMS and Vanstar have conducted some preliminary discussions as to what items outside and IBM standard configuration are included in its bid. DMS is in essence allowing and encouraging Vanstar to change its bid to include peripherals in its microcomputer bid after the bids were opened, albeit at the same percent mark-up from dealers cost as the microcomputers. Such after the fact changes are impermissible. Moreover, irrespective of the definitions of computer, DMS's interpretation of the bid specifications flies in the face of its stated purpose for not defining terms. DMS elected not to specifically define terms, because it wanted to rely on manufacturer's, such as IBM, to define what would be included in its computer configuration. In this case, IBM defined those configurations. If DMS had desired to include peripherals outside a manufacturers standard configuration as part of a configured system when purchased simultaneously with a computer then the specifications needed to cover such simultaneous purchases. Neither the specifications nor the evidence support DMS's interpretation of this bid. Clearly the term microcomputer, computer, computer system, etc. are very material terms in this ITB. The failure to clearly (not necessarily specifically) define that family of terms is fatal to this ITB since there was no mutual understanding between the parties on the IBM portion of the contract as to what was to be bid as a microcomputer. Therefore, all the bids should be rejected on the IBM portion of ITB 9-250-040-B.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is, RECOMMENDED that a final order be entered rejecting all bids under the IBM portion of ITB 9-250-040-B. DONE and ENTERED this 11th day of August, 1995, at Tallahassee, Florida. DIANE CLEAVINGER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 11th day of August, 1995.
Findings Of Fact Respondent, through its Invitation to Bid (ITB) No. 123-395-98-C Rebid, seeks to award a 12-month contract for, the purchase of electronic data processing cards. Bids were opened on November 10, 1981, at which time Petitioner was the apparent low bidder. However, Respondent disqualified Petitioner's bid because Data Specialties Mart did not have a corporate charter number and had no manufacturing capability on the bid opening date. S. F. Holdings, Inc., is a Florida corporation, Charter No. 637983. Data Specialties Mart is a division of this corporation and has been assigned Vendor No. 00417 by Respondent. Confusion over Petitioner's identity arose from the section on Respondent's ITB where the vendor name is to be entered. Petitioner placed the name "Data Specialties Mart, Inc.," (non-existent as a corporation) in this block. Petitioner did, however, enter the S. F. Holdings, Inc., charter number and the Data Specialties Mart vendor number in adjacent blocks. A letter attached to the bid describes Data Specialties Mart as a marketing division of S. F. Holdings, Inc. Although this letter did not have as its purpose correction of the above error, it did provide the clarification Respondent should have sought. Furthermore, this relatively minor discrepancy could have been resolved through contact with the Petitioner. Petitioner stated by letter dated November 9, 1981, (attached to its bid) that "The cards will be produced through our Lakeland, Florida manufacturing facilities (formally [sic] known as National Electronics Computing Supplies, Inc.)." Respondent investigated the claimed ownership and determined that Petitioner did not possess the manufacturing facility on the bid opening date, November 10, 1981, as represented. Petitioner's president, who signed the letter, believed he would acquire the facility at a November 16, 1981, bankruptcy proceeding and thus claimed the facility for bid purposes. Although Petitioner did acquire the factory as anticipated, it possessed no manufacturing capability on the bid opening date.
Recommendation From the foregoing, it is RECOMMENDED that Respondent enter a final order dismissing the petition. DONE and ENTERED this 11th day of February, 1982, in Tallahassee, Leon County, Florida. 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 11th day of February, 1982. COPIES FURNISHED: Dean Bunch, Esquire Ervin, Varn, Jacobs, Odom and Kitchen Post Office Box 1170 Tallahassee, Florida 32302 William P. Beck, Esquire Department of General Services 457 Larson Building Tallahassee, Florida 32301 Thomas R. Brown, Executive Director Department of General Services Room 115, Larson Building Tallahassee, Florida 32301
Findings Of Fact Prior to June, 1988, HRS determined that it needed 32,000 square feet of office space to house some of its indigent social services for southern Escambia County. Since the desired office space is greater than 2,000 square feet HRS was required to competitively bid lease number 590:1984. Towards that end, Respondent prepared an Invitation to Bid and a bid submittal package. The package contained various bid specifications, bid evaluation criteria and the numerical weight assigned to each of those criteria. Specific areas of importance to Respondent in the selection of its office space were: client safety one building to house all its units employee morale moving costs traffic flow within the building public access Many of the above areas were important to HRS since the agency would render indigent services to approximately 17,000 people a month, many of whom are handicapped or lack good mobility due to age or infirmity. Employee morale was important because of high employee burn out due to rendering aid to so many people who have so little and supplying a pleasant environment conducive to the work of the employees. Moving costs were important should HRS be required to find other space to operate in while necessary remodeling took place in the selected building, or be required to incur the expense of moving to a new building. 1/ All of the above areas were covered by one of Respondent's weighted bid evaluation criteria. The District Administrator of HRS, Chelene Schembera, is ultimately responsible for bidding, selection and leasing of all HRS facilities within District I, including Escambia County, Florida. In order to accomplish this task, Ms. Schembera appointed a bid evaluation committee to review and grade the responsive bids under the criteria established in the bid package, and to recommend to her the committee's choice of the lowest and best bid. Ms. Schembera's purpose in establishing the bid evaluation committee was to secure a cross section of input from people who had a variety of backgrounds and knowledge that would be material in evaluating the office space under the uses for which it was intended and the relative public worth of the work space. Ms. Schembera appointed individual who were familiar with the type of work to be done in the proposed space, as well as a persons familiar with the bid process. Ms. Schembera assigned to serve on the committee Charles