The Issue The issue in this case is whether Respondent should award a contract to Intervenor to provide physical and occupational therapy services to approximately 1,300 exceptional education students who qualify for such services in 77 public schools in Brevard County, Florida.
Findings Of Fact Intervenor is the incumbent contractor for physical and occupational therapy services provided to Respondent. Intervenor has provided such services to Respondent for approximately six years. On February 24, 1999, Respondent issued its request for proposals ("RFP") for occupational and physical therapy services. The RFP consists of eight unnumbered pages. Ten companies responded to the RFP. However, only the proposals of Petitioner and Intervenor are at issue in this proceeding. A four-member evaluation committee ranked each proposal on the basis of six categories. The six categories were: experience; qualification; recruiting ability; location of office; and responsiveness. The evaluation committee also considered the hourly rate and mileage to be charged by each proposer. The evaluation committee met as a body. Each member of the committee then returned to his or her respective office to complete a scoring sheet. The scoring sheet listed each proposer's name in a column down the left side of the sheet and the six categories for evaluation from left to right across the top of the sheet. A column down the right side of each sheet listed the hourly rate to be charged by the proposer identified in the column down the left side of the sheet. The RFP does not prescribe a scoring formula to be used in completing the scoring sheets. In relevant part, the RFP merely states: . . . The Selection Committee shall rank the firms in order of preference and will submit its recommendation to the Superintendent for his consideration. The [Board] will bear responsibility for the selection of the Contractor and will decide which bid [sic] is most appropriate for Brevard schools and their students. The Superintendent will recommend a therapy service provider which will be presented to the . . . Board for approval at a regular or special Board meeting. RFP at unnumbered page 8. All four members of the evaluation committee ranked Intervenor's proposal first and Petitioner's proposal second. However, the hourly rate in Petitioner's proposal was the lowest of all proposers, at $34.75, and $4.25 less than the $39 hourly rate quoted in the proposal submitted by Intervenor. The proposal submitted by Intervenor charged mileage in addition to the hourly rate while the hourly rate quoted by Petitioner included mileage. Before May 11, 1999, when the Board selected Intervenor as the proposer, the evaluation committee met. The committee asked Respondent's buyer assigned to the contract if the committee was required to recommend the proposal with the lowest price. The buyer advised the committee that the contract was for professional services and did not require the committee to recommend the lowest-priced proposal. The committee determined that Ms. Eva Lewis, one of its members and the Director of Program Support for Exceptional Student Education in Brevard County, should telephone Intervenor and ask if Intervenor would match Petitioner's price. Ms. Lewis telephoned Mr. Rick McCrary, the manager for Intervenor, and asked if Intervenor would accept the contract price of $34.75. After consultation with his superiors, Mr. McCrary agreed to the straight-rate price of $34.75. On May 11, 1999, Ms. Lewis presented the recommendation of the evaluation committee to the Board. The Board asked Ms. Lewis if Intervenor's price was the lowest price. Ms. Lewis disclosed that the evaluation committee preferred the proposal submitted by Intervenor, asked Intervenor to lower its price to meet that of Petitioner, and that Intervenor agreed to do so. The Board voted unanimously to select Intervenor as the proposer to be awarded the contract. The parties directed most of their efforts in this proceeding to the issues of whether competitive bidding requirements apply to the proposed agency action and whether the scoring formula used to rank the proposers complied with those requirements. Petitioner asserts that the selection of Intervenor by the Board violates the competitive bidding provisions in Section 120.57(3), Florida Statutes (1997). (All chapter and section references are to Florida Statutes (1997) unless otherwise stated). Intervenor and Respondent contend that Section 120.57(1), rather than Section 120.57(3), controls the Board's selection of Intervenor for the contract. Although the document used by Respondent to obtain proposals from vendors describes itself as an RFP and describes the responses as either proposals or bids, Respondent and Intervenor suggest that the document is not an RFP but merely a "solicitation." Respondent and Intervenor further argue: . . . that the . . . Board . . . did not attempt to comply with the requirements for competitive procurement under Section 120.57(3) or Chapter 287. . . . And . . . that the . . . Board was never required to comply with those statutes. . . . these are contracts for professional, educational and health services, contracts uniquely and specifically exempted from [the] competitive bid procurement process. Transcript ("TR") at 40. It is not necessary to reach the issue of whether Section 120.57(1) or the competitive procurement provisions in Section 120.57(3) and Chapter 287 control Respondent's selection of Intervenor as the proposer to be awarded the contract. In either event, the proposed agency action is contrary to the specifications in the RFP. Assuming arguendo that Section 120.57(3) and Chapter 287 do not apply to the contract at issue in this proceeding, Respondent failed to comply with RFP specifications. As Intervenor and Respondent point out in their joint PRO, Section F.8. of the RFP states: The . . . Board . . . and the selected proposer will negotiate a contract as to terms and conditions for submission to the . . . Board for consideration and approval. In the event an agreement cannot be reached with the selected proposer in a timely manner, then the . . . Board reserves the right to select an alternative proposer. (emphasis supplied) Intervenor and Respondent are also correct that the phrase "negotiate a contract as to terms and conditions" includes terms and conditions such as the contract price. Contrary to the provisions of Section F.8., the Board did not first select a proposer at its meeting on May 11, 1999, and then negotiate a contract price with the selected proposer. Rather, the evaluation committee negotiated a contract price with Intervenor before May 11, 1999, and the Board then selected Intervenor as the successful proposer. The evaluation committee is not the Board and does not have authority to act on behalf of the Board. As the RFP states, the evaluation committee has authority only to: . . . rank the firms in order of preference and . . . submit its recommendation to the Superintendent for his consideration. The [Board] will bear responsibility for the selection of the Contractor and will decide which bid [sic] is most appropriate for Brevard schools and their students. The Superintendent will recommend a therapy service provider which will be presented to the . . . Board for approval at a regular or special Board meeting. RFP at unnumbered page 8. The last sentence in Section F.8. makes clear that the right to select a proposer is the sole province of the Board and not the evaluation committee. Even if one were to ignore the legal distinctions between the evaluation committee and the Board and the authority of each, the RFP specifications fail to provide adequate notice to potential proposers of the true purpose for the RFP. As Respondent and Intervenor state in their joint PRO: . . . the . . . Board used the proposals it received to test the market for physical and occupational therapy services in Brevard County. The . . . Board then used the information it developed from the proposals as negotiating leverage to obtain a price concession from its incumbent contractor. The . . . Board's negotiation tactics permitted it to secure the superior vendor at the price of an inferior vendor. PRO at 33. The RFP fails to disclose that Respondent intended to use potential proposers to obtain negotiating leverage with the incumbent contractor. The failure of the RFP to disclose its purpose violates fundamental principles of due process, adequate notice, and fairness to potential proposers. It creates a gap between what agency staff knew of the Respondent's intent for the RFP and what potential proposers could know from reading the specifications in the RFP. The failure of the RFP to disclose its true purpose suggests that its authors recognized the chilling effect such a disclosure would have had on the response of potential proposers. The lack of responses from potential proposers, in turn, would have frustrated Respondent's intent to "secure the superior vendor at the price of an inferior vendor." Assuming arguendo that Section 120.57(3) controls the contract award at issue in this proceeding, Respondent's proposed agency action violates relevant provisions in Section 120.57(3)(f). In relevant part, Section 120.57(3)(f) provides: In a competitive procurement contest, other than a rejection of all bids, the Administrative Law Judge shall conduct a de novo proceeding to determine whether the agency’s proposed action is contrary to the agency’s governing statutes, the agency’s rules, or policies, or the bid or proposal specifications. The standard of proof for such proceedings shall be whether the proposed agency action was clearly erroneous, contrary to competition, or arbitrary, or capricious. . . . (emphasis supplied) As previously found, the proposed award of the contract to Intervenor is contrary to the RFP specifications, including specifications for the evaluation and selection process described in paragraphs 7 and 17, supra. The proposed agency action is clearly erroneous within the meaning of Section 120.57(3)(f). It violates fundamental notions of due process, adequate notice, and a level playing field for all proposers. All of the proposers who were induced by the terms of the RFP to expend the time, energy, and expense required to prepare and submit proposals were entitled to rely in good faith on the specifications in the RFP and to require Respondent to adhere to its own specifications. The proposed agency action is also contrary to competition within the meaning of Section 120.57(3)(f). The economic incentive to respond to an RFP would likely diminish over time if the proposed agency action were to persist. Potential proposers would eventually recognize the RFP process as a device intended to reduce the contract price of the incumbent provider rather than as a bona fide business opportunity for potential proposers to gain new market share. Such an economic environment would not likely induce potential proposers to incur the time and expense necessary to prepare and submit proposals. The pool of potential proposers would shrink, and Respondent would lose negotiating leverage with the incumbent vendor. The likely result would be an erosion of negotiating leverage and an accretion in costs.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a Final Order finding that the selection of Intervenor for the contract award is contrary to the RFP specifications and contrary to competition. DONE AND ENTERED this 3rd day of September, 1999, in Tallahassee, Leon County, Florida. DANIEL MANRY 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 3rd day of September, 1999. COPIES FURNISHED: Dr. David Sawyer, Superintendent Brevard County School Board 2700 Judge Fran Jamieson Way Viera, Florida 32940-6699 Harold Bistline, Esquire Stromire, Bistline, Miniclier, Miniclier and Griffith 1970 Michigan Avenue, Building E Cocoa, Florida 32922 Jonathan Sjostram, Esquire Steel Hector and Davis, LLP 215 South Monroe Street, Suite 601 Tallahassee, Florida 32301 Edward J. Kinberg, Esquire Edward J. Kinberg, P.A. 2101 South Waverly Place Suite 200E Melbourne, Florida 32901
Findings Of Fact The Petitioner, Ana Caos, M.D., is a applicant for a restricted license to practice Medicine in the State of Florida pursuant to the provisions of Section 458.311(8), Florida Statutes. Successful completion of the Florida Board Examination is a prerequisite to licensure under Section 458.311(8), Florida Statutes. In an effort to meet that prerequisite, the Petitioner has already taken the Florida Board Examination six times since October 1, 1966. The Petitioner has passed portions of the licensure examination, but thus far she has not received a passing grade on the Basic Sciences portion of that examination. The Petitioner seeks to continue taking the licensure examination until she achieves a passing grade on all portions of the examination. On January 19, 1993, the Board of Medicine filed and served an order regarding the Petitioner's licensure application. The order reads as follows, in pertinent part: You are hereby notified pursuant to Section 120.60(3), Florida Statutes, that the Board of Medicine voted to DENY your application for licensure as a physician by examination. The Board of Medicine reviewed and considered your application for licensure by examination on November 19, 1992, in a telephone conference call originating in Tallahassee, Florida and has determined that said licensure by examination be denied, stating as grounds therefore: That you have failed to pass the FLEX examination six times since October 1986. Subsection 458.311(2), Florida Statutes, prohibits licensure of any individual who has failed the FLEX examination five times after October 1, 1986. Although the Board previously permitted you to sit for the FLEX examination for a sixth time in 1992, it has since that time determined that this provision applies to all applicants for licensure. The Board of Medicine has never adopted a rule to the effect that Section 458.311(2), Florida Statutes, applies to applicants for a restricted license under Section 458.311(8), Florida Statutes. The Board of Medicine has an existing rule that interprets several provisions of Section 458.311(8), Florida Statutes (1991). (See Rule 21M-22.020 (1)(a)-(c), Florida Administrative Code.) At the Board meeting on July 11 and 12, 1992, the Board of Medicine discussed proposed amendments to the existing rule and voted to initiate rulemaking to amend Rule 21M- 22.020(1), Florida Administrative Code, by adding to it a new subsection (d) reading as follows: (d) The phrase "successfully completes the Florida Board Examination" is interpreted as requiring obtaining a passing score as defined by Rule 21M-29.001(2) within the time frame set forth in Section 458.311(2), Florida Statutes. Specifically, if the applicant has failed the examination five times after October 1, 1986, the applicant is no longer eligible for licensure. At its meeting on July 11 and 12, 1992, the Board of Medicine instructed its legal counsel to initiate rulemaking to adopt the rule amendment quoted above. For reasons unknown to the Board's Executive Director, the Board's legal counsel had not yet filed the proposed rule amendment for adoption as of the date of the formal hearing in this case. On March 12, 1993, eleven days after the formal hearing in this case, notice of proposed rulemaking was published in the Florida Administrative Weekly. The proposed rulemaking noticed on March 12, 1993, is the same as, or substantially the same as, the proposed language described in Paragraph 5, above. The proposed rulemaking noticed on March 12, 1993, is presently the subject of a rule challenge petition filed by the Petitioner in this case. See Case No. 93-2166RP. The Petitioner in this case is also the Petitioner in Case No. 93-1801, which involves a petition filed pursuant to section 120.57(1), Florida Statutes, to challenge the proposed denial of the Petitioner's application for a license.
