The Issue The primary issues in this case relate to whether Respondent, a licensed check cashing concern, failed to make and maintain various records documenting regulated financial transactions undertaken during a two-year audit period (2011- 2012), as Petitioner alleges. If Respondent is found guilty of any disciplinable offense(s), then it will be necessary to determine the appropriate penalties for such violation(s).
Findings Of Fact At all times relevant to this case, Respondent Greenland Food Market, Inc. (the "Market"), held a license to engage in the business of cashing payment instruments, such as checks, pursuant to chapter 560, part III, Florida Statutes. Bassam Dimiati is the Market's president and sole shareholder. Petitioner Office of Financial Regulation ("OFR" or the "Office") is the state agency charged with licensing and supervising money services businesses in Florida. Licensed check cashers, such as the Market, fall within the Office's regulatory and disciplinary jurisdiction. On at least one previous occasion, the Office imposed discipline against the Market for failing to maintain books and records.1/ On May 6, 2013, OFR conducted a routine on-site examination of the Market's records to evaluate the licensee's compliance with the statutes and rules governing the check cashing business. OFR had given the Market advance notice of the examination. The two-year period under review was from January 1, 2011, through December 31, 2012. The examiners found, and OFR proved at hearing, that the Market had not complied fully with the applicable record-creation and -retention requirements, as detailed below. Missing Identification Numbers Check cashers must maintain an electronic payment instrument log documenting each transaction involving a check in the amount of $1,000 or more. For each such transaction, the log must include, among other required information, the identification number——e.g., the Florida driver license number—— of the person seeking to cash the check, who is referred to formally as a "conductor."2/ The Market's log for 2012 lists 156 transactions. Of these, the conductor's identification number was not recorded 57 times, in violation of section 560.310(1)(c), Florida Statutes (2011),3/ and Florida Administrative Code Rule 69V- 560.704(5)(a). Thus, it is determined, as a matter of ultimate fact, that the Market is guilty as charged of failing to include identification numbers in its electronic payment instrument log. Missing Endorsements A licensed check cashing business is required to make and keep a legible, complete copy (including both sides) of every check accepted. Further, at the time the licensee accepts a payment instrument, the licensee must endorse the instrument using the legal name appearing on its license. Thus, if the licensee is fully compliant, the licensee's copy of each check cashed will show the requisite endorsement. The Market failed properly to maintain copies of every payment instrument received. Showing leniency, OFR allowed the Market to obtain copies of canceled checks from its bank, even though a licensee is not entitled to rely upon bank records as a substitute for the licensee's own records.4/ Out of 720 payment instruments retrieved from the bank, 280 lacked an endorsement, or at least a legible endorsement, in contravention of section 560.309(2) and rule 69V-560.704(2)(a). It is therefore determined, as a matter of ultimate fact, that the Market is guilty as charged of failing to endorse all payment instruments accepted during the period under review, or alternatively of failing to maintain a legible copy of each such check containing an identifiable facsimile of the endorsement. Missing Thumbprints For each payment instrument accepted having a face value of $1,000 or greater, the licensee must——at the time of acceptance——affix the conductor's original thumbprint to the original payment instrument, a copy of which must be maintained, as mentioned above. Of 720 payment instruments retrieved from the Market's bank, 38 exceeded $1,000. Only 23 of these checks bear a visible thumbprint, which means that the Market either accepted at least 15 checks without taking the required thumbprints, or alternatively failed to maintain legible copies of such prints, in violation of section 560.310(1)(b)2.5/ and rule 69V- 560.704(4)(a). Consequently, it is determined, as a matter of ultimate fact, that the Market is guilty as charged of failing to take, or alternatively of failing to maintain a legible copy of, a thumbprint of the customer in connection with every transaction involving a check having a face value of $1,000 or more. Missing Records of Fees Charged For each check accepted, the licensee must keep a record showing the fee charged to cash the payment instrument. The Market created, kept, and made available to the Office a record showing the fee charged for each check having a face amount of $1,000 or more, but it failed to maintain a record of the fees charged for cashing any other checks. Thus, when asked in writing on May 10, 2013, to produce "records that show the fee charged to customers for each payment instrument cashed prior to May 10, 2013," the Market responded that it could not provide additional documentation. On May 17, 2013, Mr. Dimiati signed a statement attesting that "[a]fter a diligent search" of all the Market's books and records, he was unable to locate the requested materials and had "no reasonable basis to believe" that information regarding the fees charged for cashing checks for amounts less than $1,000 would become available. Accordingly, it is determined, as a matter of ultimate fact, that the Market is guilty as charged of failing to maintain and produce records reflecting the fee charged to each customer for the service of cashing a check, in violation of rule 69V-560.704(2)(b). Missing Corporate Customer Files When accepting a check payable to a corporation, which is referred to as a "corporate payment instrument,"6/ the licensee must create and maintain a customer file on the payee if the amount of the check exceeds $1,000. This file must include: (i) documentation from the Secretary of State verifying registration as a corporation or fictitious entity and showing the officers and Federal Employer Identification Number; (ii) articles of incorporation or similar documentation; (iii) documentation of the occupational license; (iv) documentation from the Division of Workers' Compensation website showing proof of coverage; and (v) documentation of individuals authorized to negotiate payment instruments on the corporation or fictitious entity's behalf, including corporate resolutions or powers of attorney. See Fla. Admin. Code R. 69V-560.704(4)(d). During the period under review, the Market cashed corporate payment instruments in amounts exceeding $1,000 for Impact Collision and Main Line Trucking. On May 10, 2013, OFR submitted a written request for the Market's customer files on Impact Collision and Main Line Trucking. Mr. Dimiati replied that, after a diligent search, he was unable to locate in the Market's records all of the information relating to these customers that rule 69V-560.704(4)(d) requires be kept on corporate payees. The Market was unable to provide the following information about Impact Collision: (i) articles of incorporation or similar documentation; (ii) documentation of the occupational license; and (iii) documentation of individuals authorized to negotiate payment instruments on the corporation or fictitious entity's behalf, including corporate resolutions or powers of attorney. The Market was unable to provide the following information about Main Line Trucking: (i) documentation of the occupational license and (ii) documentation of individuals authorized to negotiate payment instruments on the corporation or fictitious entity's behalf, including corporate resolutions or powers of attorney. Consequently, it is determined, as a matter of ultimate fact, that the Market is guilty as charged of failing to maintain a complete customer file, i.e., one meeting all of the requirements prescribed in rule 69V-560.704(4)(d), for each corporate entity named as the payee in a corporate payment instrument, in violation of section 560.310(1)(a), Florida Statutes (2011).7/
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Office of Financial Regulation enter a final order finding Greenland Food Market, Inc., guilty of the offenses charged in the Amended Administrative Complaint. It is further RECOMMENDED that the Office impose a fine against the Market in the amount of $10,500 and suspend its license for a period of 30 days. DONE AND ENTERED this 17th day of September, 2014, in Tallahassee, Leon County, Florida. S JOHN G. VAN LANINGHAM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 17th day of September, 2014.
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, the documentary evidence received, and the entire record compiled herein, the following relevant facts are found. Respondent, Homer L. (Glenn) Wade, is the holder of certificate No. CA 453 B, which has been issued pursuant to Chapter 559, Florida Statutes. Respondent, Wade, has used that certificate to qualify American Collection Systems, Inc., doing business as American Collection Systems, with its principal offices located at 3011 Northeast 44th Street in Fort Lauderdale. (Petitioner's Composite Exhibit No. 1.) By two, five count Notices to Show Cause filed herein on November 19, 1980, Petitioner seeks to suspend or revoke Respondent, Wade's certificate of qualification for reasons which will be set forth hereinafter in detail. 2/ Count II of the Notices allege, in pertinent art, that on or about May 22, 1980, Respondent and/or its agent materially misrepresented a consumer claim from a debtor, Ms. Joyce Kilgore, by misrepresenting the amount owed, in violation of Chapter 559.73(3), Florida Statutes. The deposition of Joyce Kilgore, 3/ taken on April 20, 1981, reveals that Ms. Kilgore, a resident of Atlanta, Georgia, ordered one set of three (3) mint mark covers of the Susan Anthony Dollar from Fleetwood, a coin collection agency in Cheyenne, Wyoming. Ms. Kilgore was billed $28.50 plus a $2.00 interest charge. Ms. Kilgore cancelled the order prior to receiving the coin collection and subsequently received a credit for the receipt of the cancellation notice. The remaining three (3) allegations set forth in the Notices to Show Cause allege, in pertinent part, that Respondent, Homer L. Glenn Wade, and/or its accent, communicated to debtor Richard Pruss, which gave the appearance of being authorized, issued or approved by a government, governmental agency or attorney at law, when it was not, in violation of Chapter 559.72(10), Florida Statutes: that Respondent and/or its agent engaged in a material misrepresentation by misrepresenting the amount owed in its attempt to collect a consumer claim from debtor Richard Pruss, in violation of Chapter 559.73(3), Florida Statutes, and finally, that Respondent and/or its agent, on September 22, 1980, communicated or threatened to communicate with debtor Richard Pruss' employer, prior to obtaining final judgement against debtor Pruss, and without securing Pruss' permission to do so in writing, in violation of Chapter 559.72(4), Florida Statutes. The facts surrounding these allegations are that on June 26, 1980, Richard truss took his dog to the Boca West Animal Clinic. The treating veterinarian, Art Malernee, Doctor of Veterinary Medicine (D.V.D.) performed a series of laboratory and symptomatic screenings to determine from what Messr. Pruss' dog was suffering. Within the next day, the treating veterinarian, advised Messr. Pruss that his dog was apparently poisoned and that it was best to "put the dog to sleep." Messr. Pruss agreed to euthanasia and cremation and was presented a bill for $306.50 the following day. Messr. Pruss considered the bill excessive, so advised Dr. Malernee's receptionist and told her that he could only make a partial payment. Pruss also presented the receptionist with a check which along with she was told (by Pruss) to delay presenting for payment until he obtained sufficient funds to cover that check. The following day, Messr. Pruss attempted, without success, to negotiate and pay a lesser amount than the balance due to Dr. Malernee. Messr. Pruss then stopped payment on the check, which was drawn in the amount of $231.40 and he (Pruss) has not paid the remaining balance. The bill was referred to Respondent for collection. On approximately July 24, 1980, Respondent's agent, a Mr. Bob Stoudt, telephoned Respondent's wife to inquire about the bill. Mrs. Pruss, according to Messr. Pruss, was advised that she should be at Respondent's office by 7:00 P.M., inasmuch as he would "hate to see Messr. Pruss arrested or to know that his employer had learned of this unpaid obligation." Debtor Pruss subsequently received the demands from Respondent requesting payment of $242.50 which represented a fee of an approximate $10.00 service or interest charge to satisfy the alleged unpaid claim. (See Petitioner's Exhibit No. 4.) Messr. Pruss also received a collection notice and a separate notice which basically quoted Florida's fraudulent check law showing American Collection Systems as the sender of that notice. (Petitioner's Composite Exhibit No. 3.) On September 22, 1980, debtor Pruss received a letter bearing the same date from Respondent, which appeared to show that a copy of that letter was sent to Pruss' employer (Publix Super Market in Sunrise, Florida), marked to the attention of the store manager. See Petitioner's Exhibit No. 4. Thereafter, debtor Pruss advised his employer of the outstanding obligation. Debtor Pruss admitted that he initially agreed to pay a portion of the outstanding bill but on September 2, 1980, refused to pay based on the telephone call(s) that he had received at work (allegedly three or four times including the phone calls to his wife at his residence.) Respondent's Defense Respondent generally denied the allegations set forth herein in the Notices to Show Cause. Respondent countered on the basis that he signed no document or authorized any document to be signed to the effect that he was an attorney, nor did the form letter which, in pertinent part, recited the fraudulent check law, purport to be, in any manner a judicial document. Respondent contends that there was no misrepresentation as to the amount owed and that the law authorized a service charge of five percent (5 percent) which is sanctioned per Chapter 559, Florida Statutes. Finally, Respondent denies that any threat was made or that any attempt was made to communicate with debtor Pruss' employer. Respondent points out that there was no future action which is contemplated in a threat inasmuch as the letter here complained of had already been sent and further that it was not written or otherwise approved by Respondent. Additionally, Respondent points out that in any event, the letter was simply a request for assistance from Pruss' employer to adjust a debt and that no disciplinary action was taken against Pruss by his employer. In support of his position as to the fact that the amount claimed to be due by the debtor (Pruss) was in fact owed, Respondent pointed out that Pruss tendered a check in the amount claimed to Dr. Malernee for satisfaction of the obligation.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That Respondent's certificate of qualification and license be suspended for a period of thirty (30) days; said suspension commencing 30 days from the Division's final order. RECOMMENDED this 22nd day of September, 1981, in Tallahassee, Florida. JAMES E. BRADWELL, 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 22nd day of September, 1981.
The Issue Whether proposed rules 25-4.300 ("Scope and Definition"); 25-4.301 ("Applicability of Fresh Look"); and 25-4.302, ("Termination of Local Exchange Contracts"), Florida Administrative Code, known as "The Fresh Look Provision," constitute an "invalid exercise of delegated legislative authority".
Findings Of Fact Telecommunications carriers/providers may "wear different hats," dependent upon what function they are performing at a given time. Local exchange carriers are abbreviated "LECs" in the proposed rules. For purposes of this case only, Time Warner is an Alternative Local Exchange Carrier ("ALEC") and GTE and BST are Incumbent Local Exchange Carriers ("ILECs"). Both types of companies provide local telephone service over the public switch network. On February 17, 1998, Time Warner filed a Petition to Initiate Rulemaking. Time Warner's Petition requested that the Commission adopt what it described as a "Fresh Look" rule, under which a customer a/k/a "patron" a/k/a "end user" of an ILEC who had agreed to a long-term, discounted contract would have an opportunity to abrogate that ILEC contract without incurring the liability to the ILEC which the customer had agreed to, so that the customer could then enter a new contract with an ALEC. On at least one prior occasion, the Commission had elected to reach a similar result by a Final Order, rather than by enacting a rule. This time, the Commission granted Time Warner's Petition, and the Commission began the rulemaking process. Other states have adopted "Fresh Look" rules or statutes with varying degrees of success. The legislative, administrative, or litigation histories of these extraterritorial matters are immaterial to the rule validity issues herein, which are governed by Chapter 120, Florida Statutes. Those histories are likewise non-binding on this forum. The Commission has no way of identifying, let alone notifying, ILEC contract customers as a separate class of the public or as a separate class of potentially interested parties. However, the public, including customers and carriers, received the required statutory notice(s) at each stage of the rulemaking process, and only the following dates and occurrences have significance within the rulemaking process for purposes of the issues herein. A Notice of Rulemaking Development was published in the Florida Administrative Weekly on April 3, 1998. Commission staff held a Rule Development Workshop on April 22, 1998. Based on information received from carriers in response to staff data requests, the rules as proposed April 3, 1998, were revised by staff. On March 4, 1999, staff recommended that the revised rules be adopted by the Commission. At its Agenda Conference on March 19, 1999, the Commission set the rulemaking for hearing. On March 24, 1999, the Commission issued a Notice of Rulemaking, which included further revisions to the proposed rules. The Commission received a letter from JAPC dated April 28, 1999 ("the JAPC letter") which stated, in pertinent part: Article 1, Section 10 of the Florida Constitution prohibits the passage of laws impairing the obligation of contracts. Inasmuch as the rules effectively amend the terms of existing contracts, please reconcile the rules with the Constitution. The JAPC letter was not placed into the rulemaking record, responded-to by the Commission, or specifically addressed on its merits by any interested parties. Interested parties did not find out about it until many months later. A rulemaking hearing on the proposed rules was held before the Commission on May 12, 1999. Interested persons submitted written and oral testimony and comments at the hearing. No customer with a contract that would be affected by these rules participated in the rulemaking proceedings, including the hearing, before the Commission. At no time did anyone formally submit a lower cost regulatory alternative, but it was clear throughout the rulemaking process that Petitioners herein opposed the adoption of the proposed rules. Two Statements of Estimated Regulatory Cost ("SERCs") were prepared by Commission staff. The proposed rules were further revised after the May 12, 1999, hearing. On November 4, 1999, Commission staff issued a recommendation that the Commission adopt the latest rules draft, in part on the basis that the proposed rules will implement the "regulatory mandates" of Section 364.01, Florida Statutes, that the Commission should "promote competition by encouraging new entrants" and "encourage competition through flexible regulatory treatment among providers of telecommunication services." Attached to this recommendation was a revised SERC, dated September 13, 1999. The September 13, 1999, SERC addressed the alternative of not adopting the proposed rules, and found such an alternative was not viable because it would not foster competition. In preparing both SERCs, Commission staff relied solely on market share data for analyzing competition and did not fully account for revenues to which ILECs were contractually entitled, but which potentially could be unilaterally cancelled by the ILEC customer as a result of the proposed rules. Staff did not ask for such data for estimating cost of the proposed rules to the ILECs. At its November 16, 1999, Agenda Conference, the participation of interested parties was limited to addressing the new SERC. During this Agenda Conference, the Commission revised the rules further, limiting the contracts affected by them to contracts entered into before July 1, 1999, and voted to approve the proposed rules as revised. The exact language of the proposed rules under challenge, as published in the December 3, 1999, Florida Administrative Weekly, pursuant to Section 120.54(3)(d), Florida Statutes, is as follows: PART XII - FRESH LOOK: 25-4.300 Scope and Definitions. Scope. For the purposes of this Part, all contracts that include local telecommunications services offered over the public switched network, between LECs and end users, which were entered into prior to June 30, 1999, that are in effect as of the effective date of this rule, and are scheduled to remain in effect for a least one year after the effective date of this rule will be contracts eligible for Fresh Look. Local telecommunications services offered over the public switched network are defined as those services which include provision of dial tone and flat-rated or message-rated usage. If an end user exercises an option to renew or a provision for automatic renewal, this constitutes a new contract for purposes of this Part, unless penalties apply if the end user elects not to exercise such option or provision. This Part does not apply to LECs which had fewer than 100,000 access lines as of July 1, 1995, and have not elected price-cap regulation. Eligible contracts include, but are not limited to, Contract Service Arrangements (CSAs) and tariffed term plans in which the rate varies according to the end user's term commitment. The end user may exercise this provision solely for the purpose of obtaining a new contract. For the purposes of this Part, the definitions to the following terms apply: "Fresh Look Window" - The period of time during which LEC end users may terminate eligible contracts under the limited liability provision specified in Rule 25- 4.302(3). "Notice of Intent to Terminate" - The written notice by an end user of the end user's intent to terminate an eligible contract pursuant to this rule. "Notice of Termination" - The written notice by an end user to terminate an eligible contract pursuant to this rule. "Statement of Termination Liability" - The written statement by a LEC detailing the liability pursuant to 25-4.302(3), if any, for an end user to terminate an eligible contract. 25-4.301 Applicability of Fresh Look. The Fresh Look Window shall apply to all eligible contracts. The Fresh Look Window shall begin 60 days after the effective date of this rule. The Fresh Look Window shall remain open for one year from the starting date of the Fresh Look Window. An end user may only issue one Notice of Intent to Terminate during the Fresh Look Window for each eligible contract. 25-4.302 Termination of LEC Contracts. Each LEC shall respond to all Fresh Look inquiries and shall designate a contact within its company to which all Fresh Look inquiries and requests should be directed. An end user may provide a written Notice of Intent to Terminate an eligible contract to the LEC during the Fresh Look Window. Within ten business days of receiving the Notice of Intent to Terminate, the LEC shall provide a written Statement of Termination Liability. The termination liability shall be limited to any unrecovered, contract specific nonrecurring costs, in an amount not to exceed the termination liability specified in the terms of the contract. The termination liability shall be calculated as follows: For tariffed term plans, the payments shall be recalculated based on the amount that would have been paid under a tariffed term plan that corresponds to the actual time the service has been subscribed to. For CSAs, the termination liability shall be limited to any unrecovered, contract specific nonrecurring costs, in an amount not to exceed the termination liability specified in the terms of the contract. The termination liability shall be calculated from the information contained in the contract or the workpapers supporting the contract. If a discrepancy arises between the contract and the workpapers, the contract shall be controlling. In the Statement of Termination Liability, the LEC shall specify if and how the termination liability will vary depending on the date services are disconnected pursuant to subsections (4) and (6). From the date the end user receives the Statement of Termination Liability from the LEC, the end user shall have 30 days to provide a Notice of Termination. If the end user does not provide a Notice of Termination within 30 days, the eligible contract shall remain in effect. If the end user provides the Notice of Termination, the end user will pay any termination liability in a one-time payment. The LEC shall have 30 days to terminate the subject services from the date the LEC receives the Notice of Termination. (Emphasis provided only to facilitate the following discussion of "timed" provisions) "Tariff term plans" or "tariffed term plans" are telecommunication service plans in which the rate the customer pays depends on the length of the service commitment. The longer the service commitment the customer makes with the company, the lower the monthly rate will be. Ninety-eight percent of the contracts affected by the proposed rules are tariff term plans filed with the Commission. Contract service arrangements (CSAs) have many functions. By tariff term plans and CSAs, carriers and their customers formalize a negotiation whereby the customer signs-on for service for an extended period, in exchange for lower rates than he would get if he committed to shorter periods or under the regular tariff. Both tariff term plans and CSAs are subject to the Commission's regulatory oversight. No reason was given for use of the "included but not limited to" language added in the rules' current draft. The Commission has published that the "specific authority" for the proposed rules is Sections 350.127(2) and 364.19, Florida Statutes. The Commission has published that the "law implemented" by the proposed rules is Sections 364.19 and 364.01, Florida Statutes. The proposed rules would allow customers of ILECs, including Petitioners GTE and BST, to terminate their contracts and tariffed term plans for local exchange services without paying the termination liability stated in those contracts and tariffs. Instead, customers would only be required to pay the ILEC "any unrecovered, contract specific nonrecurring costs" associated with the contracts. (Proposed rule 25-4.302(3)(b)). For tariffed term plans (but not contracts), termination liability would be recalculated as the difference, if any, between the amount the customer paid and the amount he would have paid under a plan corresponding to the period during which he actually subscribed to the service. (Proposed rule 25- 4.302(3)(a)). The "Fresh Look" rule applies to agreements entered into before June 30, 1999, and that remain in effect for at least one year after the date the rule takes effect. (Proposed rule 25-4.300(1)). The window for contract termination starts 60 days after the rules' effective date and lasts for one year thereafter. (Proposed rule 25-4.301). In the case of ILEC customers who may exercise the "opt-out early" (termination) provisions of the proposed rules, the proposed rules would provide the ILECs with the compensation they would have received if the contracts had been made for a shorter period than for the period of time