Bates, Deputy District Administrator; Jim Peters, to provide a fiscal and overall administrative perspective as well as bid expertise; two citizens from the District Advisory Council to assure objectivity and to look at the properties from the perspective of a private citizen; Mamun Rashied, a program manager; Darlene McFarland, a program manager; Cherie Neal, a unit supervisor and program worker; and Stacey Cassidy, a clerical employee. Ms. Schembera did not personally know Cherie Neal or Stacey Cassidy. These staff members were designated by the supervisors upon Ms. Schembera's direction that she wanted persons who were both intelligent and respected by their peers. One private citizen member of the committee did not participate. The committee as constituted showed a great deal of thought on Ms. Schembera's part to ensure the objectivity of the bid process she was engaging in and to ensure the maximum amount of input from persons who had experience relevant to the overall review of the proposed real estate and to the decision they were being asked to make. The selection of the bid evaluation committee members was neither an arbitrary nor capricious act on Ms. Schembera's part. In fact, the evidence demonstrated the merit in constituting the committee as she did for the input she sought. The bid evaluation committee members, minus Mr. Bates, were briefed on their duties by Joe Pastucha, Facilities Services Manager. Mr. Pastucha is part of the staff responsible for the bid process at HRS. He provided these committee members with the weighted bid evaluation criteria found at page 15 in the bid package. He also gave the committee members a copy of Chapter 5 of the HRS manual containing guidelines for the bid process. His verbal instructions on specific procedures to follow in the evaluation process were limited since he did not wish to improperly influence the committee members. On July 20, 1988, HRS received three bids responding to its invitation to bid on Lease Number 590:1984. Bid A was submitted by Phillips and Company, the apparent second lowest bidder and Intervenor in this case. Its property consisted of one multi-story building located at 1740 North Palafox Street, Pensacola, Florida. Bid B was not responsive and therefore was not considered by HRS and is not a part of this litigation. Bid C was submitted by Petitioner Carmon S. Boone, and was the apparent low bid. Mr. Boone's property consisted of two buildings located at 401 and 411 North Baylen Street, Pensacola, Florida. The Boone property is the present location of Respondent's offices. Both Bid A and Bid C were within the mandatory geographical area designated in the bid package. Once the bids were received the bid evaluation committee began its work. The committee members, minus Mr. Bates, visited the Phillips property. However, the members did not visit the Boone property. There was no need. Four of the members currently worked at the Boone property and the other members had previously visited the Boone property on various other occasions. Mr. Bates was likewise already familiar with both properties. All members were sufficiently familiar with the cogent aspects of each property to allow them to make a rational decision. The bid evaluation committee, minus Mr. Bates, met as a group to evaluate each property in accordance with the weighted bid evaluation criteria. Each individual scored their sheets separately and the general consensus was supportive of recommending the Phillips property. Five committee members scored Mr. Phillips' property higher than the Boone property. The one exception was Mr. Peters who felt that HRS could not support a bid awarded for other than monetary reasons, i.e., he felt the lowest bid had to be accepted. Mr. Bates later reviewed all the bid synopsis sheets of the committee members and discussed the bid award with Mr. Peters and Mr. Pastucha. Mr. Bates felt that the Phillips property was the lowest and best bid. At about the same time, the staff responsible for providing technical assistance to the committee and the District Administrator were made aware that the general consensus of the committee was leaning towards the second lowest bidder, Phillips and Company, as the lowest and best bid. The staff members, one of whom was a bid committee member, disagreed with the award of the bid to Phillips and Company because the Boone property was the lower bid. The staff members sought to head off the committee's intended recommendation. The staff personnel held a meeting with some of the committee members in order to get them to join in a recommendation to Ms. Schembera of the Boone property. Mr. Boone was invited and attended the meeting. He was allowed to improperly bolster his bid by agreeing to convert the two buildings to one and other lesser additions. /2 The potential decision was discussed, but no committee member changed his or her mind. However, through a total lack of communication, a run away staff somehow rationalized themselves into a position of being authorized to submit a letter for Ms. Schembera's signature which awarded the Boone property the lease. Ms. Schembera became aware of her staff's attempt to subvert the bid process she had established. She refused to sign the letter submitted by the staff. She removed the staff member of the committee as a voting member. The staff member had supported the Boone property. She also removed a committee member who supported the Phillips property as a voting member. Ms. Schembera feared that her staff had improperly influenced this member to such an extent that his objectivity had been affected. Both members could still participate in committee discussions. Ms. Schembera thereby reasonably ensured the ongoing objectivity of the bid evaluation committee. The committee was reconvened, minus one member. It recommended the Phillips and Company property. Every reason given by the individual committee members for distinguishing and preferring one bid over another were rational and reasonable considerations and were covered by the bid evaluation criteria. Each individual member gave a rational and reasonable basis for the scoring he or she used on the bid synopsis score sheets. The scoring was done by each member after discussion of the two buildings and without influence from the other committee members. In essence, the committee felt that the Phillips property was the better property for the money. The Phillips property allowed working units to be located in one area with each such unit having its own access. It provided flat safe parking areas and sidewalks, bigger and more elevators, wide halls and windows which presented a bright, happy and pleasant working environment. The Boone property was in two buildings which could not accommodate co-located working units with their own access no matter how much remodeling took place. Parking and sidewalks are on a hill which is slippery when wet. It had one small elevator and narrow halls