Findings Of Fact Department of Transportation (DOT) Project #02000-3608 is a federal aid highway project requiring the replacement of a bridge on Kings Bay Drive over a canal near the Crystal River in Citrus County, Florida. The bridge is currently closed due to hurricane damage. The bid specifications were published, and a bid submittal deadline of March 28, 1990, was established. The bid specifications included a disadvantaged business enterprise (DBE) goal of 10%, and hiring goals of 6.9% female and 17.1% minority. The bid specifications also included the following special provisions related to DBE: PREPARATION OF PROPOSALS * * * 2-5.3.2 Submittals for Contracts with Goals: For all contracts for which DBE contract goals have been established, each contractor shall meet or exceed or demonstrate that it could not meet, despite its good faith efforts, the contract goals set by the Department. The DBE participation information shall be submitted with the Contractor's bid proposal. Award of the Contract shall be conditioned upon submission of the DBE participation information with the bid proposal and upon satisfaction of the contract goals or, if the goals are not met, upon demonstrating that good faith efforts were made to meet the goals. The Contractor's bid submission shall include the following information (Submitted on Forms Nos. 275-020-002-DBE Utilization Affirmative Action Certification, 275-020-003-DBE Utilization Summary and 275-020-004-DBE Utilization Form): The names and addresses of certified DBE firms that will participate in the contract. Only DBEs certified by the Department at the time the bid is submitted may be counted toward DBE goals. A description of the work each named DBE firm will perform. The dollar amount of participation by each named DBE firm. If the DBE goal is not met, sufficient information to demonstrate that the contractor made good faith efforts to meet the goals. * * * DISQUALIFICATION OF BIDDERS ARTICLE 2-11 (Page 11) is expanded as follows: (h) Failure to satisfy the requirements of 2-5.3. * * * (Petitioner's exhibit #2, emphasis added) DBE goals for projects to be bid are established at DOT by a committee which includes a representative from the agency's Bureau of Minority Programs. From a list of individual bid items, the committee determines which items are normally subcontracted. Those items are totalled to achieve a percentage of the job. The Bureau of Minority Programs then reviews the list to determine the number of DBEs, from the agency directory, which would be available to perform the subcontracted work in the relevant geographical area. The Bureau of Minority Programs then makes its recommendation to the goals-setting committee. For example, if 40% of the job would normally be subcontracted and DBEs were available to perform 50% of that work, the goal could be set at 20%. In practice, the goals are not set so high, and the most common goal is 10%, as that is the overall goal of the DOT. Goals vary, depending on the type of work, the location and the availability of DBEs. Hiring goals are also established for each project, but in contrast to the DBE goals, they are not considered in the award of a bid. Four firms responded to the bid advertisement for Project Number 02000- 3608. The Cone Corporation was the low bidder at $588,793.45. Cone Constructors, Inc. bid $629,736.85. Piling and Structures, Inc. bid $700,436.53; and Leware Construction Company bid $733,333.33. The Cone Corporation bid included DBE utilization forms indicating that $56,000.00 would be subcontracted to H.S. Thompson Construction Company for concrete and rebar work. This amounts to approximately 9.5% of its bid. The Cone Corporation did not submit any statement with its bid package as to how good faith efforts were made to comply with the DBE goal. A good faith effort committee of the department met to review the bids, and determined that it could not evaluate the Cone Corporation's good faith efforts because no information was provided. Cone Constructor, Inc., the next lowest bidder, provided a $70,000.00 subcontract with a DBE firm, D.A.B. Constructors, Inc., for various work items related to the project. This amounts to approximately 11% of its bid, and meets the specified 10% goal. Piling and Structures, Inc., provided for six DBE subcontractors for a total of $56,000.00, or approximately 8% of its bid; and Leware Construction Company, the highest bidder, provided for four DBE subcontractors, for a total of $76,887.45, or approximately 10.5% of its bid. Thus, two bidders met the specified DBE goal, and two did not. The good faith efforts committee recommended that Cone Corporation's bid be declared nonresponsive because the DBE goal was not achieved and documentation of good faith effort was not submitted. The committee noted that DBE utilization forms submitted by other bidders indicated that there were other DBE subcontractors available for work on the project. Bob Graham is vice-president of the Cone Corporation and has worked for the firm for ten years. He is responsible for the day to day management of the firm, and he prepared the project bid. Bob Graham concedes that the DBE subcontract in his bid does not meet the 10% goal. He solicited and received other DBE subcontract quotations, but rejected them as being higher than non-DBE quotations. Only one DBE subcontractor responded lowest in an area of work and Graham submitted that firm, H.S. Thompson, as part of his bid. Bob Graham also admits that he did not submit any good faith documentation with his bid to demonstrate that an effort was made to meet the DBE goal. Bids are commonly compiled at the last minute, with the bidders assembling various quotations and putting together final numbers to meet the bid deadline. Graham simply did not have time to add the good faith effort documentation. He made a considered business decision to reject all but one DBE subcontractor, in favor of being able to submit a lower bid. He knew at the time that his bid was submitted that the DBE goal was not met. His bid was approximately $41,000.00 lower than the next lowest bid. For an additional $2,800.00 he could have met the 10% goal. This, of course, was apparent only after the bids were opened.
Recommendation Based on the foregoing, it is hereby, RECOMMENDED That a Final Order be entered, dismissing the protest of Petitioner, the Cone Corporation. DONE AND RECOMMENDED this 9th day of July, 1990, in Tallahassee, Leon County, Florida. Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9th day of July, 1990. COPIES FURNISHED: W. Crit Smith, Esquire SMITH AND THOMPSON, P.A. 1530 Metropolitan Blvd. Tallahassee, FL 32308 John H. Beck, Esquire 1020 East Park Avenue Tallahassee, FL 32301 Paul J. Martin, Esquire and Susan P. Stephens, Esquire Department of Transportation Haydon Burns Building, M.S. #58 605 Suwannee Street Tallahassee, FL 32399-0450 Ben G. Watts, Secretary Attn: Eleanor F. Turner, M.S. #58 Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, FL 32399-0450 Thornton J. Williams, General Counsel Department of Transportation 562 Haydon Burns Building 605 Suwannee Street Tallahassee, FL 32399-0450 =================================================================
Findings Of Fact Nine bids were received for Contract E4571, Project/Job No. 99004-3516 ("E4571"). Petitioner's bid was timely received. Respondent opened bids on December 13, 1991. Respondent posted its intent to award E4571 to J & D Tropical Landscape Design on December 20, 1991. Section 1.2 of the Bid Specifications for E4571, as modified by the Special Provisions, states: A contractor's bid shall be in the form of a unit price for each unit expected to be accomplished. The Special Provisions to E4571 require each bidder to submit a single unit price for each pay item called for in the Bid Price Proposal. Item 4 in the Special "Provisions provides: It shall be the responsibility of the Contractor to submit to the Department A SINGLE unit price for each pay item called for in the Bid Price Proposal. The Contractor shall be responsible for his/her method of averaging. Failure to comply shall result in the Contractor's Bid Proposal being declared "Irregular" and such Bid Proposals will be rejected. (emphasis added) Petitioner's Bid Proposal was properly declared irregular and rejected by Respondent. Petitioner failed to comply with the requirements of Item 4 in the Special Provisions by failing to submit a single unit price for each pay item, by failing to correctly average a unit price, and by failing to state the unit price in words. The Unit Price Sheet on page 23 of the Bid Proposals contains the following table listing item numbers A582- 2 through A584-4. Petitioner listed item number A583 as follows: ITEM PLAN ITEM DESCRIPTION AND UNIT PRICE $ AMOUNTS NUMBER QUANTITIES UNIT PRICE (IN FIGURES) (Exten- (IN WORDS) sion Price) 3/ A583 4 200.000 TREES (8' TO 20, 85 20400 PLANT ' HEIGHT OR CLEAR TRUNK) @ DOLLARS CENTS The actual extension price 4/ for 200 trees at $85 per unit is $17,000 rather than the $20,400 stated by Petitioner in the table on page 23. The "Contract Total" stated by Petitioner in the bottom right corner of the table is $37,013.20. The "Contract Total" that should have been stated if Petitioner intended the extension price of item number A583-4 to be $17,000 would have been $33,613. The "Contract Total" listed by a bidder on the Unit Price Sheet is the unverified contract price. The actual contract price is determined by Respondent pursuant to the formula given in Section 1.3 of the Bid Specifications. Section 1.3 of the Bid Specifications foil E4571 states: The contract price is defined as the sum of the unit bid price times the planned work for each item as shown on the Unit Price Sheet. Petitioner would have been the lowest successful bidder irrespective of whether Respondent had replaced the extension price for item number A583-4 and the "Contract Total" stated by Petitioner with the actual extension price for item number A583-4 and the actual "Contract Total" . However, Respondent is precluded from doing so by Section 3-1 of the Standard Specifications For Road ,and Bridge Construction ("Standard Specifications"), published by the Florida Department of Transportation (1991) and by the Special Provisions for E4571. Respondent follows "Section 3-1 of the Standard Specifications for the purpose of evaluating bid proposals. Section 3-1 is used, in part, to determine the extension price for item numbers listed on the Unit Price Sheet. Section 3- 1 provides in relevant part: In the event of any discrepancy in the three entries for the price of any item, the unit price as shown in words shall govern unless the extension and the unit price shown in figures are in agreement with each other, In which case they shall govern over the unit price shown in words. Petitioner did not show the unit price in words for any item number on the Unit Price Sheet, including item number A583-4. There is a discrepancy in the three entries for item number A583-4 on the Unit Price Sheet. Petitioner failed to show the unit price for item number A583-4 in words, and the unit price and extension price are not in agreement. Under such circumstances, Respondent interprets Section 3-1 of the Standard Specifications as requiring that Petitioner's bid be declared irregular and rejected. Respondent's interpretation of Section 3-1 of the Standard Specifications is reasonable and is consistent with the mandate in Item 4 of the Special Provisions for E4571. See Finding 4, supra. Furthermore, in practice, the correct unit price of a pay item is necessary to process payment under the contract and the contractor must submit invoices based upon the pay items and unit prices listed in its bid. The bid specifications for E4571 provide that a bidder is responsible for his or her own averaging of a stated unit price, and that if a bidder fails to provide a single unit price for each pay item on the Unit Price Sheet the bid shall be declared "Irregular" and will be rejected. The requirement to provide a single unit price for each pay item was emphasized by Respondent at the mandatory pre-bid meeting. Petitioner's representative attended the mandatory pre-bid meeting. No challenges were made to the bid specifications by any bidder.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a Final Order dismissing the protest filed by Petitioner. DONE AND ORDERED in Tallahassee, Leon County, Florida, this 20th day of February, 1992. DANIEL MANRY Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (964) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 20th day of February, 1992.
