The Issue The issue is whether the Department of Corrections (DOC) acted fraudulently, arbitrarily, illegally or dishonestly when it decided to award the contract under Bid Number 94-CO-6355, for Inmate Pay Telephones and Long Distance Service (the Contract), to the number two-ranked bidder, North American Intelecom, Inc. (NAI).
Findings Of Fact Background On or about August 12, 1994, the DOC issued Invitation to Bid Number 94-CO-5355, Inmate Pay Telephones and Long Distance Service. Michael H. Johnson, a General Services Specialist, prepared the ITB at the direction of Jim Morris, Chief of the DOC's Bureau of General Services. Johnson developed the evaluation criteria and point allocations in Section 8.0 of the ITB. The document was reviewed and approved by Morris, Jim Biddy, Chief of the DOC's Bureau of Finance and Accounting, and Max Denson of the DOC's Operations Office. Inmate pay telephone and long distance service requires more than just the installation of pay phones in correctional facilities. The service vendor must also provide a means of blocking inmate telephone calls and, when calls are authorized, preventing inmates from making harassing calls to members of the public. Additionally, the ITB includes a provision requiring some means for monitoring and automatically recording inmate telephone calls, and for deactivating the automatic recording function when an inmate calls his or her attorney. A requirement is also included in the ITB that the system limit the length of inmate calls and generate monthly call detail reports. Other mandatory, no cost features to be provided under the Contract include a Personal Identification Number ("PIN") system capability, a three-way call detection and cutoff feature, a pilot site to test the call monitoring/recording system, on-site administrators to free facility staff from all tasks associated with the inmate phone system, and a semi-annual audit to ensure that the provider is meeting all technical and service requirements. The specifications in the ITB for provision of inmate pay telephone and long distance service are some of the most comprehensive in the country, requiring state-of-the-art hardware, software, and service in order to implement specified mandatory system features. Security concerns are prominent among reasons for having adequate service and support for the inmate pay telephone and long distance service. PIN-Driven System One of the primary features specified in the ITB is a PIN-driven system for blocking inmate calls. The PIN system requires each inmate to be assigned his or her own personal identification number for use with the telephone system. An inmate must key in his or her personal identification number before dialing an outgoing call. The system must automatically screen the telephone number dialed to ensure it is one which has received prior authorization for accessibility by the PIN. A PIN-driven system is labor-intensive and requires on-site administration to facilitate assignment of inmate PIN numbers and constant input and modification of each inmate's list of numbers for authorized outgoing calls. Project Staffing The DOC specifically requested the inmate phone system vendor to provide sufficient on-site administrators for a number of reasons including, but not limited to, support for proper administration of the PIN system. Noting that on-site administrators are to relieve DOC staff of all responsibilities relating to the inmate phone system, the DOC stated in the ITB that it did not want its staff to be involved with time-consuming service and maintenance problems. The DOC expressed a preference in the ITB for one on-site administrator being assigned to each major facility, except in those circumstances in which a single individual may cover several facilities in close geographic proximity to one another. Support services are important to maintain the proper functioning of the type of inmate phone system requested by the DOC. The ITB, taken as a whole, is a solicitation for an integrated telecommunications system, encompassing not only hardware, but systems software, service and project support. The ITB did not simply solicit manufacturers and models for various pieces of hardware; it contained a comprehensive description of functional requirements that had to be met. As a consequence, any determination that one bidder's "equipment" is identical to that offered by any other bidder must take into consideration proposed support and service, as well as proposed hardware and software applications. Bid Evaluation Procedure Specified in the ITB As established at final hearing by the unrebutted testimony of MCI's expert in telecommunications service bid response preparation, DOC's ITB differed from those in many other states. Unlike the instant ITB, many ITBs from other jurisdictions provide for a determination that bids meet specified minimum requirements and then dictate the award of a contract to the responsive bid with the lowest price. Conversely, DOC's ITB specified a detailed procedure to be followed in evaluating the bids, including evaluation criteria, points to be assigned to each criterion, and an evaluation committee to conduct the evaluation of bids. Johnson, the DOC employee responsible for the preparation of the ITB, understood that the Contract would be awarded to the bidder with the highest number of points allocated in accordance with the evaluation scheme described in Section 8.0 of the ITB. The DOC includes in its ITB both general and special conditions and specifications. The ITB, by its own terms, provides that special conditions and specifications shall have precedence over general conditions. The ITB contains numerous special conditions and specifications, including the bid evaluation procedures under Section 8.0. The bid evaluation criteria which are described by these special conditions and specifications identify the areas of the state's interest which must be addressed by the bids, as well as the weight to be assigned to each. Section 8.3 of the ITB emphasizes that any information gleaned from post bid demonstrations will not be used to change bid responses. The bid evaluation scheme specified in the ITB provided for points to be awarded to each bid using the following weighted criteria: CRITERIA POINTS CORPORATE QUALIFICATIONS 15 REFERENCES 10 PROPOSED PROJECT STAFF 5 COMMISSION RATE 70 TOTAL POSSIBLE POINTS 100 The points awarded for "commission rate" were to be determined by using a formula specified in the ITB which initially gave 70 points to the bidder proposing the highest commission rate, with all other bidders receiving a lesser number of points, depending on how close they came to the highest proposed commission rate. The points awarded for all of the other criteria were to be determined by a seven-member Evaluation Committee, members of which were selected by Assistant Secretary Kronenberger for their experience with management and actual operation of inmate phone systems, both from the institutional perspective and the regional office perspective. Each bid was required to be independently evaluated. The DOC issued two addenda to the ITB. The first addendum was issued August 23, 1994, and advised potential bidders of a change in location for the pre-bid conference scheduled for September 7, 1994. At the pre-bid conference, the DOC explained the award process to potential bidders. Johnson, the DOC representative, advised potential bidders at the pre- bid conference that the contract award would not be determined solely on the strength of the commission rate quote. On September 22, 1994, the DOC issued Addendum Number Two to the ITB which, among other things, changed the evaluation procedure by adding a new criterion and re-allocating the weight among the expanded criteria as follows: CRITERIA POINTS CORPORATE QUALIFICATIONS 10 REFERENCES 10 PROPOSED PROJECT STAFF 5 TECHNOLOGICAL ENHANCEMENTS 10 COMMISSION RATE 65 TOTAL POSSIBLE POINTS 100 The addition of "technological enhancements" was made at the request of Deputy Secretary Thurber, who wanted to be sure that the DOC had an opportunity to see what features above and beyond the minimum features specified in the original ITB were available for an inmate pay telephone system. When technological enhancements were added as an evaluation criterion, the weight to be given the commission rate in the evaluation scheme was lowered from 70 to 65 points. The DOC officials who reviewed and approved Addendum Number Two determined that the reduced weight for proposed commission rates was appropriate. At 65 percent of the available points, the reduced weight for the proposed commission is still higher than the 45 percent to 50 percent weight typically given by the DOC to the revenue side of a bid. Bidder Preparation MCI relied on the representation in the ITB and assurances of DOC's representative, Michael H. Johnson, at the bid conference that DOC's decision would not be made solely on the basis of cost. As a consequence of DOC representations, MCI prepared its bid to address the specifications in the ITB and thereby maximize its overall points under the ITB's evaluation scheme, as opposed to submission of a bid package concerned solely with scoring the highest possible points for "commission rates." Bid Opening and Initial Review On October 21, 1994, bids were submitted to DOC by MCI, NAI, AT&T, TEI, Robert Cefail & Associates (RC&A), 21st Century, RC&A/21st Century, and LDDS Metromedia. At the Bid Opening, Johnson again explained the award process to bidders on behalf of the DOC, and advised bidders that the bid tabulation was strictly for the purpose of documenting responses and that nothing was to be inferred from the proposed commission rates. Bidders were again advised that commissions would be only one aspect of the award. Johnson's understanding at the time of the Bid Opening was that the Contract would be awarded based on points awarded pursuant to the bid evaluation scheme specified in the Section 8.0 of the ITB. Johnson participated in an initial review of the bids, reading each of the proposals to determine whether the mandatory requirements were satisfied. Of eight bids received, five, including the bids submitted by MCI and NAI were determined by the DOC to satisfy the mandatory requirements. The Evaluation Committee As required in the ITB, the DOC formed an Evaluation Committee to evaluate the bids. Selected by Assistant Secretary Kronenberger, members of the Evaluation Committee were: Jim Biddy, Chief of the Bureau of Finance and Accounting; Jerry Pilcher, Chief of Regional Administrative Services for Region II; Kermit Kerley, Superintendent of the Hardee Correctional Institution; Stan Czerniak, Superintendent of the North Florida Reception Center; Charles Mask, Superintendent of the Corrections Mental Health Institution; Charles Dennard, Business Manager for the Polk Correctional Institution; and Robert Sandal, General Services Manager for Region I. Members of the Evaluation Committee were selected from the DOC's business managers and superintendents on the basis that their participation would provide an overall perspective with respect to management and actual operation of the inmate phone system. Evaluation Committee's Recommendation All five of the bids determined by the DOC to be responsive were thoroughly reviewed by Evaluation Committee in accordance with the bid evaluation procedures specified in the ITB, including Addendum Number Two, in an almost day-long session in the DOC's Central Office on January 5, 1995. The total points awarded by each Committee member for all of the four evaluation criteria were averaged to establish each bidder's total Evaluation Points. Every member of the Evaluation Committee scored MCI's bid as their number one or number two choice. NAI was ranked no higher than third by anyone on the Committee and was ranked fourth by five of the Committee's members. No member of the Committee gave NAI a higher score than MCI on any of the evaluation criteria. Comments on a majority of the evaluation forms of the seven members of the Evaluation Committee reflect a general concern for the adequacy of NAI's proposed project support. Specifically, Mr. Biddy noted that "[p]roposed project staff consisted of only 17 people [and that it was] questionable whether this would be sufficient for site administration as well as contract management." Similarly, Mr. Kerley noted on the NAI bid evaluation form that "17 staff may not be enough to support [the] system." Mr. Pilcher's comments indicated that "[p]roject support was not as I expected or not explained very well." Mr. Dennard indicated that NAI's bid provided "no breakdown of [the] 17 staff to support [the] contract [and] no mention of site administrators." The NAI bid indicates that a total of 17 personnel will be made available to support the Contract with more to be "added if the