for which the parties had actually negotiated. The proposed rules clearly modify existing contracts. Indeed, they retroactively impair existing contracts. It may reasonably be inferred that the retroactive elimination of the respective durations of the existing contracts would work to the detriment of any ILECs which have waived "start up costs" on individual contracts or which planned or invested in any technological upgrades or committed to any other business components (labor, training, material, development, expansion, etc.) in anticipation of fulfilling the contracts and profiting over the longer contract terms legally entered-into prior to the proposed rules. The purpose of the proposed rules, as reflected in the Commission's rulemaking notices, is to "enable ALECs to compete for existing ILEC customer contracts covering local exchange telecommunications services offered over the public switched network, which were entered into prior to switch-based substitutes for local exchange telecommunications services." However, the Commission now concedes that switch-based substitutes for the ILECs' local exchange services were widely available to consumers prior to June 30, 1999, the date provided in the proposed rule. At hearing, the Commission asserted that it is also the purpose of the proposed rules to actively encourage competition, and that by proposing these rules, the Commission deemed competition to be meaningful or sufficient enough to warrant a "fresh look" at the ILECs' contracts, but not so widespread that the rules would not be necessary. In effect, the Commission made a "judgment call" concerning the existence of "meaningful or sufficient" competition, but has not defined "sufficient" or "meaningful" competition for purposes of the proposed rules. The Commission's selection of June 30, 1999, as the cut-off date for contract eligibility was motivated primarily by a concept that using that date would render approximately 40 percent of existing ILEC contracts eligible for termination. The rulemaking process revealed that the terms of so- called "long-term" agreements range from six months to four years in duration. The Commission selected a one-year term for eligible contracts subject to the proposed rules as a compromise based on this spread of actual contract durations. The one-year window of opportunity in which a customer will be permitted to terminate a contract was selected by the Commission as a compromise among presenters' views expressed during the rulemaking process. The one-year window is to be implemented 60 days after the effective date of the rule to avoid the type of problems incurred when a "fresh look" was previously accomplished by a Commission Order and to allow the ILECs and ALECs time to prepare. Tariffed term plans were developed as a response to competition and have been used at least since 1973. As early as 1984, the Commission had, by Order, given ILECs authority to use CSAs for certain services, upon the condition that there was a competitive alternative available. The Commission has long been aware of the ILECs' use of termination liability provisions in CSAs and tariff term plans, including provisions for customer premises equipment (CPE), and has not affirmatively determined that their use is anticompetitive, discriminatory, or otherwise impermissible. Private branch exchanges (PBXs), which are switches, competed with the ILECs' Centrex systems for medium- to large- size business customers and key telephone systems for smaller businesses, from the early 1980's, as recognized by a Commission Order in 1994. Commission Order No. PSC-94-0285-FOF-TP, dated March 3, 1994, in Docket No. 921074-TP, permitted a "fresh look" for customers of LEC private line and special access services with terms equal to, or greater than, three years. Customers were permitted a limited time to terminate their existing contracts with LECs to take advantage of emerging competitive alternatives, such as alternative access vendors' (AAVs') ability to interconnect with LECs' facilities. Termination liability of the customer to the ILEC was limited to the amount the customer would have paid for the services actually used. Prior to 1996, only ILECs could offer dial tone service, which enables end users to communicate with anyone else who has a telephone. Chapter 364, Florida Statutes, Florida's telecommunication statute, was amended effective January 1, 1996, to allow ALECs to operate in Florida. ILECs had offered tariffed term plans and CSAs for certain services before the 1996 revision of Chapter 364, Florida Statutes, but effective 1996, substantial amendments allowed the entry of ALECs into ILECs' markets. The new amendments codified and expanded the ILECs' ability to use CSAs and term and volume discount contracts in exchange for ILECs losing their exclusive local franchises and deleted statutory language requiring the Commission to determine that there was effective competition for a particular service before an ILEC could be granted pricing flexibility for that service. Tariff filings before the amendments had required Commission approval. The federal Telecommunications Act of 1996 also opened the ILECs' local exchange markets to full competition and imposed upon the ILECs a number of obligations designed to encourage competitive entry by ALECs into the market, including allowing ALECs to interconnect their networks with those of ILECs; "unbundling" ILEC networks to sell the unbundled elements to competitors; and reselling ILEC telecommunications services to ALECs at a wholesale discount. See 47 U.S.C. Section 51 et seq. "Resale" means taking an existing service provided by a LEC and repackaging or remarketing it. The requirement that ILECs resell their services, including contracts and tariffed term plans, to competitors at a wholesale discount, has been very effective in stimulating resale competition, but to resell or not is purely an internal business decision of each ALEC. For instance, Time Warner has elected not to be involved in "resales," and is entirely "facility based." Since 1996, competing carriers could and do sell additional (other) services to customers already committed to long-term ILEC contracts. They may also purchase ILEC CSAs wholesale at discount and resell such agreements to customers. Market share data demonstrates that there has been greater ALEC competition in Florida since the 1996 amendments, but typically, ALECs target big cities with denser populations and denser business concentrations. There is no persuasive evidence that any of the affected ILEC contracts (those post-June 30, 1999) were entered into by customers who did not have competing alternatives from which to choose. In fact, testimony by Commission staff supports a finding that since LECs' CSAs are subject to Commission review and their service tariffs are filed with the Commission, the Commission has not authorized CSAs unless there was an "uneconomic bypass" or competition. "Uneconomic bypass" occurs where a competitor can offer service at a price below the LEC's tariffed rate but above the LEC's cost. The Commission presented an ILEC customer, Mr. Eric Larsen of Tallahassee, who testified that he had had the benefit of competition, not necessarily from an ALEC, when he had entertained a bid from a carrier different from his then-current ILEC in 1999. However, at that time, he renegotiated an expiring contract with his then-current ILEC instead of with the competitor. This renewal contract with an ILEC would not be affected by the proposed rules. Business customers, such as Mr. Larsen, may reasonably perceive business trends. They could reasonably be expected to have factored into their negotiations with competing carriers at the time the contracts were formed that a potential for greater choices would occur in the future, even within the life of their long-term contracts with an ILEC. As of 1999, 80 ALECs were serving Florida customers, 100 more had expressed their intention of serving Florida before the end of the year 2000, and ALECs had obtained some share of the business lines in many exchanges. While this does not mean that every area of Florida has every service, it is indicative of a spread of competition. Petitioner GTE is anchored in the Tampa Bay area. By June 30, 1999, the date expressed in the proposed rules, nine facilities-based competitors were in the same geographic area. One ALEC (MCI) was serving 10,000 lines. Competitors operated 20 switches and 83 percent of the buildings in GTE's franchise area were within 18,000 feet of a competitor's switch. However, in most cases, GTE's CSA or tariff term agreements had been successful against specific competing bids for the respective services. Market share data showed that by June 30, 1999, Petitioner GTE had executed 101 agreements allowing ALECs to provide service by inter-connecting their networks with GTE's networks, reselling GTE's services, and/or taking "unbundled" parts of GTE's network. While market share data is not conclusive, in the absence of any better economic analysis by the Commission or other evidence of existing ALEC presence or of a different prognosis for ALEC penetration, market share is at least one indicator of the state of competition when the contracts addressed by the proposed rules were entered into. The Commission has no data about how many customers currently opt-out of their ILEC contracts prior to natural expiration and pay the termination liability to which those ILEC agreements bind them in order to accept a competing offer from another carrier, but clearly, some do. This evidences current competition. Competing carriers can and do sell to ILEC customers at the natural expiration of their long-term agreements. This evidences current competition. The Commission has no data predicting how many more customers would opt-out if the proposed rules are validated. Therefore, the presumption that "if we publish a rule they will come" is speculative. Likewise the Commission's presumption that customers regard termination liability provisions in ILEC contracts as a barrier to their choices and a bar to competition was not proven. Some of the factors that went into that presumption were speculative because the Commission has not reviewed the termination liability provisions of Petitioners' contracts and has offered no evidence of formal complaints to the Commission by customers who want to opt-out of ILEC contracts. "Informal communication" with Commission staff by customers was undocumented and unquantified. The Commission did present the testimony of Mr. Larsen who explained that because he needs to keep the same business telephone number, he feels that it is not economically feasible for him to opt-out of his several overlapping ILEC contracts unless he can synchronize all his existing contract termination dates and that the proposed "fresh look" rules would permit him to do that. However, his testimony provided no valid predictor that even if the termination of all his existing ILEC contracts were enabled by the proposed rules he would, in fact, be able to find a competitor in his area whose contract(s) were more to his liking. The proposed rules, with their arbitrary date of June 30, 1999, would not allow Mr. Larsen to terminate, without liability, the one ILEC contract he entered into after that date. (See Finding of Fact No. 47). Based on his sincere but unfocused testimony, it remains speculation to presume that Mr. Larsen would be willing to incur contractual liability by early termination of his single non-qualifying ILEC contract just because the proposed rules would let him "opt-out" of the several qualifying ILEC contracts. It is indicative of the proposed rules' possible effect on future competition that Mr. Larsen speculated that if he could terminate all his qualifying ILEC contracts simultaneously under the proposed rules, he might be able to persuade a competitor, perhaps an ALEC, to pay his termination costs on his single non- qualifying ILEC contract if he renegotiated all his business away from his ILEC and to that competitor. The introduction of the proposed rules into the market place could create a "competitive edge" not anticipated by the Commission. Other carriers, including ALECs competing with ILECs, can and do enter into contracts with their customers which, like the contracts which would be affected by the proposed rules, are long-term contracts subject to termination liability, but the long-term contracts of carriers other than ILECs would not be affected by the proposed rules. The proposed rules pertain only to ILECs and their business customers. In effect, the proposed rules apply predominantly to ILECs' large business customers. Under the proposed rules, competitors which had originally bid against the ILECs for an affected contract at the time it was entered-into could get "a second bite at the apple" occasioned solely by the application of the proposed rules.
The Issue Whether the protest of Barton Protective Services, LLC (Barton) challenging the Department of Transportation's (Department's) announced intention to commence negotiations with Faneuil, Inc. (Faneuil), "the firm ranked number one by the Selection Committee," for the contract advertised in ITN-DOT- 05/06-8007-EH "to provide Revenue Collection Services by staffing Department operated toll facilities" on the Florida Turnpike, should be sustained.
Findings Of Fact Based on the evidence adduced at hearing, and the record as a whole, the following findings of fact are made: Florida's Turnpike Enterprise and its Toll Operations The Florida Turnpike System consists of toll roads in the southern and central parts of the state. Florida's Turnpike Enterprise (Turnpike Enterprise), a unit of the Department, is responsible for the management and operation of the Florida Turnpike System. There is, organizationally, within the Turnpike Enterprise, a Division of Toll Operations, which is headed by a Director of Toll Operations. The current Director of Toll Operations is Evelio Suarez. Mr. Suarez's immediate predecessor as Director of Toll Operations was Deborah Stemle, who held the position from December 1997, to November 13, 2003. Three "distinct units" make up the Division of Toll Operations, each headed by a Deputy Director, who reports to the Director of Toll Operations: SunPass Operations; Toll Systems Support and Maintenance; and Revenue Collection Services (RCS). The SunPass Operations unit is responsible for the Turnpike Enterprise's electronic toll collection operations. Faneuil currently has two contracts with the Department involving SunPass Operations: a "SunPass Secondary Call Center" contract, which has been in effect since April 2005; and a "SunPass Contact Center and Support Services" contract that has been in effect since April 1, 2006. The Toll Systems Support and Maintenance unit is responsible for acquiring and maintaining the infrastructure and equipment needed for toll operations. RCS is responsible for the "accurate collection and deposit of cash toll revenues and to provide efficient and friendly service to the motoring public in manned and automatic coin lanes." Milissa Burger is now, and has been since July 2002, the RCS Deputy Director. Ms. Burger's immediate predecessor as RCS Deputy Director was Charles Gilliard. Preceding Mr. Gilliard in the position was Ms. Stemle. Ms. Stemle held the position from September 1986, to December 1997.4 Under Ms. Burger's direct supervision are six regional toll managers, who oversee the overall operation of the toll facilities in one of the six following "toll regions": Orlando region; Tampa region; Palm Beach region; North Broward region; South Broward region; and Miami region. There are approximately 10 to 15 toll facilities located in each of these "toll regions." Approximately 50 of the toll facilities are "open[] on [a] 24-hour, seven-days-a-week, 365-days-a-year basis." Barbara Brantley (formerly Trien) is now, and has been since November 2002, the Orlando Regional Toll Manager. Ms. Brantley's immediate predecessor as Orlando Regional Toll Manager was Ms. Burger, who held the position from June 1991, until her promotion to RCS Deputy Director in July 2002. Frankie Cook is now, and has been for the past year and a half, the Tampa Regional Toll Manager. Steve Spitzer is now, and has been since December 1994, the Palm Beach Regional Toll Manager. Mr. Spitzer has been employed by the Department since 1990. Before becoming the Palm Beach Regional Toll Manager, he was an Operations Management Consultant with the Department. Reno Abbadini is now, and has been since December 1997, the North Broward Regional Toll Manager. Mr. Abbadini has been employed by the Department since February 1995. Before becoming the North Broward Regional Toll Manager, he was an Operations Management Consultant with the Department. Karen Greenawalt is now, and has been since October 1996, the South Broward Regional Toll Manager. Ms. Greenawalt has been employed by the Department for 32 years. John Sneed is now, and has been since August 1994, the Miami Regional Toll Manager. Before becoming the Miami Regional Toll Manager, Mr. Sneed was an Operations Management Consultant II with the Department. When she was with the Department, Ms. Stemle exercised supervisory authority over Ms. Burger, Ms. Brantley, Mr. Spitzer, Mr. Abbadini, Ms. Greenawalt, and Mr. Sneed.5 In carrying out her supervisory responsibilities, she evaluated them and authorized or recommended pay increases and/or promotions for them that she believed they "deserve[d]" and had "earned."6 Her relationship with them was "purely professional." They were not personal friends of hers with whom she socialized (nor are they now).7 Each toll facility has a toll facility manager who exercises day-to-day operational control over the activities at the facility, including supervision of regional office support staff. Toll facility managers are under the direct supervision of the regional toll manager of the region in which their facility is located. The Director of Toll Operations, RCS Deputy Director, regional toll managers, toll facility mangers, and regional office support staff are all Department employees. Privatization of Toll Facility Staffing Working at each toll facility under the direction and control of the toll facility manager are toll collectors, toll collector supervisors, toll facility laborers, and toll collection couriers. Toll collectors are "responsible for accurately classifying vehicles, collecting tolls and providing change to motorists traveling through a toll lane." Toll collector supervisors "coordinate [the] work shift[s] of toll collectors." Toll facility laborers "maintain the cleanliness of a toll facility by performing routine maintenance and custodial duties." Toll collection couriers "provide pick up and delivery service between toll facilities and [the] regional office." Until 1994, toll collectors, toll collector supervisors, toll facility laborers, and toll collection couriers were employed by the Department. Since 1994, these positions have been outsourced, with Barton providing the Department with the necessary staffing services pursuant to written contracts (one for each region). Barton representatives have regular contact with RCS personnel, including the regional toll managers (who serve as the Department's contract managers under the contracts), to discuss operational issues relating to the staffing services it provides the Department. Barton was selected to provide these services following competitive procurement solicitations in 1994, 1996, and 2000. It currently provides the Department with approximately 2,000 contract employees. The contracts Barton entered into with the Department following the 2000 solicitation each had an expiration date of November 30, 2005, which "was extended initially for a six-month period." The Department, in or around 2005, decided to "rebid" the contracts. It "wanted to provide a better overall package to the employees" than was required under its contracts with Barton in order to help limit turnover and the number of vacant positions. ITN-DOT-05/06-8006-EH To this end, in or around the first week of November 2005, the Department issued ITN-DOT-05/06-8006-EH (ITN 006), "soliciting written replies from qualified vendors interested in participating in competitive negotiations to establish [two separate] contract[]s to provide Personnel Services: Toll Collections": one providing for staffing services for the Orlando, Tampa, and Palm Beach regions; and the other providing for staffing services for the North Broward, South Broward, and Miami regions. Vendors were instructed that they could "submit proposals for both or one of the contracts to be awarded" and that they were to "submit separate proposals for each of the contracts." Ms. Burger was the "primary drafter" of ITN 006. Ms. Brantley assisted her in "writing parts of the Scope of Services." Also assisting Ms. Burger were Sheree Merting and Elizabeth Hill of the Turnpike Enterprise's "contracts office," which is headed by Woodrow Lawson, who is a contractual services administrator with the Department. ITN 006 provided for a "mandatory pre-proposal meeting," which vendors had to attend to avoid being "immediately disqualif[ied] from further consideration." It also required that vendors have experience "for at least the past five (5) years, in the management and operation of toll collections staffing." Mr. Lawson did not have any direct involvement in the drafting or issuance of ITN 006. When he first reviewed it after its issuance (in order to respond to questions from vendors that had been forwarded to him by his staff), he had a "number of concerns with the document," including the requirement that vendors have previous "toll collections staffing" experience. In Mr. Lawson's view, such a requirement was unnecessary and anti-competitive because the Department, not the vendor, was to be providing training to the contract employees. Given the extensive changes that he believed needed to be made to ITN 006, Mr. Lawson decided that the Department "needed to pull back this document and start all over." He spoke about the matter with Mr. Suarez, who "concurred and he pulled [it] back." Mr. Lawson, with the assistance of a member of his staff, Frank Elmore, and Ms. Burger, made numerous changes to ITN 006. The result of their efforts was a new invitation to negotiate, ITN-DOT-05/06-8007-EH (ITN 007). ITN-DOT-05/06-8007-EH The Department issued ITN 007 in mid to late January 2006, establishing a March 7, 2006, deadline for the submission of sealed replies. Pre-submission addenda to ITN 007 were issued on February 23, 2006 (Addendum No. 1) and February 28, 2006 (Addendum No. 2). The documents comprising ITN 007 included: the Advertisement; Special Conditions; General Contract Conditions (PUR 1000); General Instructions to Respondents (PUR 1001); Standard Written Agreement; Scope of Services (Exhibit "A"); Method of Compensation (Exhibit "B"); Price Proposal (Exhibit "C"); various "forms" and "attachments"; and the aforementioned addenda. Advertisement The Advertisement identified the "Scope of Services" the Department was soliciting as follows: The State of Florida, Department of Transportation (hereinafter referred to as the "Department") is soliciting written replies from qualified Proposers interested in participating in competitive negotiations to establish a term contract to provide Revenue Collection Services by staffing Department operated toll facilities with Proposer's employees. It is anticipated that agreement will have an initial contract term of sixty (60) months with a renewal option. The Department intends to award a contract [to] the responsive and responsible Vendor whose proposal is determined by a Selection Committee to provide the best value to the Department. One contract will be awarded which will cover the following regions in the State of Florida as further described in the Invitation to Negotiate (ITN): Orlando Region Tampa Region Palm Beach Region North Broward Region South Broward Region Miami Region Special Conditions Special Condition 5 addressed the "Scope of Services." It provided as follows: Details of desired commodity/services, information and items to be furnished by the Vendor are described in Exhibit "A," Scope of Services, attached hereto and made a part hereof. Special Condition 6 required that "any technical questions arising from this Invitation to Negotiate . . . be forwarded in writing" to Mr. Lawson's subordinate, "procurement officer" Ms. Hill. In addition, it advised that "[t]he Department's written response to written inquiries submitted timely by interested vendors [would] be posted on the Florida Vendor Bid System." In Special Condition 7, the Department "reserve[d] the right to reject any and all replies received pursuant to this Invitation to Negotiate (ITN), if [it] determine[d] such action [to be] in the best interest of the Department," and it further "reserve[d] the right to waive minor irregularities in submitted replies." The Department provided the following description of the "Invitation to Negotiate Process" in Special Condition 10: The Steps for this Invitation to Negotiate process are outlined below. Dates and times associated with these steps are shown in Section 11, Schedule of Events, of these Special Conditions. Vendors['] replies should be prepared to provide a straightforward, concise description of the Vendor's ability to meet the requirements and to allow the Department to properly evaluate the Vendor's reply. The Vendor's reply shall be thorough and complete since negotiations with respect to items of scope and items of price will be at the sole discretion of the Department. Once Vendors have been ranked, the Department will proceed with negotiation in accordance with the negotiation process described below. Vendors should be cognizant of the fact during negotiations, the Department reserves the right to finalize negotiations at any time in the negotiation process when the Department determines that such election would be in the best interest of the State. Step 1): Scope Pre-Proposal Meeting will be conducted at the Turnpike Enterprise Headquarters . . . . Attendance by Proposers is optional. Step 2) Interested Vendors must submit a sealed reply consisting of the following to the "Procurement Agent" identified on the cover page: Qualifications Questionnaire Form - with additional sheets as needed to address and respond to all questions completely (see Special Condition 14.1). Dun and Bradstreet Supplier Evaluation Report Technical Proposal Price Proposal Step 3) The Evaluation and Selection Committee, composed of at least three members, will evaluate and score the replies individually. The individual scores of the committee members will be averaged by Turnpike's Contractual Service Staff to arrive at an overall score. Vendors will be ranked in the order of their overall score with the highest scored firm ranked number one, the second highest scored firm ranked number two and so forth.