The Issue Whether the Department arbitrarily evaluated the bids submitted for State Job No. 10120-3522, or reviewed the bids in any manner that was fraudulent, illegal or dishonest. Whether the Department should set aside its notice of intent to award and rebid the contract. Whether Petitioner Kelly Brothers or Intervenor Tom Quinn was the lowest responsive bidder instead of Intervenor Hubbard, the prime contractor named in the notice of intent to award.
Findings Of Fact State Job No. 10120-3522 is a road construction project on State Road 674 that begins east of US 301 and ends at Pierce Bridge in Hillsborough County. The Department solicited for bids on the work and established June 19, 1991, as the date project bids were due. As part of the bidding documentation, prime contractors who submitted bids were required to use the bid blank issued by the Department for that purpose. In addition, prime contractors had to certify that they understood the Disadvantaged Business Enterprise (DBE) goal for the project was 11 percent of the total dollar amount bid for the project. All of the parties to this bid protest certified that they understood the DBE goal for this project. The 11 percent DBE goal was a bid specification that was not timely challenged through the bid solicitation protest process within 72 hours of receipt of project plans and specifications. Bidders who were unable to fully comply with the contract DBE goal were required to demonstrate good faith efforts had been made to meet the DBE goal. The means used by the Department to evaluate the good faith efforts were set forth in Rule 14-78.003, Florida Administrative Code, and the bid specifications. Kelly Brothers submitted the low bid on this project with the total project bid of $2,311,322.78. The dollar amount for the DBE goal listed on the DBE Utilization Form completed by Kelly Brothers was $205,989.12. The multiplication of this sublet amount into the project bid shows that Kelly Brothers achieved only 8.91 percent of the 11 percent DBE goal. To support its good faith efforts to meet the DBE goal, Kelly Brothers noted on the DBE Utilization Form that bid quotes were solicited from eleven certified DBEs on the project. It was further represented that seven of those contacted responded to Kelly Brothers' request, and two were actually used in the project bid submitted to the Department. Documentation of these good faith efforts as set forth in Rule 14- 78.003, Florida Administrative Code, and the bid specifications were not submitted with the bid. Instead, the DBE Utilization Form filed by Kelly Brothers simply stated, "Telephone log will be submitted if necessary." During the bid protest proceeding, Kelly Brothers supplied evidence of price quotes received from one DBE. This subcontractor was not listed on bid documents and the quotes were not included in the bid. Tom Quinn submitted the next lowest total project bid of $2,406,167.54. The dollar amount listed for DBE participation on the DBE Utilization Form submitted by Tom Quinn was $262,327.80. The multiplication of this sublet amount into the project bid shows that Tom Quinn achieved 10.9 percent of the 11 percent DBE goal. The person who completed the bid documents for Tom Quinn rounded the DBE utilization calculation to 11 percent, contrary to the mathematical procedure for the rounding of numbers set forth on the form. The goal was improperly rounded to the nearest tenth as opposed to the nearest tenth percent. Tom Quinn did not submit documentation of its good faith efforts to comply with the project's DBE goal. A reasonable inference exists that Tom Quinn did not submit the documentation because its mathematical error mistakenly shows that the DBE goal was met in its bid submission. Hubbard submitted the third lowest project bid of $2,748,991.70. The total dollar amount for DBE goal listed was $302,794.32. Nine DBE's were utilized by Hubbard. The calculations to determine the DBE percentage of the total project show an 11.01 percent DBE goal was achieved. The four remaining bids reached a DBE percentage of the total project that met or exceeded the DBE goal.
Recommendation Based upon the foregoing, it is recommended: The Department's evaluation of the bids submitted for State Job No. 10120-3522 should be upheld as a proper evaluation. The bids received from Kelly Brothers and Tom Quinn on State Job No. 10120-3522 should be deemed nonresponsive for failure to achieve the DBE participation goal and for failure to submit sufficient documentation of good faith efforts. The bid protests in this proceeding should be denied and the bid awarded to Hubbard, the apparent responsive low bidder. RECOMMENDED this 25th day of October, 1991, in Tallahassee, Leon County, Florida. VERONICA E. DONNELLY Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 25th day of October, 1991. APPENDIX TO RECOMMENDED ORDER, CASE NO. 91-5337BID Petitioner's proposed findings of fact are addressed as follows: Accepted. See HO #1. Accepted. See HO #12. Accepted. Accepted. Rejected. Contrary to fact. Respondent's proposed findings of fact are addressed as follows: Accepted. See HO #2. Accepted. See HO #2 and #5. Accepted. See HO #4. Accepted. See HO #7. Accepted. See HO #8. Accepted. See HO #8. Accepted. See HO #6. Accepted. Accepted. Accepted. See HO #12 and #13. Accepted. See HO #9 and #12. Rejected. Contrary to fact. Intervenor Tom Quinn's proposed findings of fact are addressed as follows: Accepted. See HO #1. Accepted. Accepted. Accepted. Rejected. Contrary to fact. COPIES FURNISHED: Michael F. Kayusa, Esquire TITUS & KAYUSA 1922 Victoria Avenue, Suite A Fort Myers, Florida 33911 Susan P. Stevens, Esquire Assistant General Counsel Department of Transportation 605 Suwannee Street, M.S. 58 Tallahassee, Florida 32399-0458 Ben G. Watts, Secretary Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32399-0458 Thornton J. Williams, Esquire General Counsel Department of Transportation 605 Suwannee Street, Rm 562 Tallahassee, Florida 32399 0458 Bruce Leinback, Esquire Cummings, Lawrence & Vezina, P.A. 1004 DeSoto Park Drive Tallahassee, Florida 32301 Thomas P. Parks, Qualified Representative Tom Quinn Company, Inc. 1321 77th Street East Palmetto, Florida 34221
Findings Of Fact Background The procurement of private legal services by the Department for child support enforcement is exempt from the competitive bidding requirements set forth in Chapter 287, Florida Statutes. In July 1992, the Department published notice that it was soliciting proposals from interested attorneys to provide intrastate and interstate child support legal services in HRS District VI, including Hillsborough, Hardee, Highlands, and Polk Counties. These services were to be provided from October 1, 1992, through June 30, 1993. Separate proposals were solicited for each of the following: the Hillsborough County Interstate Contract, the Hillsborough Intrastate Contract, the Polk County Contract, and the contract for Hardee and Highland Counties. The solicitation package does not incorporate any of the Florida Statutes or the agency's own rules regarding solicitation and award procedures in competitive bidding situations. Instead, the solicitation purports to be a self contained package of reasonably definite specifications with its own evaluation criteria and award procedures. The Petitioners in all four of the consolidated cases timely filed written protests which challenge the contents and requirements of the package. Evaluation Criteria In addition to the evaluation criteria contained in the solicitation package, the Department adopted and distributed to its employees additional criteria to be used in evaluating the proposals submitted. The additional criteria are set forth in the following documents which were entered into evidence as Belveal Exhibit No. 7: Work Sheet for Evaluating Criteria and Determining Relative Value to be Applied to Technical Information, Evaluation Criteria, Scoring Matrix for Structured Interview of Offerers, Work sheet for Scoring Oral Interview, and Questions for Use at Interview. The additional criteria set forth in these documents were intended for use to award points in the evaluation of offers, and to make the award of the contracts. They were not revealed to potential offerers. Such a procedure affords opportunities for favoritism, whether or not any favoritism is actually practiced by the Department. Once the representation is made in a solicitation package that it contains the evaluation criteria, the offerers should not be subjected to an additional evaluation process. Anne Donovan, Assistant Secretary of the Department of Health and Rehabilitative Services, admitted during hearing that the additional criteria which was not included in the solicitation package are intentionally biased to give existing legal services contractors an advantage in obtaining renewal of their contracts. This is contrary to the representation made in the solicitation package which states, "Through this solicitation for offers to provide legal services, the department seeks to obtain the highest possible standard of legal representation... while ensuring free and open competition among prospective offerers." Specifications The proposed contract to be executed at the conclusion of the bid solicitation and contract award process was to provide for compensation to the contractor based on (a) the number of cases referred to the contractor during the contract term, and (b) the number of final orders obtained by the contractor in these cases referred for action. The solicitation package contains a document identified as Attachment VI, which sets fort numbers purporting to be the Department's estimates of the number and type of cases which would be referred to the successful bidder during the course of each of the contracts, the number of payable orders to be expected, and the maximum fees which would be paid for each type of order obtained pursuant to the contract. Separate estimates have been given for the following contracts: Hillsborough County Intrastate, Hillsborough County Interstate, Polk County, and Hardee and Highlands Counties. The actual numbers set forth in each of the four separate contract proposals were estimates made by the field office staff of the Department and compiled by the headquarters office. Rosemary O'Neil, the contract manager in District VI, estimated the number of functions for each of the four contracts in District VI. In identifying the direct cost amount for each individual contract, she used automated and manual statistics or the tracking of functional activities for the past year. During the preparation of her projections, Ms. O'Neil tracked only nine activities, as originally required by the Department. Later, she was required to break these down into twenty-two functions, which may have adversely affected the estimates. Ms. O'Neil and other Department personnel testified that the estimates for District VI might be too low based upon past estimates and current needs. Ms. O'Neil completed the estimates in good faith and in accordance with the Department's stated requirements. Attachment VI also contains a fee schedule based upon a functional cost survey devised and carried out by the Department between April 15, 1991 and March 31, 1992. The survey randomly selected 3,800 cases throughout the state for tracking to determine the average cost the Department paid over the stated time period for each legal activity represented in the survey. During the survey, only 2,100 of these cases were actually tracked. In October 1992, the functional cost survey was changed to include 22 instead of 10 categories of legal service activity. The implementation of the survey was faulty in that different districts tracked attorney time and paralegal time in different ways. In addition, the administrative procedures utilized by judges and hearing officers in different districts directly affected statistics in ways which were not contemplated in the survey. Without uniform procedures, the legal services performed and attorney fees charged in different counties cannot be effectively reviewed on a comparable basis to create a true average cost per function. Many of the fees allocated to different functions in the specifications were illogical. For example: Fees paid for stipulated matters were, in many cases, higher than the fees paid for contested matters of the same type. Fees paid for simple matters, such as contempt hearings, were substantially the same as fees paid for more complex litigation involving the establishment of paternity and support. Certain orders obtained by the attorney, such as bankruptcy matters, required the expenditure of time by the contractor, but did not pay any fee. The functional cost survey used to establish the terms in the solicitations for estimated number of cases, types of cases and the maximum fees to be paid is defective as it relates to District VI. Proposals cannot be comparatively reviewed because the data upon which the proposals are created is inaccurate. After the contract award, it is reasonably anticipated that the Department would be required to make modifications to the contract which would afford opportunities for favoritism.