schedule so indicates." NAI's bid does not specifically identify the number of persons to be involved in on-site administration. However, NAI has committed only 17 people in support the Contract as a whole, ten of whom are expressly identified as performing tasks other than on-site administration. While NAI's bid indicates provision of additional personnel if required by the schedule, ambiguity about whether NAI would expand the number of on-site administrators for the entire term of the contract is evident. The "installation requirements" described in the ITB refer to time-limited activities necessary to initiate operation of the inmate telephone system, as opposed to the ongoing nature of the commitment necessary for on-site administration. In its bid response, NAI also agreed to cooperate with the DOC "to insure the proper distribution of on-site administrators." This offer does not suggest, however, that the number of on-site administrators committed in support of the Contract will be augmented by NAI. Such assurance relates to location and not number of on-site administrators. Testimony of NAI presented at final hearing that additional on-site administrators will be provided is not credited, inasmuch as such testimony constitutes an impermissible attempt by NAI to modify its bid after the bid opening. Based upon the substantial disparity in the proposed levels of customer service, the MCI and NAI bids cannot be considered to be identical. NAI's assertion at hearing that its bid included other system features which do not appear on the face of its written proposal constitutes a prohibited post-bid-opening modification. Such modifications included PCs, keyboards, printers and color monitors at each facility. These items are included on the face of the MCI bid. MCI offered 28 personnel in support of the Contract, including an express commitment for 20 on-site administrators. MCI's proposal to provide 20 on-site administrators is one of the highest number of on-site administrators offered by any bidder and a very costly aspect of MCI's bid since all employee salary and benefits must be covered for each on-site administrator dedicated to the project. The assignment of points for each bidder's proposed commission rate (Commission Points) was based on a scale which assigned 65 points to the bid with the highest commission rate quote. A lesser number of points was assigned to all other bids pursuant to a formula specified in Section 8.2 of the ITB, as amended by Addendum Number Two. The highest commission rate quoted by any bidder was proposed by NAI at 56 percent. NAI was accordingly assigned 65 Commission Points. NAI was also awarded 22.143 Evaluation Points, which, when combined with NAI's 65 Commission Points, produced a total of 87.143 points. MCI proposed a 53 percent commission rate and, in accordance with the formula set forth in the ITB, earned 61.51 Commission Points. MCI was also awarded 30 Evaluation Points which, when combined with MCI's 61.51 Commission Points, produced a total of 91.51 points. When the Evaluation Committee's other scores were combined with the scores for commission rates obtained by applying the formula in the ITB, MCI's point total was higher than that received by any of the other bidders. The DOC officials later involved in the decision to award the Contract to NAI indicated that they had no reason to question the work of the Evaluation Committee. After reviewing the bid evaluation forms produced by the Evaluation Committee, and based on his continuing understanding that the Contract would be awarded to the bidder receiving the highest number of points under the evaluation scheme specified in the ITB, Michael H. Johnson prepared a memorandum for signature of his supervisor, Mr. Morris, to Assistant Secretary Kronenberger. Dated January 31, 1995, the memorandum recommended award of the Contract to MCI. Morris signed the January 31, 1995 memorandum and forwarded the same to Assistant Secretary Kronenberger. At prehearing deposition in this case on April 13, 1995, Kronenberger denied having received any recommendation from anyone regarding which company should be awarded the contract. Later at the final hearing following Johnson's testimony that he, Johnson, had been instructed to destroy the signed document by Morris (his supervisor), Kronenberger finally admitted that he had told Morris "we ought to pull that memo." These instructions were followed by Morris, who directed Mr. Johnson to destroy the January 31, 1995 memorandum recommending award of the Contract to MCI. Significantly, neither Morris, Kronenberger, nor Thurber--all DOC officials involved in the contract award decision--mentioned the existence of this document prior to Mr. Johnson's revelation on the witness stand that it had been destroyed. After-The-Fact Evaluation In a February 22, 1995 memorandum to Deputy Secretary Thurber, Kronenberger, after acknowledging that MCI received the highest number of points, formally recommended that the Contract be awarded to NAI. This memorandum was drafted by Morris at the direction of Kronenberger. Before making the recommendation to award the contract to NAI, Kronenberger had not read the ITB, the addenda to the ITB, or any portion of the bids. Morris was the only member of his staff with whom Kronenberger consulted. Kronenberger's decision was approved by Deputy Secretary William Thurber. Neither Kronenberger, Morris, nor Thurber read the bids at any time prior to the DOC's issuance of the notice of intended award to NAI. Kronenberger based his decision to recommend award of the Contract to NAI on his belief that NAI and MCI proposed to install "identical equipment," and that at least $1.1 million in additional revenue would be generated by the 3 percent higher commission rate offered by NAI over the three-year base term of the Contract. Although the February 22, 1995 Kronenberger memorandum states that the DOC could find no correlation between the proposed commission rates and equipment capabilities, the DOC officials who made the decision to award the Contract to NAI (Morris, Kronenberger and Thurber) performed no analysis of the proposals, did not complete a score sheet, did not talk with any of the members of the Evaluation Committee, and were unaware of the specific content of the bids and the proposed differences in staffing offered by the two bidders. In contrast to the assertion of the Kronenberger memorandum, the proof establishes a direct inverse correlation between the total average scores awarded by the Evaluation Committee to the top three bids and the commission rates offered in those bids. This inverse correlation proves that the bidders had to balance the cost of the hardware, software and support personnel aspects of their bids against the commission rate they could offer and that the cost of each hardware, software and support personnel aspect of a bid has a direct impact on the commission rate which could be offered. This balancing is precisely what is required by the ITB since all of these aspects of the bid were assigned specific weights in the specified evaluation scheme. Kronenberger's assumption, as set forth in his memorandum recommending award of the contract to NAI, that both NAI and MCI proposed to install identical "equipment" ignores the fundamental premise of the solicitation--that hardware, software and support were needed to provide a fully functioning, secure inmate phone system, as well as the fact that the vendors offered different approaches in responding to this requirement. System hardware proposed by MCI and NAI includes the Telequip System Automatic Call Processor ("ACP") 4000, a Dictaphone recording and monitoring system, and Philips & Brooks/Gladwin phone instruments. However, with regard to all aspects of the hardware offered, MCI's bid was more detailed and specific as compared with the NAI bid which generally identified system capabilities by referencing attached brochures. At best, NAI's bid is ambiguous as to whether it offered the same hardware component features. NAI's general references to the brochures in its bid failed to specify which features of a piece of equipment was being affirmatively offered. NAI's after-the-fact assertion at the final hearing regarding features to be provided cannot be credited since such constitutes an impermissible attempt to modify its bid after the bid opening. Software jointly developed by MCI and Telequip would permit operation of the attorney exception capability utilizing the Telequip ACP-4000 with the proposed Dictaphone recorder systems. Until MCI requested development of the necessary software, the attorney exception capability, which deactivates the automatic recording function when an inmate calls his or her attorney, was not available with the Telequip ACP-4000 when used in conjunction with the Dictaphone recorder. Software jointly developed by MCI and Telequip was also necessary to provide an international call capability because the standard Telequip ACP-4000 ordinarily utilizes a debit system to process international calls, and "the debit system is inherently incompatible with the PIN system and the allowed calling list feature that are requirements in the . . . ITB." The MCI bid offers more technological enhancements at no cost to the DOC, than does the NAI bid. Further, the items identified on MCI's list of technological enhancements do not appear anywhere on the face of the NAI bid. NAI's omission of the enhancements listed in the MCI bid adds further credence to the finding that the DOC had no reasonable basis to conclude that it would be getting those enhancements under the NAI bid at the time it was submitted. Moreover, the DOC's own synopsis of technological enhancements shows that it was aware of differences in the bids. Differences in the hardware, software and services offered in the MCI and NAI bids preclude a determination that the two bids offered "identical equipment." Monetary Considerations Revenue figures used by the DOC to project a $1.1 million difference in commissions were drawn from a period of time in late 1994 and early 1995 when the DOC's own summary reports indicate that NAI's billing exceptions range from 41 percent to 49 percent of all calls. Billing exceptions are the number of calls which exceed AT&T rates or could not otherwise be reviewed in monthly call detail reports. NAI's customer overcollections for telephone calls from inmates in the correctional facilities presently served by NAI provide an additional basis for uncertainty regarding the reliability of the projected $1.1 million difference in commissions. While the overcollections have not yet been quantified, NAI has admitted to the Florida Public Service Commission overcollections from customers receiving telephone calls from inmates under its current contract with the DOC in the amount of $394,318. Notwithstanding the ongoing PSC inquiry and reports of extensive billing exceptions under its existing contract with NAI, the DOC has no apparent incentive to closely scrutinize overcollections inasmuch as the more revenues billed by NAI, the greater the amount of commissions received by the DOC. Thus, while there is a 3 percent difference in the proposed commission rates between the two bidders, it cannot be determined from this record with any degree of certainty how that difference will translate into actual dollars to the DOC. In any event, the revenues generated by the contract for inmate pay telephones are placed in the Inmate Welfare Trust Fund, which does not support essential correctional facilities or services. Notice of Award and Protest On March 2, 1995, the DOC issued an intent to award the Contract to NAI. On March 8, 1995, within 72 hours of receipt of DOC's notice of intent, MCI timely filed a Notice of Protest. On March 20, 1995, within ten days of filing its Notice of Protest, MCI timely filed a Formal Written Protest pursuant to Section 120.53(5) and 120.57, Florida Statutes, and Rule 33-20.005, Florida Administrative Code. With its Formal Written Protest, MCI delivered to the DOC a cashier's check in the amount of $5,000. On April 10, 1995, the DOC served its Motion to Dismiss MCI's protest, alleging that MCI has no right to a formal administrative hearing on the award of the Contract. On April 12, 1995, the undersigned Hearing Officer, after consideration of the parties' pleadings and oral argument, ruled that MCI is entitled to a formal administrative hearing under Chapter 120, Florida Statutes, to determine whether the DOC's decision to award the contract to NAI was arbitrary, illegal, fraudulent, or dishonest. MCI has requested reasonable attorneys' fees and expenses pursuant to Section 120.57(1)(b)5, Florida Statutes, for costs incurred in responding to the DOC's Motion to Dismiss. The Hearing Officer has ruled on the motion by order issued concurrently with this recommended order.