[8] Step 4) Posting of Ranking for 72 hours on the Vendor Bid System. Step 5) Once the posting period has ended the Department may undertake negotiations with the first-ranked Vendor until an acceptable contract is agreed upon, or it is determined an acceptable agreement cannot be reached with such Vendor. If negotiations fail with the first-ranked Vendor, negotiations may begin with the second- ranked Vendor, and so on until there is an agreement on an acceptable contract. The Department reserves the option to resume negotiations that were previously suspended. The Department also reserves the right to forego any negotiations and execute an agreement based upon a Vendor's written proposal. The Department will initiate all negotiations. Step 6) The intended award will be posted in accordance with law and rule. Step 7) The Department will contract with the Vendor with whom an acceptable agreement was reached. Special Condition 12 provided the following information regarding the protest procedures that were available to "adversely affected" vendors: Any vendor who is adversely affected by the Department's recommended award or intended decision must file the following with the Department of Transportation . . . .: A written notice of protest within seventy-two (72) hours after posting of the intended decision, and A formal written protest and protest bond in compliance with Section 120.57(3) Florida Statutes, within ten (10) days of the date on which the written notice of protest is filed. At the time of filing the written protest a bond (a cashier's check or money order may be accepted) payable to the Department must also be submitted in an amount equal to one percent of the estimated contract amount based on the contract price submitted by the protestor. Failure to file a protest within the time prescribed in Section 120.57(3), Florida Statutes, or failure to post the bond or other security required by law within the time allowed for filing a bond shall constitute a waiver of proceedings under Chapter 120, Florida Statutes. If the notice advises of the bond requirement but a bond or statutorily authorized alternate is not posted when required, the agency shall summarily dismiss the petition. In Special Condition 13, vendors were given notice of the optional "pre-proposal meeting," the purpose of which would be "to provide an open forum for the Department to review the Scope of Services, ITN requirements, contractual requirements, etc." This special condition further provided as follows: At least three (3) days before the Scope Meeting, Vendors should Mail, e-mail, or fax known technical questions to the person shown on the Special Conditions page, questions and issues which they want addressed during the pre-proposal meeting. The Vendor should pay particular attention to identifying any improvement, corrective measures, or other changes that could be incorporated in the Scope of Services that had not existed or may have been overlooked or require clarification. If required, a revised Scope of Services will be issued. Vendors are certainly welcome to ask questions at the pre-proposal meeting other than those previously forwarded to the Department, but the Department reserves the right to delay a response when further consideration is needed. Special Condition 14 described what vendors needed to include in their replies to ITN 007. It read, in pertinent part, as follows: The Sealed Reply shall be in the following format and provide the requested information. Qualifications Vendors must complete and submit Form 1 "Qualifications Questionnaire" and provide the Dun & Bradstreet Report requested in the Qualification[s] Questionnaire, to show that they have the necessary qualifications and experience in providing Revenue Collection Services - Toll Operations, as specified in the Scope of Services. Written Technical Proposal Executive Summary. The Vendor shall provide an Executive Summary to be written in non-technical language to summarize the Vendor's overall capabilities and approaches for accomplishing the services specified herein. The Vendor is encouraged to limit the summary to no more than three (3) pages. Administration and Management Plan. The Vendor shall provide an administration and management plan that describes the proposed organization's administration, management, and management personnel to be assigned to the project. This will include the percent of time that each individual assigned to the program will devote to the project, and the effort that top management will commit towards support of the program. The Vendor shall provide resumes of the management personnel assigned to the project as an appendix to the technical proposal. Staffing Plan. The Vendor shall provide an in depth staffing plan for (1) each of the Vendor's six regional offices and the duties and responsibilities for each assigned position including the resumes of known individuals with education and professional experience provided in the resumes[9] and (2) the method planned to be used to staff and schedule the Department's needs at each toll facility taking into consideration both full time and part time positions. Recruitment, Hiring and Employment Matters. The Vendor shall provide an in depth plan on proposed recruitment, screening, hiring, and employee evaluations. Employee Pay, Benefits, Recognition and Retention Programs. The Vendor shall provide an in depth plan for contract employee pay adjustments, benefits, performance recognition whether positive or negative, maintaining communications to minimize turnovers and increase general employee moral[e], and any additional methods for staff retention. When presenting the plan, include as part of your retention plan, your method for calculating and reporting turnover; include as part of performance recognition, your incentive program; include as part of communications your program for communicating information to employees; include as part of the benefits plan the following: (1) the employee's out of pocket expenses expressed as a percentage of total cost for group[] medical coverage (2) vacation and sick leave policy including the amounts of hours earned annually and retention policy of such hours (3) how employees will be compensated for holiday pay and (4) any other planned benefits with associated employee cost; include as part of pay adjustments, your plan for merit increases, cost of living increases and other compensation plans such as bonuses. Implementation Schedule and Plan. The Vendor shall provide an in depth plan and schedule for the implementation of the project, outlining all task[s] necessary to achieve a fully staffed and trained force as well as transitioning retained contract employees. Forms. Forms 2, 3 and 4 are to be completed and included in the Forms Section of the Technical Proposal. Be certain to fill in all blanks on the forms supplied; do not leave any blanks on the forms. Be sure to sign the form. Price Proposal The Proposer shall prepare its price proposal in accordance with the instructions set forth in 14.3.2 below and within the project budget limitations set forth in below. 14.3.1 Project Budget The Proposers Price Proposal shall not exceed the Department's budget. Funding for this Agreement is provided to the Department by the Florida Legislature on a Department fiscal year basis. The Department's fiscal year begins July 1 of each year and ends June 30 of each succeeding year. The Department anticipates that the following funds will be appropriated by the Florida Legislature for the fiscal year noted. The Proposer shall not exceed the Department's anticipated funding for any given fiscal year when preparing its price proposal. Before submitting a Price Proposal, compare your cost for a given time period in Schedule 2 of your price proposal to the corresponding time period shown below and do not exceed the Department's anticipated legislative funding. Fiscal Period Department Funding 6/1/06-6/30/06 $7,000,000 7/1/06-6/30/07 $55,500,000 7/1/07-6/30/08 $57,165,000 7/1/08-6/30/09 $58,880,000 7/1/09-6/30/10 $60,647,000 7/1/10-5/31/011 $57,261,000 14.3.2 Preparation The Proposer is required to present its Price Proposal on the forms set forth in Exhibit "C" . . . . * * * How replies would be evaluated was described in Special Condition 15, which read as follows: Evaluation Process The Department will evaluate the Vendor's Proposal utilizing the following criteria and point system: Qualification[s] Questionnaire(10) 10 Technical Proposal(80) Administrative and Management Plan 5 Staffing Plan 20 Recruitment, Hiring, and Employment Matters 10 Employee Pay, Benefits, Recognition and Retention Programs 35 Implementation Schedule and Plan 10 Price Proposal(10) 10 Total 100 Total Price Proposal (Evaluation) Price Proposal evaluation is the process of examining a Vendor's price. The Proposer's Price will be evaluated using the present value methodology as required by Section 287.0572, Florida Statutes. A present value discount rate of 4.27% shall be used in the evaluation. The price analysis will be conducted by a comparison of the present value of each Vendor's proposal. The criteria for price evaluation shall be based upon the following formula: (Lowest Present Value Price/Vendor's Present Value Price) x Maximum Points (10) = Vendor's Total Price Points The lowest present value proposal price will be divided by the Vendor's present value price. The results will be multiplied by the maximum price proposal points (10) to arrive at the total price points for the Vendor. In Special Condition 18, the Department "reserve[d] the right to perform or have performed an on-site review of the vendor's facilities and qualifications" following the "sealed reply due date and prior to contract execution" in order to "verify data and representations submitted by the vendor"; "determine whether the vendor has an adequate, qualified, and experienced staff, and can provide overall management facilities"; and "verify whether the vendor has financial capability adequate to meet the contract requirements." The Department added: Should the Department determine that the reply has material misrepresentations or that the size or nature of the vendor's facilities or the number of experienced personnel (including technical staff) are not adequate to ensure satisfactory contract performance, the Department has the right to reject the reply. Special Condition 23 stated that the Department would "execute a written agreement with the awarded Vendor, which w[ould] include the final negotiated terms, conditions, specifications/scope of services, and prices." Special Condition 25 listed the forms that were part of the ITN. It provided as follows: FORMS QUALIFICATIONS QUESTIONNAIRE Package (Form 1) Drug Free Work Place Certification (Form 2) MBE/DBE Participation Statement (Form 3) Certification of Acceptable Driving Record (Form 4) OPTIONAL Corporate Resolution (Form 5) General Contract Conditions The General Contract Conditions included the following provisions, among others: * * * 19. Lobbying and Integrity The Contractor shall not, in connection with this or any other agreement with the State, directly or indirectly (1) offer, confer, or agree to confer any pecuniary benefit on anyone as consideration for any State officer or employee's decision, opinion, recommendation, vote, other exercise of discretion, or violation of a known legal duty, or (2) offer, give, or agree to give to anyone any gratuity for the benefit of, or at the direction or request of any State officer or employee. . . . * * * 33. Contractor Employees, Subcontractors, and Other Agents. The Customer and the State shall take all actions necessary to ensure that Contractor's employees, subcontractors and other agents are not employees of the State of Florida. . . . * * * 47. Special Conditions. Pursuant to 60A- 1.002(7), F.A.C., a Customer may attach additional contractual and technical terms and conditions. These "special conditions" shall take precedence over this form PUR 1000 unless the conflicting term in this form is statutorily required, in which case the term contained in the form shall take precedence. General Instructions to Respondents The General Instructions to Respondents included the following provisions, among others: * * * Terms and Conditions. All responses are subject to the terms of the following sections of this solicitation, which in case of conflict, shall have the order of precedence listed: Technical Specifications, Special Conditions, Instructions to Respondents (PUR 1001), General Conditions (PUR 1000), and Introductory Materials. The Buyer objects to and shall not consider any additional terms or conditions submitted by a respondent, including any appearing in documents attached as part of respondent's response. In submitting its response, a respondent agrees that any additional terms or conditions, whether submitted intentionally or inadvertently, shall have no force or effect. Failure to comply with terms and conditions, including those specifying information that must be submitted with a response, shall be grounds for rejecting a response. Questions. Respondents shall address all questions regarding this solicitation to the Procurement Officer. Questions must be submitted via the Q & A Board within MyFloridaMarketPlace and must be RECEIVED NO LATER THAN the time and date reflected on the Timeline. Questions shall be answered in accordance with the Timeline. All questions submitted shall be published and answered in a manner that all respondents will be able to view. Respondents shall not contact any other employee of the Buyer or the State for information with respect to this solicitation. Each respondent is responsible for monitoring the MyFloridaMarketPlace site for new or changing information. The Buyer shall not be bound by any verbal information or by any written information that is not contained within the solicitation documents or formally noticed and issued by the Buyer's contracting personnel. Questions to the Procurement Officer or to any Buyer personnel shall not constitute formal protest of the specifications of the solicitation, a process addressed in paragraph 19 of these Instructions. Conflict of Interest. This solicitation is subject to chapter 112 of the Florida Statutes. Respondents shall disclose with their response the name of any officer, director, employee or other agent who is also an employee of the State. Respondents shall also disclose the name of any State employee who owns, directly or indirectly, an interest of five percent (5%) or more in the respondent or its affiliates. * * * 10. Performance Qualifications. The Buyer reserves the right to investigate or inspect at any time whether the . . . qualifications, or facilities offered by respondent meet the Contract requirements. . . . . Respondent must be prepared, if requested by the Buyer, to present evidence of experience, ability, and financial standing . . . . If the Buyer determines that the conditions of the solicitation documents are not complied with, . . . or that the qualifications, financial standing, or facilities are not satisfactory, . . . the Buyer may reject the response . . . . * * * Clarifications/Revisions. Before award, the Buyer reserves the right to seek clarifications or request any information deemed necessary for proper evaluation of submissions from all respondents deemed eligible for Contract award. Failure to provide requested information may result in rejection of the response. Minor Irregularities/Right to Reject. The Buyer reserves the right to accept or reject any and all bids, or separable portions thereof, and to waive any minor irregularity, technicality, or omission if the Buyer determines that doing so will serve the State's best interests. The Buyer may reject any response not submitted in the manner specified by the solicitation documents. * * * 19. Protests. Any protest concerning this solicitation shall be made in accordance with section 120.57(3) and 287.042(2) of the Florida Statutes, and chapter 28-110 of the Florida Administrative Code. Questions to the Procurement Officer shall not constitute formal notice of a protest. It is the Buyer's intent to ensure that specifications are written to obtain the best value for the State and the specifications are written to ensure competitiveness, fairness, necessity and reasonableness in the solicitation process. Section 120.57(3)(b), F.S. and Section 28- 110.003, Fla. Admin. Code require that a notice of protest of the solicitation documents shall be made seventy-two hours after the posting of the solicitation. Section 120.57(3)(a), F.S. requires the following statement to be included in the solicitation: "Failure to file a protest within the time prescribed in section 120.57(3), Florida Statutes, shall constitute a waiver of proceedings under Chapter 120, Florida Statutes." Section 28-110.005, Fla. Admin. Code requires the following statement to be included in the solicitation: "Failure to file a protest within the time prescribed in Section 120.57(3), Florida Statutes, or failure to post the bond or other security required by law within the time allowed for filing a bond shall constitute a waiver of proceedings under Chapter 120, Florida Statutes." Scope of Services Section 2.0 of the Scope of Services contained "Definition[s] of Terms," including the following: Department's Project/Contract Manager: The individual employee of the Department responsible for the management of the Contract. Department Deputy Project/Contract Manager: These employees of the Department are responsible for scheduling (establish[ing] staff requirements) and monitoring of work being performed, inspection and acceptance of services provided and approval for payment of services requested herein. Department's Deputy Director [of] Toll Operations - RCS: This individual provides operational oversight and direction for the six (6) toll regions. Serves as the Department's Project/Contract Manager, at the statewide level of this contract. 2.7. Department's Regional Toll Manager: The individual employee responsible for the management oversight of an entire region, including the management of the toll collection staffing contract, supervision of toll facility managers and regional office support staff[;] provides direction and guidance for the operation of the toll facilities, budget control, monitor[s] cash collection, and monitor[s] banking and auditing reports for cash handling errors. Serves as the Department's Deputy Project/Contract Manager at the Region level of this Contract. 2.8 Department's Toll Facility Manager: This individual is responsible for the total operation of a toll facility. Responsibilities include supervision of Department and contract employees, maintaining a well trained and motivated work force, providing exceptional customer service, contract management and meeting the financial goals of the Department. 2.9. Contract Employee: The individual employed by the contractor performing the duties and responsibilities of a toll collector, toll collector supervisor, toll facility laborer or courier. Retained Contract Employee[]: An employee of the current Vendor that accepts employment with the new toll collection services Vendor. Contractor's Program Director: The individual employee of the Contractor responsible for management of Contract, scheduling (staff Department requirements), payroll, monitoring of work being performed, inspection of services provided and the submission of payment documents for all services requested herein. The Contractor's Program Director is responsible for all communication with the Department and the Department's Contract Manager. Section 3.0 of the Scope of Services contained the following "General Description" of the services sought by the Department through ITN 007: The Department is currently under contract for the above-mentioned services; however, the contract will expire in the winter of 2006. It is the intent of the Department to retain all current contracted full-time and part-time positions under this contract (see Section 23.1, First Right of Refusal). This ITN is directed to vendors who can meet the Department's requirements described herein. This indefinite quantity contract retains the Vendor to provide toll collection service employees for full-time and part-time positions at the toll facilities located within the six toll regions. The number of positions may increase or decrease during the term of the contract, depending on need (see Section 9.1.5) and availability of budget. The Vendor shall provide toll facility personnel, including toll collector, toll collector supervisor, laborer, and courier positions. The Vendor shall provide and maintain, at minimum, one local office within the specified geographic boundaries in each of the toll regions, approved by the Department, with space useable for interviewing, scheduling, orientation and training, and maintenance of employee files and uniform inventory. Furnishing each office with appropriate furniture, equipment and office supplies as well as telephone services, utilities, janitorial and other needed services or items are the responsibility of the Vendor. The Department will provide at the toll facilities all toll facility management staff, technical support individuals, procedures, furniture, computers, office supplies, uniforms, and access to the toll collection system for the contractor's employees assigned to the toll facilities. Section 4.0 of the Scope of Services advised that "[o]ne contract w[ould] be awarded from this Invitation to Negotiate to provide services for toll facilities assigned to the Department's six toll regions . . . consisting of the Orlando Region, Tampa Region, Palm Beach Region, North Broward Region, South Broward Region and the Miami Region." Section 5.0 of the Scope of Services was entitled, "Project Management," and read as follows: The Vendor shall provide a senior level employee to be located in the State of Florida and preferably in the area of one of the six toll facilities to act as the Program Director during the term of the Agreement with authority to act on the behalf of the vendor in any matter related to the contract personnel assigned and is responsible for all communication with the Department and the Department's Contract Manager. The Program Director shall speak, read, write and understand the English language and must be available or on-call to the Department on a 24/7 (24 hours per day, 7 days per week) basis during the term of the Contract. The Vendor shall provide emergency telephone numbers and contingency procedures for failure of first level of response. The Vendor shall respond, by telephone, to the Department within thirty (30) minutes of initial contact. The "Revenue Collection Services Vendor Team" was the subject of Section 6.0 of the Scope of Services, which read as follows: The Vendor shall establish and maintain a fully qualified team for all phases and for the duration of the contract. The Vendor shall supply all of the labor, expertise and travel necessary to provide all of the services specified herein. Contract staff performing Revenue Collection Services at the toll facilities will consist of: Toll Collectors, Toll Collector Supervisors, Toll Facility Laborers, and Couriers. The job descriptions for the above-mentioned staff are located in Attachment "B." The contract personnel shall meet the minimum requirements and be able to perform duties listed for each position. Section 7.0 of the Scope of Services was entitled, "Work Force Diversity," and read as follows: The Department desires to maintain a work force that is ethnically and culturally diverse. As such, the Vendor shall be required to provide a diverse and balanced mix of employees to meet the Department’s goal. Discrimination on the grounds of race, color, religion, sex, national origin, age or disability shall result in termination of the contract as stipulated in Section 6 of the Standard Written Agreement. Section 8.0 of the Scope of Services addressed "Recruitment, Hiring and Employment Matters." Subsection 8.1 discussed the "Screening Method" for prospective contract employees. It provided as follows: The Vendor shall establish and maintain a screening process for potential employees assigned to the project. The focus of the screening process shall be the safe and proper handling of Department revenues, and the ability to effectively communicate and deal with the motoring public. The Vendor must obtain the Department's approval of the screening methods prior to their use. Documentation of successful screening results shall be maintained in the employee's individual personnel file. Assignment of unqualified personnel may result in liquidated damages as stipulated in Section 21. The screening process will include, but not be limited to, a background check at the State level to exclude from employment individuals with financial crime records or other background history which might jeopardize the Department's ability to perform its mission. The successful results of the background check must be in the employee's individual personnel file prior to the assignment of the employee. At the request of the Department, the Vendor will periodically be required to perform a National Level background check on employees assigned to this contract. The Vendor will be reimbursed for the out of pocket expense for National Level background checks requested and approved in writing by the Department's Contract Manager. The screening process shall include a method to measure the following: the applicants' ability to speak and read English; accuracy and speed of simple math and cash calculation skills; and ability to use a computerized cashiering system to determine if they meet the minimum requirements of the position. Additional skill based evaluations approved by the Department may also be administered. Under no circumstances shall an employee be assigned to this Contract unless they have successfully passed both the English and the math and cash calculation test. The Department reserves the right to approve all tests prior to use and to test contract personnel that do not appear to meet minimum requirements. An interview process for all positions shall be conducted by the Vendor. Second interviews by the Department may be required for toll collector supervisory, laborer and courier positions prior to assignment to the Contract. The Vendor shall permanently fill vacant positions as quickly as possible, but shall have no longer than thirty (30) calendar days to permanently fill vacant positions. A vacant position does not exclude the Vendor from the responsibility to fill the required shifts left open by the vacancy. Subsection 8.2 indicated that contract employees who were related to one another could not be assigned to the same work location and that, "[a]dditionally, relatives of the Vendor's management team [could] not be assigned to this project." Subsection 8.3 prescribed the procedure the successful vendor would have to follow for "Reassignments and Rehires" of contract employees. Subsection 8.4 set forth the requirements the successful vendor would have meet with respect to "maintain[ing] individual personnel files on each contract employee." Subsection 8.5 was entitled, "Employment Matters," and read as follows: The Vendor shall be responsible for all matters pertaining to the employment, scheduling, benefits, compensation (i.e. wages, salary, unemployment, worker's compensation, etc.), payroll administration, discipline, discharge, and similar matters of personnel such as, but not limited to: mandatory Sexual Harassment and Workforce Violence training, provided under this Contract. The Vendor shall be an independent contractor of the Department in performance of its duties herein. The Vendor's personnel performing services under the Contract, shall at all times be under the Vendor's exclusive control and shall be employees of the Vendor and not of the Department. Subsection 8.6 was entitled, "Employee Direction," and read as follows: Contract personnel shall follow the directions and instructions of the Department's designated representative and shall be subordinate to these individuals while on duty for the Department. The Department will provide the Vendor written documentation on contract employee performance using an agreed upon form. The Vendor shall be responsible for initiating corrective and progressive disciplinary action with the contracted employee. The Vendor shall provide the Department with written notification of action initiated. Subsection 8.7 was entitled, "Employee Evaluation," and read as follows: The Department requires all contract employees receive, at a minimum, an annual performance appraisal in a format to be approved by the Department. The Vendor shall solicit input on the employee's performance from the appropriate Toll Facility Manager and/or Regional Toll Manager. The Department's input will be considered in final performance ratings and incorporated into the employee's reviews. Subsection 8.8 was entitled, "Employee Removal," and stated that "[t]he Department reserve[d] the right to require the immediate removal of any contract employee whom the Department identifie[d] as a potential threat to the health, safety security or general well-being of the Department's customers, employees, agents, assets or whomever the Department determine[d] d[id] not meet the minimum performance requirements of the position." The subject of Section 9.0 of the Scope of Services was "Staffing, Scheduling, Shift Reporting and Time Keeping." Subsection 9.1 addressed "Staffing and Scheduling." It indicated, in its introductory paragraph, that the "vendor w[ould] be required to provide contract employees, as described herein, for a 24/7 operation at times and locations required by the Department." Subsection 9.1.5.2 discussed "replacement employees." It provided as follows: The Vendor shall be responsible for providing replacement employees for scheduled Vendor employees who fail to report to work or are otherwise unavailable. The Vendor is required to provide replacement employees as quickly as possible, but no later than one (1) hour of the beginning of the schedule[d] shift, or at the beginning of the scheduled shift time if notified at least one (1) hour before the scheduled shift. Requests for replacement employees will be made verbally to the Vendor by the Department managers or their designee. The Department reserves the right to require another contract employee from the off-going shift to remain on-duty until the replacement employee arrives. Compensation for such shift extensions will be billed at the Vendor's hourly rate. No overtime additive rate will be paid by the Department for any hours worked by the Vendor's employees. Subsection 9.2 addressed "Shift Reporting and Timekeeping." It read as follows: Contract personnel shall be required to report to the on-duty manager or supervisor at the beginning of their assigned shift at the specified toll facility location. Contract employees shall be required to record their shift starting and ending times and all rest and meal breaks on prescribed forms or by use of an electronic timekeeping device provided by the Department. Hours worked shall be calculated using the Department method for calculating hours. The Department's method for calculating hours is provided in Attachment "C." The Vendor shall be required to verify hours worked with the Department Toll Facility Manager weekly and the Department Region staff monthly. The Department will pay the Vendor's hourly rate for hours worked by contract employee positions, described herein, on approved schedules and for training required by the Department. All other hours shall be considered non-billable and should not be reflected on the time logs or monthly invoice. Orientation given to contracted employees is not considered training and therefore is not billable as time worked.