Recommendation Based upon the foregoing, it is RECOMMENDED: The previously undisclosed evaluation criteria should be included in the solicitation package if the Department intends to use them in the evaluation process. The current specifications on the projected number of cases to be referred in each contract in District VI should be revised to more reasonably and accurately reflect potential referrals within the District. The designated attorney fee for each function should be revised so that the charges are reasonably related to the work expected by the specifications in the proposal. The contents of the functional cost survey should be reevaluated based upon the evidence presented during the protest proceedings. The current specifications should be rejected as they are so flawed as to be arbitrary, in violation of state standards regarding the competitive bidding process. DONE and ENTERED this 22nd day of December, 1992. VERONICAL E. DONNELLY Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of December, 1992. APPENDIX Petitioner Carlton's proposed findings of fact are addressed as follows: Accepted. Accepted. See HO No. 1. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. See HO No. 5 Accepted. See HO No. 7 Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Rejected. Irrelevant. Rejected. Irrelevant. Accepted. See HO No. 16. Accepted. See HO No. 19. Accepted. See HO No. 17. Accepted. See HO No. 18. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. See HO No. 20 - No. 21. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Rejected. Contrary to fact. See HO No. 21. Accepted. See HO No. 21. Accepted. Accepted. See HO No. 12. Accepted. See HO No. 12. Accepted. See HO No. 15. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Rejected. Contrary to fact. See HO No. 22. Accepted. Accepted. Accepted. Accepted. - 81. Rejected. Without jurisdiction to determine. 82. - 87. Rejected. Beyond the jurisdiction of the Hearing Officer under the Grove-Watkins review standards. 88. - 100. Rejected. Beyond the jurisdiction of the Hearing Officer. Petitioner Redman's proposed findings of fact are addressed as follows: Accepted. Accepted. See HO No. 1. Accepted. Accepted. Accepted. Rejected. Contrary to fact. See HO No. 3. Accepted. Accepted. Accepted. Accepted. See HO No. 7. Accepted. Accepted. See HO No. 8 - No. 9. Accepted. See HO No. 16. Accepted. Accepted. Accepted. Accepted. Rejected. Irrelevant. Rejected. Irrelevant. Accepted. Accepted. See HO No. 20 and No. 22. Accepted. Accepted. See HO No. 17. Accepted. See HO No. 18. Accepted. See HO No. 16. Accepted. Accepted. Accepted. Accepted. See HO No. 19. Accepted. Accepted. Accepted. Accepted. Rejected. Irrelevant. Accepted. Accepted. See HO No. 20. The word "misleading" should be replaced by the "faulty". Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. See HO No. 20 and No. 22. Accepted. Rejected. Speculative. Accepted. See HO No. 21. Accepted. See HO No. 21. Accepted. See HO No. 21. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. See HO No. 22. Accepted. See HO No. 21. Accepted. See HO No. 21. Accepted. Accepted. See HO No. 21. Accepted. See HO No. 21. Accepted. See HO No. 21. Rejected, except for the determination that the specifications are arbitrary. All other allegations were not proved at hearing. Accepted. See HO No. 11. Accepted. See HO No. 12. Rejected. Contrary to fact. See HO No. 13. Accepted. See HO No. 13. Accepted. Accepted. Accepted. Accepted. Accepted. See HO No. 13. Accepted. See HO No. 13. Accepted. Accepted. - 105. Rejected. Beyond the hearing officer's jurisdiction. Accepted. Rejected. Contrary to findings, except the determination that the specifications were arbitrary and unreliable. Rejected. Beyond subject matter jurisdiction. Rejected. Competency not determined. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. See HO No. 20. Rejected. Contrary to fact. Accepted. Rejected. Contrary to fact. - 128. Rejected. Beyond subject matter jurisdiction. Petitioner Belveal's proposed findings of fact are addressed as follows: Accepted. Accepted. Accepted. Accepted. Accepted. See HO No. 1. Accepted. Accepted. Accepted. Accepted. See HO No. 2. Accepted. Accepted. See Preliminary Statement & HO No. 4. Accepted. See HO No. 11. Accepted. See HO No. 3. Accepted. Accepted. See HO No. 5. Accepted. See HO No. 5 - No. 6. Accepted. See HO No. 7. Accepted. See HO No. 10. Accepted. See HO No. 12. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. See HO No. 16. Accepted. Rejected. Irrelevant. Accepted. See HO No. 21. Accepted. Accepted. Accepted. Accepted. Accepted. See HO No. 21. Accepted. Accepted. See Preliminary Statement. COPIES FURNISHED: CHARLES L CARLTON ESQ 2120 LAKELAND HILLS BLVD LAKELAND FL 33805 CECELIA M REDMAN ESQ 2124 W KENNEDY BLVD - STE B TAMPA FL 33606 DONALD W BELVEAL ESQ 100 W KENNEDY BLVD - STE 600 TAMPA FL 33602 JACK EMORY FARLEY ESQ HRS DISTRICT VI LEGAL OFFICE 4000 W DR MARTIN LUTHER KING JR BLVD TAMPA FL 33614 JOHN DAVIS ESQ 1170 NE CAPITAL CIRCLE TALLAHASSEE FL 32308 JOHN SLYE ESQ GENERAL COUNSEL DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES 1323 WINEWOOD BLVD TALLAHASSEE FL 32399 0700
The Issue Was Petitioner responsive to the bid solicitation for Project E-2B59, Duval County (the project) by Respondent? Did Respondent act appropriately in rejecting all bids for the project?
Findings Of Fact Respondent solicited numerous firms to bid for a contract to conduct roadside mowing and litter removal under terms of the project. This included the edging of sidewalks, curbs, and gutters. The estimated cost of this project for budgetary purposes was $300,000. The project was to be completed within 365-calendar days with a renewal option. Only four firms responded to the bid solicitation notice. Petitioner and Intervenor were among those firms. In particular, the bid solicitation notice informed the bidders about the DBE goals for the project wherein it stated: This contract has minimum DBE goals of 10% Black and/or Hispanic. The DBE Utilization Summary Form 275-020-003, Rev. 10/95 must be included with the bid submission or the bid will be declared non-responsive. In addition, all DBE Utilization Form(s) S275- 020-004, Rev. 10/95 must be completed and received by 5:00 P.M. on the third business day following the letting or the bid will be declared non-responsive. In addition to other comments concerning 275-020-003, DBE Utilization Summary Form and 275-020-004, DBE Utilization Form, the bidders were provided the following instructions for completing those forms in relation to the project: Revised 5/96 INSTRUCTIONS FOR COMPLETING UTILIZATION FORMS 275-020-003 and 275-020-004 (REVISED 10/95) NOTE: THESE FORMS MUST BE COMPLETED IN ACCORDANCE WITH RULE CHAPTER 14-78, FLORIDA ADMINISTRATIVE CODE FORM 275-020-003, DBE UTILIZATION SUMMARY This form must have all information requested including total goal in dollars and total goal in percentage. No signatures are required. If the project has one DBE goal use one form. If the project has a split goal (i.e. 4% Black 4% Non-minority Women) use two forms, one for each goal. The completed form if not submitted with the bid, must be received by the Minority Programs Office no later than 5:00 p.m. on the third business day after the letting. Electronic transmittals (e.g. facsimiles) sent directly to the Department will not be accepted. FORM 275-020-004, DBE UTILIZATION FORM Complete the form indicating prime contractors, state project number and DBE name, address and phone number. Submit one form for each DBE utilized on the project. Make additional copies if necessary. The form submitted to the Department must be completed, signed by an authorized representative of the DBE and received by the Minority Programs Office by 5:00 p.m. on the third business day following the letting. Electronic transmittals (e.g. facsimiles) sent directly to the Department will not be accepted. The columns for "Item No." and "Description" shall include the same information as per the "Request to Sublet" form. The amount paid to a certified DBE supplier must be factored by 60% to attain the amount to be applied toward the DBE goal. Complete line showing "Total to DBE." It can be seen that the explanation provided by Respondent in its bid solicitation notice and the instructions for completing utilization forms are in conflict in relation to the time for submitting 275-020-003, DBE Utilization Summary Form. The bid solicitation notice mandated the provision of that form with the bid submission or the bid would be declared non- responsive. Whereas, the instructions for completing that form would allow a bidder until 5:00 P.M. on the third business day after the letting for receipt of that information by the Minority Programs Office in the event that the information had not been submitted with the bid. The bidders for the project were also provided with excerpts of Chapter 14-78, Florida Administrative Code, in relation to participation by socially and economically disadvantaged individuals in Department of Transportation contracts. Rule 14-78.003, Florida Administrative Code, was part of the excerpt. At 14-78.003 Subpart 2(b)3., provided to the project bidders, it states: For all contracts for which DBE contract goals have been established, each bidder shall meet or exceed or demonstrated it could not meet, despite its good faith efforts, the contract goal set by the department. The DBE participation information shall be submitted as outlined in 14-78.003(2)(b)3.a. and b. below. . . . Failure to satisfy information requirements shall result in contractor's bid being deemed non-responsive and the bid being rejected. The contractor's bid submission shall include the following information. . . and shall be submitted on a completed Disadvantaged Business Enterprise (DBE) Utilization Form, Form 275-020-004, Rev. 10/95 and Disadvantaged Business Enterprise (DBE) Utilization Summary Form, Form 275-020- 003, Rev. 10/95: The names, addresses, and current telephone numbers of the certified DBE firms that will participate in the contract; and A description of the work each named DBE certified firm will perform; and The dollar amount of participation by each named DBE certified firm; and Any documentation required by the contract or applicable rules as evidence of certified DBE participation; and Signature of an authorized representative of the certified DBE firm confirming the DBE utilization information; and Evidence that the DBE goal for the project has been met. If the DBE goal is not met, sufficient information must be provided to demonstrate that the contractor made good faith efforts to meet the DBE goals. In lieu of a completed Disadvantaged Business Enterprise (DBE) Utilization Summary Form, Department of Transportation Form 275- 020-003, Rev. 10/95, and a Disadvantaged Business Enterprise (DBE) Utilization Form, Department of Transportation Form 275-020- 004, Rev. 10/95, the contractor will submit a Disadvantaged Business Enterprise (DBE) Utilization Summary Form which indicates that either the contractor will achieve the DBE goal established for the project for which the bid has been submitted, or that the contractor has submitted sufficient information to demonstrate that the contractor made good faith efforts to meet the DBE goal as part of the bid submission. If the contractor has submitted a Disadvantaged Business Enterprise (DBE) Utilization Summary Form on which the contractor has indicated that the DBE goal will be achieved, the contractor will provide to the Minority Programs Office by 5:00 P.M. on the third business day following the bid letting day (Electronic transmissions, such as a FAX, sent directly to the Department will not be accepted): An updated Disadvantaged Business Enterprise (DBE) Utilization Summary Form listing the DBE subcontractors that will be utilized on the project to meet the DBE goal, the dollar amount of the DBE goal subcontracted to each DBE, and the total dollar amount