which did not adequately accommodate more than one wheel chair, and one ground floor where no windows could ever be remodeled into the building leaving a dark, dingy and unpleasant environment. Importantly, every committee member except for the staff member came to the conclusion that the Phillips and Company property was the lowest and best bid. There is no statutory or rule requirement that one scoring method be preferred over another. The only requirement is that the method be rational and reasonable especially where highly subjective, but legitimate criteria are involved in the selection of a particular piece of property. On these facts, the individual scoring methods used by the individual committee members were not arbitrary and capricious, but were very rational and reasonably related to the relative importance the committee members gave the above factors. After reviewing and considering information from the bid evaluation committee, the information on the bid synopsis sheet, and the oral recommendations of Mr. Bates, Mr. Peters and Mr. Pastucha, Ms. Schembera concluded that the Phillips property was vastly better, even considering costs. She found it to be materially superior in terms of construction, organization, client accessibility, handicap accessibility, repairability (in terms of walls), and maneuverability for clients and staff. She felt the Phillips' building's qualities would offer more "humanity" to the process of serving the Department's clients. Additional facts she considered when making her decision included the morale of the staff and their productivity; the ability of staff and clients to conduct their business in a reasonably pleasant, comfortable, safe, and easy to understand and comprehend environment; and the desire to provide a minimally adequate work space. In addition to other monetary costs, she considered energy costs and life cycle costs as reflected on the bid synopsis sheet. The bid synopsis sheet defined minimal energy and life cycle costs to be anything less than 55 BTU's per square feet per year. In this case, the Boone property reflected 39.5 BTU's per square feet and the Phillips property reflected 53.5 BTU's per square feet. Both properties were under the 55 BTU cutoff established by HRS. Translated into monetary figures (life cycle costs) the Boone property reflected a cost of $26,735.00 and the Phillips property reflected a cost of $41,160.00. It was the difference between the energy figures which caught Ms. Schembera's eye. In her layman's opinion, it was incomprehensible that the two buildings would have such a wide divergence of energy costs. /3 She learned from her staff that the information used to compute these costs was supplied by the bidders who had vested interests in the outcome. Ms. Schembera concluded the cost difference was minimal and not of overriding concern in relation to the physical characteristics of the two buildings and how they compared to each other. She quite correctly felt the two buildings were not comparable. In essence, the two buildings' differences in design location and construction rendered neither building comparable to the other building as a like facility under Section 255.254, Florida Statutes. 4/ Based on that information she gave the energy figures relatively little weight. More importantly, however, before the final bid award was made by HRS, the Division of General Services within HRS in its failsafe role in reviewing bids considered the life cycle cost figures of the two bids. The minimal language of Section 255.254, Florida Statutes, has been interpreted by HRS to mean that anything under 55 BTU's is minimal and except in one instance not applicable here, numerical differences under 55 BTU's are immaterial. The Division, without getting into the issue of the likeness of the facilities, concluded that both bids met the Department's interpretation of the "minimal" language of Section 255.254, Florida Statutes, and the relative numerical difference in the energy costs was immaterial. Ms. Schembera is entitled to rely on other more expert HRS Division staff to ensure a proper analysis of highly technical bid specifications such as the energy cost analysis required under Section 255.254, Florida Statutes. It does not matter that the review took place after Ms. Schembera had made her preliminary decision. What is important is that the review be made either personal or vicariously through staff before the final award is made. A proper review of energy costs was, therefore, made by Respondent before the final award was made. Likewise, Ms. Schembera's ultimate decision that the buildings were not comparable like facilities was a proper review of energy costs even though that conclusion was arrived at through a layman's unsophisticated, but more accurate intuition and common sense. To that extent, the energy cost data had no impact on the ultimate choice made by the District Administrator and were properly considered by the District Administrator. 5/ A letter for Ms. Schembera's signature adopting the committee's recommendation was drafted by Mr. Pastucha. The letter was signed and sent to the Department's Division of General Services for review. The District was requested to provide additional justification for its choice by the Department's Division of General Services. Mr. Rashied was directed to draft the response. He simply reorganized the original memorandum into a format more compatible with the Division's direction, clarified a few points and without significantly changing the content, submitted the response as directed. The Division acquiesced in Ms. Schembera's decision.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Department of Health and Rehabilitative Services enter a final order dismissing Case NO. 88-4900BID, and awarding lease number 590:1984 to Phillips and Company as the lowest and best bidder. DONE and ORDERED this 5th day of January, 1989, in Tallahassee, Florida. DIANE CLEAVINGER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 5th day of January, 1988.
The Issue The following issues were raised in the challenge of the award of the bid: Did Harris/3M fail to comply with Special Condition 28 of the Invitation to Bid, which required each bidder to provide references from two customers having similar equipment? Did the Department request a demonstration of the bid equipment under Special Condition 15? If such a demonstration was requested, did Harris/3M comply with the request? Were the machines bid by Harris/3M available under terms of General Condition 4(d)? Did the machines bid by Harris/3M comply with General Condition 4(f) requiring that the equipment bid carry the Underwriter's Laboratory listing? In response to Harris/3M's Motion for Directed Verdict on issue number 5, the Hearing Officer granted the motion on a finding that no evidence had been presented on this issue by the Petitioner. The Petitioner's compliance with the specifications was not at issue.