[10] The Department strongly discourages use of overtime for this contract. To that extent, the Vendor shall not be able to bill at an overtime hourly billing rate when the Vendor provides an employee who works in excess of forty (40) hours per week on this contract. This does not eliminate the Vendor's responsibility to comply with the federal or state employment laws should a contract employee work in excess of forty (40) hours in a week. Section 10.0 of the Scope of Services dealt with "Employee Pay, Benefits, Recognition and Retention Programs." The prefatory language of this section read as follows: The Department desires to maintain an experienced workforce through retention of quality employees and programs that reduce unnecessary turnover and training costs. The Vendor shall minimize turnover rates by providing salaries that are competitive within the area and benefits to its full- time employees and maintain a well-trained staff by implementing timely performance recognition and feedback, incentive programs and an effective communication plan. The Department requests that the Vendor define in its technical proposal their evaluation, recognition, incentive and communication plan. Additional methods for staff retention may be presented by the Vendor to the Department for review and approval. The Vendor shall be responsible for tracking contract employee turnover and providing monthly reports, in a format approved by the Department, by position, Region and toll facility. The Vendor shall provide its method for calculating and reporting turnover in its technical proposal for the Department. Subsection 10.1 discussed "Stable Workforce." It read as follows: The Vendor shall provide a stable workforce which will include both full-time and part- time employees. The Vendor shall be required to maintain a 75% minimum full-time contract employee workforce at each toll facility. Full-time employees are defined as employees whose position requires them to work a minimum of thirty-two (32) hours per week. Subsection 10.2 discussed "Employee Pay." It read as follows: The Vendor shall be required to pay the minimum hourly starting wages by position classification and Region as outlined in the table below. Should at any time the federal or state minimum wage rate laws change such that such governmental minimum wage rates exceed the minimum wage rates established in this contract, the Contractor shall use the minimum wage rate required by governing law as the starting wages. MINIMUM STARTING WAGES Orlando: TOLL COLLECTOR- TOLL COLLECTOR SUPERVISOR- $7.25 $9.25 TOLL FACILITY LABORER $8.00 COURIER $9.00 Tampa: TOLL COLLECTOR- TOLL COLLECTOR SUPERVISOR- $7.00 $9.00 TOLL FACILITY LABORER $7.50 COURIER $9.00 Palm Beach: TOLL COLLECTOR- TOLL COLLECTOR SUPERVISOR- $7.00 $9.00 TOLL FACILITY LABORER $8.00 COURIER $9.00 North Broward: TOLL COLLECTOR- TOLL COLLECTOR SUPERVISOR- $7.00 $9.25 TOLL FACILITY LABORER $8.00 COURIER $9.00 South Broward: TOLL COLLECTOR- TOLL COLLECTOR SUPERVISOR- $7.00 $9.25 TOLL FACILITY LABORER $8.00 COURIER $9.00 Miami: TOLL COLLECTOR- TOLL COLLECTOR SUPERVISOR- $7.00 $9.25 TOLL FACILITY LABORER $8.00 COURIER $9.00 Effective July 1, 2007, and on each annual anniversary thereof, the minimum hourly starting wage for each position classification within each Region shall increase by 3%. The Vendor shall be required to provide each retained contract employee hired at least their current rate as of December 13, 2005, or if the retained contract employee was earning less than the minimum required by this contract, such retained contract employees shall be paid at least the minimum required for their position. The current rate of pay, as of December 13, 2005, of retained contract employees is shown in Attachment D. The names of retained contract employees will be provided to the Vendor upon execution of the Contract. The Vendor shall define in its proposal how it will address annual adjustment of salary rates for its employees to include, but not limited to, merit and cost of living increases. The Vendor shall also address any other programs it plans to implement that would increase the compensation paid an employee such as bonuses. * * * Subsection 10.3 discussed "Employee Benefits." It read as follows: The Department desires to maintain an experienced work force through the recruiting and retention of quality employees. In order to meet the Department's goal, the Vendor shall provide an employee benefits program that, at a minimum, provides the following: Group Medical Coverage: Affordable medical coverage which is in part subsidized by the contract and is available for all full-time employees no later than 90 days after their hire date. There will be no waiting period for insurance coverage for retained contract employees participating in the current contractor's medical plan. This coverage must allow for, at minimum, single and family coverage. Paid Vacations for full-time employees. Full-time employees are defined as employees whose position requires them to work a minimum of thirty-two (32) hours per week. Retained contract employees will be eligible for vacation based on their total years of service in providing toll collection services to the Department whether as a Department or contractor employee. Retained contract employees will not have a waiting period to earn or use their vacation time. Paid Sick Leave for full-time employees. Retained contract employees will not have a waiting period to earn or use their sick leave. Holiday Pay for full-time employees to include: New Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. The Vendor shall address how it plans to compensate holidays for employees required to work on holidays and how it plans to compensate holidays for employees whose scheduled day off falls on the holidays. The Vendor shall define in its technical proposal an attractive benefit package aimed at staff retention. The Vendor shall include [an] individual's out of pocket expenses for group medical coverage for both single and family. The Vendor shall also include in its proposal the vacation and sick leave policy including the amount of hours earned annually and retention of such hours earned. The Vendor shall also include any other benefit programs available to employees. Subsection 10.4 discussed "Incentive Program[s]." It read as follows: The Department understands the need to reward its staff. Incentive programs are critical to maintain a dynamic and enthusiastic workplace. The following goals should be considered the basis for implementing incentive programs: To boost morale and provide challenge to a routine day. To create an atmosphere of healthy competition, thus providing enhanced customer care and overall work results. To challenge and strengthen the ability of a struggling employee. The Vendor shall implement incentive programs for its employees assigned to this contract. Competitions can be set up as individual contests, teams located at the same toll facility, teams representing toll facilities in the same Region, and/or teams representing an entire Region. Prior to implementation, the Department shall approve the program and its monthly awards and rules. The Department expects the following parameters to be considered as part of a Vendor's proposal for incentive programs. All contract personnel should be eligible for incentives. The amount of monthly incentives should not exceed $10.00 per person with a total maximum dollar value based on no more than 30% of the total number of active contracted employees receiving an incentive in any given month. The 30% shall be calculated by Region. The number of active employees will be determined by the previous monthly report. The incentives will be awarded on a schedule approved by the Department but no less than once a month. Incentives can include, but are not limited to, store gift certificates, restaurant gift certificates, trophies, certificates of achievement, plaques, bonuses, movie passes, toll facility lunches, Regional events and points established in an awards catalogue. All incentives will be approved in advance by the Department. The Vendor shall provide the Department, on a monthly basis, a list of individuals who received incentives and a description of the incentive received, including the value. The Contractor's incentive program is not eligible as a direct reimbursable expense under this contract. Section 11.0 of the Scope of Services was entitled, "Employee Orientation and Training."11 It read as follows: It is the Department's desire to have a well-trained and motivated staff focused on the mission. Orientation The Vendor shall develop and furnish a general orientation program for all contracted personnel. This orientation shall not be considered training.[12] The program shall be submitted to the Department for review and approval prior to commencement of the work. Specific subjects to be covered shall include, but not be limited to, an overview of the Department's toll operations, customer service, safety, lane crossing procedures, uniform and dress code requirements, non revenue travel policies, and an explanation of specific contract provisions related to employee behavior and performance. Each contract employee must complete the orientation program prior to reporting to an assigned work location. Orientation for a contracted employee is not considered time worked and therefore such hours are non-billable.[13] The Vendor shall provide Department staff written certification of the orientation completion for each contract employee. Certification must be included in the employee's individual personnel file. Interactive Training The Department will provide an interactive training program for toll collectors by Department employees.[14]. All toll collectors and toll collector supervisors (with no previous toll collector experience) shall be required to successfully complete interactive training prior to assignment to a toll facility for on-the-job training. The interactive training program is administered primarily by Department managers. On-The Job (OJT) Training Upon completion of the orientation and interactive training programs, contract employees will be assigned to a toll facility for on-the-job operational and equipment training. Employees must successfully complete OJT before being assigned to a lane or shift. The Department currently has an OJT program in place for all contract positions described herein. The program includes using designated contracted employees as trainers. The Vendor shall work with the Department in improving the OJT program as needed. Additional Training Requirements The Vendor shall be required to develop additional training programs for contracted employees to meet Department requirements. This additional training includes, but is not limited to, Sexual Harassment, Work Place Violence, Safety and Customer Service. The Department shall approve all training programs before they are administered. Training Compensation The Department shall pay for attendance of contract employees at initial or follow-up Department provided or mandated training at the employees' hourly rate. Training History and Record The Vendor shall be required to maintain records on contracted employees' training history. The Vendor is responsible for ensuring that all employees have the proper training required for their position. The Vendor shall provide these reports as requested by the Department in a format that will be compatible with the Department's database. Section 12.0 of the Scope of Services was entitled, "Uniforms." Subsection 12.1 provided that "[t]he Department w[ould] provide uniforms to the Vendor to be issued to employees assigned to the contract." Subsection 12.2 read as follows: Contract employees shall be expected to be in uniform within two weeks of assignment to their work unit. Employees shall be required to sign a toll uniform receipt, acknowledging receipt of the uniform items issued. A copy of the receipt shall be included in the employee’s individual personnel file. The remaining subsections of Section 12.0 imposed additional requirements that the Vendor awarded the contract would have to meet with respect to "Uniforms." Section 13.0 of the Scope of Services was entitled, "Photo Identification, Name Tags and Access Cards." Subsections 13.3.1 through 13.3.5 read as follows: Upon satisfactory completion of orientation and training programs, the Vendor shall place an order for the access card to the Department by providing the contracted employee’s name and a unique identification number on the prescribed form. The employee access card will be issued to the contract employee by the Department. The contract employee shall be required to sign an acknowledgement receipt for the card. The Vendor shall be responsible for collecting employee access cards from contract employees at the time of their termination and for returning the access cards to the Department. The Vendor shall immediately notify the Department of lost, stolen, or unreturned employee access cards. The Vendor is responsible for all access cards issued to contracted employees. The Department will assess a replacement charge to the Vendor for any lost or damaged cards. The Department will replace any worn card, damaged due to normal wear and tear. It is the sole determination of the Department to determine if the card was damaged due to normal wear and tear or through employee misuse. The Department will send a monthly statement to the Vendor detailing the total amount due for lost or damaged cards which shall serve as an invoice. The Vendor has sixty (60) days from the date of notice to reimburse the Department for all lost or damaged cards. Section 15.0 of the Scope of Services was entitled, "Transportation." Subsection 15.1 addressed "Department Vehicles" and included the following provisions: The Vendor shall maintain and provide proof annually of automobile liability insurance covering all vehicles with minimum combined single limit for bodily injury and property damage of at least $500,000. All such policies of insurance shall name the Department as an additional insured, as its interests may appear, and shall not be canceled without thirty (30) days' written notice to the Department. The Vendor shall be responsible for any and all damages caused by its employees, agents or sub vendors as a result of the operation of any Department vehicle. Subsection 15.2 discussed "Payment for Mileage" and provided as follows: In the event that a Department vehicle becomes unavailable for use, for whatever reason, Contract employees will be required to use their personal vehicles for travel to and from the assigned toll facility administration building to remote ramps or other work locations. The Vendor shall be required to reimburse the employee for this mileage at the Department's reimbursement rate. Mileage reimbursement will be billed separately and should not be included in the price proposal. Section 16.0 of the Scope of Services was entitled, "Reports." Subsection 16.4 discussed "Training Reports," and read as follows: The Vendor shall be required to maintain records on contracted employees' training history. The Vendor shall provide these reports as requested by the Department in a format that will be compatible with the Department's database. Section 17.0 of the Scope of Services addressed "Invoice Requirements." Subsection 17.2 set forth procedures for "Invoicing for Payment." Section 19.0 of the Scope of Services concerned "Equipment, Manuals, Policies and Procedures" and read as follows: The Department will provide all equipment and materials required for operations at the toll facilities for use, as needed, by the contracted employees. The Department will also provide the State rules and regulations for use of such items to the Vendor. These rules and regulations shall be adhered to at all times during the length of the contract. The Department's RCS Operating Procedures, Safety Procedures, Comprehensive Emergency Management Plan manuals and Quality Assurance Review program will be made a part of the Contract by reference. Such documents will be available for review at designated Department offices. Section 20.0 of the Scope of Services was entitled, "Workday Shortages," and read as follows: The Department routinely performs daily audits and security investigations on toll employees to ensure that vendor's employees are following proper cash handling procedures. The Vendor shall cooperate with the Department during these investigations and provide [the] Department with all information requested on a contracted employee as soon as possible. When an employee has a cash shortage(s), $50 or higher, that is determined, at the sole discretion of the Department, to be caused by contracted employee error, contracted employee theft or is unrelated to any equipment issues, the Vendor will be responsible for reimbursing the Department for the shortage(s). The Department will send a written notice informing vendor of the shortage(s) and Vendor will have thirty (30) days to reimburse the Department for this amount. Historical information for toll collector shortages of $50 or higher invoiced under the current contract is provided in Attachment E. Section 21.0 of the Scope of Services described circumstances under which the vendor awarded the contract would have pay the Department "Liquidated Damages." Section 22.0 of the Scope of Services was entitled, "Implementation Plan," and provided as follows: The Vendor shall provide an implementation plan in its technical proposal detailing how they would staff and train employees for toll facilities, as well as transition the current Vendor's staff to be operational within thirty (30) days from the execution of the contract. The implementation shall be sufficient in detail to clearly demonstrate the Vendor's knowledge of the steps necessary to implement this contract. Within five (5) days of execution of the contract, the Vendor shall provide an update of the Implementation Plan, which will include a detailed schedule of when each activity is to commence and end. This schedule shall also provide the names of the responsible person(s) or parties that are to complete each activity. This implementation plan shall be in sufficient detail as to clearly demonstrate the Vendor's ability to manage the implementation process. Section 23.0 of the Scope of Services was entitled, "Transition," and provided as follows: The Department is currently under contract for staffing. Under this agreement, the current Vendor has paid its employees and provided them with certain employee benefits. The Vendor awarded this contract, shall engage with the current Vendor's staff as follows: First Right of Refusal for Positions The Vendor shall provide first right of refusal to each current Vendor's employees, hereafter referred to as retained contract employees, who desire to be employed by the Vendor. This includes contracted employees covered under this contract; toll collectors, toll collector supervisors, laborers and couriers; and does not include the current Vendor's management team or office personnel. The Vendor shall offer the retained employees the same or equivalent position the employee held as of the last day of the term of the previous Vendor's agreement. If an employee is not offered a position, the Vendor must provide the reason in writing to the Department. Salaries The Vendor agrees to provide each retained contract employee hired their current rate as of December 13, 2005, or if the retained contract employee[] was earning less than [the] minimum required by this contract, such retained contract employee shall be paid at least the required minimum of their position. The current rate of pay, as of December 13, 2005, of retained contract employees is shown in Attachment "D." The names of retained contract employees will be provided to the selected Vendor upon execution of the contract. Insurance Benefits Insurance benefits shall meet or exceed ITN specifications, as per Section 10.3. The probationary period for any health benefits shall be waived for the retained contract employee participating in the current contractor's medical plan. The benefits shall become effective as of the date the Vendor hires the employees. Vacation and Sick Leave Vacation and sick leave benefits shall meet or exceed ITN specifications as per Section 10.3.2 and 10.3.3. The vacation and sick leave benefits of each retained contract employee shall be calculated as of the date the Vendor hires the retained contract employee based on their total years providing toll collection services for the Department whether as a Department or contractor employee. Holiday Pay Holiday benefits shall meet or exceed the ITN specifications as per Section 10.3.4. Any probationary period for the receipt of holiday pay benefits shall be waived for all retained contract employees and be in effect beginning the first day the Vendor hires the retained contract employee based on their total years of service providing toll collection services for the Department whether as a Department or contractor employee. Anniversary Date Retained contract employees will maintain their current anniversary date for leave calculation. Section 24.0 of the Scope of Services was entitled, "Department Employment Opportunities," and read as follows: The Department may periodically advertise for permanent Department positions. In the event that an employee of the Vendor is selected to fill a Department position, the Department will provide, at minimum, two (2) weeks notice to allow the Vendor time to replace the employee. NON EXCLUSIVITY CLAUSE IN CASE OF DEFAULT OR CONTRACT TERMINATION: The Contractor agrees that should they default or the contract is terminated, the Contractor’s staff will have the right with no penalties and at no cost to be hired by the Department or the new Vendor to conduct the work. Section 25.0 of the Scope of Services discussed "Subcontracting or Assignment of Work" and read as follows: The Vendor shall not subcontract, assign, or transfer any work under this Agreement without the written consent of the Department. After written consent of the Department, the Vendor will be permitted to subcontract a portion of the work, but shall perform within its organization, work amounting to not less than 51% of the total contract amount. Any and all sub vendor[]s are required to be qualified and certified, in accordance with requirements herein, meet all federal, state and local regulations, and be approved by the Department. Subcontracting of work shall not relieve the Vendor of its respective liabilities. The Department recognizes a subcontractor only in the capacity of an employee or agent of the Vendor. The Vendor may subcontract with a qualified non-profit agency as defined in 413.033, Florida Statutes, through RESPECT agency as authorized under 413.036, Florida Statutes and any such subcontracting will not be subject to the 51% restriction. Section 26.0 of the Scope of Services was entitled, "Licenses and Fees," and provided that the vendor awarded the contract would "be responsible for all licenses and fees associated with performance of this Contract." Section 27.0 of the Scope of Services was entitled "Succession Planning." It advised that the vendor awarded the contract would be required to "provide a Succession Plan for the transfer of operations at the end of the contract, in the event the Vendor cannot, will not, or is not allowed to continue operations." Method of Compensation Section 3.0 of the Method of Compensation discussed "Progress Payments." It read as follows: For the satisfactory performance of services, the Vendor shall be paid monthly for the following: Hours worked by contract employees performing toll collection activities or receiving required training will be paid for at the contract hourly billing rates established in Exhibit "C" [Price Proposal], Schedule 1a, attached hereto and made a part hereof. The contract hourly billing rates shall include the cost of salaries, overhead, fringe benefits, overtime, contract management, administration, operating margin or profit, and all expenses except the expenses defined herein as allowable. Regional Office expenses shall be paid for at the monthly lump sum amount established in Exhibit "C," Schedule 1b, attached hereto and made a part hereof. Actual costs of the following items which shall be supported by receipts. Unless specifically approved in writing by the Department, there will be no direct reimbursement of any other items. Travel expenses associated with Department authorized travel of contracted employees. No travel expense shall be paid for contract employee[s] when reporting to work at their assign[ed] Toll Facility Administration Building. When directed by the Department, out of pocket expenses associated with obtaining a National Level background check on a contract employee assigned to this project. When directed by the Department, out of pocket expenses associated with participation in a customer services and satisfaction assessment. "Minority Business Enterprise Utilization (MBE)" was discussed in Section 4.0 of the Method of Compensation, which read as follows: When subcontracting services or making reimbursable purchases, the Vendor should take all necessary and reasonable steps to ensure that minority businesses have the opportunity to compete for and perform contract work for the Department in a non- discriminatory environment. An MBE certification form shall be submitted by the Vendor with each invoice. Form 1: Qualifications Questionnaire Form 1, with its various attachments, contained the "Qualifications Questionnaire" referred to in the ITN's Special Conditions. The following "Instructions to the Qualifications Questionnaire" were set forth in the form: The Proposer is required to complete and return this Qualifications Questionnaire (Form 1) and include as part of this questionnaire, a Dun & Bradstreet Report. This information shall be included as part of the Proposer's Proposal as set forth in the Special Conditions in ITN-DOT-05/06- 8007-EH. Failure to properly complete this Qualification[s] Questionnaire (Form 1) or to provide requested related information, either in part or in its entirety or fail[ure] to provide the Dun & Bradstreet Report may result in the rejection of the Proposer's application for qualification.