Conclusions The Department adopts the Conclusions of Law contained in its Proposed Order, except for paragraph 189. The Hearing Officer's Conclusions of Law are also adopted, to the extent they do not conflict with the Department's. The following additional Conclusions of Law are now adopted into this Final Order. Service and personnel support were clearly part of the ITB, and were scored accordingly. Although Mr. Kronenberger considered service and support by recognizing the work already performed by Intervenor under its existing contract, sufficient consideration was not given for the $394,318 overcharge which Intervenor admitted to at the hearing. Since this overcharge was admitted to the Public Service Commission and not the Department, oversight is understandable. However, at this time the overcharge cannot be ignored. Certainly the significant amount of this overcharge has an impact on service provided. Although the Department still believes the equipment bid by Petitioner and Intervenor are "identical," service can no longer be considered the same due to the overcharge. Therefore, the award of the contract pursuant to the ITB should be made to Petitioner, MCI Telecommunications Corporation. RULING ON INTERVENOR'S EXCEPTIONS TO RECOMMENDED ORDER Intervenor's exceptions to paragraphs 46-50 of the Recommended Order are accepted by the Department and incorporated into this Final Order. Intervenor's exceptions to paragraph 51 are denied. Although the equipment are "identical," the Department does not, and did not at the hearing, maintain that the bids of Petitioner and Intervenor are identical in terms of support and service. Intervenor's exception to paragraph 70 of the Recommended Order is accepted by the Department and incorporated into this Final Order. Intervenor's exception to paragraph 71 of the Recommended Order is denied. The Hearing Officer is merely reciting the terms of the ITB, that service and support are also an important part of the bid. Mr. Kronenberger never denied the importance of service and support. Intervenor's exceptions to paragraphs 73-77 of the Recommended Order are accepted by the Department and incorporated into this Final Order. Intervenor's exceptions to paragraphs 79 and 81 of the Recommended Order are accepted by the Department and incorporated into this Final Order. Intervenor's exception to paragraph 80 of the Recommended Order is denied to the extent it rejects the finding of fact that Intervenor admitted to an overcharge of $394,318. Intervenor did admit this fact. Intervenor's exception to paragraph 82 of the Recommended Order is accepted by the Department and incorporated into this Final Order. RULINGS ON PETITIONER'S FILINGS No response is provided to the Petitioner's Response to Intervenor's Exceptions. There is no provision for filing such response under Chapter 120, and the Department is not required to respond to such pleadings. The Department has reviewed Petitioner's Request for Official Recognition and Enforcement of Ex Parte Communications Prohibitions. No Department employee who has testified or been deposed in this matter has discussed the merits of this action with the agency head. However, the Department does not agree with Petitioner's contention in its Request for Recognition that section 120.66, Florida Statutes, prohibits the agency head from conversing with the Department employees listed therein. This order may be appealed within thirty days by filing a notice of appeal with the agency and the district court of appeal. Except in cases of indigence, the court will require a filing fee and the agency will require payment for preparing the record on appeal. For further explanation of the right to appeal, refer to Section 120.68, Florida Statutes, and the Florida Rules of Appellate Procedure. DONE AND ORDERED this 17 Day of July, 1995 in Tallahassee, Florida. HARRY K. SINGLETARY, JR, SECRETARY Department of Corrections 2601 Blairstone Road Tallahassee, Florida 32399-2500 (904) 488-2326 COPIES FURNISHED: Carloyn Raepple (via certified mail) Hopping Green Sams & Smith 123 South Calhoun Street Tallahassee, Florida 32314 Hume Coleman (via certified mail) Holland & Knight 315 South Calhoun Street Suite 600 Tallahassee, Florida 32302 Steven S. Ferst Department of Corrections Assistant General Counsel 2601 Blairstone Road Tallahassee, Florida 32399-2500 Mike Johnson Department of Corrections 2601 Blairstone Road Tallahassee, Florida 32399-2500 Don W. Davis, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 Filed in the official records of the Department of Corrections on this 17th day of July, 1995. LORETTA L. LATSON, Agency Clerk
Recommendation Based on the foregoing, it is hereby RECOMMENDED that a final order be entered which declines the award to NAI and takes into account the foregoing findings of fact and conclusions of law when deciding the future course of awarding the contract for hardware, software and support needed to provide a fully functioning, secure inmate telephone system. DONE AND ORDERED this 15th day of June, 1995, in Tallahassee, Leon County, Florida. DON W. DAVIS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 15th day of June, 1995. APPENDIX In accordance with provisions of Section 120.59, Florida Statutes, the following rulings are made with regard to purposed findings of fact submitted by the parties. Petitioner's Proposed Findings: 1.-30. Adopted. 31.-32. Adopted in substance. 33.-49. Adopted. 50.-54. Adopted in substance. 55.-58. Adopted. 59-63. Adopted in substance. 64-70. Adopted. 71. Rejected, unnecessary to result reached. 72.-82. Adopted. 83. Rejected, unnecessary. 84.-85. Adopted. Adopted in substance. Rejected, unnecessary to result. 88-92. Adopted. 93. Incorporated. 94.-96. Subordinate to HO findings. Respondent's Proposed Findings: Adopted. Rejected, unnecessary. 3.-5. Adopted. Adopted, not verbatim. Adopted. Rejected, redundant. Adopted. 10.-12. Rejected, subordinate. 13.-17. Adopted. 18.-22. Rejected, argumentative and subordinate. 23. Rejected, unnecessary. 24.-25. Rejected, weight of the evidence. 26. Rejected, subordinate. 27.-35. Rejected, weight of the evidence. 36.-43. Rejected, argumentative, weight of the evidence. 44.-52. Rejected, redundant, argumentative, subordinate. 53.-54 Rejected, argumentative, subordinate to HO findings. 55.-58. Rejected,Relevancy, weight of the evidence. 59.-63. Rejected, subordinate, weight of the evidence. Accepted. Rejected,Relevance. Rejected, weight of the evidence. Rejected, stands for proposition that an agency is not bound by terms of ITB at all, argumentative. Rejected,Relevance. Rejected, argument. 70.-71. Rejected, weight of the evidence. 72.-76. Rejected, argument. 77.-78. Rejected, argument, weight of the evidence. Adopted. Rejected, subordinate, authority is to award within perimeters of legality and the ITB. Rejected, comment on testimony. 82.-83. Rejected, subordinate to HO findings. 84. Rejected, legal conclusion. 85.-89. Rejected, subordinate to HO findings. 90.-91. Rejected,Recitation of documents. 92.-95. Rejected, argumentative. Rejected, subordinate. Rejected, recitation of documents. Rejected, relevance. 99.-107. Rejected, subordinate to HO findings. Intervenor's Proposed Findings: 1.-10. Accepted, though not verbatim. 11. Rejected, no record citation. 12.-14. Rejected, subordinate to HO findings. 15. Adopted, not verbatim. 16.-21. Rejected, subordinate to HO findings. 22. Rejected, no record citation. 23.-24. Rejected, subordinate. 25. Rejected, no record citation. 26.-29. Rejected, subordinate to HO findings. Adopted by reference. Rejected, subordinate. 32.-40. Rejected, subordinate to HO findings. 41. Accepted except for last sentence which is rejected on basis of relevance. 42.-43. Rejected, subordinate to HO findings. COPIES FURNISHED: Carolyn S. Raepple, Esquire Cheryl G. Stuart, Esquire Hopping Green Sams & Smith, P.A. 123 South Calhoun Street Tallahassee, FL 32301 Linda P. Armstrong, Esquire MCI Telecommunications Corporation 1133 19th Street, N.W. Washington, D.C. 20036 Steve Ferst, Esquire Florida Department of Corrections 2601 Blair Stone Road Tallahassee, FL 32399-2500 Hume F. Coleman, Esquire Holland & Knight 315 South Calhoun Street Tallahassee, FL 32302 Harry K. Singletary, Jr., Sec. Dept. of Corrections 2601 Blairstone Rd. Tallahassee, FL 32399-2500 Louis A. Vargas, Esq. Dept. of Corrections 2601 Blairstone Rd. Tallahassee, FL 32399-2500
Findings Of Fact Findings based on stipulation The School Board of Broward County, Florida, ["Board"] issued bid number 94-307D [Lease of School Board Owned Parking Lot - Term Contract] on the 22nd day of November, 1993. Three bidders responded to the invitation to bid. They were: Bliss Parking, Inc., a Florida Corporation ("Bliss"); Fort Lauderdale Transportation, Inc., d/b/a USA Parking Systems ("USA"); and Carl A. Borge. An initial review of the tabulations of the bids indicated that Bliss and USA had submitted the identical percentage of shared revenue to the Board in their respective bids. After the review of the bids, Board staff posted a recommendation to award the bid to USA. [See the "remarks" portion of Exhibit B.] A bid protest was filed by Bliss because of the "remarks" portion of Exhibit B. After a review of Bliss' bid protest, Board staff amended its recommendation to reject all bids because of the issues raised in Bliss' protest. After Board staff notified all bidders of this amended recommendation, USA filed a notice and formal protest. The Board, at its meeting on March 1, 1994, heard the presentation of USA and Board staff. The Board, after deliberating the matter, deferred the item until the meeting of March 15, 1994, wherein seven Board members would be present. At the March 15, 1994, Board meeting, by a vote of 4 to 3, the Board granted USA's protest and awarded the bid to USA whom the Board had determined was the highest bidder meeting bid specifications. All bidders were notified of the Board's action and on the 16th day of March 1994 Bliss timely filed its notice of protest and its formal written protest. Bliss appeared with counsel before the Board on the 5th day of April 1994. After considering arguments of counsel for Bliss and reviewing the material in Agenda Item H-1 and in consideration of its previous actions, it voted to reject Bliss' protest seeking the rejection of all bids received and re-bidding of the item. Bliss subsequently requested a formal hearing under Chapter 120.57, Florida Statutes. Findings