Findings Of Fact On or about December 15, 1986, the Department issued and advertised its Invitation to Bid 3162-86 related to the acquisition of 15 microfilm reader/printers for use in searching, reading and printing motor vehicle documents which had been microfilmed by the Department of Highway Safety. Microfilm reader/printers are essentially units of hardware into which cartridges of microfilm are inserted and the microfilm is passed through a camera which reflects the images of the microfilm onto a screen from which information can be read and copies printed. The Invitation to Bid required that the equipment must have a "controller," a device for automatically locating specific microfilm documents by the use of coded information or "blips" on the film. On or about January 5, 1987, responses to the Department's bid were submitted by Petitioner OSC and Intervenor, Harris/3M, together with bids from other bidders whose bids are not an issue in these proceedings. All bids were opened on January 5, 1987. The equipment bid by Harris/3M was the Model MFB1100 Reader/Printer with a "page search" kit or controller. Special Condition 28 of the Invitation to Bid states: "28. REFERENCES The bidder shall supply with his bid the names, addresses and telephone numbers of two references for whom the bidder has previously provided similar equipment being bid. If the bidder is unable to provide satisfactory references to the Department, the Department may, at its discretion, reject the bidder's bid if it determines that a responsive offer in full compliance with the bid speci- fications and conditions was not submitted. Failure to supply the references as required may result in rejection of the bid." (e.s.) Harris/3M provided two references in satisfaction of Special Condition Both of the references had versions of the Model MFB1100; however, neither of the references had the "controller" or page search kit, which was called for in the Invitation to Bid. Special Condition 28 was drafted by Merelyn Grubbs. According to Ms. Grubbs, the purpose of this requirement was to assure the Department that the bidder was responsible. "Similar" equipment is sufficient to assess the bidder's responsibility based upon machines made by the same manufacturer which performed essentially the same function. The MFB1100 without a page search kit is a "similar" machine. The two references provided were sufficient. Special Condition 15 states: DEMONSTRATIONS After opening of bid and prior to award of bid, the apparent low responsive bidder may be required to demonstrate to the Division of Administrative Services the equipment he proposes to furnish. If requested, a "working model" of the equipment bid and to be supplied in compliance with these specifications must be demonstrated in Tallahassee, Florida, within seven (7) calendar days from receipt of notification. If apparent low responsive bidder cannot successfully execute the demonstration, the Department shall revert to the next low responsive bidder and request demon- stration, continuing through the list of responsive bidders until a successful demonstration is achieved, the list of responsive bidders is exhausted or it is in the State's best interest to terminate the bid process. Demonstrations to be furnished at no expense to the Department." On January 7, 1987, Mr. Ray Boetch, the supervisor of the division within the Department of Highway Safety where the reader/printers would ultimately be used, wrote a memorandum to Merelyn Grubbs requesting that a demonstration be made on the Harris/3M Model MFB1100 Reader/Printer prior to the awarding of the bid. Mr. Boetch also discussed the matter with Ms. Grubbs indicating his primary concern was verifying the quality of the prints produced by the machine and whether it could print half pages. Ms. Grubbs spoke with Nick Vuillemot of Harris/3M about a demonstration of the equipment in Tallahassee. In these discussions, Harris/3M offered to fly representatives of the Department to St. Paul, Minnesota, the home office of the manufacturer, for a demonstration of the equipment. This was because Harris/3M had only two prototypes of the equipment and it was more economical for Harris/3M to fly Department personnel to Minnesota for purposes of the demonstration than to disassemble, ship to Tallahassee and reassemble the prototype for a demonstration. The Department declined to accept Harris/3M's offer. The Department accepted instead a demonstration of a Model MFB1100 without the controller or page search kit at the Division of Elections in Tallahassee, Florida. The MFB1100 without controller does not meet the specifications in the Invitation to Bid. The "controller" or page search kit is of modular construction in the MFB1100, which can be ordered with or without the controller or page search kit. However, the bid specifically calls for a reader/printer with a page search device. Following the demonstration of the MFB1100 without page search capability, the Department officially posted its bid tabulations on January 12, 1987, designating Harris/3M as the low and responsive bidder and OSC was the next low and responsive bidder. Item 4 (d). Conditions and Packaging of the General Conditions of the Invitation to Bid provides as follows: It is understood and agreed that any item offered or shipped as a result of this bid shall be new, current standard production model available at the time of bid. (e.s.) Item 18. Delivery Schedule of the special conditions required delivery of the items bid within 30 days of the bid award or, in the alternative, a substitute item acceptable to the Department at no cost to the Department. The bid submitted by Harris/3M certified that delivery of all 15 units would be delivered within 30 days after receipt of a purchase order. Although the Harris/3M Model MFB1100 Reader/ Printer without page search had been on the market for a number of months prior to the issuance of the Invitation to Bid, the Model MFB1100 with page search had not been authorized for sale by the manufacturer until late November 1986. At the time demonstration was requested, only two prototypes existed of the MFB1100 with page search capability. As of the date of the hearing on February 11, 1987, no Model MFB1100 Reader/Printers with page search capability had been installed in any customer location within the United States. The Petitioner did not present any evidence to support its claim that the MFB1100 Reader/Printer with page search did not have a UL listing.
The Issue The issue for determination is whether Respondent acted fraudulently, arbitrarily, illegally, or dishonestly in selecting Intervenor as the lowest bidder for a contract to supply the state with lamps valued at $3,692,499.