[15] If the Proposer's Qualification[s] Questionnaire is rejected, the Proposer's Proposal will not be considered. When completing the Proposer's Qualification Statements, the Proposer is required to use either ink or typewriter (black ribbon) and affix signatures where required. NOTICE: APPLICANTS FOR QUALIFICATION ARE HEREBY NOTIFIED THAT INTENTIONAL INCLUSION OF FALSE, DECEPTIVE OR FRAUDULENT STATEMENTS ON THIS APPLICATION CONSTITUTES FRAUD. FURTHERMORE, APPLICANTS ARE HEREWITH NOTIFIED THE STATE OF FLORIDA CONSIDERS SUCH ACTION ON THE PART OF AN APPLICANT TO CONSTITUTE GOOD CAUSE FOR DENIAL OF THE QUALIFICATION FOR BIDDING ON STATE PROJECTS LET TO CONTRACT BY THE STATE OF FLORIDA DEPARTMENT OF TRANSPORATION. DUN AND BRADSTREET REPORT The Department has chosen Open Ratings (a partner of Dun & Bradstreet) to assist with the evaluation process of this ITN through a report that Open Ratings will generate about your company when you provide them with the requested information. The report is called "Past Performance Evaluation/Supplier Evaluation Review" (PPE/SER) and will provide an overall rating on timeliness, problem responsiveness, quality of purchased products or services, total cost, technical support, deliveries/quantities, and attitude of vendor personnel. This report must be submitted with your "Qualifications Questionnaire." Information and Forms are attached. It is mandatory that you order and pay for this report and submit the results with your reply to the "Questionnaire" in order to be considered for this contract. Because this Report takes approximately four weeks to complete, interested vendors are encouraged to submit their request to Open Ratings in a timely fashion. In the event your firm has obtained this report within the past twelve months, such report will be acceptable and will meet this requirement. REQUIRED FORMS The Proposer shall complete the following required forms of this Qualification[s] Questionnaire: Form 1- Attachment No. 1A: Organization - Prime Form 1- Attachment 1B: Organization - Subcontractor Form 1- Attachment 1C: List of Completed Projects Form 1- Attachment 1D: List of Current Projects Under Contract Form 1- Attachment 1E: Required Background Information Form 1- Attachment 1F: Staffing - Program Director Form 1- Attachment 1G: Staffing - Other Key Personnel Form 1- Attachment 1H: Proposer's Surety History Form 1- Attachment 1I: Subcontractor Approval List Reference Checks The Department may choose to perform reference checks on one or more, but not necessarily all of the Proposers as a result of the Department's review of the Dun & Bradstreet Report or other information provided in this Qualification[s] Questionnaire. Some, but not necessarily all of the purposes for reference checks, if performed, will be to determine the level of satisfaction and quality of service provided by the Proposer to present and past clients in the areas of: General performance of the proposed services Technical Competency Compliance with implementation plans Project management Working within the projected dollar amounts General responsibilities Contract compliance Customer satisfaction Adherence to project schedule Employee satisfaction. Note: The results of the reference checks, if performed, may be graded as part of the overall evaluation. The Proposer is advised that the Program Director named in this Questionnaire as well as any other named key staff may be contacted or required to attend an interview with the Department if additional information is required for the purpose of understanding or confirming the information furnished. Form 1- Attachment 1C: List of Completed Projects, contained the following "attachment-specific" instructions: The Proposer shall list representative[16] projects or programs the Proposer has completed during the past five (5) years in the area of providing staffing services for a client with employees of the Proposer. The Proposer shall ensure that the Principal Contact and telephone number information is current so the Department may contact the customer (attach additional sheets if necessary). There were spaces on the form for the vendor to provide: "Customer Name"; "Project Name & Brief Description"; "Principal Contact Name"; "Principal Contact Title"; "Address"; "Telephone Number"; "Location of Work"; "Prime or Subcontractor"; "Number of Staff Provided"; "Contract Start Date"; "Scheduled Completion Date"; "Actual Completion Date"; "Value of Work Performed"; and "Other Pertinent Information." Form 1- Attachment 1D: List of Current Projects Under Contract, contained the following "attachment-specific" instructions: The Proposer shall list representative[17] projects or programs the Proposer has under contract in the area of providing staffing services for a client with employees of the Proposer. The Proposer shall ensure that the Principal Contact and telephone number information is current so the Department may contact the customer (attach additional sheets if necessary). There were spaces on the form for the vendor to provide: "Customer Name"; "Project Name & Brief Description"; "Principal Contact Name"; "Principal Contact Title"; "Address"; "Telephone Number"; "Location of Work"; "Prime or Subcontractor"; "Number of Staff Provided"; "Contract Start Date"; "Scheduled Completion Date"; "Actual Completion Date";18 "Value of Work Performed"; and "Other Pertinent Information." Form 1- Attachment 1F: Staffing - Program Director, directed that the following information "for the planned Program Director" be supplied on the form in the spaces provided: "Name"; "Title"; "What percentage of his/her time will this person devote to this Project"; "Is this individual currently employed by Proposer"; "If yes, number of years employed"; "Is this individual currently employed by Proposer's subcontractor"; "If yes, number of years employed"; "If this individual is not currently employed by Proposer or Proposer's subcontractor, does the Proposer or subcontractor have a Letter of Commitment from this individual"; "Current employer name"; "Address"; "telephone number"; "Does this individual currently live in the State of Florida"; and "If no, does the Proposer or Subcontractor have a Letter of Commitment from this individual to move to the State of Florida." It then further directed that the vendor also supply on the form in the spaces provided "a list of project(s) where this individual has had the responsibilities and has performed the duties similar to the Project responsibilities and duties being proposed with the following information: Project name; Employer; Client name; Start and end dates of project assignment; Address; [and] Telephone number of Client." Form 1- Attachment 1G: Staffing - Other Key Personnel, directed that the following information "for [the vendor's] planned key personnel" "(as determined by [the vendor])" be supplied on the form in the spaces provided: "Name"; "Title"; "What percentage of his/her time will this person devote to this Project"; "Is this individual currently employed by Proposer"; "If yes, number of years employed"; "Is this individual currently employed by Proposer's subcontractor"; "If yes, number of years employed"; "If this individual is not currently employed by Proposer or Proposer's subcontractor, does the Proposer or subcontractor have a Letter of Commitment from this individual"; "Current employer name"; "Address"; and "telephone number." It then further directed that the vendor supply on the form in the spaces provided "a list of project(s) where this individual has had the responsibilities and has performed the duties similar to the Project responsibilities and duties being proposed with the following information: Project name; Employer; Client name; Start and end dates of project assignment; Address; [and] Telephone number of Client." Form 1, Attachment 1I: - Subcontractor Approval List, contained the following additional "attachment-specific" instructions: This form is included as a Proposal requirement to assist the Department in the evaluation of the subcontractor(s) proposed by the Proposer for the work under this ITN (attached additional sheets as necessary) Once approved by the Department, subcontractor substitutions, additions, or replacements must receive prior written approval. All subcontractors assigned more than five percent (5%) of the Contract dollar value per year are considered Major Subcontractors and must be listed. The Proposer shall also provide identification of all major subcontractors who are Minority Business Enterprises (MBEs). Form 5: Corporate Resolution Form 5 contained the following form resolution: NOW THEREFORE, IT IS RESOLVED, that the (specify authorized officer; e. g. President, Vice President, Treasurer) of this corporation or LLC is hereby authorized and empowered on behalf of the corporation or LLC to enter into a contract with the State of Florida, Department of Transportation, in consideration of Dollars ($ ), upon the terms and conditions contained in the proposed contract, a copy of which is attached hereto as Exhibit A, and made a part hereof. Preparation of Faneuil's Reply, Including Ms. Stemle's Involvement Anna McNider is Faneuil's Vice President and Managing Director of Government Services. Ms. McNider was responsible for putting together Faneuil's reply to ITN 007. She thought it would "helpful" to have a consultant with expertise in toll operations to not only "look over her proposal" before it was submitted, but to also commit to being a part of the "ongoing management of the contract" if it was awarded to Faneuil. In late February 2006, Ms. McNider contacted TEAMFL, a Florida toll industry association, asking for the name of someone who might be able to provide this help. Ms. Stemle was recommended. Ms. Stemle was by now employed in the private sector. She was working as a senior consultant - toll operations for Montgomery Consulting Group (MCG), a Department-certified Disadvantaged Business Enterprise, and had been in this position since accepting an "Offer of Employment" from MCG, dated March 19, 2004, which read, in part, as follows: The Montgomery Consulting Group, Inc. (MCG) is pleased to offer you a part-time position as a senior consultant - toll operations. Your position centers on providing strategic planning and consulting services for specific task assignments on projects with the Florida Turnpike Enterprise Authority and their general consultant, Post, Buckley, Schuh & Jernigan (PBS&J) and others as may be appropriate. . . . As project manager for MCG, Monty Gettys will coordinate your activities; however, specific PBS&J and Turnpike staff may direct your day-to-day activities. You should closely coordinate all contractual and budget matters with Monty Gettys. As an MCG employee, Ms. Stemle had provided (and was continuing to provide) sub-consultant services to the Turnpike Enterprise. In her capacity as a sub-consultant, she worked on projects for the Turnpike Enterprise's Toll Systems Support and Maintenance unit. This, at times, involved her serving on committees and otherwise interacting with Ms. Burger and some (but not all) of the regional toll managers. She also, as a sub-consultant, helped Mr. Suarez prepare a presentation he was going to give to the Department Secretary on the Turnpike Enterprise's experience with toll operations "over the years," including its "privatization effort[s]." Her task was to obtain the historical information Mr. Suarez needed for his presentation. On February 22, 2006, Ms. Stemle met with Ms. Burger in Ms. Burger's office to retrieve a "file" that contained such information. The meeting lasted approximately 15 minutes. During the meeting, Ms. Burger told Ms. Stemle that the toll facility staffing services contract "was out for bid again,"19 but provided no other information about the matter. Up until this point in time, Ms. Stemle had not known anything about this solicitation. She had not been involved in any way in the drafting or issuance of either ITN 006 or ITN 007. To enable her to more efficiently provide services to the Department as a sub-consultant, Ms. Stemle was given a Department e-mail address and a card that gave her access to the "offices and conference rooms" in the Turnpike Enterprise's Boca Raton facility (but not to the "computer room" in that building where computer hardware storing data relating to the Turnpike Enterprise's toll operations is located). Other consultants that Ms. Stemle worked with had the same access. On February 27, 2006, after having spoken with her attorney and finding out from him that Ms. Stemle was a former Director of Toll Operations with the Department, who was, in the attorney's opinion, "nice" and "very well respected," Ms. McNider telephoned Ms. Stemle to see if she would be interested in teaming with Faneuil to provide the Department with the services it was seeking through ITN 007. Ms. Stemle told Ms. McNider that "she might be interested but that she worked for a company called Montgomery Consulting, and that [Ms. McNider] would have to talk to her boss," Monty Gettys. During their conversation, Ms. Stemle truthfully assured Ms. McNider that she had "absolutely nothing to do with the preparation of [ITN 007]." After Ms. McNider spoke with Ms. Gettys, Faneuil and MCG entered into a "Teaming Agreement," dated March 1, 2006, which read, in pertinent part, as follows: The Teaming Agreement is entered into by and between Montgomery Consulting Group, Inc. ("MCG") and Faneuil, Inc., each a "Party" and collectively the "Parties." The Proposed Transaction. MCG and Faneuil desire to assess the commercial viability of providing Revenue Collection Services - Toll Operations to the Florida Department of Transportation (FDOT) with the intent of Faneuil submitting a proposal and making a presentation (if asked) for FDOT Advertisement Number ITN-DOT-05/06-8007-EH. If Faneuil is successful in obtaining a contract with FDOT for this project, it is the intention that MCG would provide professional consulting services as a subcontractor to Faneuil in support of this project. The Draft Term Sheet. To assist in discussions on the proposed transaction if the team is successful, some of proposed principal terms and conditions that may be contained in future, definitive, written agreements are set forth on the Draft Term Sheet attached hereto as Exhibit "A." The Teaming Agreement and Term Sheet are intended to be and shall be construed only as the proposed framework for discussions between MCG and Faneuil and their respective representatives. Non-Exclusive Arrangement. The Parties agree that teaming together for this project is not an exclusive arrangement. Faneuil and MCG may join in commercial pursuits and/or team with other firms pursuing this project. . . . * * * Exhibit "A" to the "Teaming Agreement" provided, in pertinent part, as follows: Pursuit Defined FANEUIL intends to respond and pursue the above referenced project [ITN-DOT-05/06- 8007-EH]. MCG intends to assist FANEUIL in preparation of such response. FANEUIL shall be the prime contractor and MCG shall be a subcontractor for any agreement that may arise from a successful effort in obtaining a contract with FDOT. * * * Services FANEUIL desires to be the prime contractor for the project and would have the direct contractual relationship with FDOT. MCG desires to be a subcontractor to FANEUIL to provide professional toll operations planning services throughout the contract period and provide a senior tolls consultant (i.e., Debbie Stemle) to act as subject matter expert on the Toll Collection Services contract, including, but not limited to: Initial Project Start-up/Initiation: Contract award to complete transition in each region providing overall operational support during transition and implementation including, but not limited to, integration with Turnpike Enterprise organization and business practices, staffing models, training program content, training delivery methodologies, contract requirement fulfillment strategies, resource utilization analyses and techniques to maximize efficiencies. Expected commitment level of MCG: Approximately 20-24 hours per week (on average) for senior tolls operation consultant. Screening Staff: MCG senior management (i.e. Debbie Stemle or other senior staff) would assist Team with screening of contract management employees. Expected commitment level of MCG: Be part of team throughout contract period for MCG Senior Management Staff. Ongoing responsibility as needed for review of routine business information reports and continuous improvement to operating processes and programs. Expected commitment level of MCG: Approximately 4-8 hours per week (on average) for senior tolls operation consultant. Special needs such as implementation of changes in contract scope, dispute resolution, quality assurance, and other identified needs. Expected commitment level of MCG: Be part of team throughout contract period for MCG Senior Management staff. * * * Ms. Stemle met with Ms. McNider in Orlando on Friday, March 3, 2006, and Saturday, March 4, 2006, to go over Faneuil's reply to ITN 007, which was due on March 7, 2006. After reviewing the document, Ms. Stemle recommended that certain changes be made including adding two satellite offices (one in the Panhandle and one in Naples); "hav[ing] the head office [in Orlando physically] separate from the regional office [there]"; "ton[ing] down" the role of the other subcontractor, Imperial Parking US), Inc. (Impark); eliminating unnecessary layers of management; and deleting details regarding "cash controls and auditing functions." Faneuil's reply was revised accordingly and subsequently submitted in a timely manner to the Department. Contents of Faneuil's Reply Faneuil's reply was responsive to ITN 007 in all material respects. As required by ITN 007, Faneuil's reply included a Technical Proposal, Price Proposal, and filled-out Forms 1 through 4 (including, as part of Form 1, a Dun and Bradstreet/Open Ratings report20 reflecting an "overall performance rating" of 87, with no "Negative Feedback"21). It also included a completed "Corporate Resolution" (Form 5). As required by ITN 007, Faneuil's Technical Proposal included an Executive Summary; an Administration and Management Plan (supplemented by resumes of management personnel who would be assigned to the project22); a Staffing Plan; provisions relating to Recruitment, Hiring and Employment Matters; Employee Pay, Benefits, Recognition and Retention Programs23; and an Implementation Schedule and Plan. As part of its Staffing Plan, Faneuil provided the following discussion (along with explanatory charts and diagrams) regarding its "change management philosophy": Faneuil's change management philosophy includes two concurrent components: change monitoring and change execution. Faneuil uses a virtual command center method to view and respond to the effect of staff changes to schedules in real-time. The command center team comprised of six Scheduler/Dispatcher positions covering the 24/7 hours of operation executes schedule changes in order to minimize the impact on staffing coverage.[24] On-duty command center staff as well as Department managers or Toll Supervisors will be able to monitor staffing levels across all facilities via our workforce management system. Faneuil's use of integrated time collection software provides real-time staffing attendance information specific to each toll facility and region. Faneuil tracks employee attendance using the time collection system and provides trending reports so that long-term and near-term actions can be implemented to respond to absenteeism and attendance issues. The integrated attendance data enable Dispatchers to react in real-time when employee[]s sign on late- the display uses color-coded schedule verification to view staff status based on actual sign in time. Schedules are highlighted in different colors based on user-defined parameters and thresholds to help monitor position status changes. Real-time monitoring of shift sign ins/sign outs allows command center personnel the ability to assess staffing shortages at any time. The change management process includes: Monitoring real-time displays of actual shift sign in/sign out to identify staffing shortages due to absences or late shift sign in. Maintaining communication with Department Manager and Toll Supervisor on employee activities and schedule assignments. Escalating to Department Manager and Toll Supervisors when changes in personnel shift assignment occur within a 2-hour period. Maintaining communication with Toll Supervisors. Coordinating with Toll Supervisors to ensure proper staffing levels for each toll facility. Processing employee transactions such as vacation requests, status change requests, leave of absences, etc. Using workforce management software to adjust schedules, assign shifts, and determine on-call availability for replacement shifts or emergency call-in situations. The command center will be able to view employees work availability so on-call employees can fill workforce shortages. Faneuil surveys employees to determine their work preferences, location, on-call availability, and on-call notice method. This process allows the command center to quickly determine who is available to cover an open shift or a replacement shift. * * * Upon arranging alternate shift coverage, the Scheduler/Dispatcher will notify management of the change in personnel assignments immediately as well as update schedules with the new shift assignment. Staffing requirements will be monitored in real-time to continually assess Faneuil's ability to provide staffing for each toll facility. Faneuil management teams will have access to past, present, future, and real-time schedules to ensure schedule adherence. The command center will serve as a resource for on-duty Department managers and Toll Supervisors to help ensure staffing meets coverage needs. In the event an emergency arises that requires additional staff coverage to report to work on a temporary basis, the Department can rely on the command center to initiate Faneuil's on-call emergency process and alert employees of the situation. These Workforce Management change processes and others will be reviewed and finalized with Department staff prior to incorporating the processes as Standard Operating Procedures. Faneuil's Staffing Plan, in addition, discussed its "time collection and tracking software," which would allow "Faneuil to track training activity and mark it as billable or non-billable."25 The following discussion regarding "overtime" was also included in Faneuil's Staffing Plan: Faneuil's workforce management system integrated with time collection software provides the ability to minimize and control overtime. The integrated systems ensure that overtime does not occur through automated overtime reporting. The automated tracking process identifies real-time overtime on a daily basis. Additionally, Faneuil sets parameters for hours worked to prohibit unauthorized overtime. Faneuil can anticipate overtime situations on a daily/weekly basis to prevent overtime at the scheduling level. However, in the event that overtime occurs, Faneuil will pay employees in accordance with the FLSA- mandated employment overtime laws.[26] Faneuil's Employee Pay Program, as delineated in its Technical Proposal, set minimum hourly rates for new, inexperienced employees that met or exceeded the minimum rates prescribed by ITN 007. Its program featured a "step and grade pay system" with two different grades (regular and senior) for each of the four contract positions, and three levels or steps for each grade. Faneuil described the system as follows in its Technical Proposal: . . . . Faneuil has structured a Step and Grade system that creates a process for supervisors and managers and illustrates to the employees opportunities for advancement. * * * All current employees will be designated into one of the grade and level sections as most appropriate for their current pay rate but in no case will they receive a lower rate of pay. New hires will start at Grade 1 Level 1 for their position and will move through the levels on average every two years. Note that these levels will increase over time as for example the Grade 1 Level 1 Toll Collector will increase by 3% annually as required in the ITN.[27] The Step and Grade system also brings peer recognition rewards as more experienced employees receive the designation of Senior. Eventually an employee will progress to the top of their range of pay. In this case, lump sum re-earnable bonuses can be given annually dependent on performance. The amount of this bonus would typically be the annualized value of a one-step increment in the range. The bonuses are subject to regular deductions. Among the recruitment strategies discussed in Faneuil's Technical Proposal was "Creative Network Recruiting," which it described as follows: Creative Network Recruiting Ongoing posting will be faxed or emailed to our community partners and posted in their locations. Our contact person will be knowledgeable about our open positions and explain to their members what we are looking for and refer candidates to our Human Resource professionals. Our community partners will mirror our community and assist with our diversity recruitment efforts. Community Partners include but are not limited to: Workforce Development Agencies, Agencies for Senior Citizens, Hispanic Human Resource Council, Haitian Center for Human Services, Chamber of Commerce, and Community Colleges.[28] The section of its Technical Proposal devoted to Recruitment, Hiring and Employment Matters also contained the following discussion regarding "Training" and "Inventory Management": Training It is Faneuil's and Impark's practice to provide thorough and on-going training in order to ensure a highly competent and motivated work force. The first step to achieve this goal is to solicit and incorporate the Department's training objectives into our training system. The specially designed training is implemented utilizing the following systematic approach: Orientation Aware of the potential anxiety associated with employees changing employment, [the] new employee orientation program meets two objectives: a) welcome employees to the Company and b) train[] employees to practice and procedures. Human Resources welcomes new employees with a small gift and a comprehensive overview of the company, its history, scope of services and presence across North America. Human Resources discuss and instruct new employee on all company policies and procedures, inform the new employee of job performance expectation, and criteria for performance appraisals, with a strong emphasis on the need for exceptional customer service and how the employee's job contributes to the overall performance of the organization.[29] Included in the orientation are the essential materials the employee needs to be successful from the start: his schedule, uniform and contact directory. On the Job Training Faneuil will utilize the expertise of our subcontractor Impark by working with [it] to assist the Department in improving the OJT program as needed. Impark has extensive experience developing on the job training programs for employees in the parking industry that will provide valuable in[sight] to the Department for future training needs. * * * Inventory Management During the transition Faneuil will request, from the current contractor, inventory data by employee as well as inventory on hand. This data will be entered in Faneuil's web- based Inventory Management System to track security cards,[30] uniforms and transponders. New employees will be provided with the Department's standard issue as appropriate. Faneuil's Inventory Management System will track all issuances, returns, certified for destruction, losses and purchases as well as inventory in stock.[31] The Inventory Management System will be remotely accessible by the Department's inventory auditors and reports can be created by them. Quarterly audits will be streamlined with the introduction of the system. Faneuil's Employee Benefits Program, as delineated in its Technical Proposal, included medical32 and dental benefits; "paid time off"; company holidays (which were the same as those listed in Subsection 10.3.4 of the Scope of Services); "double time" for holiday work; tuition reimbursement; life insurance; short-term disability insurance; paid bereavement leave; paid leave for jury duty; unpaid military leave; unpaid personal leave; unpaid leave to vote; unpaid leave to testify pursuant to a subpoena; day care benefits; Employee Assistance Program availability; and access to "[t]wo benefit coordinators . . . rotat[ing] between [Faneuil's] six regional offices and two satellite offices" who "w[ould] be available to enroll employees in benefit programs [and] answer employee questions." At the end of its discussion in its Technical Proposal of its Employee Benefits Program, Faneuil provided an Employee Benefits Summary. The medical benefits Faneuil proposed to offer were summarized in the Employee Benefits Summary as follows: Who is Eligible- Full time employees after 90 [] day[s] of employment.