for the DBE goal; and Disadvantaged Business Enterprise (DBE) Utilization Forms shall be completed and signed by an authorized representative of the DBE, for each DBE subcontract utilized on the project to achieve the DBE goal. Disadvantaged Business Enterprise (DBE) Utilization Forms that are not signed by an authorized representative of the DBE firm, will be rejected and will result in the bid being non-responsive. The bid solicitation notice tended to coincide with Rule 14-78.003(2)(b)3.b, Florida Administrative Code, with the exception that the bid solicitation notice did not call for the submission of an updated Disadvantaged Business Enterprise (DBE) Utilization Summary Form by 5:00 P.M. on the third business day following the bid letting. The Disadvantaged Business (DBE) Utilization Summary Form 275-020-003 provided to the bidders, in relation to paragraph 6.a. states: This form must be included in the bid submission and must be completed in accordance with one of the following options: Goal achieved with the following information completed (Note: All signed DBE Utilization forms 275-020-004 must be received by the District Contracts Office, 1901 S. Marion St., Lake City, Florida 32025, no later than 5:00 p.m. on the third business day after the letting). Later the form states: NOTE: Bids shall be declared non-responsive if the DBE Utilization Summary form providing all information listed in 6.a. above, and all completed DBE Utilization forms are not received by the District Contracts Office, 1901 S. Marion St., Lake City, Florida 32025, by 5:00 P.M. on the third business day following the letting. Electronic transmittals (e.g. Faxes) sent directly to the Department will not be accepted. This form is internally inconsistent in that it initially states that the Disadvantaged Business Enterprise (DBE) Utilization Summary Form must be included with the bid submission and later states that the DBE Utilization Summary Form providing the information will not be declared non-responsive if received by the District Office on the third business day following the letting. By contrast, consistent with the bid solicitation notice, the Disadvantaged Business Enterprise (DBE) Utilization Form 275-020-004, provided to the bidders for the project stated: NOTE: All DBE Utilization Forms submitted to the Department must be completed, signed by an authorized representative of the DBE and received by the District Contracts Office, 1901 S. Marion St., Lake City, Florida 32025, by 5:00 P.M. on the third business day following the letting. . . . Bids will be declared non-responsive if all DBE Utilization forms are not received by the District Contracts Office by 5:00 P.M., on the third business day following the letting. . . . Petitioner and Intervenor were represented at the pre- bid conference conducted by Respondent. From the discussion held in the pre-bid conference, Intervenor in the person of its President Bilal Saleem, understood that the Utilization Summary Form 275-020-003, was to be provided with the bid submission or the bid would be declared non-responsive. Consistent with that understanding Intervenor provided the DBE Utilization Summary Form with its bid submission. Petitioner did otherwise. When Intervenor submitted its bid response, it included the Disadvantaged Business Enterprise (DBE) Utilization Summary Form 275-020-003 reflecting its full quote of $241,971.40, in that Intervenor is a DBE firm. Petitioner provided a DBE Utilization Form 275-020-004 with its bid submission which was not signed on the signature line by the DBE representative submitting the quote found within Petitioner's submission. The submission of the Utilization Form noted that the amount to be paid to the DBE subcontractor was $59,200, out of a total price quote of $229,279. The unsigned Utilization Form described the activity as "mowing large machines" to be done by R & L Cleaning Services (Black), 2090 South Nova Road, Daytona Beach, Florida 32115, telephone no. (904) 761-1001. Petitioner's provision of the unsigned DBE Utilization Summary Form 275-020-004 with its bid submission was not in keeping with any instructions or explanations provided by Respondent concerning the manner in which DBE utilization would be described by bidders. Upon the third day following the bid opening, Petitioner submitted a DBE Utilization Summary Form 275-020-004 signed by the Vice President of R & L Cleaning Services, reflecting the same information as had been provided on the Utilization Form provided with Petitioner's bid submission. In addition, upon the third day following the bid opening, Petitioner provided the DBE Utilization Summary Form 275-020-003, reflecting R & L Cleaning Services as being the DBE subcontractor for a DBE goal of $59,200, representing 26 percent of the total project "price quotation," which was also reflected on that form. Given the inconsistencies in the information provided to Petitioner and other businesses solicited to bid on the project, the question arises whether Petitioner has sufficiently conformed to the expectations of Respondent for reporting information on DBE compliance. The issue of compliance by the reporting of DBE goals by Petitioner was promoted by action of the Respondent at the bid opening for the project on August 20, 1998, in which Intervenor whose price quotation was $241,971.40, second low quote, was declared the responsive low bidder for the project and a recommendation made to award the contract to Intervenor. This was followed by correspondence of August 31, 1998, from Respondent to Petitioner in which Jane E. Jones, District Contract Administrator for Respondent, District 2 informed Petitioner that its bid had been found non-responsive for the following reason: DBE Utilization Summary form was not completed and submitted with your bid. As per our advertisement and Florida Administrative Code 14-78, the DBE Utilization Summary form #275-020-003 must be submitted with your bid. Your bid did not include this form. In turn, Patrick Daugherty, Secretary and Treasurer for Petitioner, wrote Ms. Patsy Elkins of the Florida Department of Transportation on September 1, 1998, concerning Petitioner's response to the requirement for providing information on DBE compliance. This correspondence pointed out the instructions for completing Utilization Forms 275-020-003 and 275-020-004 as constituting the reason why Petitioner had taken advantage of the three-day period in which to submit DBE forms. This was followed by the Notice of Protest for the project dated September 2, 1998 and ultimately the Formal Protest dated September 9, 1998, by Petitioner. Although, submission of the unsigned Disadvantaged Business Enterprise (DBE) Utilization Form 275-020-004 with the bid documents did not comport with any instructions or information provided from Respondent to Petitioner, it does not matter. Beyond the submission of incomplete information on the wrong form at the time of the bid submission, Petitioner complied with the Respondent's instructions for completing the Utilization Forms 275-020-003 and 275-020-004 within the third business day after the letting. These facts are found in a setting in which Ms. Jones as District Contract Administrator, and policymaker, acknowledged the confusion in the instructions that had been given to the bidders concerning the submission of DBE compliance information and the lack of an explanation for declaring Petitioner non-responsive for failure to submit needed information, other than to state that some part of the instructions called for Petitioner to submit the DBE Utilization Summary Form 275-020-003 at the time the bid was submitted. On balance, the facts established Petitioner's compliance with the requirements to state DBE goals. Therefore, Petitioner is the apparent responsive low bidder. Rejection of All Bids Respondent through its bid tabulation had begun its posting on August 31, 1998, following its decision finding Intervenor the responsive low bidder. Respondent then determined as of September 3, 1998, to reject all bids "due to conflicting information in the bid package." This notice rejecting all bids was posted on September 3, 1998, with an ending date for posting of September 8, 1998. Addendum 4 also informed bidders that all bids had been rejected for the project "due to conflicting information in the bid package." While Intervenor had supported Respondent's decision to reject Petitioner's bid, Intervenor was in agreement with Petitioner's September 9, 1998 Formal Protest of the Respondent's decision to reject all bids. In the context of the decision to reject all bids, Ms. Jones discovered that only one of the four bidders on the project had received Addendum 3. Addendum 3 was dated August 7, 1998, and was only received by Intervenor among the four bidders. Addendum 3 stated: Addendum No. 3, Financial Project No. 21477217232, E-2B59 Attached are the Approximate Quantities with a brief explanation that these quantities are for one cycle and that the begin date for this contract will be January 1, 1999. Also, attached is a revised Bid Blank and Calendar of Events for this project. These forms must be utilized when bidding on this project August 20, 1998 at 2:00 p.m. Please sign, date and fax a copy of this addendum back to me by close of business today to indicate receipt. Also, include a copy of this addendum with your bid. As Ms. Jones explains, Addendum 3 was important in that it attempted to establish "posting rules" that had been left out before. Ms. Jones also expressed concern in that in the absence of receiving Addendum 3, Petitioner had not included a copy of Addendum 3 with Petitioner's bid submission. All participating bidders had received a copy of Addendum 1 for the project. Addendum 1 stated approximate quantities in relation to places and hectares to be addressed by the contractor. Addendum 1 in describing the attachment of that information stated: Attached are location sheets for the roadside mowing and litter removal, edging of sidewalk and curb and gutter sections for the above referenced project. Addendum 3 by its attachment pertaining to approximate quantities mirrored the attachments to Addendum 1, but its attachment had the following information in addition to that found within the attachment to Addendum 1: THE QUANTITIES LISTED ARE APPROXIMATE QUANTITIES FOR ONE CYCLE THE BID QUANTITIES ARE APPROXIMATE AND ARE GIVEN AS AN AID TO THE CONTRACTOR. THE ESTIMATED QUANTITIES OF WORK TO BE PERFORMED MAY BE INCREASED, DECREASED, OR OMITTED. THE CONTRACTOR WILL BE PAID FOR WORK COMPLETED AND ACCEPTED. THIS CONTRACT WILL BEGIN JANUARY 1, 1999. The calendar of events that was referred to in Addendum 3 as an attachment stated the following: FIN Project Number 21477217232 Contract Number E-2B59 Roadside mowing and litter removal, edging of sidewalk and curb and gutter sections. Duval County 06-29-98 Mailed Bid Solicitation Notice. 06-29-98 Published Advertisements in Florida Times Union, 07-06-98 Gainesville Sun, Tallahassee Democrat & Tampa Tribune 07-15-98 a MANDATORY PREBID CONFERENCE @ 2:00 p.m. Jacksonville Urban Office 2250 Irene Street Jacksonville, Florida Kelly Stroupe 904-381-8777 08-20-98 Bid opening - 2:00 P.M. - Large Conference Room 1901 South Marion St., Lake City, FL 32025 08-27-98 Evaluation committee meeting, Encumber funds. 08-31-98 Presentation of bid results to Executive Committee 08-31-98 4:15 p.m. - Begin Posting of Bid - 72 hours 09-07-98 5:00 p.m. - End Posting of Bid - 72 hours 09-30-98 Contract to Contractor for Signature 10-09-98 Execution of Contract and mail to Contractor(2), District Office Fiscal(2), Maintenance/Construction(3) District Office File(1) The Calendar of Events referring to the bid opening on August 20, 1998, was information found in Addendum 2. Obviously some of the events that were described in the calendar attached to Addendum 3 had already transpired before the August 7, 1998 preparation date of Addendum 3.