Findings Of Fact The Parties Respondent is the state agency responsible for soliciting bids to establish a contract for the purchase of large lamps by state agencies and other eligible users. Petitioner is a Florida corporation and the incumbent vendor under similar contracts for the preceding 10 years. Petitioner does not manufacture lamps. Petitioner sells lamps manufactured by Osram-Sylvania ("Sylvania"). Intervenor is an Ohio corporation doing business in Florida. Intervenor manufactures the lamps it sells. The ITB On March 15, 1996, Respondent issued Invitation To Bid Number 39-285- 400-H, Lamps, Large, Photo and STTV (the "ITB"). The purpose of the ITB is to establish a 24 month contract for the purchase of Large Lamps (fluorescent, incandescent, etc.), Photo Lamps (audio visual, projection, flash), and Studio, Theatre, Television, and Video Lamps ("STTV") by state agencies and other eligible users. The contract runs from July 10, 1996, through July 9, 1998. The ITB estimates the contract price at $3,692,499. The ITB contains General and Special Conditions. General Conditions are set forth in 30 numbered paragraphs and elsewhere in DMS Form PUR 7027. Special Conditions are set forth in various unnumbered paragraphs in the ITB. General Conditions Paragraphs 5, 11, and 24 of the General Conditions are at issue in this proceeding. The terms of each paragraph are: 5. ADDITIONAL TERMS AND CONDITIONS: No additional terms and conditions included with the bid response shall be evaluated or considered and any and all such additional terms and conditions shall have no force and effect and are inapplicable to this bid. If submitted either purposely through intent or design or inadvertently appearing separately in transmittal letters, specifications, literature, price lists, or warranties, it is understood and agreed the general and special conditions in this bid solicitation are the only conditions applicable to this bid and the bidder's authorized signature affixed to the bidder's acknowledgment form attests to this. 11. QUALITY ASSURANCE: The contractor, during the contract term, upon mutual agree- ment with the Division of Purchasing, will provide reasonable travel and lodging accommodations for one (1) to three (3) government employees to perform an on-site inspection of the manufacturing process(es) and review of the manufacturer's product quality control(s) and total quality manage- ment program(s). The contractor will reim- burse the State for actual transportation cost, per diem and incidental expenses as provided in Section 112.061, F.S. It is the State's desire that the contractor provide demonstration of quality control for improvement rather than post production detection. 24. FACILITIES: The State reserves the right to inspect the bidder's facilities at any reasonable time with prior notice. Included Items Special Conditions in the ITB require bidders to submit prices for "Item 1" and "Item 2" lamps ("included items"). 1/ Item 1 lamps consist of Group 1 and 2 lamps. Group 1 lamps are Large Lamps such as fluorescent, incandescent, quartz, mercury vapor, metal halide, and high-pressure sodium lamps. Group 2 lamps are Photo Lamps such as audio visual, projection, flash, and STTV lamps. The total price for each group is multiplied by a weighted usage factor. The product calculated for Group 1 is added to the product calculated for Group 2 to determine the total price for Item 1 lamps. Item 2 consists of a category of lamps described as "T- 10 Lamps." The total price for Item 2 lamps is determined without application of the weighted usage factor used for Item 1 lamps. The total price for Item 2 lamps is a de minimis portion of the contract price. Special Conditions in the ITB require Respondent to award a single contract for included items to a single bidder. Special Conditions state that, "During the term of the contract established by this bid, all purchases of items will be made from the successful bidder." 2/ Excluded Items Special Conditions require that, "The bidder shall offer a fixed discount from retail prices on all excluded items." Excluded items include high technology lamps. The requirement for a fixed discount on excluded items is not considered in evaluating bid prices for included items. Rather, the requirement is intended to reduce the state's cost for both included and excluded items by assuring a meaningful discount on excluded items. Formatting Requirements Special Conditions prescribe the format in which bids must be submitted. Price lists and authorized dealers' lists are required to be submitted in hard copy and on computer diskette. The format prescribed for computer diskette includes requirements for font and graphics. The Special Conditions state that, "Failure to comply with this requirement will result in disqualification of your bid." The Bids The ITB prohibits the alteration of bids after they are opened. Respondent opened bids on April 10, 1996. Seven vendors submitted bids in response to the ITB. Included Items Four vendors, including Petitioner, submitted a bid for both Item 1 and Item 2 lamps. Intervenor and two other bidders did not submit a bid for Item 2 lamps. General Conditions Intervenor deleted paragraphs 11 and 24 of the General Conditions from its bid. At the direction of Intervenor's legal department in Cleveland, Ohio, Intervenor's regional sales manager struck through paragraphs 11 and 24 and initialed the deletions. The deletions are consistent with Intervenor's corporate policy. Intervenor routinely objects to contract provisions requiring inspection of Intervenor's facilities. Excluded Items Petitioner's bid includes a fixed discount of 44 percent on excluded items. Intervenor's bid includes a fixed discount of 0 percent. Formatting Requirements Intervenor included the information required by the ITB on the diskette it submitted with its bid. However, Intervenor supplied the information in Courier 12 characters per inch ("cpi") font, not the Courier 10 cpi font prescribed in the ITB. Proposed Agency Action Respondent determined that Intervenor's bid was responsive. The purchasing specialist for Respondent who reviewed each bid to determine if it was responsive failed to observe the deleted paragraphs in Intervenor's bid. The purchasing specialist forwarded those bids determined to be responsive to the purchasing analyst assigned by Respondent to: determine if the lamps offered in each bid met the specifications prescribed in the ITB; and evaluate bid prices. The purchasing analyst noted that paragraphs 11 and 24 were deleted from Intervenor's bid. The purchasing analyst and purchasing specialist conferred. They determined that paragraph 5 of the General Conditions cured Intervenor's deletions without further action. The purchasing analyst correctly determined: that lamps offered by Petitioner and Intervenor met ITB specifications; that Intervenor's bid is the lowest bid for Item 1 lamps; that Petitioner's bid is the second lowest such bid; and that Petitioner's bid is the lowest bid for Item 2 lamps. Petitioner's bid for Item 1 lamps is approximately five percent greater than Intervenor's bid. Respondent proposes to award one contract for Item 1 lamps to Intervenor. Respondent proposes to award a second contract for Item 2 lamps to Petitioner. At 4:00 p.m. on May 20, 1996, Respondent posted its intent to award the contract for Item 1 lamps to Intervenor. Petitioner timely filed its formal protest on June 3, 1996. Respondent did not award a contract for excluded items. Respondent's failure to award a contract for excluded items is not at issue in this proceeding. Arbitrary Respondent's proposed award of a contract to Intervenor for substantially all of the items included in the ITB is a decisive decision that Respondent made for reasons, and pursuant to procedures, not governed by any fixed rule or standard prescribed either in the ITB or outside the ITB. Respondent's proposed agency action is arbitrary. Excluded Items The requirement for bidders to offer a fixed discount on excluded items operates synergistically with the requirement for Respondent to award a single contract on included items to a single bidder. The combined action of the two requirements operating together has greater total effect than the effect that would be achieved by each requirement operating independently. The requirement for a fixed discount on excluded items, operating alone, may not induce a bidder who could receive a contract solely for Item 2 lamps to offer a discount that is as meaningful as the discount the bidder might offer if the bidder were assured of receiving a contract for Item 1 and 2 lamps upon selection as the lowest bidder. 