*[33] Description- Coinsurance: 90% in-network 70% Out-of-Network Preventative Care: 100% no deductible Health Reimbursement Acct: $500-1000- acct created by Faneuil for participating employees that pays first dollar coverage for medical expenses before any deductible. A percentage of unspent dollars at year end can be rolled over to the following years['] HRA Acct.[34] Deductible: $1000 after HRA Acct Who Pays- Faneuil pays 70% employee and 50% family rate. The dental benefits Faneuil proposed to offer were summarized in the Employees Benefits Summary as follows: Who is Eligible- Full time employees after 90 [] day[s] of employment.*[35] Description- In Network Deductible- None Out of Network Deductible- $50/$150 Plan Year Max- $1000 Cleaning Copayment- $10 Set Copayment Schedule for In Network Out [of] Network Copay- 100%/80%/50% Who Pays- Faneuil pays 70% employee and 50% Family rate.[36] The "paid time off" (PTO) benefits Faneuil proposed to offer were summarized in the Employee Benefits Summary as follows: Who is Eligible- Full time and eligible part-time employees after 90 [] days of employment.*[37] Description- PTO is an all-purpose time-off policy for eligible employees to use for vacation, personal business, and an employee's own illness or an illness of a family member. It combines traditional vacation and sick leave plans as well as most traditionally company-sponsored holidays into one flexible paid time-off policy. PTO accrues based on length of employment accordingly: -0-5 years- 21 days or 168 hours -5 to 10 years- 26 days or 200 hours -10 to 20 years- 31 days or 248 hours -20+ years- 36 days or 288 hours Employees accrue PTO each pay cycle Employees are strongly encouraged to use PTO within the year it is earned as Faneuil recognizes the need for employees to take time away from work to refresh themselves periodically. Employees can, however, carryover up to 25% of their earned and unused time to a separate "reserve bank" up to a maximum of 100 hours at any one time. Faneuil's PTO policy offers a unique feature in that it allows employees to "sell back" up to 30% of their accrued and unused time at the end on an employee's vacation year at a rate of 50% of the employee's average base pay. Employees would forfeit any accrued and unused time remaining. Employees must schedule PTO in accordance with the Company Attendance Policy. Who Pays- The Faneuil Group The tuition reimbursement benefits Faneuil proposed to offer were summarized in the Employee Benefits Summary as follows: Who is Eligible- Full time employees with 90 days of employment. Employee must start and complete course while retaining active full- time status. Description- - Reimbursement of percentage of allowable tuition costs for eligible, successfully completed courses as follows and not exceeding $2,500 per calendar year, per employee. -Individual courses that are part of an accredited degree program must be related to the employee's current job duties or a foreseeable future position with the organization in order to qualify for tuition assistance. The percentage of tuition reimbursement (50% or 100%) will be determined based on the relevance of the course to the employee's job. -Expenses will be reimbursed 100% up to $2,500 per year, per employee if the course is directly related to the employee's job. -Expenses will be reimbursed 50% up to $2,500 per year, per employee if the course is not directly related to the employee's job, but is related to a future job at Faneuil. Who Pays- The Faneuil Group Faneuil also described in its Technical Proposal a variety of Recognition and Retention Programs that it proposed to use as part of its effort to communicate effectively with contract employees. Although Faneuil omitted certain information from the various attachments that comprised the Qualifications Questionnaire (Form 1) it submitted as part of its reply, the information it did provide on these attachments, particularly when considered together with the other information contained elsewhere in its reply, was sufficient to show that it had the necessary qualifications and experience to provide the staffing services sought by the Department through ITN 007. A completed Attachment 1A (Organization - Prime) was submitted. On it, Faneuil indicated, among other things, that it had 12 years of experience as a prime contractor "in staffing the needs of its clients with [its] employees . . . as would be required by this project." Two completed Attachments 1B (Organization - Subcontractor), one for Impark and one for MCG, were submitted. A completed Attachment 1C (List of Completed Projects) was submitted. On it, Faneuil provided the requested information concerning two of its "completed projects": the "TennCare" project for the State of Tennessee; and the "Megacenter Operations" project for Verizon.38 On the Attachment 1D (List of Current Projects Under Contract) that Faneuil submitted, nine "current projects" were listed: "SunPass Contact Center and Support Services" project for the Department; "SunPass Secondary Call Center" project for the Department; "Medicaid Appeals" project for the State of Tennessee; "Customer Sales and Service" project for Network Solutions; "Bell Canada Holding 1B Sales" project for Bell Canada; "DSL, Long Distance and Future Sales" project for Sprint; "Private Education-Inbound" project for Collegiate Funding Services; "Private Education-Inbound" project for First Marblehead; and "ATX Tire Recall" project for Bridgestone/Firestone. Faneuil did not provide on Attachment 1D the "Location of Work" for the Sprint "DSL, Long Distance and Future Sales" project. Faneuil did not provide on Attachment 1D the requested "Prime or Subcontractor" information for the Sprint "DSL, Long Distance and Future Sales" project, the Collegiate Funding Services "Private Education-Inbound" project, the First Marblehead "Private Education-Inbound" project, or the Bridgestone/Firestone "ATX Tire Recall" project. Faneuil did not provide on Attachment 1D the "Number of Staff Provided" for the Network Solutions "Customer Sales and Service" project or the Sprint "DSL, Long Distance and Future Sales" project. Faneuil did not provide on Attachment 1D the "Contract Start Date" for the Network Solutions "Customer Sales and Service" project or the Sprint "DSL, Long Distance and Future Sales" project. Faneuil did not provide on Attachment 1D the "Scheduled Completion Date" for the Network Solutions "Customer Sales and Service" project, the Sprint "DSL, Long Distance and Future Sales" project, or the Bridgestone/Firestone "ATX Tire Recall" project. For none of the projects, except the Bridgestone/Firestone "ATX Tire Recall" project, did Faneuil provide on Attachment 1D the "Actual Completion Date."39 For none of the projects, except the State of Tennessee "Medicaid Appeals" project, did Faneuil provide on Attachment 1D the "Value of Work Performed."40 Except as noted above, Faneuil provided on Attachment 1D all of the information requested for the projects listed. A completed Attachment 1E (Required Background Information) was submitted. A completed Attachment 1F (Staffing - Program Director) was submitted. Ed Borchardt, Faneuil's Vice President for Service Delivery Support, was identified on the attachment as Faneuil's "planned Program Director,"41 who would devoting 100 percent of his time to the project.42 On the Attachment 1G (Staffing - Other Key Personnel) that Faneuil submitted, Faneuil identified the following individuals, in addition to Mr. Borchardt, as its "planned key personnel" "(as determined by [the vendor])": Tarsha Lehrr (of Faneuil), Francine Andrieshyn (of Faneuil), Cynthia Selley (of Faneuil), Gregg Hickman (of Faneuil), Mike McKeon (of Impark), Colleen Niese (of Impark), and Bruce Cousin(of Impark).43 On the attachment, Faneuil provided all of the information requested about these individuals except: it did not indicate the number of years Ms. Selley had been employed by Faneuil, nor whether she was also "currently employed by Proposer's subcontractor"; no details were given regarding "similar" projects Ms. Niese and Mr. Cousin had been assigned other than the name of their employer at the time (Impark); and the "similar" project assignments listed for Ms. Lehrr, Ms. Andrieshyn, Ms. Selley, Mr. Hickman, and Mr. McKeon did not reveal a "start . . . date[] of project assignment." As required by Attachment 1H (Proposer's Surety History), Faneuil appended to the attachment "a copy of a letter from a surety company [Acstar Insurance Company] that state[d] that [the] surety plan[ned] to bond [Faneuil] for this project." The Attachments 1I (Subcontractor Approval List) that Faneuil submitted indicated that that MCG and Impark would each be working as a subcontractor for Faneuil on the project for "less than 1%" of the "prime contract value." Appended to this attachment was Ms. Stemle's resume.44 On the completed Form 3 that it submitted, Faneuil indicated that it was not a Department-certified Minority Business Enterprise (MBE) or Disadvantaged Business Enterprise (DBE); that the "[e]xpected percentage of contract fees to be subcontracted to MBE/DBE's [was] .5%"; that MCG would be the "MBE/DBE" performing this subcontracting work; and that the "[t]ype of [w]ork" MCG would be performing was "management consulting." Other Replies Submitted The Department received five other timely submitted replies to ITN 007, in addition to Faneuil's. These replies were submitted by Barton, Serco, Ampco System Parking, EG&G Technical Services, and Central Parking System. One reply was submitted after the deadline and was rejected without further consideration because it was untimely. Evaluation, Scoring and Ranking of Replies An evaluation committee was formed to evaluate and score the Qualifications Questionnaires and Technical Proposals that had been submitted by Faneuil, Barton, Serco, Ampco System Parking, EG&G Technical Services, and Central Parking System as part of their replies to ITN 007. The RCS Deputy Director (Ms. Burger) and the six regional toll managers then under her supervision (Ms. Brantley, Ms. Cook, Mr. Spitzer, Mr. Abbadini, Ms. Greenawalt, and Mr. Sneed) were selected to serve on the evaluation committee.45 They were logical choices given their job responsibilities and experience with RCS. Regional toll managers46 had been on the evaluation committees for past procurements for RCS staffing services, and, more importantly, they had served as contract managers under the contracts (with Barton) resulting from those procurements, including the most recent contracts. Moreover, they would be deputy contract managers under the contract awarded pursuant to ITN 007, assisting the RCS Deputy Director (who would be the contract manager). In short, Ms. Burger, Ms. Brantley, Ms. Cook, Mr. Spitzer, Mr. Abbadini, Ms. Greenawalt, and Mr. Sneed were all capable of competently discharging their duties as members of the evaluation committee. Furthermore, there was no apparent impediment to them performing these duties in a fair and impartial manner. Members of the evaluation committee were given copies of ITN 007, as well as the replies that had been submitted (which, prior thereto, had not been reviewed for responsiveness by Mr. Lawson or anyone else in the Turnpike Enterprise's "contracts office"). Evaluation committee members were also provided with, for each reply, score sheets that Ms. Burger had prepared, with Ms. Brantley's assistance. These score sheets (which were not among the documents that comprised ITN 007) had spaces for the evaluators to write in their scores for each of the scoring categories (except "price proposal") specified in Special Condition 15 of ITN 00747 and for them to make written "comments" regarding their scoring. The score sheets also contained information and instructions designed to help the evaluators perform their evaluative functions. "Submittal Requirements" imposed by ITN 007 were listed by scoring category and evaluators were "refer[red]" to pertinent sections of the Scope of Services: Section 9.0, for the "Technical Proposal: Staffing Plan" scoring category; Section 8.0, for the "Technical Proposal: Recruitment, Hiring and Employment Matters" scoring category; Section 23.0, for the "Technical Proposal: Implementation Schedule and Plan" scoring category; and Section 10.0, for the "Technical Proposal: Employee Pay, Benefits, Recognition and Retention" scoring category. For each scoring category, the maximum number of points, as established by Special Condition 15 of ITN 007, was indicated, as were three different ranges of point awards: one for "Exceeds Requirements"; another for "Meets Requirements"; and a third for "Fails to Meet Requirements." The scoring sheets erroneously indicated that a completed "Corporate Resolution" (Form 5) was a "Submittal Requirement." Pursuant to Special Condition 25 of ITN 007, such a submission was actually "optional." Also, the scoring sheets should have referred the evaluators to Section 22.0 of the Scope Services for the "Technical Proposal: Implementation Schedule and Plan" scoring category.48 The evaluation committee members met as a group before beginning their evaluations. At the meeting, Ms. Burger went over the scoring sheets with the other committee members and answered their questions about the evaluation process. Among other things, she advised them to address to Mr. Lawson any questions they might have, when reviewing a particular reply, concerning the reply's responsiveness. The Department has a Procurement of Commodities and Contractual Services policy (Topic No. 375-040-020-j, effective July 21, 2005), Section 4.13.8 of which states the following regarding the ITN review process, including responsiveness determinations: ITNs: The procurement unit and/or Project Manager[49] shall review all information submitted to the Department to ensure that the vendors were responsive to the ITN and are responsible and qualified. Evaluations/reviews/negotiations should be conducted by at least three (3) persons for contracts of the threshold amount provided in Section 287.017, F.S., for Category Four or less. For contracts in excess of Category Four, the agency head or designee shall appoint at least three (3) persons to evaluate replies and at least three (3) persons to conduct negotiations (can be the same) who collectively have experience and knowledge in negotiating contracts, contract procurement, and the program areas and service requirements for which commodities or contractual services are sought. The authority to appoint these persons is delegated to Senior Management Level Directors and above, who may delegate such authority to other office heads in writing. All meetings of these persons to discuss or evaluate replies will be conducted as public meetings. The procurement unit is responsible for tabulating the scores and completing the Negotiation Tabulation, 375- 040-2C. Following the committee's pre-evaluation meeting, committee members went their separate ways and began their evaluations of the Qualifications Questionnaires and Technical Proposals submitted in response to ITN 007. They were given no formal training on how to analyze and compare employee benefit plans before commencing their evaluations. During the time that the evaluation committee members were conducting their evaluations, Mr. Lawson received questions from three committee members concerning the responsiveness of certain replies. In each instance, Mr. Lawson determined that the reply in question was "not nonresponsive," and he communicated his determination to the inquiring evaluator (but not to any of the other evaluators on the committee).50 Mr. Lawson did not tell any evaluator "how to score something." Ms. Brantley was one of the three evaluators who addressed a responsiveness question to Mr. Lawson. Her question was whether Barton's failure to include a completed "Corporate Resolution" (Form 5) rendered its reply nonresponsive, to which Mr. Lawson responded in the negative. Mr. Sneed made a similar inquiry and received a like response. Each member of the evaluation committee, independently and without collaboration or collusion with any other member of the committee, reviewed and evaluated the Qualifications Questionnaires and Technical Proposals and entered their scores on the score sheets they had been provided for that purpose. No member of the evaluation committee attempted to influence the evaluation of any other committee member in favor or against any vendor. Furthermore, there is no persuasive record evidence that anyone else, including Ms. Stemle, acted through channels not authorized by ITN 007 in an effort to affect the scoring of any evaluation committee member. ITN 007 granted the evaluators extremely broad discretion in determining how to score the Qualifications Questionnaires and Technical Proposals. Special Condition 15.1, which described the "Evaluation Process," merely identified the various scoring categories and the maximum number of points that could be awarded for each category. How the evaluators were to determine the number of points to award a vendor within the maximum allowable for each category was a matter left to the judgment of the each evaluator based on the evaluator's assessment of the relative importance of the different components of that category and how well the vendor addressed each of those components in its Qualifications Questionnaire and Technical Proposal. The evaluation committee members exercised the considerable discretion they were granted by ITN 007 in a good faith and consistent, "across-the-board" manner. They acted honestly and without any unfair bias, partiality, or favoritism, giving each of the Qualifications Questionnaires and Technical Proposals full and evenhanded consideration and scoring them, not in a manner designed to further their personal interests,51 but rather in accordance with the provisions of ITN 007, as they understood them. How Ms. Stemle had treated Ms. Burger, Ms. Brantley, Mr. Spitzer, Mr. Abbadini, Ms. Greenawalt, and Mr. Sneed when they were her subordinates played no role in the scores these five evaluators gave Faneuil (or any other vendor). Some of the evaluators compared services set forth in the Technical Proposals to those being provided under the requirements of the Department's existing contracts with Barton in order to help them gauge the quality and "pointworthiness" of the proposals.52 Doing so was neither unreasonable, nor prohibited by ITN 007.53 After completing their evaluations, the evaluators turned in their completed score sheets. The following are the scores that Faneuil, Barton, and Serco received from Ms. Burger: Faneuil Qualifications Questionnaire: 5 Technical Proposal: Administration and Management: 4 Staffing Plan: 18 Recruitment, Hiring and Employment Matters: 8 Implementation Schedule and Plan: 7 Employee Pay, Benefits, Recognition and Retention 23 TOTAL POINTS: 65 Barton Qualifications Questionnaire: 5 Technical Proposal: Administration and Management: 2 Staffing Plan: 7 Recruitment, Hiring and Employment Matters: 5 Implementation Schedule and Plan: Employee Pay, Benefits, 6 Recognition and Retention: 15[54] TOTAL POINTS: 40 Serco Qualifications Questionnaire: 5 Technical Proposal: Administration and Management: 5 Staffing Plan: 7 Recruitment, Hiring and Employment Matters: 5 Implementation Schedule and Plan: Employee Pay, Benefits, 9 Recognition and Retention: 16 TOTAL POINTS: 47 The following are the scores that Faneuil, Barton, and Serco received from Ms. Brantley: Faneuil Qualifications Questionnaire: 6 Technical Proposal: Administration and Management: 3 Staffing Plan: 19 Recruitment, Hiring and Employment Matters: 9 Implementation Schedule and Plan: 9 Employee Pay, Benefits, Recognition and Retention: 30 TOTAL POINTS: 76 Barton Qualifications Questionnaire: 3[55] Technical Proposal: Administration and Management: 4 Staffing Plan: 10 Recruitment, Hiring and Employment Matters: 5 Implementation Schedule and Plan: 8 Employee Pay, Benefits, Recognition and Retention: 20 TOTAL POINTS: 50 Serco Qualifications Questionnaire: 7 Technical Proposal: Administration and Management: 5 Staffing Plan: 10 Recruitment, Hiring and Employment Matters: 6 Implementation Schedule and Plan: 9 Employee Pay, Benefits, Recognition and Retention: 20 TOTAL POINTS: 57 The following are the scores that Faneuil, Barton, and Serco received from Ms. Cook (who was the only member of the evaluation committee who had never been a subordinate of Ms. Stemle's): Faneuil Qualifications Questionnaire: 6 Technical Proposal: Administration and Management: 4 Staffing Plan: 15 Recruitment, Hiring and Employment Matters: 7 Implementation Schedule and Plan: 7 Employee Pay, Benefits, Recognition and Retention: 33 TOTAL POINTS: 72[56] Barton Qualifications Questionnaire: 5 Technical Proposal: Administration and Management: 2 Staffing Plan: 11 Recruitment, Hiring and Employment Matters: 6 Implementation Schedule and Plan: Employee Pay, Benefits, 9 Recognition and Retention: 30 TOTAL POINTS: 63 Serco Qualifications Questionnaire: 7 Technical Proposal: Administration and Management: 4 Staffing Plan: 13 Recruitment, Hiring and Employment Matters: 7 Implementation Schedule and Plan: Employee Pay, Benefits, 10 Recognition and Retention: 21 TOTAL POINTS: 62 The following are the scores that Faneuil, Barton, and Serco received from Mr. Spitzer: Faneuil Qualifications Questionnaire: 5 Technical Proposal: Administration and Management: 4 Staffing Plan: 18 Recruitment, Hiring and Employment Matters: 8 Implementation Schedule and Plan: 9 Employee Pay, Benefits, Recognition and Retention: 24 TOTAL POINTS: 68 Barton Qualifications Questionnaire: 5 Technical Proposal: Administration and Management: 4 Staffing Plan: 13 Recruitment, Hiring and Employment Matters: 8 Implementation Schedule and Plan: 9 Employee Pay, Benefits, Recognition and Retention: 24 TOTAL POINTS: 63 Serco Qualifications Questionnaire: 7 Technical Proposal: Administration and Management: 4 Staffing Plan: 15 Recruitment, Hiring and Employment Matters: 6 Implementation Schedule and Plan: 9 Employee Pay, Benefits, Recognition and Retention: 21 TOTAL POINTS: 62 The following are the scores that Faneuil, Barton, and Serco received from Mr. Abbadini: Faneuil Qualifications Questionnaire: 6 Technical Proposal: Administration and Management: 4 Staffing Plan: 17 Recruitment, Hiring and Employment Matters: 10 Implementation Schedule and Plan: Employee Pay, Benefits, 8 Recognition and Retention: 32 TOTAL POINTS: 77 Barton Qualifications Questionnaire: 5 Technical Proposal: Administration and Management: 2 Staffing Plan: 14 Recruitment, Hiring and Employment Matters: 6 Implementation Schedule and Plan: 10 Employee Pay, Benefits, Recognition and Retention: 32 TOTAL POINTS: 69 Serco Qualifications Questionnaire: 8 Technical Proposal: Administration and Management: 4 Staffing Plan: 12 Recruitment, Hiring and Employment Matters: 7 Implementation Schedule and Plan: 7 Employee Pay, Benefits, Recognition and Retention: 30 TOTAL POINTS: 68 The following are the scores that Faneuil, Barton, and Serco received from Ms. Greenawalt: Faneuil Qualifications Questionnaire: 6 Technical Proposal: Administration and Management: 3 Staffing Plan: 12 Recruitment, Hiring and Employment Matters: 6 Implementation Schedule and Plan: Employee Pay, Benefits, 6 Recognition and Retention: 11 TOTAL POINTS: 44 Barton Qualifications Questionnaire: 4 Technical Proposal: Administration and Management: 3 Staffing Plan: 9 Recruitment, Hiring and Employment Matters: 6 Implementation Schedule and Plan: 6 Employee Pay, Benefits, Recognition and Retention: 22 TOTAL POINTS: 50 Serco Qualifications Questionnaire: 6 Technical Proposal: Administration and Management: 4 Staffing Plan: 9 Recruitment, Hiring and Employment Matters: 6 Implementation Schedule and Plan: 7 Employee Pay, Benefits, Recognition and Retention: 20 TOTAL POINTS: 52 The following are the scores that Faneuil, Barton, and Serco received from Mr. Sneed: Faneuil Qualifications Questionnaire: 5 Technical Proposal: Administration and Management: 3 Staffing Plan: 11 Recruitment, Hiring and Employment Matters: 6 Implementation Schedule and Plan: 6 Employee Pay, Benefits, Recognition and Retention: 17 TOTAL POINTS: 48 Barton Qualifications Questionnaire: 6 Technical Proposal: Administration and Management: 3 Staffing Plan: 12 Recruitment, Hiring and Employment Matters: 6 Implementation Schedule and Plan: 6 Employee Pay, Benefits, Recognition and Retention: 19[57] TOTAL POINTS: 52[58] Serco Qualifications Questionnaire: 5 Technical Proposal: Administration and Management: 3 Staffing Plan: 11 Recruitment, Hiring and Employment Matters: 6 Implementation Schedule and Plan: 6 Employee Pay, Benefits, Recognition and Retention: 18 TOTAL POINTS: 49 The total number of points each vendor received from the seven evaluators was divided by seven to obtain a "Qualification & Technical/Average Score" for that vendor. Faneuil's "Qualification & Technical/Average Score" was 64.29. Barton's "Qualification & Technical/Average Score" was 55.29 Serco's "Qualification & Technical/Average Score" was 56.71. A "price proposal evaluation" was performed on the price proposals submitted, in accordance with the requirements of Special Condition 15.2 of ITN 007, to obtain a "Price Score" for each vendor. Faneuil's "Price Score" was 8.98. Adding this "price Score" to its "Qualification & Technical/Average Score" gave it a "Total Score" of 73.27, which was the highest "Total Score" received by any vendor. Barton's "Price Score" was 9.04. Adding this "price Score" to its "Qualification & Technical/Average Score" gave it a "Total Score" of 64.33, which was the third highest "Total Score" received by any vendor. Serco's "Price Score" was 9.34. Adding this "Price Score" to its "Qualification & Technical/Average Score" gave it a "Total Score" of 66.05, which was the second highest "Total Score" received by any vendor.59 The awards committee met on March 23, 2006, and publicly announced the scores that the vendors had received and ranked the vendors based on their "Total Scores" as follows: 1: Faneuil; 2: Serco; 3: Barton; 4: EG&G Technical Services; 5: Central Parking System; and 6: Ampco System Parking. These rankings were set forth on a "Posting Tabulation," which also indicated: The Department will commence negotiations with the firm ranked number one by the Selection Committee. Should the Department be unable to negotiate a satisfactory contract with the number one ranked firm, negotiations with the firm shall be suspended. The Department may then undertake negotiations with the firm ranked number two by the Selection Committee. Failing accord with the firm ranked number two, the Department may continue the negotiations process in the order of the ranking until the Department is able to negotiate a satisfactory contract. The Department reserves the option to resume negotiations that were previously suspended with any of the shortlisted vendors; and further indicated: Failure to file a protest within the time prescribed in Section 120.52(3), Florida Statutes, shall constitute a waiver of proceedings under Chapter 120, Florida Statutes. Failure to file the proper bond at the time of filing the formal protest will result in a denial of the protest. The "Posting Tabulation" was posted from March 23, 2006, through March 28, 2006. Petitioners' Protest Barton timely protested the decision announced in the "Posting Tabulation."
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department enter a final order rejecting Barton's protest. DONE AND ENTERED this 20th day of July, 2006, in Tallahassee, Leon County, Florida. S STUART M. LERNER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 20th day of July, 2006.
The Issue The issue is whether Respondent properly denied payment of certain charges related to out-of-network surgical procedures pursuant to the State Employees’ PPO Group Health Insurance Plan.