Recommendation Upon consideration of the facts found and conclusions of law reached, it is RECOMMENDED: That a final order be entered finding that Petitioner submitted a responsive bid for the project but upholding Respondent's decision to reject all bids. DONE AND ENTERED this 1st day of March, 1999, in Tallahassee, Leon County, Florida. CHARLES C. ADAMS 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 1st day of March, 1999. COPIES FURNISHED: Joseph A. Lane, Esquire Lowndes, Drosdick, Doster, Kantor and Reed, P.A. Post Office Box 2809 Orlando, Florida 32802 Brian F. McGrail, Esquire Department of Transportation Haydon Burns Building Mail Station 58 605 Suwannee Street Tallahassee, Florida 32399-0458 Bilal Saleem, Personal Representative Saleem Lawn Service, Inc. Post Office Box 26736 Jacksonville, Florida 32226 Thomas F. Barry, Secretary C/O James C. Meyers, Clerk Department of Transportation Haydon Burns Building Mail Station 58 605 Suwannee Street Tallahassee, Florida 32399-0458 Pamela Leslie, General Counsel Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32399-0458
The Issue At issue in this proceeding is whether the decision of the Department of Management Services (Department) to reject the bid of National Data Products, Inc. (NDP), as non-responsive departed from the essential requirements of law.
Findings Of Fact Background On December 4, 1992, the Department of Management Services (Department) issued Invitation to Bid number 79-250-040-B REBID (hereinafter "the ITB") to establish a contract whereby eligible users could purchase microcomputers and optional components during the period of January 15, 1993, through October 31, 1993. The deadline for submitting sealed bids in response to the ITB was established as 2:00 p.m., December 16, 1992. At the time of the deadline, the Department received a number of bids, including those of petitioner, National Data Products, Inc. (NDP), and intervenor, Mon-Wal, Inc., d/b/a the Waldec Group (Waldec). On December 21, 1992, following its evaluation of the bids, the Department posted its bid tabulation. The bid tabulation indicated, inter alia, that, although NDP was the apparent low bidder, its bid had been rejected as non-responsive, and that Waldec was declared the low responsive bidder. Pertinent to this case, the predicate for the Department's rejection of NDP's bid was its conclusion that NDP had failed to include, as required by the ITB, the manufacturer's suggested retail price lists with its bid. NDP filed a timely notice of protest and formal written protest to contest the Department's decision. Such protest contended that the manufacturer's suggested retail price lists were included with its bid or, alternatively, that had they not been submitted, such oversight was a minor irregularity that should be waived. The Invitation to Bid The stated purpose of the ITB was to establish pricing for the purchase of microcomputers and optional components to be added to an existing contract for use by all State of Florida agencies and other eligible users. Specifically, the ITB invited bids for three separate product lines, Hewlett Packard, NCR and Zenith, and a bidder could respond with regard to one or more of the product lines. This bid protest relates only to that portion of the ITB regarding the Hewlett Packard (HP) product line. The ITB, apart from specifying the HP product line, did not identify any particular HP product or volume. Rather, the ITB sought to establish pricing by requiring each bidder to specify a percentage discount off the manufacturer's suggested retail price of all HP microcomputer systems and peripheral products. Pertinent to this case, the general conditions of the ITB provided: 9. AWARDS: As the best interest of the State may require, the right is reserved . . . to reject any and all bids or waive any minor irregularity or technicality in bids received. * * * 15. PRICE ADJUSTMENTS: Any price decrease effectuated during the contract period by reason of market change shall be passed on to the State of Florida . . . Price increases are not acceptable. * * * 24. THE SUCCESSFUL BIDDER(S) MUST PROVIDE: A copy of any product literature and price list, in excellent quality black image or white paper, or on 4 x reduction microfiche, suitable for duplication (120 lines resolution or better). * * * NOTE: ANY AND ALL SPECIAL CONDITIONS AND SPECIFICATIONS ATTACHED HERETO WHICH VARY FROM THESE GENERAL CONDITIONS SHALL HAVE PRECEDENCE. . . . And, the ITB contained the following special conditions: LITERATURE DISTRIBUTION Successful bidder shall be required to furnish State agencies and political subdivisions with price lists, (printed) descriptive literature and technical data service information for items awarded. Bidders are urged to reserve approximately 1,500 price lists for this purpose. * * * PRICE DISCOUNT SCHEDULE Bidders of brand name microcomputer systems and optional components, shall complete the price discount schedule in the format provided. The following information will be included: a copy of the Manufacturer's Suggested Retail current Price list (current Price list is the latest price list in effect between the "date mailed" as shown on the ITB and the Bid opening date), number and date, bid discount for microcomputer configured systems, bid discount for optional components not purchased as part of a microcomputer system. Separate bid discounts for government and education are requested, however education bid discounts must be greater than government bid discounts, for a separate award to be made. (See EVALUATION and AWARD paragraph, page 16, for evaluation and award criteria.) PRICING The discount offered and awarded shall remain firm for any product placed on the contract resulting from this bid, or for products added to the contract at a later date through revision to the contract. * * * MANUFACTURER'S SUGGESTED RETAIL PRICE CHANGES When the list prices for products on the contract are reduced, the contractor shall submit new prices which reflect the same percentage off list price as was originally bid. When the contractor cannot continue to offer products at the contracted discount due to a general change in the manufacturer's pricing policy or other valid reasons, the State shall determine whether to allow the product line to remain on contract. The contractor shall provide to the Division of Purchasing, documentation to justify why the product line can no longer be offered at the contracted discount. The determination to allow the product line to remain on contract and under what conditions shall be at the discretion of the Division of Purchasing in the best interest of the State. In no instance may the new pricing result in an increase in net prices. Reductions in price shall be effective upon receipt of written notification to the Division of Purchasing and shall remain in effect for the balance of the contract term, unless further reduced by the contractor. In the event that the contractor announces a price reduction on any equipment listed on the contract prior to the purchaser's acceptance of said equipment, such price reduction shall be made available to the purchaser. * * * FORMAT FOR SUBMISSION OF BID PRICE SHEETS Referenced Price Lists, Ordering Instructions, Dealer Lists and Locations or Service Locations, required in this bid, must be submitted in hard copy with the bid package. Also provide with the bid package or within ten (10) working days after notification the identical information, in WordPerfect 5.1 format, portrait orientation with minimum 0.5 inch margins, Courier 10 pitch font, in hard copy and on 3.5 or 5.25 diskette media. Failure to comply will result in your contract being withheld from distribution. EVALUATION AND AWARD Bids will be evaluated as follows: Government and Education bids will be evaluated and awarded separately. The percentage (%) discount bid for each brand name, for each category (configured microcomputer systems and optional components), will be multiplied by an applicable usage factor, (the projected percentage purchases from each category) to be stated at the time of the bid opening, which will yield a weighted discount. The weighted discounts of the two categories will be added to yield the total weighted discount on which an award will be made. Awards will be made separately for Government, and Education (if applicable), to the responsive bidder offering the greatest total weighted discount. EVALUATION FORMULA (Micro (%) discount (x) usage factor) (+) plus (option components (%) discount (x) usage factor) = total evaluation (%) discount. * * * MICROCOMPUTERS AND OPTIONAL COMPONENTS PRICE DISCOUNT SCHEDULE GOVERNMENT EDUCATION Manufacturers MICROS OPTIONS MICROS OPTIONS Brand Name Catalog Date %DISCOUNT %DISCOUNT %DISCOUNT %DISCOUNT HEWLETT PACKARD 1(A) (B) (C) -NA- (D) -NA- NCR 2(A) (B) (C) (D) ZENITH 3(A) (B) (C) (D) MSPR: Manufacturer's Suggested Retail Price from which discounts will be taken. Micros: Percentage discount for microcomputer systems. Options: Percentage discount for optional components when purchased Separately, not as a part of a microcomputer system. Responses to the ITB The price discount schedules submitted on behalf on NDP and Waldec were virtually identical except for the discounts offered. Each specified the HP catalog of October 1992 as containing the manufacturer's suggested retail price for personal computer products and the HP catalog of November 1992 for peripheral products from which percentage discounts would be taken for microcomputer systems and optional components. As to discounts, NDP bid 32.02% for microcomputer systems and 38.05% for optional components, and Waldec bid 25.90% for microcomputer systems and 39.92% for optional components. Following the bid opening, at which the bids were announced and tabulated, the bid documents were transported to the office of a Department purchasing specialist charged with the responsibility of evaluating the bids. Applying the evaluation criteria established by the ITB, NDP was calculated to be the apparent low bidder; however, because NDP's bid failed to include the MSRP lists, when examined by the specialist, it was declared non-responsive. The bid of Waldec, which scored second under the evaluation criteria, was found to include copies of the MSRP list referenced in its price discount schedule and was declared the low responsive bidder. The Manufacturer's Suggested Retail Price (MSRP) List With regard to Hewlett Packard, and ostensibly all manufacturers, there is only one manufacturer's suggested retail price (MSRP) at any given time. That price may be established by reference to the MSRP list published by the company, as well as any addenda that may be pertinent. Hewlett Packard publishes separate MSRP lists for personal computer products and peripheral products at 90 day intervals and updates those lists on a monthly basis, as needed, through addenda, its "In Touch" publication, and "The Hewlett-Packard News Network." Each method used by HP to update its quarterly MSRP list is expected to provide identical information, and each is considered an addendum to its quarterly MSRP list from which the current MSRP can be derived. 