3/ By assuring bidders that a single contract for Item 1 and 2 lamps will be awarded to a single bidder, the ITB creates an economic incentive for bidders to provide a meaningful discount on excluded items. Respondent frustrated the synergy intended by the ITB by applying the requirements for a fixed discount and for a single contract independently. Respondent penalized the bidder conforming to the requirement for a fixed discount on excluded items by awarding only a de minimis portion of the contract to the bidder. Respondent rewarded the bidder not conforming to the requirement for a fixed discount on excluded items by awarding substantially all of the contract to that bidder. If Respondent elects to purchase all excluded items from Petitioner, Respondent will have used the contract for Item 1 lamps to induce a meaningful discount from Petitioner without awarding Petitioner with the concomitant economic incentive intended by the ITB. Such a result frustrates the ITB's intent. Paragraph 5 Respondent's interpretation of paragraph 5 fails to explicate its proposed agency action. Respondent's interpretation of paragraph 5: leads to an absurd result; is inconsistent with the plain and ordinary meaning of the terms of the ITB; and is inconsistent with Respondent's actions. Respondent's interpretation imbues paragraph 5 with limitless curative powers. Respondent's interpretation empowers paragraph 5 to cure the deletion of all General Conditions in the ITB whether stricken by pen or excised with scissors. Respondent's interpretation of paragraph 5 would transform a bid containing no General Conditions into a responsive bid. Respondent's interpretation of paragraph 5 is inconsistent with the plain and ordinary meaning of its terms. Paragraph 5 operates to cure "additional" terms. It does not operate to restore deleted terms. Respondent's interpretation of paragraph 5 is inconsistent with Respondent's actions. Respondent did not rely on paragraph 5 to cure Intervenor's deletions without further action. Respondent took further action to cure the deletions. Further Action On the morning of May 20, 1996, the purchasing analyst for Respondent telephoned Intervenor's regional sales manager. The purchasing analyst demanded that Intervenor accept the conditions Intervenor had deleted from its bid by submitting a letter of acceptance before the bid tabulations were posted at 4:00 p.m. on the same day. The regional sales manager contacted Intervenor's corporate headquarters in Cleveland, Ohio. Intervenor authorized the regional sales manager to accept the deleted paragraphs. By letter faxed to Respondent at approximately 3:20 p.m. on May 20, 1996, Intervenor accepted the paragraphs it had previously deleted. The letter stated that, "GE Lighting [will accept] the Contract Conditions noted in Paragraphs 11 and 24 of the Lamp Quotation." [emphasis not supplied] At 4:00 p.m. on May 20, 1996, Respondent posted the bid tabulation form. The bid tabulation form stated that the "award is contingent upon General Electric's acceptance of all the terms in conditions (sic)" in the ITB. Respondent argues that the purchasing analyst who contacted Intervenor on the morning of May 20, 1996, exceeded her authority. Respondent characterizes the word "contingent" in the bid tabulation form as "poorly written" and a "bad word." Agency Construction Of ITB Terms Respondent construes terms in the ITB in a manner that is inconsistent with their plain and ordinary meaning. The ITB requires that, "The bidder [shall] offer a fixed discount from retail price list on all excluded items." [emphasis supplied] Respondent interprets the quoted provision as meaning the bidder may offer such a fixed discount if the bidder elects to do so. The purpose of the ITB is to establish "[a] 24 month contract" to supply large lamps to the state. [emphasis supplied] Respondent interprets the quoted provision as meaning that the purpose of the ITB is to establish two contracts. The ITB states that, "During the term of the contract established by this bid, all purchases of items [will] be made from [the] successful bidder." [emphasis supplied] Respondent interprets the quoted provision as meaning that purchases of some items will be made from one successful bidder and that purchases of other items will be made from a second successful bidder. The ITB states that the contract "[shall] be made statewide on an all or none basis" to the responsive bidder who satisfies the conjunctive requirements for: "[the] lowest "Award Figure Item (1; [and] lowest Award figure for Item (2." [emphasis supplied] Respondent interprets the quoted provision as meaning that separate contracts may be made statewide on less than an all or none basis to separate responsive bidders who satisfy the disjunctive requirements for either the lowest bid for Item 1 lamps or the lowest bid for Item 2 lamps, or both. The ITB requires offers to be submitted for all items listed within a group for a bid to qualify for evaluation. Respondent interprets the requirement as meaning that a bidder who does not qualify for evaluation for all of the groups in the contract nevertheless qualifies for evaluation for the contract. Finally, the ITB states that failure to comply with the formatting requirements for the diskette "[will] result in disqualification of your bid." [emphasis supplied] Respondent interprets the quoted language to mean that failure to comply with prescribed formatting requirements may result in disqualification of a bid. The interpretations of the quoted terms proposed by Respondent, individually and collectively, frustrate the purpose of the ITB. They also ignore material requirements of the ITB. Material Deviation Respondent deviated from the rule or standard fixed in the ITB in several respects. First, Respondent altered the bid evaluation procedure prescribed in the ITB. Second, Respondent ignored the requirement to award a single contract to a single bidder. Third, Respondent ignored the requirement that bidders provide a fixed discount on excluded items. Fourth, Respondent ignored the requirement to comply with the formatting requirements prescribed in the ITB. Each deviation from the rule or standard fixed in the ITB is a material deviation. Each deviation gives Intervenor a benefit not enjoyed by other bidders. Each deviation affects the contract price and adversely impacts the interests of Respondent. 4/ 5.5(a) Benefit Not Enjoyed By Others Intervenor enjoyed a benefit not enjoyed by other bidders. Intervenor obtained a competitive advantage and a palpable economic benefit. Respondent altered the bid evaluation procedure prescribed in the ITB. On the morning of May 20, 1996, Respondent disclosed the bid tabulations to Intervenor alone, 5/ gave Intervenor an opportunity that lasted most of the business day to determine whether it would elect to escape responsibility for its original bid, allowed Intervenor to cure the defects in its bid, accepted Intervenor's altered bid, and conditioned the bid tabulations on Intervenor's altered bid. Respondent used a bid evaluation procedure that is not prescribed in the ITB and did not allow other bidders to participate in such a procedure. 6/ In effect, Respondent rejected Intervenor's initial bid, with paragraphs 11 and 24 deleted, and made a counter offer to Intervenor to accept a bid with paragraphs 11 and 24 restored. Intervenor accepted Respondent's counter offer. Respondent excluded other bidders from that process. Respondent gave Intervenor an opportunity to determine whether it would elect: to escape responsibility for its original bid by declining Respondent's counter offer; or to perform in accordance with an altered bid by restoring paragraphs 11 and 24. A bidder able to elect not to perform in accordance with its bid has a substantial competitive advantage over other bidders unable to escape responsibility for their bids. 7/ Respondent awarded substantially all of the contract to Intervenor even though Intervenor failed to provide a meaningful discount on excluded items. Respondent provided Intervenor with a palpable economic benefit. 