based on evidence adduced at hearing The General Conditions portion of the Invitation To Bid includes the following provision: INTERPRETATIONS: Any questions concerning conditions and specifications must be submitted in writing and received by the Department of Purchasing no later than five (5) working days prior to the original bid opening date. If necessary, an Addendum will be issued. A related provision in the Special Conditions portion of the Invitation To Bid reads as follows: 21. INFORMATION: Any questions by prospective bidders concerning this Invitation to Bid should be addressed to Mrs. Sharon Swan, Purchasing Agent, Purchasing Department, (305) 765-6086 who is authorized only to direct the attention of prospective bidders to various portions of the Bid so they may read and interpret such for themselves. Neither Mrs. Swan nor any employee of the SBBC is authorized to interpret any portion of the Bid or give information as to the requirements of the Bid in addition to that contained in the written Bid Document. Questions should be submitted in accordance with General Condition #7. Interpretations of the Bid or additional information as to its requirements, where necessary, shall be communicated to bidders only by written addendum. The Special Conditions portion of the subject Invitation To Bid includes the following provisions: REFERENCES: A minimum of three (3) references must be provided by completing page 14 of the bid. Failure to provide references with the bid or within five (5) days of request by the Purchasing Department will be reason for disqualification of bid submitted. All references will be called. SBBC reserves the right to reject bid based on information provided by references. Page 14 of the Invitation To Bid has three sections, each of which reads as follows: COMPANY NAME: STREET ADDRESS: CITY: STATE: ZIP: TELEPHONE NUMBER: CONTACT PERSON'S NAME: NUMBER OF PARKING SPACES: LENGTH OF CONTRACT: At page 12 of the Invitation To Bid, the following note appears under the Bid Summary Sheet portion of the document: "NOTE: Calculation of high bidder shall be the bidder offering the highest percent of shared revenue meeting all specifications and conditions of this bid." The Special Conditions portion of the Invitation To Bid also contains a procedure for resolving tie bids, which reads as follows, in pertinent part: TIE BID PROCEDURES: When identical prices are received from two or more vendors and all other factors are equal, priority for award shall be given to vendors in the following sequence: A business that certifies that it has implemented a drug free work place program shall be given preference in accordance with the provisions of Chapter 287.087, Florida Statutes; The Broward County Certified Minority/ Women Business Enterprise vendor; The Palm Beach or Dade County Certified Minority/Women Business Enterprise vendor; The Florida Certified Minority/Women Business Enterprise vendor; The Broward County vendor, other than a Minority/Women Business Enterprise vendor: The Palm Beach or Dade County vendor, other than a Minority/Women Business Enterprise vendor; The Florida vendor, other than a Minority/Women Business Enterprise vendor. If application of the above criteria does not indicate a priority for award, the award will be decided by a coin toss. The coin toss shall be held publicly in the Purchasing Department; the tie low bid vendors invited to be present as witnesses. The Petitioner filled out all three sections on page 14 of the Invitation To Bid and submitted that page with its bid. The three references listed by the Petitioner were companies for whom the Petitioner provided parking services or parking facilities, but none of the three references listed by the Petitioner was a land owner from whom the Petitioner leased land for the operation of a parking facility. Mr. Arthur Smith Hanby is the Director of Purchasing for the School Board of Broward County. In that capacity he is in charge of the bidding process for the School Board. Specifically, he was in charge of the bidding process for the subject project. In the course of evaluating the bids on the subject project, the evaluation committee reached the conclusion that there was a problem with the bid submitted by the Petitioner with respect to the references listed in the Petitioner's bid. In the original bid tabulation and recommendation posted on January 4, 1994, the recommendation was that the contract be awarded to the Intervenor, whose bid amount tied with the Petitioner's bid amount. 4/ The reasons for the recommendation were described as follows in the "remarks" portion of the tabulation and recommendation form: REJECT BID FROM BLISS PARKING, INC. REFERENCES WERE GIVEN ON PAGE 14 OF BID. ALL REFERENCES WERE CALLED. BASED UPON INFORMATION PROVIDED BY THESE REFERENCES AND IN ACCORDANCE WITH SPECIAL CONDITION #10, IT IS RECOMMENDED THAT THE BID FROM BLISS PARKING, INC. BE REJECTED. EVALUATION OF THIS BID CEASED AT THIS TIME. THERE MAY BE ADDITIONAL REASONS WHY THIS BID COULD NOT BE ACCEPTED. The sole reason for the rejection of the Petitioner's bid was that the references listed by the Petitioner were not the types of references the evaluation committee wanted to receive. The evaluation committee wanted references from entities who, like the School Board, were land owners who had leased land to a parking lot operator. The evaluation committee was of the opinion that references from other sources would not adequately protect the interests of the School Board. There is nothing in the Invitation To Bid that addresses the issue of who should be listed as references. Specifically, there is nothing in the Invitation To Bid requiring that references be submitted from land owners who had leased land to a parking lot operator. At the time of the issuance of the subject Invitation To Bid, the Petitioner was operating the subject parking lot for the School Board. There were no material differences in the bids submitted by the Petitioner and the Intervenor other than the differences in the types of references they listed. The Petitioner's references who were contacted did not provide any adverse information about the Petitioner. The evaluation committee spoke to two of the references listed by the Petitioner, but did not speak to the third listed reference. The third reference listed by the Petitioner was a court reporting firm located across the street from the location of the subject parking lot. The evaluation committee did not speak to anyone at the court reporting office because the telephone number listed for that reference was not a working number. The evaluation committee made an unsuccessful attempt to locate the telephone number of the court reporting firm in the telephone book.
Recommendation On the basis of all of the foregoing, it is RECOMMENDED that the School Board issue a final order in this case concluding that the Petitioner's bid is responsive to the Invitation To Bid and that the School Board then take one of the courses of action described in paragraph 26, above. DONE AND ENTERED this 23rd day of June 1994 at Tallahassee, Leon County, Florida. MICHAEL M. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 23rd day of June 1994.
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.
Findings Of Fact Based upon the documentary evidence received and the entire record compiled herein, I hereby note the following findings of fact: Notice and Invitation to Bid on State Project Number 72001-3448 (the project) was extended to various contractors by the Respondent, Department of Transportation, on August 1, 1985. Sealed bids on the project were opened August 28, 1985. The scope of the project involved cleaning and painting the structural steel of the Buckman Bridge over the St. Johns River in Jacksonville, Florida. (State Bridge Numbers 720249 and 720343). The bids were opened and Petitioner was the apparent low bidder on the project with a bid amount of $193,000. The Department of Transportation, on October 2, 1985, rejected all bids "due to error in quantities in plans." According to the contract plans and specifications utilized by the Department of Transportation for the project, the beams, girders, bracing and trusses were composed of 2,540 tons of structural steel. The plans were in error and the tonnage of structural steel was less than 2,540 tons. Petitioner, upon visiting the job site as required, immediately recognized that there was less steel in the bridge than shown in the plans. In submitting and formulating his bid, the Petitioner considered the amount of work and materials which would actually be required to complete the project. 6 Prior to the bids being posted on the project, the Department of Transportation discovered that the amount of structural steel noted in the plans was grossly overestimated. On October 2, 1985, the Department of Transportation notified bidders in writing that all bids submitted on the project were rejected and that the plans would be revised and the project relet.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is, RECOMMENDED that the petition of Industrial Enterprise Sandblast and Painting, Inc., protesting the rejection of all bids on State Project No. 72001- 3448, be dismissed. DONE AND ORDERED this 11th day of December 1985 in Tallahassee, Florida. W. MATTHEW STEVENSON Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 11th day of December 1985. APPENDIX Respondent's Findings of Fact FINDING RULING Accepted; see Recommended Order paragraph 1. Accepted; see Recommended Order paragraph 2. Accepted, but not included because subordinate. Accepted; see Recommended Order paragraph 4. Accepted; see Recommended Order paragraphs 3 and 6. Accepted; see Recommended Order paragraphs 3 and 6. Accepted; see Recommended Order paragraph 6. COPIES FURNISHED: HONORABLE THOMAS E. DRAWDY, SECRETARY DEPARTMENT OF TRANSPORTATION HAYDON BURNS BUILDING TALLAHASSEE, FLORIDA 32301 A. J. SPALLA, ESQUIRE GENERAL COUNSEL DEPARTMENT OF TRANSPORTATION 562 HAYDON BURNS BUILDING TALLAHASSEE, FLORIDA 32301 LARRY D. SCOTT, ESQUIRE DEPARTMENT OF TRANSPORTATION HAYDON BURNS BUILDING, M.S. 58 TALLAHASSEE, FLORIDA 32301-8064 INDUSTRIAL ENTERPRISE SANDBLAST & PAINTING, INC. P. O. BOX 1547 1502 FOX RUN DRIVE TARPON SPRINGS, FLORIDA 32486-1547
The Issue The issue in this case is whether the bid specifications, together with other applicable authority, require that a bid, in order to be responsive, contain any written list of subcontractors.