Findings Of Fact At all times pertinent to this proceeding, Petitioner, who is now 29 years old, was an employee of the University of West Florida, and was enrolled as a member of the State Employees PPO Plan (Plan). She started employment with the University on December 1, 2007, and became enrolled in the Plan. Respondent was provided with the State Employees’ PPO Plan Group Health Insurance Plan Booklet and Benefits Document, effective January 1, 2007 (Plan Booklet). The Department of Management Services is responsible for all aspects of the purchase of health care for state employees, including those services provided under the Plan. Respondent is responsible for the administration of the state group insurance program. As authorized by law, Respondent has contracted with Blue Cross & Blue Shield of Florida (now known as Florida Blue) as its third-party medical claim administrator of employee health insurance benefits. The Plan Booklet contains the terms and conditions of the state group insurance program applicable to this proceeding. The booklet provides, as part of its Summary of Benefits, that: When you go to non-network providers, this Plan pays benefits based on the non-network allowance. If your provider charges more than the non-network allowance, you are responsible for any amounts above the non- network allowance. In addition, because the Plan pays a lower benefit level for non- network care, you pay more out-of-pocket for non-network care. In selecting BCBSF as the Medical Claim Administrator for the state Employees’ PPO Plan, DSGI agreed to accept the non-network allowance schedule used by BCBSF to make payment for specific healthcare services submitted by non-network providers. Keep in mind that you will receive benefits at the non-network level whenever you use non-network providers, even if a network provider is unavailable. (Emphasis added). The booklet provides, in section 6, entitled About the Provider Network, that: In an effort to contain healthcare costs and keep premiums down, BCBSF has negotiated with PPCSM network healthcare providers to provide services to health Plan participants at reduced amounts. PPCSM network providers have agreed to accept as payment a set amount for covered services . . . . Non-network providers will bill you their regular charges. You will be responsible for a larger coinsurance and/or copayment, and you will be responsible for paying the difference between the provider’s charges and the amount established as the non- network allowance for the service. The non- network allowance may be considerably less than the amount the non-network provider charges. * * * An Important Note About Using Non-Network Providers To make sure you receive the highest level of benefits from the Plan, it’s important to understand when non-network benefits are paid. When you use non-network providers, you receive non-network benefits. Here are some examples. In some situations, your network provider may use, or recommend that you receive care from, a non-network provider. For example, your network family doctor says you need to see another doctor and recommends a non-network doctor. It is your choice; you decide whether to go to the recommended non-network doctor or to ask your doctor for another recommendation to a network doctor. In this example, even though your family doctor is a network doctor, you will receive non-network benefits if you go to the recommended non- network doctor. Sometimes the health care professional you need to see is not in the network. You receive non-network benefits when you use non-network providers, even if no network provider is available. From an early age, Petitioner was plagued with symptoms of temporomandibular joint (TMJ) disorder. When she was seven or eight years old, Petitioner began to experience clicking in her jaw, and her jaw would occasionally lock. The symptoms soon abated. While she was in sixth grade, Petitioner was fitted for orthodontic braces. The braces were removed when she was 12 or 13 years old. When Petitioner was in her early teens, the clicking in her jaw reappeared. The clicking was now accompanied by pain in her jaw muscles, which was likened to that experienced from a migraine headache. Petitioner was referred to an oral surgeon regarding her jaw symptoms. The surgeon recommended a course of physical therapy for her jaw, and placed her on a diet that eliminated foods that were “chewy.” Despite those measures, Petitioner’s jaw began to periodically lock open. At the age of 16, Petitioner had her wisdom teeth removed. While that procedure resulted in a cessation of the locking, Petitioner could only open her mouth about one-quarter of the way. She was also prescribed Tylenol #3, which contained codeine, for pain. At the age of 16 or 17, Petitioner was given splints to keep her jaw in alignment. Petitioner was clenching her teeth so hard in response to the pain, that she broke several splints during the first year that she had them. By the time she was 19 years old, Petitioner’s headaches were “out of control.” She was referred to the facial pain center at the University of Florida, where she was fitted with custom-made splints. She was provided with a course of physical therapy, and was prescribed muscle relaxers. When she returned home from college for the summer, she did the recommended physical therapy, which was effective in relieving her symptoms for a few months. Petitioner was subsequently referred to Dr. Widmer, a physician at the University of Florida. Dr. Widmer performed an arthrocentesis, by which a steroid solution was injected into Petitioner’s temporomandibular joints. The procedure was ineffective. By 2006, when Petitioner was 23 years old, the opening of her mouth began to be accompanied by a “squishing” noise. Dr. Widmer referred Petitioner to Dr. Margaret Dennis. Dr. Dennis ordered an MRI of Petitioner’s jaw to determine if there was any bone damage. The MRI revealed that the bones of the temporomandibular joint were degraded, and that the disk material was calcified. Dr. Dennis increased the dosage of Petitioner’s pain medications to handle the pain associated with her condition. After a period of time, and with Petitioner having little relief from her symptoms, Dr. Dennis referred her to Dr. Mark Piper, a physician who is board-certified in oral and maxillo-facial surgery. Dr. Piper maintains his office in Tampa, Florida. Petitioner had her first appointment with Dr. Piper in August 2009. Dr. Piper ordered a level 3 MRI, which produced a clearer picture than her earlier MRI, as well as a CAT scan. He took imprints of Petitioner’s teeth, and performed a physical examination of the bones of Petitioner’s jaw. The results of the imaging and the physical exam showed severe and active degeneration of Petitioner’s temporomandibular joints, especially the right joint. To remedy Petitioner’s physical condition, Dr. Piper recommended a bilateral arthroplasty of Petitioner’s jaw, consisting of a fat graft to the right temporomandibular joint, and a procedure involving the disk tissue to the left temporomandibular joint. Given the exhaustion of more conservative forms of treatment, arthroplasty was, by this point, appropriate and medically necessary for the resolution of Petitioner’s condition. On August 25, 2009, Dr. Piper provided Petitioner with a statement summarizing his diagnosis, and providing an explanation of his recommended course of action. Petitioner provided Dr. Piper’s statement to BCBSF to explain the necessity for her proposed out-of-network treatment. The evidence suggests that Petitioner provided the CPT codes for the recommended procedures at issue. CPT codes are a system by which medical services are assigned numbers to describe those services, and are used by insurers to establish a uniform schedule of reimbursement. On a case-by-case basis, the numbers are provided by medical service providers to describe the services they have rendered. Respondent maintains a business record of all communications between it and its customers. On August 27, 2009, those records reflect that a telephonic request for information was received either from or regarding Petitioner. The notation regarding the request for information stated, in pertinent part: PRICING FOR PROC CODES 21240 AND 69990 RELATED TO TREATMENT OF TMJ NEEDED, PROV IS 62468....ALLOWANCES ARE 1168.09 AND 252.53 Petitioner acknowledged that she received the information regarding the rates, but understood the rates to be estimated amounts, and not official because the person with whom she spoke could not give final figures over the telephone. Later on August 27, 2009, Respondent’s records reflect that a second telephonic request for information was received either from or regarding Petitioner. The notation regarding the request for information stated, in pertinent part: MEMBER S REQUESTING TO SPK WITH THE VPCR [Voluntary Pre-coverage Review] AREA AS SHE WANTS PRIOR APPROVAL OF CODES 21240 AND 69990 FOR THE TREATMENT OF TMJ....I ADVISED HER OF THE PROCESS AND TO GO AHEAD AND SUBMIT THE LMN [Letter of Medical Necessity] AND SUPPORTING DOCS IF THE NON PAR PROV IS UNWILLING TO CALL OUR OFFICE..I EXPLAINED THAT THE DET WOULD BE MADE AND IF ADDTLS DOCS ARE REQD, THIS WOULD BE ADVISED ALSO, ADV MEMBER SHE CAN WITH FAX OR MAIL TO AD ON THE BACK OF INS CARD. Respondent’s records reflect no further telephonic inquiries regarding Petitioner until October 19, 2009. Petitioner scheduled her surgery with Dr. Piper for September 16, 2009. Petitioner testified that approximately one week prior to the scheduled surgery, BCBSF sent an e-mail to Petitioner providing her with the name of a network provider in Jacksonville who could perform the surgery necessary to resolve her TMJ issues. She further testified that she contacted the network provider’s office, and was advised by a Dr. Milton that the medical group could not perform the surgery. Petitioner testified that she advised BCBSF of that information, and advised BCBSF that there was no one in-network that could perform the surgery. A copy of the e-mail was not provided, nor was there evidence to otherwise corroborate the described events. Therefore, no finding can be made as to that alleged series of communications. Respondent maintains a list of network health care providers by specialty type and location. The list is available on-line. The list includes a number of oral and maxillofacial surgeons located in the Jacksonville area. However, one cannot determine from the list whether a provider is capable of performing a particular procedure under the specialty. The evidence demonstrates that Dr. Piper is an accomplished oral and maxillofacial surgeon, with particular expertise in disc removal and fat graft placement surgery for the temporomandibular joint. However, even if Dr. Piper is the surgeon most qualified to perform the procedure, that does not mean he is the surgeon singularly qualified to perform the procedure. Dr. Imray testified that he has referred patients for bilateral arthroplastic procedures on many occasions. His referrals were generally to oral and maxillofacial surgeons practicing at teaching centers in Jacksonville and Gainesville. Although he could not testify whether such surgeons were in the State Employees’ PPO network without consulting his PPO reference book, he could recall no instance of having had to refer a patient to an out-of-network provider, “because most of the teaching centers take most of the plans.” The evidence in this case failed to demonstrate that there were no network providers capable of performing the procedures medically necessary for the resolution of Petitioner’s TMJ issues. Having concluded that Dr. Piper afforded her with the greatest likelihood for a successful outcome, Petitioner proceeded with the surgery as scheduled. After a recovery period of two years, which included braces to adjust her teeth to fit her repaired and aligned temporomandibular joints, the surgery has proven to be a complete success. Petitioner testified convincingly that the surgery was a life-changing event. The total cost to Petitioner for the surgical and immediate post-operative procedures was $30,005.00. In November, 2009, Petitioner began the process of filing her claim with BCBSF. After some difficulties, the submission of the claim was completed in January, 2010. The amount billed to BCBSF was $29,976.00. The bulk of the charge, in the amount of $24,650.00, was for the procedure identified by Dr. Piper as CPT Code 21240. The documentation submitted clearly indicated -- both by the description of the CPT Code 21240 procedure as “Bilateral TMJ Arthroplasty” and by the listing of the modifier code “50”, which was the code assigned for procedures that were bilateral -- that the arthroplasty procedure was bilateral. On March 11, 2010, BCBSF notified Petitioner that it would reimburse her medical expenses related to the surgery in the amount of $1,526.57. That amount included $1,168.09 for the arthroplasty (CPT Code 21240), and $358.48 for the surgical splint (CPT Code 21085). BCBSF indicated that it would not pay the $1,650.00 charge for the operating microscope (CPT Code 69990) on the basis that the charge was incidental to the primary arthroplasty procedure, and therefore included in the $1,168.09 allowance for that procedure. BCBSF also denied payment for a ZZ Therabite (CPT Code 99070). The reimbursement amount was calculated by applying the CPT Codes provided by Dr. Piper to the BCBSF fee schedule. The amount was then further adjusted by the non-network payment allowance to reach the final reimbursable amount. The process is mechanical, and involves no exercise of discretion. In that regard, the reimbursement for the arthroplasty was identical to the estimate provided to Petitioner on August 27, 2009. The evidence demonstrates that the amounts paid to Petitioner for CPT Code 21240 procedures and the CPT Code 21085 surgical splint were accurately derived through application of the BCBSF fee schedule allowance to the procedure codes provided by Dr. Piper. However, as to the arthroplasty procedure, the evidence further demonstrates that the amount paid was based on a single procedure. The arthroplasty performed by Dr. Piper was a bilateral procedure, which was clearly disclosed on the claim form. According to Kevin Tincher, BCBSF’s senior manager of coding and professional payment, Petitioner is entitled to reimbursement for both procedures, with the reason given for not paying for both being Dr. Piper’s failure to bill each part of the bilateral procedure on separate lines of the claim form. Given the lack of any instruction requiring that the two sides of a single bilateral procedure be billed on separate lines, especially given the application of the modifier code “50” to indicate a bilateral procedure, the information provided on the claim form was neither deficient nor in error. When two procedures of the same type are performed on the same day, the BCBSF fee schedule calls for reimbursement for the second procedure at a rate of 50 percent of the allowance for the first procedure. Under that schedule, Petitioner should have been reimbursed an additional $584.05, i.e., 50 percent of the $1,168.09 allowance for the first CPT Code 21240 procedure. The evidence demonstrates that the Therabite device (CPT Code 99070) was “appropriate and acceptable” in Petitioner’s case. Thus, the device was medically necessary under the circumstances. Petitioner should have been reimbursed, at the non-network rate, for that device. During the hearing, Jessica Bonin, BCBSF’s Critical Inquiry Analyst, admitted that the post-operative CT scan -- CPT Code 70486 -- in the amount of $301.93, should have been paid, but that the claim had not been reprocessed by BCBSF. Respondent further admitted in its Proposed Recommended Order that payment in the amount of $301.93 should be made for the post-operative CT scan. It is so found. Petitioner initiated a Level I appeal with BCBSF. She provided BCBSF with as much of her medical history as she could locate, a list of medications, and all of the records, photographs, and X-rays that she could access. She also provided a letter from Dr. Piper, dated March 18, 2010, in which he detailed the services provided to Petitioner. Dr. Piper’s description suggests that the services provided to Petitioner were extensive, but did not suggest that the procedure itself varied from the procedure described in CPT Code 21240. However, Dr. Piper did reaffirm that the surgery was a bilateral procedure involving both of Petitioner’s temporomandibular joints. BCBSF did not change its decision as a result of the Level I Appeal. On May 14, 2010, Petitioner filed a Level II Appeal with Respondent. On June 16, 2010, the Level II Appeal was denied.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Department of Management Services enter a final order finding that Petitioner is entitled to additional reimbursement for her medical expenses as set forth herein.1/ DONE AND ENTERED this 23rd day of August, 2012, in Tallahassee, Leon County, Florida. S E. GARY EARLY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 23rd day of August, 2012.
The Issue The issue in the case is whether the Petitioner received appropriate compensation for telephone service interruptions and whether the Respondent and the Intervenor have acted appropriately under applicable statutes and administrative rules in resolving the Petitioner’s complaint.
Findings Of Fact Calvin "Bill" Wood resides on Schaefer Lane in Lake Wales, Florida, and receives local telephone service from GTE. GTE is a telecommunications service provider doing business in Florida and regulated by the PSC under the authority of Chapter 364, Florida Statutes, and Chapter 25, Florida Administrative Code. In May 1997, the Petitioner began to experience telephone service problems, including line static and service outages. According to GTE records reviewed by PSC personnel, GTE responded to the Petitioner’s reports of telephone service problems. GTE attempted to identify and repair the causes of the problems over an extended period of time. The GTE records, as reviewed by the PSC personnel, indicate that the Petitioner’s problems continued and that he frequently reported the trouble to GTE. GTE’s "trouble reports" and summaries characterize the Petitioner’s service problems as "miscellaneous" and "non-service affecting" at times when the Petitioner’s complaint was a lack of dial tone. The inability to obtain a dial tone is a service- affecting problem. A GTE installation and repair manager testified that technicians will identify a problem as "miscellaneous" and "non- service affecting" when they are unable to identify the cause of a problem, or when the problem is intermittent and is not active at the time the technician tests the line. Notations on records suggest that frequently the problems were not apparent at the time of testing. In any event, the Petitioner’s telephone service problems continued through the summer and fall of 1997. By the end of 1997, the Petitioner complained that one of his neighbors was often unable to call him. On December 30, 1997, the Petitioner filed a complaint with the PSC Consumer Affairs Division, alleging that his telephone service was inadequate, specifically that the neighbor could not call him, and that his phone did not ring. The Petitioner’s complaint was tracked in the PSC Consumer Affairs Division computer system. At the time the complaint was filed, the PSC complaint tracking systems were not integrated between PSC divisions, resulting in individual consumer complaints being routed to various PSC personnel who were unaware that the consumers problems were already being investigated by other PSC personnel. PSC consumer complaints are now handled by an integrated docketing system. Beginning after the filing of the complaint of December 30, 1997, the PSC began to inquire into the Petitioner’s telephone problems. In response to contact from the PSC, GTE acknowledged that service problems existed and indicated that lightning possibly damaged the Petitioner’s telephone service. GTE stated that the main cable providing service to the Petitioner would be replaced. By letter dated February 3, 1998, the Petitioner advised GTE and the PSC that he would withhold payment of his telephone bill until such time as his phone service was functioning and the neighbor could call him without problem. On February 11, 1998, GTE made repairs to the Petitioner’s "drop wire" and connection. GTE also examined the Petitioner’s owner-supplied telephone equipment and determined that it was defective. The Petitioner agreed to acquire another telephone. On February 12, 1998, GTE personnel visited the Petitioner’s home to determine whether the service had been restored. At that time, the Petitioner asked them to check with the neighbor whose calls were not being received by the Petitioner. On February 12, 1998, GTE personnel visited the neighbor and determined by observation that the neighbor’s calls to the Petitioner were being misdialed. On February 26, 1998, GTE installed new cable to serve the Petitioner but were unable to connect his telephone to the new cable because GTE’s "serving cable pairs" were defective. Weather-related problems prevented the company from correcting the defective "serving cable pair" problem on February 27, and apparently on any subsequent day prior to March 9, 1998. GTE provided a credit of $1.78 on the Petitioner’s February 1998 telephone bill for the time the phone was out of service. GTE also provided a $25 credit as part of GTE’s "Service Performance Guarantee." The "Service Performance Guarantee" provides a $25 credit to a GTE customer when the customer-reported service issue is not resolved within 24 hours. On March 9, 1998, GTE personnel visited the Petitioner and found that earlier in the day, the Petitioner’s home had been destroyed by a tornado. The GTE personnel testified that they advised the Petitioner to contact them when his electrical service was restored and the telephone would be reconnected. The Petitioner testified that he told the GTE personnel he intended to live in a camper trailer he would place next to his house and testified that the GTE personnel told him they would return to connect his phone service. The GTE personnel did not hear from the Petitioner and did not immediately return to connect phone service. The Petitioner did not contact GTE to advise that his electrical service had been restored. The next day, March 10, 1998, GTE notified the Petitioner that his telephone service would be disconnected for nonpayment of an outstanding balance in excess of $600. The GTE notice established a deadline of March 19, 1998, for payment. On March 11, 1998, the Petitioner requested that his calls be forwarded to his neighbor’s home. GTE complied with the request and began forwarding the Petitioner’s calls on March 13, 1998. On March 23, 1998, GTE personnel attempted to visit the Petitioner and ascertain the situation, but the Petitioner’s private drive was barricaded. The GTE representative assumed that the condition of the property was not suitable for reconnection of telephone service. By letter to the PSC dated March 25, 1998, the Petitioner complained that the phone service to his property had not been restored. On March 25, 1998, the Petitioner’s telephone service was disconnected for nonpayment of the outstanding balance on his account. On March 27, 1998, GTE advised the Petitioner that his telephone service would be "permanently" disconnected if the outstanding balance of $664.02 were not paid. GTE provided another $25 SPG credit on the Petitioner’s March 1998 bill. On April 2, 1998, the Petitioner informed the PSC that he had no telephone service and requested an informal conference to resolve the matter. The Petitioner offered to escrow his telephone payments until his service was repaired to his satisfaction. On the same day, GTE notified the PSC that the Petitioner had the outstanding unpaid balance. Because the Petitioner’s complaint was still pending and the PSC had not proposed a resolution, the Petitioner’s request for an informal conference was premature. In subsequent letters, the Petitioner continued to seek an informal conference prior to completion of the investigation. The PSC did not act on the requests. There is no evidence that the Petitioner disputed the amount due on his telephone bill. The Petitioner’s decision to withhold payment of the bill was service-related. The PSC does not have authority to prevent a service provider from disconnecting service for nonpayment of undisputed telephone service charges. On April 4, 1998, GTE "permanently" disconnected the Petitioner’s telephone service for nonpayment. By letter to the PSC dated April 6, 1998, the Petitioner requested assistance in obtaining telephone service, asserting that a heart condition required access to a telephone. There is no evidence that prior to April 6, 1998, the Petitioner had advised either GTE or the PSC of any existing heart condition. By rule, GTE is required to maintain customer access to an emergency 911 communications system except where telephone service is "permanently" disconnected. Other than after the "permanent" disconnection of his telephone service, there is no evidence that the Petitioner lacked access to the emergency 911 system. By letter to the PSC dated April 8, 1998, the Petitioner alleged to the PSC that several of his neighbors were having telephone problems and were, for a variety of reasons, unable to contact the PSC to complain. The Petitioner attempted to involve a number of his neighbors in his complaint, but none of the neighbors filed a complaint with the PSC, and there is no evidence that the neighbors complained to GTE about any service problems. There is no evidence that any resident of Schaefer Lane filed a telephone service complaint with the PSC. There is no evidence that the Petitioner is authorized to represent his neighbors or neighborhood in this matter. On April 17, 1998, GTE offered to reconnect the Petitioner’s local telephone service and block all toll calls if he would agree to arrange payment of the outstanding balance. The Petitioner apparently refused the offer, but on April 20, 1998, GTE reconnected the local service and activated the toll block. GTE waived the $55 reconnection charge and suspended collection procedures pending resolution of the complaint the Petitioner filed with the PSC. On May 9, 1998, the Petitioner made payment of the outstanding balance of his telephone bill. The toll block should have been removed from the Petitioner’s telephone service at that time, but it was not. On May 13, 1998, the Petitioner notified the PSC that the toll block remained on his phone. The PSC notified GTE that the toll block was still active. GTE apparently did not act on the information. On May 29, 1998, the PSC tested telephone lines at the Petitioner’s home and at the home of the calling neighbor. The technicians detected no telephone line problem in any location. The PSC technician attempted to complete numerous calls from the neighbor’s home to the Petitioner. The technician’s calls were completed without incident. The neighbor was asked to dial the Petitioner’s number. The PSC technician observed that the neighbor misdialed the Petitioner’s telephone number on each of three attempts. GTE eventually provided and installed a "big button" telephone for the neighbor. GTE also provided speed-dialing service at no charge to the neighbor and instructed him on use of the service. The Petitioner asserts that the PSC technician violated PSC administrative rules by traveling with GTE personnel to the Petitioner’s and neighbor’s homes on May 29. The evidence fails to establish that the transportation constituted a violation of any administrative rule. By June 1, 1998, with the toll block still activated, the Petitioner filed a complaint with the PSC concerning the service disconnection and the toll block. The June 1, 1998, complaint was assigned to the Telecommunications Division and the PSC again relayed the complaint to GTE. GTE removed the toll block on June 4, 1998. At this point, the PSC realized that the Petitioner had filed two separate complaints and the agency combined the investigations. It is unclear as to the reason GTE did not remove the toll block after the PSC relayed the matter to them on May 13, 1998; but there is no evidence that it was done to retaliate against the Petitioner. Despite the toll call block, the Petitioner was able to make long distance calls by using a calling card. After GTE removed the block, GTE credited the Petitioner with the difference between the cost of the calls made using his calling card and the cost of the calls that would have been made using the regular long distance carrier had the toll block not been in place. GTE issued service credits of $2.14 and $1.65 on the Petitioner’s June bill for out-of-service claims. The Petitioner asserted that there were times when callers were unable to reach him, but the evidence fails to establish that failed calls were the result of service problems. The Petitioner had numerous telecommunications and computer devices attached to the line. Use of devices, including computers and fax machines, can result in an incoming call not being completed. The Petitioner also acknowledges that he sometimes does not answer the telephone. The PSC technician testified that as of May 29, 1998, he considered the service problem resolved. Tests on the Petitioner’s telephone lines revealed the lines to be in working order. Numerous calls placed to the Petitioner from the neighbor’s house and other locations were completed without incident. In mid-June 1998, the technician recommended that the case be closed. By letter dated June 17, 1998, the PSC advised the Petitioner of the informal resolution of the case and advised him of his right to request an informal conference. On August 18, 1998, the Petitioner informed the PSC that the neighbor was able to complete calls to him and considered that matter resolved, but asked for an informal conference. The PSC staff, attempting to negotiate a settlement of the dispute, did not convene an informal conference until May 12, 1999. The matter was not resolved at the May 12, 1999, conference. On July 15, 1999, the PSC staff filed its recommendation for action at the PSC’s Agenda Conference on July 27, 1999, at which time the PSC referred the dispute to the Division of Administrative Hearings. The Petitioner has previously asserted that he is entitled the $25 SPG credit for each time he called GTE to complain about his telephone service. There is no evidence that the Petitioner is entitled to any SPG credits beyond those he has already received. The evidence establishes that the Petitioner’s service- related problems were intermittent, required extensive "troubleshooting" to locate, and were repaired as soon as was practicable. The Petitioner’s monthly local telephone service charge is $10.86, or approximately 36 cents per day. The PSC staff calculates that the Petitioner is due a maximum "out-of-service" credit of $16.46 allowing for a period of approximately 46 days of credit. GTE has issued total credits in the amount of $110.57, including two $25 SPG credits and waiver of the $55 reconnect fee. Subtracting the $105 attributable to the two SPG’s and the reconnect fee credit from the total of $110.57 leaves the remainder of $5.57, which is the total of the three "out-of-service" credits ($1.78, $1.65 and $2.14) the Petitioner has received. Based on the PSC staff determination that the Petitioner was due a maximum of $16.46 in "out-of-service" credit, it appears that the Petitioner should receive an additional credit of $10.89.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Florida Public Service Commission enter a final order requiring GTE to provide a credit of $10.89 to the Petitioner. DONE AND ENTERED this 10th day of May, 2000, in Tallahassee, Leon County, Florida. WILLIAM F. QUATTLEBAUM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 10th day of May, 2000. COPIES FURNISHED: Calvin "Bill" Wood 10577 Schaefer Lane Lake Wales, Florida 33853 Kimberly Caswell, Esquire Post Office Box 110, MC FLTC0007 Tampa, Florida 33601-0110 Donna Clemons, Esquire Florida Public Service Commission 2540 Shumard Oak Boulevard Tallahassee, Florida 32399-0850 William D. Talbott, Executive Director Public Service Commission 2540 Shumard Oak Boulevard Tallahassee, Florida 32399-0850 Rob Vandiver, General Counsel Public Service Commission 2540 Shumard Oak Boulevard Tallahassee, Florida 32399-0850 Blanca Bayo Director of Records and Reporting Public Service Commission 2540 Shumard Oak Boulevard Tallahassee, Florida 32399-0850
The Issue Whether the Department of Corrections? action to withdraw its Intent to Award and to reject all replies to ITN 12-DC-8396 is illegal, arbitrary, dishonest, or fraudulent, and if so, whether its Intent to Award is contrary to governing statutes, rules, policies, or the solicitation specifications.