5.5(b) Bid Price And Adverse Impact On The State Respondent did not award a contract for excluded items. Respondent's proposed agency action allows Respondent to purchase excluded items from either Intervenor or Petitioner. If Respondent were to purchase all of the excluded items it needs from Intervenor, Respondent could pay substantially more for excluded items than Respondent would save from the five percent price advantage in Intervenor's bid for Item 1 lamps. In such a case, Respondent's proposed agency action would effectively increase costs to the state that are inherent, but not stated, in the ITB. 8/ Conversion of incorrectly formatted data to the required font shifts prices to incorrect columns and causes other problems in accessing information in the diskette. Such problems can not be rectified easily but require substantial time and effort. Responsive Bidder Respondent did not award the contract intended by the ITB to the lowest responsive bid. Although Intervenor's bid is the lowest bid for Item 1 lamps, it is not the lowest responsive bid for Item 1 and 2 lamps. Petitioner's bid is the lowest responsive bid for Item 1 and 2 lamps. 9/ Respondent is statutorily required to award the contract to the lowest responsive bidder. 10/ Illegal Intervenor's bid is not responsive within the meaning of Sections 287.012(17), Florida Statutes (1995). 11/ It does not conform in all material respects to the ITB. Intervenor's unaltered bid deletes paragraphs 11 and 24. It does not include a fixed discount on excluded items, does not include a bid for Item 2 lamps, and does not conform to the formatting requirements in the ITB. Section 287.057 requires Respondent to award the contract to the bidder who submits the lowest responsive bid. Respondent has no authority either: to consider bids that are not responsive; or to award the contract to a bidder other than the lowest responsive bidder. Respondent's attempt to engage in either activity is ultra vires and illegal. Minor Irregularities The ITB encourages, but does require, bidders to include quantity discounts for Item 1 and 2 lamps. Petitioner's bid does not include quantity discounts. Petitioner's bid does not fail to conform to material requirements in the ITB. Petitioner does not manufacture Item 1 and 2 lamps. Sylvania manufactures the lamps Petitioner sells. Petitioner has no legal right to require Sylvania to allow inspection of its facilities pursuant to paragraph 11 of the General Conditions. Petitioner's ability to provide the requisite inspections requires the cooperation of Sylvania. Petitioner's bid requires payment by the state within 30 days of an invoice. Section 215.422 and the ITB provide that Respondent has 40 days to issue warrants in payment of contract debts and that interest does not accrue until after 40 days. The defects in Petitioner's bid are minor irregularities within the meaning of Florida Administrative Code Rule 60A-1.001(16). 12/ They neither affect the bid price, give Petitioner a competitive advantage, nor adversely impact Respondent's interests. Petitioner has the practical ability to arrange inspection's of Sylvania's facilities. Petitioner is legally responsible for failing to do so. Respondent's employees have never visited Sylvania's facilities during the 10 years in which Petitioner has been the contract vendor to the state. The requirement for payment within 30 days does not obviate the provisions of Section 215.422. Private contracts can not alter mutually exclusive statutory provisions.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a Final Order granting Petitioner's protest of Respondent's proposed agency action. RECOMMENDED this 26th day of September, 1996, in Tallahassee, Florida. DANIEL S. 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 26th day of September, 1996.
Findings Of Fact Prior to June, 1988, HRS determined that it needed 23,871 square feet of office space to house some of its social services for indigents in Northern Escambia County. Since HRS desired more than 2,000 square feet of office space, it was required to bid lease number 590:1987 competitively. To that end, Respondent prepared an Invitation to Bid and a bid submittal package. The package contained various bid specifications, bid evaluation criteria and the numerical weight assigned to each of those criteria. Specific areas of importance to Respondent in the selection of its office space were: client safety public access, ingress and egress availability of public transportation. The above areas were important to HRS since the agency would render indigent services to approximately 1000 people a month, many of whom are handicapped or lack good mobility due to age or infirmity. The majority of Respondent's clients are served within a 10 day period during each month. A great deal of pressure is placed on the surrounding area due to the in flux of people. Additionally, many of Respondent's clients utilize public transportation since they do not own or have access to personal vehicles. Because of servicing so many people the above factors received a great deal of weight under HRS's consideration of the property it desired to lease and occupy. All of the above areas were covered by Respondent's weighted bid evaluation criteria. Additionally, in order to submit a responsive bid, a prospective lessor was required to meet one of the following qualifications at the time the bid was submitted: (a) be the owner of record of the facility and parking areas; (b) be the lessee of the space being proposed and present with the bid a copy of the lease with documentation of authorization to sublease the facility and parking areas; (c) submit documentation of an option to purchase the facility and/or parking areas; or (d) submit documentation of an option to lease the facility with authorization to, in turn, sublease. The District Administrator of HRS, Chelene Schembera, is ultimately responsible for bidding, selection and leasing of all HRS facilities within District I, including Escambia County, Florida. In order to accomplish this task Ms. Schembera appointed a bid evaluation committee to review and grade the responsive bids under the criteria established in the bid package, and to recommend to her the committee's choice of the lowest and best bid. Ms. Schembera's purpose in establishing the bid evaluation committee was to secure input from a cross section of people who had a variety of backgrounds and knowledge that would be material in evaluating the office space, in light of the uses for which it was intended and the relative public worth of the work space. Ms. Schembera appointed individuals who were familiar with the type of work to be done in the proposed space, as well as persons familiar with the bid process. On July 21, 1988, HRS received five bids on the lease. Intervenors submitted the apparent low bid which Northside consisted of one building located at the Brentwood Shopping Center in Pensacola, Florida. At the time that the Intervenors submitted their bid, they included documentation which showed that they had a contract to purchase the subject facility; they have since closed on that transaction. This bid package did not include the four acres adjacent to the Brentwood Shopping Center property and no contract to purchase or other documentation was submitted as to the four acre parcel of property. Petitioner submitted the apparent second lowest bid which consisted of one building located at Fairfield Plaza in Pensacola, Florida. Petitioner's interest in Fairfield Plaza is that of a lessee under a Master Lease with rights to sublet the property. All appropriate documentation was submitted with the bid. This property was the subject of a semi-friendly foreclosure action at the time that the Petitioner's bid was submitted. Petitioner was still in possession and control of the property. Both Petitioner's and Intervenors' property were within the mandatory geographical area designated in the bid package. Both bids were responsive under the minimum bid specifications and bidder qualifications. The