2/ Here, the proof demonstrates that the "Manufacturer's Suggested Retail current Price list (current Price list is the latest price list in effect between the `date mailed' as shown on the ITB and the Bid opening date)" which the ITB directed should be included with the bid, was the HP quarterly MSRP list of October 1992 for personal computer products, the HP quarterly MSRP list of November 1992 for peripheral products, and an addendum effective December 1, 1992 (whether by addenda, "In Touch" or "The Hewlett-Packard News Network"), for personal computer products. NDP contends that included with its bid were copies of the October 1992 and November 1992 MSRP lists for personal computer products and peripheral products, respectively, and a copy of the December 1, 1992, "In Touch" newsletter. The parties have stipulated that if NDP's bid included such documents it was responsive to the ITB. Compared with NDP's averred response, Waldec's bid included a copy of the October 1992 MSRP list for personal computer products and the November 1992 MSRP list for peripheral products, but no addenda to reflect price changes affecting personal computer products through the bid opening date. Notwithstanding, the Department has found Waldec's bid responsive. Such finding, discussed more fully infra, mitigates against the Department's contention that any failure to include MSRP lists with the bid constitutes a material deviation. The missing price lists To support its position that its bid included the HP MSRP lists, NDP offered, inter alia, the testimony of Carol Hutchins, Kyle Peterson, and Jacqueline Smith. Ms. Hutchins is the government sales manager for NDP at its offices in Clearwater, Florida, and prepared NDP's bid. Mr. Peterson is the general manager of the Tallahassee branch office of NDP, and was responsible for delivering NDP's bid to the Department. Ms. Smith is employed in the Tallahassee branch office, and is engaged in government sales on behalf of NDP. The bid prepared on behalf of NDP by Ms. Hutchins ostensibly included a copy of HP's MSRP list of October 1992 for personal computer products, HP's MSRP list of November 1992 for peripheral products, and HP's "In Touch" newsletter for December 1992. This bid package, along with two blank copies of the price discount schedule (page 23 of the ITB) in case NDP decided to alter the discount it initially established in its bid before submittal, was shipped via Federal Express to Mr. Peterson at NDP's Tallahassee branch office. According to Mr. Peterson, the package was delivered to his office at or about 11:00 a.m., December 16, 1992, and placed on his desk. When he opened it, Mr. Peterson observed NDP's response to the ITB, as well as the MSRP lists heretofore discussed. Notwithstanding that the role of the Tallahassee branch was "very minor . . ., to act as courier for the bid and ensure that it was delivered in a timely manner," the bid package was disassembled at least twice within that office. First, Ms. Smith thought it would be a good idea to make a copy of the bid for their files, so she made a copy of NDP's bid, but not the MSRP lists. According to Ms. Smith, after making the copy she replaced the original bid on top of the MSRP lists on Mr. Peterson's desk. Second, NDP elected to change the discount rate it initially proposed so a new price discount schedule was typed by Mr. Peterson's staff, and he exchanged the new page for the old page in the bid document. Thereafter, according to Mr. Peterson, he inserted the bid package, including the price lists, into an envelope which he sealed and delivered to the Department shortly before the bid opening, to-wit: at 1:49 p.m., December 16, 1992. Both Mr. Peterson and Ms. Smith attended the bid opening and, at hearing, related what they recalled of the scene and procedures utilized. Regarding significant matters, their recitation of what occurred bore little resemblance to what actually transpired. For example, Mr. Peterson described the tenor of what occurred during the bid opening as one of confusion, when the more compelling proof demonstrates the contrary. Indeed, the two purchasing agents and the purchasing specialist who conducted the opening did so with precision and in accord with Department policy. Mr. Peterson, likewise, described the table upon which the bids were opened as being upon a raised platform when in fact it was not, and recalled that the purchasing agent who opened the bids separated the envelopes from the bid packages before passing the bid package to the purchasing specialist to announce the bid, which she did not. Finally, notwithstanding the limited nature of their involvement with the bid, as well as the fact that each was taking notes as each bid was announced, Mr. Peterson and Ms. Smith aver that they saw the price lists attached to NDP's bid when it was announced. As for Mr. Peterson, he averred that he noticed "stapled" booklets included with NDP's bid which could only have been the price lists. Ms. Smith recalls that the thickness of the bid package she observed at opening compels the conclusion that the price lists were attached. Given the circumstances, the testimony of Mr. Peterson and Ms. Smith regarding their observations at bid opening, and having specific recall regarding the presence of "stapled" booklets or the thickness of the package, is less than compelling. Regarding the bid opening procedure, the proof demonstrates that it was carefully and precisely run, consistent with Department policy. The first purchasing agent was seated on the left of the bid opening table, the purchasing specialist was seated in the center, and the second purchasing agent was seated to the right. The first agent had the sealed bids stacked alphabetically in front of her, opened one at a time, removed the contents from the envelope, placed the contents on top of the envelope and secured them with a rubber band, and passed the bid package to the specialist. The specialist opened the bid to the price discount schedule (page 23 of the ITB), read off the discount bid, and laid the bid package upside down to his right. Continuing through the responses, each bid or no bid was announced and placed on the appropriate stack to his right. The second agent recorded the bids on the bid tabulation sheet, as announced, and never touched the bid packages. Following the bid opening, the first agent retrieved the bids and, as to each bid, cut the date stamp off the envelope and stapled it to the first page of the bid form and, if the bid contained a form requesting notice of the bid result and a check for such service, removed the form and check and stapled them together for delivery to another employee to process. 3/ The bids, each separately secured by a rubber band, were then stacked and secured by another rubber band and taken to the office of another purchasing specialist for evaluation. When the agent took the bids from the bid room, no papers were left behind. The specialist who evaluated the bids found them in his office, as bound by the agent, between 3:15 p.m. and 3:30 p.m. that day, or approximately 45 minutes to one hour after the bid opening concluded. The specialist went through each bid separately to ascertain its responsiveness to the conditions of the ITB, and calculated the apparent low bidder by application of the evaluation formula contained in the ITB. Upon evaluation of NDP's bid, the specialist discovered that it did not include the price lists required by the ITB, and concluded that NDP's bid was, therefore, non-responsive. Considering the proof, it is most unlikely that the price lists that were to be included in NDP's bid were misplaced by the Department. Rather, it is more likely that such price lists were not included with NDP's bid, when it was delivered to the Department, because of an oversight at NDP's Tallahassee branch office. While the proof fails to support the conclusion that NDP's bid included the HP price lists when delivered to the Department, such failure is not dispositive of NDP's protest where, as here, such failing was a minor irregularity. Minor irregularity Rule 60A-1.001(31), Florida Administrative Code, defines the term "minor irregularity" as" A variation from the invitation to bid . . . terms and conditions which does not affect the price of the bid . . ., or give the bidder . . . an advantage or benefit not enjoyed by other bidders . . ., or does not adversely impact the interests of the agency. Here, the Department rejected NDP's bid based on a uniform policy which it has established that the omission of a price list from any bid can never constitute a minor irregularity and always renders a bid non-responsive. The justification for such policy was stated as follows: . . . The purpose of requiring price lists is to insure that the vendor is bidding on the material that he has offered, that he has been certified by the manufacturer to act in their behalf. It also gives [the Department] the information by which [the Department] can provide price lists to agencies so the using agencies know the price lists from which they expect the discounts. Tr. 247. . . . A bidder can obtain a competitive advantage over competitors by failing to submit price lists with its bid because the bidder would then have the ability to disqualify its own bid in the event their quotation was out of line with the other bidders. Tr. 246. Also, by failing to submit a price list, a vendor may attempt to rely on price lists reflecting higher prices for the ultimate contract with the state. Tr. 268. [Department proposed findings of fact 21 and 22.] While the Department's concerns or rationale may be legitimate, depending on the facts of the case, they do not rationally support a uniform policy that a failure to include price lists with any bid can never be a minor irregularity. Stated differently, to explicate application of its policy in this case requires that the Department demonstrate that the concerns underlying its policy are existent in the instant bid. Here, at least with regard to NDP's bid, the proof fails to support the Department's policy. Of import to the resolution of the issue in this case are the provisions of the ITB regarding the price discount schedule, as follows: Bidders of brand name microcomputer systems and optional components, shall complete the price discount schedule in the format provided. The following information will be included: a copy of the Manufacturer's Suggested Retail current Price list (current Price list is the latest price list in effect between the "date mailed" as shown on the ITB and the Bid opening date), number and date, bid discount for microcomputer configured systems, bid discount for optional components not purchased as part of a microcomputer system. NDP's bid, consistent with Waldec's bid, specified the Hewlett Packard price lists of October 1992 and November 1992 as being the "current Price list" upon which it based its bid. Such lists are readily identifiable, and permitting NDP to provide such price lists after bid opening would not affect the price of its bid, give it any advantage or benefit not enjoyed by other bidders or adversely affect the interests of the agency. Also of import to the resolution of the issue in this case is the proof which demonstrates that during the course of its evaluation the Department did not know what the current price lists were, relied upon the bidders to comply with the requirement to attach current price lists, accepted Waldec's bid as responsive although it failed to include the December 1992 addendum, and proposed to rely on the manufacturer to resolve any disputes regarding discrepancies between lists. Such proof demonstrates that the price lists were a mere technicality, and that the provisions of the ITB, which specified the basis on which the bids were predicated as the manufacturers "current" price list, defined as "the latest price list in effect between the `date mailed' as shown on the ITB and the Bid opening date," were sufficiently precise to allow the parties to confidently contract. Here, none of the announced concerns of the Department, as set forth in paragraph 24 supra, have any applicability to NDP's bid. NDP's response to the price discount schedule was sufficiently precise to identify the price lists on which it was bidding (the material being offered), it submitted the required manufacturer's certificate demonstrating NDP was authorized to represent Hewlett-Packard (page 21 of the ITB), the provisions of the ITB required the successful bidder to furnish the state agencies and political subdivisions with price lists (page 10 of the ITB) after award, and NDP's identification of the price lists in the price discount schedule would preclude it from altering its bid after bid opening. In sum, NDP's failure to include the price lists with its bid was a minor irregularity that did not affect the price of the bid, give NDP an advantage or benefit not enjoyed by other bidders, or adversely affect the interests of the agency.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be rendered finding NDP's bid responsive, and awarding the subject bid to NDP as the lowest responsive bidder. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 31st day of March 1993. WILLIAM J. KENDRICK Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 31st day of March 1993.
The Issue The issues in this proceeding are whether Gilbert’s bid proposal was responsive to the Department of Transportation’s bid proposal, and whether the Department of Transportation (Department) erred in accepting the bid of Gilbert. State alleged that Gilbert failed to comply with the DBE bid information submittal requirements of Rule 14-78.003(2)(b)3.a., Florida Administrative Code, in filing the DBE forms for the project.