Findings Of Fact On September 26, 1989, Respondent issued a document entitled, Specifications for Replacement of Air Conditioning, West Orange High School, Winter Garden, Florida, Engineers Project No. 89-016. As amended by three addenda, the above-described specifications shall be referred to as the "ITB." Respondent duly advertised for bids ore September 26, October 3, and October 10, 1989. The advertisement did not state that Respondent reserved the right to waive minor irregularities. In response to the ITB, Florida Mechanical, Inc. ("FMI") and B & I Contractors, Inc. ("B & I") timely submitted bids. For the base work and alternate 1, which Respondent ultimately decided to select, FMI bid $1,439,000, B & I bid $1,438,000, and a third bidder, S. I. Goldman, Company bid $1,621,000. These bids are recorded on a Bid Tabulation Sheet prepared by the engineer retained by Respondent for the project. The Bid Tabulation Sheet contains eight columns. Four columns record bid amounts for the base work and various alternates. The remaining columns are entitled, "Bidder," "Bid Bond," "Addenda," and "Subs." Each of the three bidders were named in one of the rows beneath the "Bidder," column. Each bidder had one "X" in its "Bid Bond" column and three "X"s in its "Addenda" column. However, only FMI and S. I. Goldman Company had "X"'s in their "Subs" columns. By resolution adopted on November 29, 1989, Respondent directed that all bids were rejected and that the Superintendent would correct any ambiguities and uncertainties in the ITB and solicit new bids. The resolution noted that Respondents staff had recommended that, if any bid were accepted, it should be that of B & I. However, [FMI] submitted with its bid a list of Major Sub-contractors of the form displayed in the [ITB], and B & I did not submit wish its aid a list of Major Sub-contractors[.] The resolution concluded that Respondent based on advice of staff and counsel, found that the [ITB is) ambiguous and/or uncertain as to whether or not a bidder must submit along with his bid a list of Major Sub-contractors, (b) that because of such ambiguity and/or uncertainty, it would be unfair and/or improper for [Respondent] to accept either of the bids received by it, and (c) that as a result thereof [Respondent] should reject all bids received by it for ,the Project and should solicit new bids for the Project as soon as is reasonably feasible after correction by [Respondents] staff of any ambiguity and uncertainty as aforesaid in the [ITB]. FMI and B & I each timely filed a notice of intent to protest and formal written protest of Respondent's decision to reject each company's respective bid. S. I. Goldman did not protest the decision and is not a party to the subject case. At a meeting on December 12, 1989, Respondent elected to refer the bid protests to the Division of Administrative Hearings for a formal hearing., At the beginning of the hearing, the parties filed a written stipulation, which stated that the only issue for determination was which Petitioner should be awarded the contract and not whether Respondent should seek further bids or award the contract to another bidder. The stipulation also stated that the Petitioners and Respondent agreed to abide by the recommendation of the hearing officer. At the hearing, the parties further stipulated that the sole issue for determination is whether the ITB, together with other applicable authority, required that the responsive bid contain any written list of subcontractors. In addition, the parties stipulated that both Petitioners had standing and the protests were timely and sufficient. The ITB requires that each bidder familiarize itself with all federal, state, and "Local Laws, ordinances, rules, and regulations that in any manner affect the work." Under the section entitled, "Preparation and Submission of Bids," the ITB states: "Each bidder shall use the Bid Form that is inserted herein, and may copy or reproduce the form on this own letterhead." Among other requirements, the ITB requires two bonds. The first is a "bid guarantee" of at, least five percent of the amount of the bid. The form of this guarantee may be cash or a Bid Bond." The other bond described in the ITB a 100% public construction bond. The surety on this bond must have been admitted to do business in Florida, must have been in business and have a record of successful continuous operation for at least five years, and must have at least a Bests Financial Rating of "Class VI" and a Bests Policyholder Ration of "A." The Bid Form contained in the ITB is two pages. Among other things, the Bid Form requires that the bidder receiving written notice of acceptance of its bid must provide the prescribed payment and performance bond and execute the contract within ten days after notification. The next document in the ITB is a single page entitled, "Form of Bid Bond." The provisions on this page identify the A.I.A. document to use and state that the Bid Bond "shall be submitted with the Bid Proposal Form." The next document in the ITB is a single page entitled, "List of Major Subcontractors." The List of Major Subcontractors states: Bidders shall list all major subcontractors that will be used if a contract is awarded. Additionally, bidders shall identify in the appropriate box whether or not that trade specialty is minority owned. Another paragraph defines minority ownership. The remainder of the form consists of ten rows for the "bidder" and nine major subcontractors, such as concrete, electrical, HVAC, and controls, and blanks where the bidder can indicate which of these entities are minority owned. The next document in the ITB is the Owner-Contractor Agreement, which is followed by tie Form of Construction Bond, General Conditions, and Supplementary General Conditions. Section 7.11 of the Supplementary General Conditions establishes certain requirements to be performed after the submission of bids. This section provides: Pre-Award Submittals: Before the Contract is awarded the apparent low bidder shall provide the following information to the owner. A copy of the Contractors current State of Florida General Contractor's or Mechanical Contractors License. Pre-Construction Meeting. After the Notice to Proceed and within eight (8) business days of the Owner [sic], the Contractor shall meet with the Owner, Engineer and Subcontractors that the Owner may designate... The Contractor shall provide the following to the Owner. * * * 2. A written list of all Subcontractors, material men and suppliers with such information as requested by the Owner or Engineer. * * * The remaining documents in the ITB are the technical specifications for the job. The three addenda supply additional technical information not relevant to this case. Respondent has promulgated rules with respect to the bidding process ("Rules"). The ITB does not refer to the Rules, which define and use many terms that are found in the ITB. For instance, Rule 1.1.25 defines the phrases, "Performance and Payment Bond," which is the same phrase used in the Bid Form in the ITB. The Rules define several other capitalized terms that are also used in the ITB, such as Bid Bond, Bid Guarantee, Bidder, and Contractor. Rule 4.1 similarly states that the bidder is familiar with federal, state, and "Local Laws, Ordinances, Rules and Regulations that in any manner affect the Work." Rule 6.1 describes the process by which a bidder is to prepare and submit bids and the Bid Guarantee in language similar to that contained in the ITB. Rule 6.2 discusses the listing of subcontractors. Rules 6.2.1 and 6.2.2 state: General Contractor shall include as an integral part of his bid a List of Subcontractors he proposes to use. The Bidder shall enclose this list in a 4" x 9" envelope, sealed and marked "List of Subcontractors" and identified ... The Bidder shall enclose said envelope with his bid proposal in the mailing envelope. The List of Subcontractors enclosed with tee Proposal of each Bidder will be examined by the ... Engineer before the Proposal is opened and read. In the event that the form is not properly executed and signed, the Proposal of that Bidder will be returned to him unopened... Rule 6.3 requires a Statement of Surety as another "integral part" of each bid. Rule 6.3.3 states: The Statement of Surety will be opened examined by the ... Engineer prior to the opening of the Proposal.... Although similar to Rule 6.2, Rule 6.3 lacks the warming that if the Statement of Surety is not "properly executed and signed, the Proposal of that Bidder will be returned to him unopened." Rule 19.1 sets forth the requirements, for the surety. These requirements are different than those set forth in the ITB. Rules 19.1.1 and 19.1.2 require, as does the ITB, that the surety be admitted to do business in the State of Florida and shall have been in business and have a record of successful continuous operations for at least five years. However, Rule 19.1.1 requires that the surety be represented by a reputable and responsible surety bond agency licensed to do, business in the State of Florida and have a local representative in the Orlando area. Rule 19.1.3 requires minimum Bests ratings of "A" in "management," and, as to "strength and surplus," "AAA+" in financial rating and $12,500,000 minimum surplus. Rule 19.1.3.3 also requires that the surety be listed on the U.S. Treasury Departments Circular 570. The bids of FMI and S. I. Goldman Company contained a completed List of Major Subcontractors. The bid of B & I did not. No bidder included a Statement of Surety with its bid.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the School Board of Orange County enter a Final Order awarding the subject contract to Florida Mechanical, Inc. ENTERED this 15th day of February, 1990, in Tallahassee, Florida. ROBERT E. MEALE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 15th day of February, 1990. APPENDIX Treatment Accorded Proposed Findings of FMI All of FMI's proposed findings have been adopted or adopted in substance. Treatment Accorded Proposed Findings of B & I 1-4: adopted or adopted in substance. 5: adopted, except that the staff recommended that, if the bid was to be awarded, that it be awarded to B & I. 6: adopted in substance. 7: rejected as conclusion of law and, to the extent fact, subordinate. 8-12: rejected as subordinate. 13-16: adopted or adopted in substance. 17: rejected as subordinate. 18: rejected as unsupported by the greater height of the evidence. 19-21: rejected as subordinate. 22: rejected as beyond the scope of the issues and irrelevant in view of the stipulation. In the stipulation, the parties agreed that the issue to be addressed would not be whether the intended agency action of Respondent was lawful (i.e., not arbitrary, fraudulent, dishonest, or otherwise improper), but rather whether the ITB, together with other applicable authority, required that the responsive bid contain any written list of subcontractors. COPIES FURNISHED: James L. Schott, Superintendent The School Board of Orange County, Florida P.O. Box 271 Orlando, FL 32802 Charles Robinson Fawsett, P. A. Shutts & Bowen 20 North Orange Avenue Suite 1000 Orlando, FL 32801 James F. Butler, III Smith, Currie & Hancock 2600 Peachtree Center Harris Tower 233 Peachtree Street, N.E. Atlanta, GA 30043-6601 William M. Rowland, Jr., Esq. Rowland, Thomas & Jacobs, P.A. 1786 North Mills Avenue P.O. Box 305 Orlando, FL 32803
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.
The Issue Whether Respondent properly rejected Petitioner's bid on the grounds that the bid did not meet a fatal item requirement.