other three bids which were submitted by HRS are not in contention The committee members personally inspected the sites offered by the Petitioner and the Intervenors. While at the Intervenors' site, the committee's concern over the property's minimal parking (as compared to Fairfield) and limited safe public access, ingress and egress were raised. The only access to Intervenor's property was from a very busy multi-lane highway. Certain turns onto and off the property were extremely dangerous. In order to make its bid package more acceptable, Intervenors' representative orally amended the bid package to include the southerly four acres contiguous to the Brentwood property. The Inclusion of the southerly four acres would adequately increase Intervenors' parking. The amendment would also create additional and safer public ingress and egress since the four acres abutted on Murray Lane which intersects Highway 29. This amendment substantially worked to Intervenors' advantage and was a material change to the previously submitted bid. The improper amendment cannot be considered here. Following the on-site inspections, the committee members met and rated the properties submitted by Petitioner and Intervenors according to a Bid Synopsis evaluation sheet which they had been previously provided. The committee members' review of the Intervenors' property included the improper bid amendment. Even with the improper amendment, the unanimous recommendation of the evaluation committee was to award the lease to the Petitioner and Fairfield Plaza. The evaluation committee based its decision on the scores attributed to each property on the Bid Synopsis sheet by the individual committee members. The committee utilized all the weighted bid criteria. However, two factors were of primary importance. One was its determination that the property offered by the Intervenors presented greater problems for ingress and egress due to the congested nature the area. The other consideration was that service to Fairfield Plaza from public transportation was both more frequent and direct. The property offered by the Intervenors had less public transportation service. The stops were less frequent and a significant number of clients would be required to transfer buses to reach Brentwood when utilizing such public transportation. All bus passengers would be required to walk from the bus stop close to Brentwood and attempt at their peril to cross a very busy, dangerous and congested highway. The reasons given by the individual committee members for distinguishing and preferring one bid over another were rational and reasonable considerations and were covered by the bid evaluation criteria. Each individual member gave a rational and reasonable basis for the scoring he or she used on the Bid synopsis score sheets. The scoring was done by each member after discussion of the two buildings and without influence from the other committee members. In essence, the committee felt that Petitioner's property was the better property for the money. Importantly, every committee member came to the conclusion that Petitioner's property was the lowest and best bid. There is no statutory or rule requirement that one scoring method be preferred over another. The only requirement is that the method be rational and reasonable especially where highly subjective, but legitimate criteria are involved in the selection of a piece of property. On these facts, the individual scoring methods used by the individual committee members were not arbitrary and capricious, but were very rational and reasonably related to the relative importance the committee members gave the above factors. The District Administrator initially adopted the committee's recommendation and reported that recommendation to King Davis, the Director of General Services for HRS. The Director of General Services later informed the District Administrator that he and his staff were concerned with the fact that the recommendation was to award the lease to the second lowest bidder. The staff's review considered the improper amendment as part of the Intervenors' bid. Over a ten year period the Petitioner's rental cost was $62,381.00 more than the Intervenors'. In addition, the estimated energy consumption for the first year for the Petitioner's property was approximately $4800 more than for Intervenors. King Davis and his staff did not believe that the justifications cited in the recommendation letter would be considered crucial enough to override awarding the lease to the lowest bidder, should the agency get involved in a bid protest over the award. He and his staff did not disagree that the reasons assigned by the committee and Ms. Schembera were legitimate considerations. Their ultimate concern was that the reasons given by the committee and Ms. Schembera would not be given as great a weight by a Division of Administrative Hearings' hearing officer; and therefore, fail to withstand a potential bid challenge. But the conclusion that the lack of ingress and egress and public transportation could not outweigh the cost differences assumed that Intervenors' bid included the four acres. Without the four acres, the problems with ingress and egress, congestion and public transportation become even more important and can outweigh minor price differences in rent and energy. This is especially true when one considers the impact that the influx of at least 1000 people would have on an already congested and unsafe area. Put simply, the conclusion that the above factors can and do outweigh price and cost considerations in these facts is not an arbitrary and capricious decision, even though others may disagree with that decision. Instead of reconvening the committee after receiving the recommendation from King Davis and discussing the same with him, the District Administrator made the determination that the lease should be awarded to the Intervenors. The District Administrator, acquiesced in Mr. Davis' assessment that HRS could not succeed in a bid challenge. She did not like his advice. In fact, even at the hearing Ms. Schembera still believed Petitioner's property was the lowest and best for HRS purposes. However, through circular reasoning she also concluded that Intervenors' property was the lowest and best bid because she chose it. The agency's ability to succeed in a bid challenge which may or may not happen is not covered by any of the weighted bid evaluation criteria contained in the bid package and is not an appropriate reason to prefer one bid over another. The foregoing is particularly true when the reason given (surviving a bid protest) is based on the occurrence of a future event which may not occur. To reject a bid for a reason outside the bid criteria and one based on an unknowable future event is an arbitrary and capricious act on the part of Respondent. A court-appointed receiver was ordered to take control of the property belonging to the Petitioner on September 28, 1988, after the bid award was announced. Petitioner still retains its right of redemption of the property, and such an interest is sufficient to confer standing on Petitioner to maintain this action. Moreover, the evidence was clear that Petitioner had both the ability and wherewithal to perform the lease should it receive the bid award. Perfected ownership or control is not required. With Petitioner's apparent ability to perform, the fact of the foreclosure action and the receiver should not work against the Petitioner in this bid protest.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED: That the Department of Health and Rehabilitative Services enter a final order awarding lease number 590:1987 to Eccelston Properties, Ltd., as the lowest and best bidder. DONE and ORDERED this 10th day of January, 1989, in Tallahassee, Florida. DIANE CLEAVINGER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 10th day of January, 1989.