Findings Of Fact The DOC is an agency of the State of Florida that is responsible for the supervisory and protective care, custody, and control of Florida?s inmate population. In carrying out this statutory responsibility, the Department provides access to inmate telephone services. On April 15, 2013, the DOC issued the ITN, entitled “Statewide Inmate Telephone Services, ITN 12-DC-8396,” seeking vendors to provide managed-access inmate telephone service to the DOC. Responses to the ITN were due to be opened on May 21, 2013. The DOC issued Addendum #1 to the ITN on April 23, 2013, revising one page of the ITN. The DOC issued Addendum #2 to the ITN on May 14, 2013, revising a number of pages of the ITN, and including answers to a number of vendor questions. EPSI, GTL, and Securus are providers of inmate telephone systems and services. Securus is the incumbent contractor, and has been providing the Department with services substantially similar to those solicited for over five years. No party filed a notice of protest to the terms, conditions, or specifications contained in the ITN or the Addenda within 72 hours of their posting or a formal written protest within 10 days thereafter. Replies to the ITN were received from EPSI, GTL, Securus, and Telmate, LLC. Telmate?s reply was determined to be not responsive to the ITN. Two-Part ITN As amended by Addendum #2, section 2.4 of the ITN, entitled “ITN Process,” provided that the Invitation to Negotiate process to select qualified vendors would consist of two distinct parts. In Part 1, an interested vendor was to submit a response that described certain Mandatory Responsiveness Requirement elements, as well as a Statement of Qualifications, Technical Response, and Financial Documentation. These responses would then be scored using established evaluation criteria and the scores would be combined with cost points assigned from submitted Cost Proposals. In Part 2, the Department was to select one or more qualified vendors for negotiations. After negotiations, the Department would request a Best and Final Offer from each vendor for final consideration prior to final award decision. The ITN provided that the Department could reject any and all responses at any time. High Commissions and Low Rates Section 2.5 of the ITN, entitled “Initial Cost Response,” provided in part: It is the Department?s intention, through the ITN process, to generate the highest percentage of revenue for the State, while ensuring a quality telephone service with reasonable and justifiable telephone call rate charges for inmate?s family and friends similar to those available to the public-at- large. Section 2.6 of the ITN, entitled “Revenue to be Paid to the Department,” provided in part that the Department intended to enter into a contract to provide inmate telephone service at no cost to the Department. It provided that, “[t]he successful Contractor shall pay to the Department a commission calculated as a percentage of gross revenues.”1/ The commission paid by a vendor is the single largest expense in the industry and is an important aspect of any bid. Contract Term Section 2.8 of the ITN was entitled “Contract Term” and provided: It is anticipated that the initial term of any Contract resulting from this ITN shall be for a five (5) year period. At its sole discretion, the Department may renew the Contract in accordance with Form PUR 1000 #26. The renewal shall be contingent, at a minimum, on satisfactory performance of the Contract by the Contractor as determined by the Department, and subject to the availability of funds. If the Department desires to renew the Contracts resulting from this ITN, it will provide written notice to the Contractor no later than thirty days prior to the Contract expiration date. Own Technology System Section 3.4 of the ITN provided in part: The successful Contractor is required to implement its own technology system to facilitate inmate telephone service. Due to the size and complexity of the anticipated system, the successful Contractor will be allowed a period of transition beginning on the date the contract is executed in which to install and implement the utilization of its own technology system. Transition, implementation and installation are limited to eighty (80) days. The Department realizes that some "down time" will occur during this transition, and Respondents shall propose an implementation plan that reduces this "down time" and allows for a smooth progression to the proposed ITS. GTL emphasizes the language stating that the successful contractor must implement “its own” technology system, and asserts that the technology system which EPSI offers to install is not owned by it, but by Inmate Calling Solutions, LLC (ICS), its subcontractor. However, EPSI demonstrated that while the inmate telephone platform, dubbed the “Enforcer System,” is owned by ICS now, that EPSI has a Master User Agreement with ICS and that an agreement has already been reached that before the contract would be entered into, a Statement of Work would be executed to create actual ownership in EPSI for purposes of the Florida contract. GTL alleges that in EPSI?s reply, EPSI relied upon the experience, qualifications, and resources of its affiliated entities in other areas as well. For example, GTL asserts that EPSI?s claim that it would be providing 83 percent of the manpower is false, since EPSI has acknowledged that EPSI is only a contracting subsidiary of CenturyLink, Inc., and that EPSI has no employees of its own. While it is clear that EPSI?s reply to the ITN relies upon the resources of its parent to carry out the terms of the contract with respect to experience, presence in the state, and personnel, EPSI demonstrated that this arrangement was common, and well understood by the Department. EPSI demonstrated that all required capabilities would be available to it through the resources of its parent and subcontractors at the time the contract was entered into, and that its reply was in conformance with the provisions of the ITN in all material respects. EPSI has the integrity and reliability to assure good faith performance of the contract. Call Recording Section 3.6 of the ITN, entitled “Inmate Telephone System Functionality (General),” provided in part: The system shall provide the capability to flag any individual telephone number in the inmate?s „Approved Number List? as „Do Not Record.? The default setting for each telephone number will be to record until flagged by Department personnel to the contrary. Securus alleges that section 3.6 of the ITN implements Department regulations2/ and that EPSI?s reply was non-responsive because it stated that recording of calls to specific telephone numbers would be deactivated regardless of who called that number. Securus alleges that this creates a security risk because other inmates calling the same number should still have their calls recorded. EPSI indicated in its reply to the ITN that it read, agreed, and would comply with section 3.6. While EPSI went on to say that this capability was not connected to an inmate?s PIN, the language of section 3.6 does not mention an inmate?s PIN either. Read literally, this section requires only the ability to “flag” any individual telephone number that appears in an inmate?s number list as “do not record” and requires that, by default, calls to a telephone number will be recorded until it is flagged. EPSI?s reply indicated it could meet this requirement. This provision says nothing about continuing to record calls to that same number from other inmates. Whether or not this creates a security risk or is what the Department actually desired are issues which might well be discussed as part of the negotiations, but this does not affect the responsiveness of EPSI?s reply to section 3.6. Furthermore, Mr. Cooper testified at hearing that EPSI does have the capability to mark a number as “do not record” only with respect to an individual inmate, at the option of the Department. EPSI?s reply conformed to the call-recording provisions of section 3.6 of the ITN in all material respects. Call Forwarding Section 3.6.8 of the ITN, entitled “System Restriction, Fraud Control and Notification Requirements,” provided that the provided inmate telephone services have the following security capability: Ability to immediately terminate a call if it detects that a called party?s telephone number is call forwarded to another telephone number. The system shall make a “notation” in the database on the inmate?s call. The system shall make this information available, in a report format, to designated department personnel. In response to an inquiry noting that, as worded, the ITN did not technically require a vendor to have the capability to detect call-forwarded calls in the first place, the Department responded that this functionality was required. Securus alleges that EPSI is unable to comply with this requirement, citing as evidence EPSI?s admission, made some months before in connection with an RFP being conducted by the Kansas Department of Corrections, that it did not yet have this capability. EPSI indicated in its reply to the ITN that it read, agreed, and would comply with this requirement. As for the Kansas solicitation, EPSI showed that it now possesses this capability, and has in fact installed it before. EPSI?s reply conformed to the call-forwarding provisions of section 3.6.8 of the ITN in all material respects. Keefe Commissary Network Section 5.2.1 of the ITN, entitled “Respondents? Business/Corporate Experience,” at paragraph e. directed each vendor to: [P]rovide and identify all entities of or related to the Respondent (including parent company and subsidiaries of the parent company; divisions or subdivisions of parent company or of Respondent), that have ever been convicted of fraud or of deceit or unlawful business dealings whether related to the services contemplated by this ITN or not, or entered into any type of settlement agreement concerning a business practice, including services contemplated by this ITN, in response to a civil or criminal action, or have been the subject of any complaint, action, investigation or suit involving any other type of dealings contrary to federal, state, or other regulatory agency regulations. The Respondent shall identify the amount of any payments made as part of any settlement agreement, consent order or conviction. Attachment 6 to the ITN, setting forth Evaluation Criteria, similarly provided guidance regarding the assessment of points for Business/Corporate Experience. Paragraph 1.(f) provided: “If any entities of, or related to, the Respondent were convicted of fraud or of deceit or unlawful business dealings, what were the circumstances that led to the conviction and how was it resolved by the Respondent?” Addendum #2. to the ITN, which included questions and answers, also contained the following: Question 57: In Attachment 6, Article 1.f. regarding respondents “convicted of fraud, deceit, or unlawful business dealing . . .” does this include associated subcontractors proposed in this ITN? Answer 57: Yes, any subcontractors you intend to utilize on this project, would be considered an entity of and related to your firm. As a proposed subcontractor, ICS is an entity of, or related to, EPSI. There is no evidence to indicate that ICS has ever been convicted of fraud or of deceit or unlawful business dealings. There is no evidence to indicate that ICS has entered into any type of settlement agreement concerning a business practice in response to a civil or criminal action. There is no evidence to indicate that ICS has been the subject of any complaint, action, investigation, or suit involving any other type of dealings contrary to federal, state, or other regulatory agency regulations. The only evidence at hearing as to convictions involved “two individuals from the Florida DOC” and “two individuals from a company called AIS, I think that?s American Institutional Services.” No evidence was presented that AIS was “an entity of or related to” EPSI. Conversely, there was no evidence that Keefe Commissary Network (KCN) or anyone employed by it was ever convicted of any crime. There was similarly no evidence that KCN entered into any type of settlement agreement concerning a business practice in response to civil or criminal action. It was shown that KCN “cooperated with the federal government in an investigation” that resulted in criminal convictions, and it is concluded that KCN was therefore itself a subject of an investigation involving any other type of dealings contrary to federal, state, or other regulatory agency regulations. However, KCN is not an entity of, or related to, EPSI. KCN is not a parent company of EPSI, it is not a division, subdivision, or subsidiary of EPSI, and it is not a division, subdivision, or subsidiary of EPSI?s parent company, CenturyLink, Inc. EPSI?s reply conformed to the disclosure requirements of section 5.2.1, Attachment 6, and Addendum #2 of the ITN in all material respects. Phases of the ITN Section 6 describes nine phases of the ITN: Phase 1 – Public Opening and Review of Mandatory Responsiveness Requirements Phase 2 – Review of References and Other Bid Requirements Phase 3 – Evaluations of Statement of Qualifications, Technical Responses, and Managed Access Solutions3/ Phase 4 – CPA Review of Financial Documentation Phase 5 – Review of Initial Cost Sheets Phase 6 – Determination of Final Scores Phase 7 – Negotiations Phase 8 – Best and Final Offers from Respondents Phase 9 – Notice of Intended Decision Evaluation Criteria in the ITN As amended by Addendum #2, the ITN established scoring criteria to evaluate replies in three main categories: Statement of Qualifications (500 points); Technical Response (400 points); and Initial Cost Sheets (100 points). It also provided specific guidance for consideration of the commissions and rates shown on the Initial Cost Sheet that made up the pricing category. Section 6.1.5 of the ITN, entitled “Phase 5 – Review of Initial Cost Sheet,” provided in part: The Initial Cost Proposal with the highest commission (percentage of gross revenue) to be paid to the Department will be awarded 50 points. The price submitted in Table 1 for the Original Contract Term, and the subsequent renewal price pages for Table 1 will be averaged to determine the highest commission submitted. All other commission percentages will receive points according to the following formula: (X/N) x 50 = Z Where: X = Respondents proposed Commission Percentage to be Paid. N = highest Commission Percentage to be Paid of all responses submitted. Z = points awarded. * * * The Initial Cost Proposal with the lowest telephone rate charge will be awarded 50 points. The price submitted in Table 1 for the Original Contract Term, and the subsequent renewal price pages for Table 1 will be averaged to determine the highest commission submitted. All other cost responses will receive points according to the following formula: (N/X) x 50 = Z Where: N = lowest verified telephone rate charge of all responses submitted. X = Respondent?s proposed lowest telephone rate charge. Z = points awarded. The ITN as amended by Addendum #2 provided instructions that initial costs should be submitted with the most favorable terms the Respondent could offer and that final percentages and rates would be determined through the negotiation process. It included the following chart:4/ COST PROPOSAL INITIAL Contract Term 5 years ONE Year Renewal TWO Year Renewal THREE Year Renewal FOUR Year Renewal FIVE Year Renewal Initial Department Commission % Rate Proposed Initial Blended Telephone Rate for All Calls* (inclusive of surcharges) The ITN, including its Addenda, did not specify selection criteria upon which the determination of best value to the state would be based. Allegation that EPSI Reply was Misleading On the Certification/Attestation Page, each vendor was required to certify that the information contained in its reply was true and sufficiently complete so as not to be misleading. While portions of its reply might have provided more detail, EPSI did not mislead the Department regarding its legal structure, affiliations, and subcontractors, or misrepresent what entity would be providing technology or services if EPSI was awarded the contract. EPSI?s reply explained that EPSI was a wholly owned corporate subsidiary of CenturyLink, Inc., and described many aspects of the contract that would be performed using resources of its parent, as well as aspects that would be performed through ICS as its subcontractor. Department Evaluation of Initial Replies The information on the Cost Proposal table was reviewed and scored by Ms. Hussey, who had been appointed as the procurement manager for the ITN. Attempting to follow the instructions provided in section 6.1.5, she added together the six numbers found in the boxes indicating commission percentages on the Cost Proposal sheets. One of these boxes contained the commission percentage for the original five-year contract term and each of the other five boxes contained the commission percentage for one of the five renewal years. She then divided this sum by six, the number of boxes in the computation chart (“divide by six”). In other words, she calculated the arithmetic mean of the six numbers provided in each proposal. The Department had not intended for the commission percentages to be averaged in this manner. Instead, they had intended that a weighted mean would be calculated. That is, they intended that five times the commission percentage shown for the initial contract term would be added to the commission percentages for the five renewal years, with that sum then being divided by ten, the total number of years (“divide by ten”). The Department did not clearly express this intent in section 6.1.5. Mr. Viefhaus testified that based upon the language, Securus believed that in Phase 5 the Department would compute the average commission rate the way that Ms. Hussey actually did it, taking the arithmetic mean of the six commission percentages provided by each vendor, and that therefore Securus prepared its submission with that calculation in mind.5/ Mr. Montanaro testified that based upon the language, GTL believed that in Phase 5 the Department would “divide by ten,” that is, compute the weighted mean covering the ten-year period of the contract, and that GTL filled out its Cost Proposal table based upon that understanding. The DOC posted a notice of its intent to negotiate with GTL, Securus, and EPSI on June 3, 2013. Telmate, LLC, was not chosen for negotiations.6/ Following the Notice of Intent to Negotiate was this statement in bold print: Failure to file a protest within the time prescribed in Section 120.57(3), Florida Statutes, or failure to post the bond or other security required by law within the time allowed for filing a bond shall constitute a waiver of proceedings under Chapter 120, Florida Statutes. On June 14, 2013, the DOC issued a Request for Best and Final Offers (RBAFO), directing that Best and Final Offers (BAFO) be provided to the DOC by June 18, 2013. Location-Based Services The RBAFO included location-based services of called cell phones as an additional negotiated service, requesting a narrative description of the service that could be provided. The capability to provide location-based services had not been part of the original ITN, but discussions took place as part of the negotiations. Securus contends that EPSI was not a responsible vendor because it misrepresented its ability to provide such location-based services through 3Cinteractive, Inc. (3Ci). EPSI demonstrated that it had indicated to the Department during negotiations that it did not have the capability at that time, but that the capability could easily be added. EPSI showed that due to an earlier call it received from 3Ci, it believed that 3Ci would be able to provide location- based services to it. EPSI was also talking at this time to another company, CTI, which could also provide it that capability. In its BAFO, EPSI indicated it could provide these services, explained that they would require payments to a third- party provider, and showed a corresponding financial change to their offer. No competent evidence showed whether or not 3Ci was actually able to provide that service on behalf of EPSI, either at the time the BAFO was submitted, or earlier. EPSI showed that it believed 3Ci was available to provide that service, however, and there is no basis to conclude that EPSI in any way misrepresented its ability to provide location-based services during negotiations or in its BAFO. Language of the RBAFO The RBAFO provided in part: This RBAFO contains Pricing, Additional Negotiated Services, and Value Added Services as discussed during negotiation and outlined below. The other specifications of the original ITN, unless modified in the RBAFO, remain in effect. Respondents are cautioned to clearly read the entire RBAFO for all revisions and changes to the original ITN and any addenda to specifications, which are incorporated herein and made a part of this RBAFO document. Unless otherwise modified in this Request for Best and Final Offer, the initial requirements as set forth in the Department?s Invitation to Negotiate document and any addenda issued thereto have not been revised and remain as previously indicated. Additionally, to the extent that portions of the ITN have not been revised or changed, the previous reply/initial reply provided to the Department will remain in effect. These two introductory paragraphs of the RBAFO were confusing. It was not clear on the face of the RBAFO whether “other specifications” excluded only the pricing information to be supplied or also the specifications indicating how that pricing information would be calculated or evaluated. It was not clear whether “other specifications” were the same thing as “initial requirements” which had not been revised. It was not clear whether scoring procedures constituted “specifications.” While it was clear that, to the extent not revised or changed by the RBAFO, initial replies that had been submitted -- including Statements of Qualifications, Technical Response, Financial Documentation, and Cost Proposals -- would “remain in effect,” it was not clear how, if at all, these would be considered in determining the best value to the State. In the RBAFO under the heading “PRICING,” vendors were instructed to provide their BAFO for rates on a provided Cost Proposal table which was virtually identical to the table that had been provided earlier in the ITN for the evaluation stage, including a single square within which to indicate a commission rate for the initial five-year contract term, and five squares within which to indicate commission rates for each of five renewal years. The RBAFO stated that the Department was seeking pricing that would provide the “best value to the state.” It included a list of 11 additional services that had been addressed in negotiations and stated that, “in order to provide the best value to the state,” the Department reserved the right to accept or reject any or all of these additional services. It provided that after BAFOs were received, the Negotiation Team would prepare a summary of the negotiations and make a recommendation as to which vendor would provide the “best value to the state.” The RBAFO did not specify selection criteria upon which the determination of best value to the State would be based. In considering commission percentages as part of their determination as to which vendor would receive the contract, the Negotiation Team decided not to consider commissions that had been listed by vendors for the renewal years, concluding that the original five-year contract term was all that was assured, since renewals might or might not occur. On June 25, 2013, the DOC posted its Notice of Agency Decision stating its intent to award a contract to EPSI. Protests and the Decision to Reject All Replies Subsequent to timely filing notices of intent to protest the intended award, Securus and GTL filed Formal Written Protests with the DOC on July 5 and 8, 2013, respectively. The Department considered and compared the protests. It determined that language in the ITN directing that in Phase 5 the highest commission would be determined by averaging the price for the original contract term with the prices for the renewal years was ambiguous and flawed. It determined that use of a table with six squares as the initial cost sheet was a mistake. The Department determined that the language and structure of the RBAFO could be read one way to say that the Department would use the same methodology to evaluate the pricing in the negotiation stage as had been used to evaluate the Initial Cost sheets in Phase 5, or could be read another way to mean that BAFO pricing would not be evaluated that way. It determined that the inclusion in the RBAFO of a table virtually identical to the one used as the initial cost sheet was a mistake. The Department determined that the language and the structure of the RBAFO could be read one way to require further consideration of such factors as the Statement of Qualifications and Technical Response in determining best value to the State, or could be read another way to require no further consideration of these factors. The Department prepared some spreadsheets demonstrating the varying results that would be obtained using “divide by six” and “divide by ten” and also considered a spreadsheet that had been prepared by Securus. The Department considered that its own Contract Manager had interpreted the Phase 5 instructions to mean “divide by six,” while the Department had actually intended the instructions to mean “divide by ten.” The Department had intended that the Negotiation Team give some weight to the renewal-year pricing, and had included the pricing table in the RBAFO for that reason, not simply to comply with statutory requirements regarding renewal pricing. The Department determined that the way the RBAFO was written and the inclusion of the chart required at least some consideration of ten-year pricing, and that vendors had therefore been misled when the Negotiation Team gave no consideration to the commission percentages for the renewal years. Specifically, based upon the Securus protest, the Department determined that the RBAFO language had been interpreted by Securus to require that the Phase 5 calculation of average commission percentage be carried over to evaluation of the pricing in the BAFOs, which Securus had concluded meant “divide by six.” The Department further determined that based upon the GTL protest, the RBAFO language had been interpreted by GTL to require the Department to consider the renewal years in pricing, as well as such things as the Statement of Qualifications and Technical Response in the BAFO stage. The Department determined that had “divide by six” been used in evaluating the BAFOs, Securus would have a computed percentage of 70 percent, higher than any other vendor. The Department concluded that the wording and structure of the ITN and RBAFO did not create a level playing field to evaluate replies because they were confusing and ambiguous and were not understood by everyone in the same way. Vendors naturally had structured their replies to maximize their chances of being awarded the contract based upon their understanding of how the replies would be evaluated. The Department concluded that vendor pricing might have been different but for the misleading language and structure of the ITN and RBAFO. The Department did not compute what the final award would have been had it applied the scoring procedures for the initial cost sheets set forth in section 6.1.5 to the cost elements of the BAFOs. The Department did not compute what the final award would have been had it applied the scoring procedures for the Statement of Qualifications and Technical Response set forth in section 6.1.3 to the BAFOs. Ms. Bailey testified that while she had originally approved the ITN, she was unaware of any problems, and that it was only later, after the protests to the Notice of Intended Award had been filed and she had reviewed the specifications again, that she had come to the conclusion that the ITN and RBAFO were flawed. Following the protests of the intended award by GTL and Securus, on July 23, 2013, the DOC posted to the Vendor Bid System a Notice of Revised Agency Decision stating the DOC?s intent to reject all replies and reissue the ITN. On August 5, 2013, EPSI, GTL, and Securus filed formal written protests challenging DOC?s intended decision to reject all replies. Securus subsequently withdrew its protest to DOC?s rejection of all replies. As the vendor initially notified that it would receive the contract, EPSI?s substantial interests were affected by the Department's subsequent decision to reject all replies. GTL alleged the contract had wrongly been awarded to EPSI and that it should have received the award, and its substantial interests were affected by the Department's subsequent decision to reject all replies. The Department did not act arbitrarily in its decision to reject all replies. The Department did not act illegally, dishonestly, or fraudulently in its decision to reject all replies. EPSI would likely be harmed in any re-solicitation of bids relative to its position in the first ITN, because potential competitors would have detailed information about EPSI?s earlier reply that was unavailable to them during the first ITN. An ITN requires a great deal of work by the Department and creates a big demand on Department resources. The decision to reject all replies was not undertaken lightly. The State of Florida would likely benefit in any new competitive solicitation7/ because all vendors would be aware of the replies that had been submitted earlier in response to the ITN, and bidders would likely try to improve upon those proposals to improve their chances of being awarded the contract.
Recommendation Upon consideration of the above findings of fact and conclusions of law, it is RECOMMENDED: That the Department of Corrections issue a final order finding that the rejection of all replies submitted in response to ITN 12-DC-8396 was not illegal, arbitrary, dishonest, or fraudulent, and dismissing all four protests. DONE AND ENTERED this 1st day of November, 2013, in Tallahassee, Leon County, Florida. S F. SCOTT BOYD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 1st day of November, 2013.