Findings Of Fact On April 24, 1992, Respondent published a Request for Proposals (RFP) for the provision of housekeeping services to South Florida State Hospital. Attached to the RFP as Appendix I was a blank copy of Respondent's "Standard Contract" which is also referred to as its "core model contract". Paragraph 1.a. of Section D of the RFP contains the following instructions to bidders: BIDDER RESPONSE a. State of Florida Request for Proposal Contractual Services Acknowledgment Form, Pur 7033 The State of Florida Request for Proposal, Contractual Services Acknowledgment Form, PUR 7033, Appendix II must be signed and returned ... with the proposal or submitted by itself if you choose not to submit a proposal and wish to remain on the department's active vendor list. Paragraph 1.g. of Section D of the RFP, contains the following instructions to bidders: Required Bidders Certification Contract Terms and Conditions The proposal must include a signed statement in response to the RFP indicating acceptance of the terms and conditions of provisions of service as specified in the RFP and contained in the core model contract. Bidders were provided a copy of the RFP rating sheet which contained the following under the heading of Fatal Items: The following criteria must be met in order for the proposal to be considered for evaluation, failure to receive a "Yes" response for any time [item] will result in automatic rejection of the proposal. * * * Does the proposal include a statement agreeing to terms and conditions set forth in the core model contract and the RFP? Petitioner was represented at a "Bidders' Conference" held May 15, 1992, at which the fatal items were discussed. Bidders were advised that it would be necessary for the responses to contain a statement agreeing to the terms and conditions set forth in the core model contract. The State of Florida Request for Proposal, Contractual Services Acknowledgment Form, PUR 7033, contains the following certification: I certify that this proposal is made without prior understanding, agreement, or connection with any corporation, firm, or person submitting a proposal for the same contractual services, and is in all respects fair and without collusion or fraud. I agree to abide by all conditions of this proposal and certify that I am authorized to sign this proposal for the proposer and that the proposer is in compliance with all requirements of the Request for Proposal, including but not limited to, certification requirements. In submitting a proposal to an agency for the State of Florida, the proposer offers and agrees that if the proposal is accepted, the proposer will convey, sell, assign or transfer to the State of Florida all rights, title and interest in and to all causes of action it may now or hereafter acquire under the Anti-trust laws of the United States and the State of Florida for price fixing relating to the particular commodities or services purchased or acquired by the State of Florida. At the State's discretion, such assignment shall be made and become effective at the time the purchasing agency tenders final payment to the proposer. The State of Florida Request for Proposal, Contractual Services Acknowledgment Form, PUR 7033, was signed by Richard A. Cosby on behalf of Petitioner and submitted as part of Petitioner's response to the RFP. Upon receipt of all responses, Respondent convened an evaluation committee to evaluate the responses. The evaluation committee determined that the response submitted by Petitioner did not contain the required statement agreeing to the terms and conditions set forth in the core model contract and the RFP. Consequently, the evaluation committee rejected Petitioner's proposal from further consideration. Petitioner does not challenge the specifications of the RFP, but, instead, asserts that Mr. Cosby's execution of the State of Florida Request for Proposal, Contractual Services Acknowledgment Form, PUR 7033, was sufficient to meet the requirement the evaluation committee found lacking. The language of the Contractual Services Acknowledgment Form, PUR 7033, that most closely approximates the certification that the bidder accepts the terms and conditions set forth in the core model contract and of the RFP is as follows: I agree to abide by all conditions of this proposal and certify that I am authorized to sign this proposal for the proposer and that the proposer is in compliance with all requirements of the Request for Proposal, including but not limited to, certification requirements. The proposal submitted by Petitioner did not contain any other statement which could be construed as accepting the terms and conditions set forth in the core model contract and the RFP. The broad language of the Contractual Services Acknowledgment Form, PUR 7033, upon which Petitioner relies does not state that the bidder accepts the terms and conditions set forth in the core model contract and the RFP. The evaluation committee properly determined that Petitioner's response failed to meet this fatal item. In this proceeding, there was evidence that the Respondent routinely inserts in its Request for Proposals the fatal item requirement that the bidders agree in writing to accept the terms and conditions set forth in the core model contract and the RFP, and that Respondent has never waived that fatal item requirement. There was no evidence that Respondent was using this fatal item requirement to discriminate against or in favor of any bidder.
Recommendation Based upon the foregoing findings of fact and conclusion of law, it is hereby RECOMMENDED that the Respondent dismiss Petitioner's bid protest. DONE AND ENTERED this 18th day of August, 1992, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON 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 18th day of August, 1992. APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 92-4311BID The following rulings are made on the proposed findings of fact submitted on behalf of the Petitioner. 1. The proposed findings of fact submitted by Petitioner are accepted in material part by the Recommended Order. Petitioner's conclusions based on those facts are rejected for the reasons discussed in the Recommended Order. The following rulings are made on the proposed findings of fact submitted on behalf of the Respondent. 1. The proposed findings of fact submitted by Respondent are adopted in material part by the Recommended Order. COPIES FURNISHED: Richard A. Cosby, Vice President National Cleaning of Florida, Inc. 1101 Holland Drive, #32 Boca Raton, Florida 33487 Colleen A. Donahue, Esquire District 10 Legal Office Room 513 201 West Broward Boulevard Fort Lauderdale, Florida 33301-1885 Sam Power, Agency Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 John Slye, General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700
Findings Of Fact On March 16, 1989, Respondent sent invitations to bid to actuaries who had been listed by the State of Florida, Department of General Services and with whom Respondent had some familiarity. These invitations pertained to two projects. The first project was one in which Respondent sought the services of qualified actuaries for the rendering of expert services in the area of rating requirements and procedures and the review of rate filings for health maintenance organizations and long term care insurance, Bid 119. The second invitation to bid was associated with the attempt to gain services from qualified actuaries pertaining to the review of health insurance filings, Bid 120. Respondent also gave public notice of the invitations to bid in the two projects that have been described. This notice was given in the Florida Administrative Weekly in its publication of March 17, 1989. On March 17, 1989, Petitioner obtained a copy of the bid materials in Bid 119. On March 20, 1989, he obtained a copy of the bid materials associated with Bid 120. In both Bid 119 and Bid 120 there are set out general conditions which are the same for both invitations. Within the general conditions is found paragraph 5 which states: INTERPRETATIONS/DISPUTES: Any questions concerning conditions and specifications shall be directed in writing 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. Any actual or prospective bidder who disputes the reasonableness, necessity or competitiveness of the terms and conditions of the Invitation to Bid, bid selection or contract award recommendation shall file such protest in form of a petition in compliance with Rule 13A-1.006, Florida Administrative Code. Failure to file a protest within the time prescribed in Section 120.53(5), Florida Statutes shall constitute a waiver of proceedings under Chapter 120, Florida Statutes. In furtherance of the opportunity to ask questions concerning the conditions and specifications set forth in the two bid instruments Petitioner, by correspondence received by Respondent on March 20, 1989, submitted a separate list of questions for the two projects, Bid 119 and Bid 120. On March 21, 1989, Respondent offered its answers to the Petitioner. Copies of these questions and answers may be found as Petitioner's composite Exhibit No. 5, pertaining to Bid 120 and Petitioner's composite Exhibit No. 6, pertaining to Bid 119, admitted into evidence. No one took advantage of the opportunity set out in paragraph 5 to the general conditions in each invitation to bid, to dispute the reasonableness, necessity or competitiveness of the terms and conditions of the invitations to bid within the prescribed time frame which is set out in Section 120.53(5), Florida Statutes. That time requirement is to make known objections within 72 hours of becoming apprised of the terms and conditions in the invitation to bid. It was only at the point in time at which Petitioner had been found unresponsive in the two bid circumstances and offered his formal written protest on April 11, 1989, that he attempted to advance claims associated with the reasonableness, necessity or competitiveness of the terms and conditions of the invitation to bid. He made further attempts to criticize those terms within the invitation to bid through presentation at hearing and in the course of the proposed recommended orders. All these efforts were untimely. The significance of Petitioner's failure to timely challenge the terms within the invitations to bid, that is the conditions and specifications, means that the facts in dispute are considered on the basis of whether the Petitioner and others who offered their responses to the invitations to bid have complied with those conditions and specifications as written, not as Petitioner would have them be. Bid 119 was responded to by the Petitioner and Touche Ross & Company. Petitioner's response was timely. By committee review of the responses to the invitation to bid performed by the Respondent and approved by the Assistant Director of Administration, Department of Insurance and Treasurer, one Bruce Brown, a decision was reached to reject all bids. Petitioner and Touche Ross were made aware of this rejection. Petitioner made a timely challenge to the rejection of his bid in accordance with Section 120.53(5), Florida Statutes, leading to the present hearing. Touche Ross did not challenge that decision and did not seek to participate in this hearing, although it was noticed of the pendency of these proceedings. Petitioner and Wakely timely responded to the invitation in Bid 120. The review committee with the concurrence of Mr. Brown found Wakely to be responsive and Petitioner to be unresponsive to the terms of the invitation. Petitioner made a timely request to be heard on this decision by the agency leading to the present hearing. Wakely was noticed of the pendency of this hearing as well as the agency's choice to change from a position of accepting the Wakely bid to one of rejecting all bids and has not participated in the process. The reason why the Respondent has chosen to reject the Wakely bid is based upon its belief that to do so would expedite the process of gaining the actuarial services which it seeks under Bid 120 and based upon some concern that if it sought to contract with Wakely, whom it believes to be the only responsive bidder in Bid 120, it would be met with disapproval by the State of Florida, Department of General Services. This resistance by the sister agency is premised upon the opinion that to contract with Wakely would constitute the use of a sole source contract in a setting in which there are numerous choices of actuaries who might be able to perform the work, and General Services who controls sole source purchases would not allow this. Within Bid 119 are various special conditions. Among those is the stated purpose found in paragraph 1.0 and it says: The Division of Insurance Rating (hereinafter "Division") within the State of Florida's Department of Insurance (hereinafter "Department") is seeking one qualified actuary for the rendering of expert services in the area of rating requirements and procedures and review of the rate filings for Health Maintenance Organizations (hereinafter "HMO") and Long Term Care Insurance (hereinafter "LTC"). It is anticipated that the contract will be effective from April 1, 1989 to September 30, 1989, although the precise dates will be dependent upon the date the contract is signed and the schedules of department personnel. By this Invitation to Bid (hereinafter "ITB"), the Division is requesting interested actuaries (hereinafter "respondent") to review the general and specific criteria outlined in this ITB and to present a bid. Other instructions in Bid 119 at paragraph 3.0 state: Emphasis on each bid must be completeness and clarity of content. In order to expedite the evaluation of proposals, it is essential that bidders follow the instructions contained herein. * * * Bidder shall complete the attached Bid Sheet in its entirety. By affixing manual signature on this bid sheet the bidder states that he/she read all bid specifications and conditions and agree to all terms, conditions, provisions, and specifications. Respondent's Credentials and Capabilities Proposals must include substantial evidence of the ability of the respondent to undertake the work required within the parameters and time frames referenced in this ITB. The respondent must be a member of both the American Academy of Actuaries and the Society of Actuaries. Furthermore, the respondent must convincingly demonstrate his or her expertise in both the HMO and LTC areas. Such demonstration must include at least the following: HMO Significant consulting assignment or other work responsibility involving HMO ratemaking in 1988 or 1989. Particulars must be provided, including the specific work product requested, hours spent on the job, the results of the job, and the respondent's precise role. Convincing evidence of familiarity with the Health Maintenance Organization Amendments of 1988 to the Federal Health Maintenance Organization Act. Such evidence might include a completed or ongoing consulting assignment in which knowledge of the new legislation was critical, an article published on the new legislation, or a speech to a professional organization. Public demonstrations of the respondent's expertise in the HMO area, such as speeches, published articles, positions held in HMO professional organizations, or prior full-time employment by an HMO. Assistance in the preparation of HMO rate filings for review by the Department. Assistance in the preparation of rates for federally qualified HMOs. LTC Significant consulting assignments or other work responsibility involving LTC ratemaking in 1988 or 1989. Particulars must be provided, including the specific work product requested, hours spent on the job, the results of the job, and the respondent's precise role. Public demonstrations of the respondent's expertise, such as speeches, published articles, or positions held in professional organizations relative to LTC (i.e., committee assignments) OTHER The respondent should also include a description of prior work assignments involving consulting or other services to state insurance departments. This prior work need not be restricted to HMO or LTC. Note: Evidence of the respondent's expertise must be verifiable. Referenced consulting assignments must include the name, address, and telephone number of an employee of the client who can verify the nature of the assignment. Copies of published articles must be provided, along with the name and date of the periodical in which it was published. Also, copies of speeches must be provided, along with the name of the organization to which the speech was given, a contract person, and the date of the speech. * * * (f) Respondent's Bid In preparing a bid, the respondent should make sure that he or she has submitted at least the following information: A demonstration that all requirements in the "Respondent's Credentials and Capabilities" section are met; An explicit statement as to the proposed hourly rate; A clear statement that the respondent is able to perform the required tasks in the prescribed time frames, as described in "Specific Work Product Required". Such information must be provided together with the bid sheet provided in Section 11. A suggested format is shown in Section 10. In both bid invitations, at paragraph 4.0 of the special conditions, bidders are reminded that bids which do not meet the mandatory technical requirements set out in 3.0 and its sub-parts will not be considered for selection and that the bids that are deemed responsive will be evaluated on the basis of cost and the award made to the lowest responsive bidder at an hourly rate of charges. Both invitations at Paragraph 4.1 indicate that the state has reserved its opportunities to reject all bids if that is felt to be in its best interest. Paragraph 5.2 of the invitation is a further reminder to bidders that any bidder desiring to file a protest arising out of the invitation to bid shall do so in a setting in which Section 120.53(5), Florida Statutes controls. Another specification found in both invitations at paragraph 10.0 entitled, "Respondent's (referring to the bid respondents) Credentials and Capabilities." Under that category it is stated that it is recommended that the format found on that page in the bid specifications be used in supplying the information needed to respond to paragraph 3.0 of the bid specifications for both invitations. Under that paragraph 10.0 there is a place for the respondent's name, the name of his employer, membership year in the AAA, membership designation in the 50A: FSA and ASA and year the 50A designation was awarded. In Bid 119, beyond paragraph 10.0 are found paragraphs 10.1, 10.2 and 10.3, these paragraphs recapitulate those items and the various sub-parts to paragraph 3.0 and provide space for answers to be given to those inquires concerning the Petitioner's credentials and capabilities. There is a paragraph 11.0 in both invitations entitled "Bid Sheet." It has lines related to the hourly rate, vendor name, name of actuary to render services, mailing address, city, state and zip code, authorized signature both manual and typed, telephone number, and the date of submission. This particular paragraph reminds the bidder that by affixing the signature, this is a verification that all bid specifications and conditions have been read and that the terms and conditions, provisions and specifications are agreed to and that certification is made that the services will be provided at the hourly rates stated. Otherwise the basic format for Bid 120 in terms of special conditions is the same as described for the pertinent paragraphs in Bid 119 that have been set out before with the exception of Paragraphs 1.0, and 3.0 (c). They state the following: 1.0 PURPOSE: The Division of Insurance Rating (hereinafter "Division") within the State of Florida's Department of Insurance (hereinafter "Department") is seeking one qualified actuary for the rendering of expert services pertaining to review of Health Insurance rate filings. It is anticipated that the contract will be effective from April 1, 1989 to September 30, 1989, although the precise dates will be dependent upon the date the contract is signed and the schedules of department personnel. * * * 3.0 (c) RESPONDENTS CREDENTIALS AND CAPABILITIES. Proposals must include substantial evidence of the ability of the respondent to undertake the work required within the parameters and time frames referenced in this ITB. The respondent must be a member of both the American Academy of Actuaries and the Society of Actuaries. Furthermore, the respondent must convincingly demonstrate his or her expertise in rating the filing with the Department the following products: Individual Major Medical Medicare Supplement Long Term care Other types of coverage depending upon the needs of the Department and skills of the respondent. Such demonstration must include at least the following: A high degree of familiarity with Chapter 4-58 of the Regulations of the Florida Department of Insurance. Such familiarity should be demonstrated by the respondent providing evidence that he or she submitted at least twenty- five Health Insurance rate filings to the Department which were approved between January 1, 1988 and February 28, 1989. The consultant should demonstrate familiarity with Individual Major Medical, Medicare Supplement, and Long Term Care policies. Such familiarity should be demonstrated by the consultant providing evidence that he or she submitted at least three filings to the Department in each of those areas which were approved between January 1, 1988 and February 28, 1989. NOTE: Only those filings actually certified by the actuary, as provided in 4-58, may be counted in meeting the above requirements. Bid 120 has paragraph 10.1 that refers back to sub-parts within paragraph 3.0(c) and provides space for answering the request for information concerning credentials and capabilities. In both bids Respondent is critical of the Petitioner for not using the format suggested in the various portions of paragraph 10, in essence filling out the specification sheet in the space provided for the answers which the petitioner would give. Having reviewed these materials associated with each bid invitation, the format idea is not a mandatory requirement, it is a suggested requirement. What is incumbent upon the Petitioner is to comply in substance with the requirements set out in the invitations to bid. In that respect the Petitioner is deficient in a material manner. A copy of the requirements Bid 119 may be found in Respondent's exhibit No. 1 admitted into evidence. Petitioner's response to the invitation to bid in Bid 119 is found within Respondent's No. 4 admitted into evidence. In his statement of credentials and capabilities, Petitioner has not utilized the spaces provided in paragraphs 10.1 through 10.3. Instead he has enclosed a letter that includes a statement of work history and professional experience. Under the category of health maintenance organization, the special conditions of paragraph 3.0(c), there is no statement of a consulting assignment or other work responsibility that would involve HMO rate making in the years 1988 or 1989. Furthermore, there is no convincing evidence of familiarity with the health maintenance organization amendments of 1988 to the Federal Health Maintenance Organization Act. There is no reference to public demonstrations of the Petitioner's expertise in the HMO area to include speeches, published articles, positions held in an HMO professional organization or prior full-time employment by an HMO. While there is an indication of experience in rate review from the regulatory point of view in Florida and Massachusetts, there is no indication as required by the specifications and conditions of the preparation of rate filings to be reviewed by a regulator. Finally, under the category of HMO there is no indication of assistance in the preparation of rates for federally qualified HMOs. In the long term care component of the credentials and capabilities portion of Bid 119, Petitioner has offered no explanation of his background. Under the category "other" Respondent has included a description of prior work assignments involving consulting or other services to state insurance departments. On the other hand he has failed to evidence in more specific terms as the note to paragraph 3.0(c) requires, names, addresses and telephone numbers. A copy of the requirements of Bid 120 may be found in Respondent's Exhibit No. 2 admitted into evidence. A copy of Respondent's reply to the invitation to bid may be found in Respondent's Exhibit No. 5 admitted into evidence. As with the previous Bid 119, in Bid 120 Petitioner did not utilize the space available in writing his answers in paragraph 10.1 which relates back to the requirements for credentials and capabilities as announced in paragraph 3.0(c). Instead Petitioner attached a letter in which he attempts to state his compliance with the requirements of the bid. He sets out comments about his work history and professional experience which do not pertain to rating and filing with the Respondent the products of individual major medical, Medicare Supplement, long term care and other types of coverage depending upon needs of the Respondent and skills of the Petitioner. Within Bid 120 in the requirement for familiarity with Chapter 4-58 Florida Administrative Code Petitioner has indicated some involvement with that regulation. However, he has not shown where he had submitted at least twenty- five health insurance rate filings to the Respondent which were approved between the January 1, 1988 and February 28, 1989. In Bid 120 on the topic of demonstration of familiarity with individual major medical, Medicare Supplement and long-term care policies, Petitioner did not demonstrate that he had submitted at least three filings with the Department in each of those areas which were approved between January 1, 1988, and February 28, 1989. By contrast the Wakely response to the invitation to bid, a copy of which is found in Respondent's Exhibit No. 9 admitted into evidence, has adequately responded to the requirements of the Bid 120 in the areas where the Petitioner has been deficient, as well as other areas. As alluded to before Petitioner has failed to make timely challenge to the conditions and specifications associated with the two invitations to bid. Moreover, while allegations in the formal written protest of April 11, 1989 and further remarks of April 20, 1989 addressed to the Insurance Commissioner, together with the proposed recommended order suggest problems with the conditions and specifications associated with the two invitations to bid, proof at hearing submitted by Petitioner did not confirm these allegations. Except in those areas preferred to in the factual discussion above Petitioner's bid responses are adequate to meet the terms of the invitations to bid.
Findings Of Fact In June 1987 The School Board of Lee County, Florida invited the submission of sealed bids for grading and drainage improvements at the new Multipurpose Building at Fort Myers High School. In addition to requiring grading, the project involves the erection or placement of structures in the nature of a drainage system consisting of culverts, pipes, and concrete inlets with grates, to be tied into the existing drainage system off School Board property across a county right-of-way into a culvert for discharge across the street, and which on School Board property attaches to and becomes a part of an existing building. Sealed bids were submitted by Systems Technologies Co. of Ft. Myers, Inc. (hereinafter "Systems Technologies") and by Ledo Lines, Inc. Respondent determined Systems Technologies to be the lowest responsible bidder and advised Ledo Lines, Inc., that it would be awarding the contract to Systems Technologies. Warren W. Hunt is the president and the qualifying agent of Systems Technologies. Hunt has an underground utilities contractor's license which has been inactive since it was obtained by him in March, 1986, being inactive therefore both at the time that Hunt submitted the bid on behalf of Systems Technologies and at the time of the final hearing in this cause. The inactive status results from Hunt's failure to complete the license process with the State of Florida. Since Hunt's license was inactive due to being incomplete at the times material to this cause, neither Hunt nor Systems Technologies was a licensed contractor and Systems Technologies was not a responsible bidder at the time that the bid was submitted. The contract specifications set forth the method by which the bids would be evaluated. Paragraph numbered 2.9 on page PD-4 provides as follows: Comparison of Proposals - Proposals will be compared on the basis of total computed price for each division of work. Total computed price equals the sum of the prices for the lump sum Contract Item, plus the sum of the total prices for the unit price Contract Items for each Division of work. The total price for each unit price Contract Item will be obtained by multiplying the estimated quantity of each item by the correspond- ing unit price set forth in the Proposal form[.] That provision, accordingly, requires that the bids be evaluated based upon the sum of all line items rather than based only upon their total or "bottom line" figure. Respondent's Director of Facilities Planning admitted that he failed to comply with this provision of the contract specifications in evaluating the two bids submitted to him and in determining that the bid should be awarded to Systems Technologies. In Systems Technologies' bid, the sum of the prices for the lump sum contract items plus the sum of the total prices for the unit price contract items amounts to $30,109.60. However, in submitting its bid Systems Technologies incorrectly added its column of figures and incorrectly computed its Total Contract Price (Estimated) to be $29,768. Since the contract specifications envision a unit price bid rather than a lump sum bid, the amount of the bid of Systems Technologies is in fact the amount of $30,109.60. The bid of Ledo Lines, Inc., is for $29,913.84. Ledo Lines, Inc., is, therefore, the low bidder on this project. The contract specifications when read in their entirety clearly require that the low bid be determined by adding the unit price and lump sum components rather than relying on the lump sum "bottom line" figure shown for Total Contract Price (Estimated). Employees of the consultant who Prepared the specifications testified that they expect to be able to hold the bidders to the unit prices but not to the Total Contract Price (Estimated) because the estimated quantities may change. Thus, the evidence is uncontroverted that the determination of low bidder pursuant to the contract specifications is based upon the total of the unit price provisions and not by the single figure at the bottom of the page which adds those individual prices and which was added erroneously in this case by Systems Technologies. In their Prehearing Stipulation, the parties stipulated that the School Board is subject to mandatory competitive bidding for this project. They further stipulated that where there is mandatory competitive bidding, the contract must be awarded to the lowest qualified, responsive bidder. Since Systems Technologies is neither a qualified, responsive bidder nor the lowest bidder, it is clear that Ledo Lines, Inc., is the lowest responsive bidder for the project in question.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is, RECOMMENDED that a Final Order be entered determining Ledo Lines, Inc., to be the lowest responsive bidder and awarding the contract for grading and drainage improvements to the Multi- purpose Building at Fort Myers High School to Ledo Lines, Inc. DONE and RECOMMENDED this 25th day of September, 1987, at Tallahassee, Florida. LINDA M. RIGOT, 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 25th day of September, 1987. COPIES FURNISHED: James E. Melvin, Superintendent School Board of Lee County 2055 Central Avenue Fort Myers, Florida 33901 E. G. Couse, Esquire Post office Drawer 1647 Fort Myers, Florida 33902 Harry A. Blair, Esquire Post Office Box 1467 Fort Myers, Florida 33902
The Issue Whether Respondent's determination that the bid submitted by Petitioner was non-responsive, was arbitrary, capricious, or beyond Respondent's scope of discretion as a state agency.
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the formal hearing, the following relevant facts are made: A. Background The Department issued a Request For Proposal and Bid Submittal Form (BID) for a full service lease, Lease Number 700:0556, seeking to rent office space in an existing facility located in Polk County, Florida. Responses to the BID were to be filed with the Department by 10:00 a.m. on June 12, 1990. Six proposals were timely submitted in response to the BID, including McCarty's and Fearn's proposal. The Department evaluated the six proposals and made site visits to the properties proposed to be leased. The McCarty proposal received the highest evaluation score of 95.4 points, while the Fearn proposal received the second highest evaluation score of 92.6 points. Because the McCarty proposal had been found responsive to the BID and received the highest evaluation score, the Department awarded the lease contract for Lease No. 700:0556 to McCarty. Fearn filed a timely protest challenging the award to McCarty. The Fearn protest was referred to the Division of Administrative Hearings for hearing. However, after the protest was referred to the Division of Administrative Hearings but before McCarty could intervene or a hearing could be held, the Department reviewed the McCarty proposal and found it to be non- responsive. The Department determined that the McCarty proposal was non-responsive because the McCarty proposal was for more space than authorized by the BID and that not all owners of the property proposed to be leased signed the BID. After determining that the McCarty proposal was non-responsive, the Department rejected the McCarty proposal and awarded the lease contract for Lease No. 700:0556 to Fearn. Upon Fearn withdrawing its protest, the Division of Administrative Hearings closed its file by relinquishing jurisdiction to the Department and the Department entered a Final Order dismissing the Fearn protest. By letter dated July 31, 1990, the Department advised McCarty of its decision to reject his proposal as non- responsive and award the bid to Fearn. By this same letter, the Department advised McCarty of his right to file a protest and his right to a formal administrative hearing. B. Lease Space Requirement Prior to issuing the BID the Department submitted to the Department of General Services (DGS) a Request For Prior Approval of Space Need (BPM Form 4405) wherein the Department justified, through a Letter of Agency Staffing, the need for 3,108 square feet of office space to be located in an existing facility in Auburndale, Polk County, Florida. However, the Department requested approval of only 3,017 net square feet. DGS approved the request for 3,017 net square feet of space and the Department issued the BID referred to in Finding of Fact l. The BID requested bidders to submit proposals to lease 3,017 square feet (plus or minus 3%) measured in accordance with Standard Method of Space Measurement and advised the bidder that the space offered must be within the plus or minus three percent required. The maximum square footage requested by the BID was 3,108 square feet (3017 + 3%). The McCarty proposal was for 3,150 square feet or 42 square feet over the maximum requested. The Department was aware of, and considered, the square feet of rental space proposed by each response to the BID in the initial evaluation since it rejected two proposals for exceeding this requirement by 145 and 392 square feet, respectively. The Department apparently considered the excess 42 square feet of space in the McCarty proposal in its initial evaluation but through an oversight failed to reject the McCarty proposal as it had in the other two proposals. Upon the Fearn protest being filed the Department's legal office reviewed the McCarty proposal and determined that the excess 42 square feet of space was a deviation that should not have been waived. At this point, the McCarty proposal was found to be non-responsive. The price per square foot of the McCarty proposal in all years, one through five, was less than the Fearn proposal. The total price of the lease in the McCarty proposal, including the excess 42 square feet, in all years, one through five, was less than the Fearn proposal. There was no evidence that the cost of the McCarty proposal would exceed the amount budgeted by the Department for this lease. C. Signature of Owner(s) and Transfer of Ownership Requirements. At the time McCarty signed and submitted the BID he was co-owner of the property bid with Adrian Gabaldon. Gabaldon was aware that McCarty was offering the property in question for lease to the Department having witnessed McCarty's signature on the BID and having been involved with the Department personnel concerning the BID. Section D. 4. A, General Provision, page 8 of the BID provides in pertinent part: Each proposal shall be signed by the owner,(s), corporate officer(s), or legal representative(s). The corporate, trade, or partnership title must be either stamped or typewritten beside the actual signature(s). If the Bid Submittal is signed by an agent, written evidence from the owner of record of his/her authority must accompany the proposal McCarty's signature was the only signature, as owner, appearing on the McCarty proposal. Below McCarty's signature the word "owner" was handwritten. Gabaldon signed the McCarty proposal as a witness to McCarty's signature and not as an owner. There is insufficient evidence to establish that at the time McCarty submitted his proposal the property bid was owned by a partnership consisting of McCarty and Gabaldon. There is no printed or typewritten partnership name in the vicinity of McCarty's signature in his proposal or anywhere else in his proposal. Sometime between the date McCarty submitted his BID and the date of the hearing, Gabaldon transferred his interest in the property bid to McCarty. D. General By signing the BID, McCarty agreed to comply with all terms and conditions of the BID and certified his understanding of those terms and conditions. In accordance with Section D.10., General Provisions, page 9 of the BID, all question concerning the specifications were to be directed to C. Donald Waldron. And, although McCarty or Gabaldon may have discussed the space requirement and other matters with certain employees of the Department, they knew, or should have known, that these questions should have been directed to Waldron. Otherwise, the answer could not be relied upon. Neither McCarty or Gabaldon ever contacted Waldron concerning the terms, conditions or specifications of the BID and, more specifically, concerning the space requirement or who was required to sign the BID. Submitted with the Fearn proposal was a letter from Entrepreneur of Tampa as owner of the property bid in the Fearn proposal appointing David Fearn, CCIM and The Fearn Partnership, Inc. as its agent to submit a proposal on behalf of Entrepreneur of Tampa.
Recommendation Pursuant to notice, the Division of Administrative Hearings by its duly designated Hearing Officer, William R. Cave, held a formal hearing in the above- captioned case on October 16, 1990 in Tampa, Florida.