Findings Of Fact State and Gilbert, among other prequalified bidders, submitted timely bids for State Project No. 86075-3423/03175- 3426, which involves the replacement of toll plazas on State Road 93 (also known as Alligator Alley) in Collier and Broward Counties. The project has been referred to in this proceeding as “the Alligator Alley project.” (Agreed Facts) The Department has adopted Rule Chapter 14-78, F.A.C., to govern utilization of DBE’s on state and federally funded construction projects. The specifications for the Alligator Alley project also include Special Provisions for Disadvantaged Business Enterprises, which incorporate many of the requirements of Rule 14-78.003, Florida Administrative Code. Consistent with Chapter 14-78, Florida Administrative Code, and the Special Provisions, the Department assigned Disadvantaged Business Enterprise (DBE) goals to the Alligator Alley project requiring bidders to subcontract 4% of the work to black DBE’s and 8% of the work to non-minority women DBE’s. (Agreed Facts) State and Gilbert submitted their sealed bid packages to the Department before the advertised deadline for bids, 10:30 a.m. on August 28, 1996. A Department review of the amounts bid showed that Gilbert was the apparent low bidder, submitting a bid totaling $9,153,215.07, while State was the apparent second-low bidder, submitted a bid totaling $9,566,051.25. (Agreed Facts) Consistent with Rule 14-78.003(2)(b)3., Florida Administrative Code, and the bid specifications, bidders were permitted to submit DBE Utilization Summary Forms and DBE Utilization Forms within 72 hours after submittal of their bid packages. State and Gilbert timely submitted DBE Utilization Summary Forms, showing the total amount committed to be subcontracted to DBE’s in order to meet each of the DBE goals set for the contract. The two companies also timely submitted DBE Utilization Forms that purported to commit each bidder to subcontract with DBE’s in amounts that totaled those shown in the DBE Utilization Summary Forms. (Agreed Facts) Gilbert’s DBE Utilization Summary Form stated that Gilbert would subcontract $369,000 (or 4% of its total bid) to black DBE’s and $734,600 (or 8% of its total bid) to non-minority women DBE’s. State’s DBE Utilization Summary Form stated that State would subcontract $400,000 (or 4% of its total bid) to black DBE’s and $800,000 (or 8% of its total bid) to non-minority women DBE’s. (Agreed Facts) The Special Provisions of the bid specifications that address the DBE Forms provide as follows: The contractor’s submission shall include the following information (submitted on Form Nos. 275-020-003 Utilization Summary and 275-020- 004 Utilization Form): The names, addresses of certified DBE firms that will participate in the contract. Only DBEs certified by the Department at the time of the bid may be counted toward DBE goals. A description of the work each named DBE firm will perform. The dollar amount of participation by each named DBE firm. If the DBE goal is not met, sufficient information to demonstrate that the contractor made good faith efforts to meet the goals. (Agreed Facts) [Emphasis Supplied] Gilbert submitted DBE Utilization Forms for each of its DBEs stating the DBE’s name, address, telephone number, the signature of the DBE or authorized individual. Gilbert submitted a DBE form for Alco Trucking, a firm owned by a Black male, which stated the value of the subcontracting work to be done as $369,000 without reduction or qualification, and stated regarding the work to be done as follows: Item No. Description of Work (Note if item qualifies for supplier) Various Hauling, aggregates, fill, on site trucking Gilbert submitted a DBE form for Swiftline Trucking, a firm owned by a non-minority female, which stated the value of the subcontracting work to be done as $82,200, without reduction or qualification, and stated regarding the work to be done as follows: Item No. Description of Work (Note if item qualifies for supplier) Various Hauling, aggregates, fill, on site trucking Gilbert submitted a DBE form for Jayalden Enterprises, a firm owned by a non-minority female, which stated the value of the subcontracting work to be done as $264,000, without reduction or qualification, and stated regarding the work to be done as follows: Item No. Description of Work (Note if item qualifies for supplier) 735-74-A Toll Plaza (Partial) 735-74-B Toll Plaza (Partial) Gilbert submitted a DBE form for Precision Contracting, a firm owned by a non-minority female, which stated the value of the subcontracting work to be done as $305,000, without reduction or qualification, and stated regarding the work to be done as follows: Item No. Description of Work (Note if item qualifies for supplier) 544-75-5 Impact Attenuator Vehicular (Partial) 102-1-A MOT (Partial) On each DBE form, Gilbert filled in the line for an “amount to be paid to DBE Subcontractor” and the total committed “toward the DBE goal,” but did not fill in the line for “Amount to be paid to DBE Supplier.” (Agreed Facts) State submitted DBE Utilization Forms for each of its DBEs stating the DBE’s name, address, telephone number, the signature of the DBE or authorized individual. State submitted a DBE form for Metro Engineering Constractors, Inc., a Black owned business, which stated the value of the subcontracting work to be done as $400,000 without reduction or qualification, and stated as follows: Item No. Description of Work (Note if item qualifies for supplier) 120-6 Embankment and 285-701 Limerock Base and Haul & Supply Materials 285-709 Limerock Base and Earthwork State submitted a DBE form for Freedom Pipeline Corporation, a non-minority female owned business, which stated the value of the subcontracting work to be done as $800,000 without reduction or qualification, and stated as follows: Item No. Description of Work (Note if item qualifies for supplier) 121-70 Flowable Fill 400-1-2 Class I Concrete Endwalls through Storm Drainage 514-71-3 Plastic Filter Baric (Riprap) and 1513120-118 Pipe Ductile Iron Pusyh on Joint 8” and 415-1-3 Reinforcing Steel Retaining Walls Retaining Walls and 635-1-11 Pull & Junction Boxes through Sewer & Water 1648100-7 Misc Water Fixt Blow Off Assy 285-701 Limerock Base and Haul & Supply Materials 285-709 Limerock Base and Earthwork State indicated on its DBE forms that both contractors were suppliers of materials and indicated that the total amount of the contract in both cases was to go to the DBE contractor. The Department’s Minority Programs Office is responsible for the implementation of the Department’s DBE program and reviews the DBE Utilization Forms submitted with bids. Kenneth Sweet, who is employed in the Minority Programs Office, had responsibility for reviewing Gilbert’s DBE Utilization Forms and determined that they complied with Rule 14-78.003(2)(b)3.a., Florida Administrative Code, and the Special Provisions of the bid specifications addressing DBE’s. The Department did not contact Gilbert or any of the DBE’s listed on Gilbert’s forms to confirm or obtain clarification of the information stated thereon. (Agreed Facts) The Department posted the bid tabulations for the Alligator Alley project, showing an award to Gilbert as the lowest responsive bidder. State filed its Notice of Protest with the Department’s Clerk of Agency Proceedings on September 23, 1996, 1996, and filed its Formal Protest on October 2, 1996. After this matter was referred to the Division, Gilbert filed its Petition to Intervene on October 22, 1996, which was granted on October 25, 1996. (Agreed Facts) It was stipulated that all of the DBE’s reflected in the DBE Utilization Forms submitted by Gilbert and State were certified DBE’s. (Agreed Facts) Gilbert’s DBE Utilization Forms were submitted to the Minority Programs Office within 72 hours after the project letting and the forms were signed by DBE representatives. The Department is dependent upon the accuracy of the information provided by the bidders to assess DBE participation. Gilbert and one of its DBE’s did not have the identical understanding of the exact scope of the work to be performed by the DBE which might impact how much of the value of the contract would be credited for DBE participation; however, there is no evidence of collusion or fraud in any of the quotes. The Department credits 60% of the value of a contract when the DBE contractor is a supplier of materials, and 100% of the value of the contract when the DBE Contractor furnishes and installs the materials designated as furnish and install items in the specifications. The toll booths and attenuators were not furnish and install items. Gilbert included 100% of the value of the contracts with Alco, Swiftline, Precision and Jayalden as DBE participation. The Department accepted Gilbert’s representations as presented in its DBE forms without questioning what services were being performed or provided by these DBE Contractors. Ken Sweet of the Department’s DBE programs office testified. The Department's justification for not examining the DBE proposals more closely was that the Department requires the prime contractor to adhere to the amount of the DBE work as presented in the forms. While this may be sufficient to maintain the integrity of the DBE program, it is insufficient review to insure that the contractor has complied with the rules for crediting DBE participation and to insure the competitiveness of the bid process. Although Gilbert asserted at hearing that its subcontractors, Swiftline and Alco, would be supplying and placing the materials, it did not so state in its forms. The forms for Alco and Swiftline said, "hauling, aggregates, fill, and on site trucking." There was no basis for the Department to conclude that the contractors were supplying and placing the materials. Further, there was no evidence that Alco and Swiftline were "regular dealers" in fill or aggregates, or identification of their sources of aggregate and fill. Gilbert indicated no item numbers with regard to Alco and Swiftline. If item numbers had been provided, the status of the work as furnish and install items could have been determined. Only two verb forms were used in the "Description of Work" portion of form: “hauling” and “trucking”. Petitioner showed that the value of the contract exceeded the reasonable value of the trucking and hauling to be done on the project. At hearing, Gilbert asserted that Swiftline and Alco were suppliers. This evidence may not be considered. The Department should have limited Gilbert's DBE credit to the value of the hauling and trucking. This was the only work described in the DBE utilization forms. Although the value of the trucking and hauling alone was not proven, it obviously was less than the full contract amount. Gilbert had stated the DBE participation amounts at the minimum required amount. Any reduction of amount creditable to a Black minority contractor would have placed Gilbert below the four percent goal stated in the specifications. The Department credited Gilbert with 100% of the value of the contract with Jayalden towards DBE participation. The DBE Utilization Form for Jayalden does not indicate Jayalden is a supplier or regular dealer. The form does not state Jayalden would install the toll booths. A contractor may obtain 100 percent credit for DBE participation for materials provided by a DBE manufacturer, a DBE regular dealer or a DBE who furnishes and installs items designated furnish and install items in the specifications. The Department knew there were only two approved manufacturers of toll booths. Jayalden was not one of the manufacturers. Neither of the manufacturers were DBE certified. Gilbert's DBE forms did not identify Jayalden as a "regular dealer," and the toll booths were not designated furnish and install items in the specifications The Department must approve additional items as furnish and install items if not designated in the specifications. The Department did not add the toll booths as furnish and install items. The evidence shows that the manufacturer offered to provide the toll booths and install the toll booths for $75,000 each. Jayalden agreed to acquire, ship and install the booths for $76,000 each. A question arises regarding the commercially useful function Jayalden was performing if the manufacturer would furnish and install the nine booths for $75,000 each. In response to the question regarding the commercially useful function Jayalden performed, evidence was presented that Jayalden assumed responsibility for this acquisition and installation of the booths and Jayalden relieved the contractor of "managing" that part of the project. The rules required the Department's approval of the commission or fee paid for management services of this type. The rules do not permit credit for DBE participation of the value of the toll booths. This would reduce the credit for minority non- Black participation by Jayalden from $684,000 to $9,000, less than the required non-Black minority DBE participation. The evidence regarding Precision established Precision was a regular dealer in traffic control devices, and contracted to supply, service and install these devices on the project. The DBE Utilization Form for Precision indicates the Item No. and indicates "Impact Attentuator Vehicular (Partial)" and "MOT (Partial)". Precision's form provided sufficient data to justify being given 100% credit. Gilbert's other DBE forms did not present any special condition warranting increasing DBE credit. The DBE Utilization Forms as submitted by Gilbert failed to mention or identify any special conditions or circumstances affecting the amount of credit Gilbert received for DBE participation. The facts submitted at hearing reveal that at least one special condition or circumstance was applicable to each subcontractor in order to justify crediting Gilbert with 100% of the value of the contract with the DBE toward DBE participation. With exception of Precision, the information was provided only after the bid opening and improperly supplemented the original proposal. The Department had previously approved DBE Utilization Forms providing the same type of information as contained on Gilbert’s DBE Utilization Forms. Had the Department reviewed the proposals as required, Gilbert would have been determined not to have met the DBE specifications. Gilbert did not justify its failure to meet the DBE participation because it facially had met the DBE criteria under the Department's existing policies. In contrast, the DBE form submitted by State for Metro indicates the items numbers involved, and that Metro will “Haul & supply materials and earthwork.” Similarly, the work to be performed by Freedom Pipeline was clearly identified and sufficient information provided to advise the Department of any special conditions affecting the credit to be awarded for DBE participation. One can readily ascertain that the subcontractor is a hauler, supplier and installer of the limestone, and that the contractor should receive 100% credit for minority participation of the contract's value. State was able to meet the DBE participation specification.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is, RECOMMENDED: That the Department enter its Final Order finding that Gilbert was non-responsive; however, because Gilbert followed the existing policies of the Department which were erroneous, it is recommended that the Department reject all bids and republish the invitation to bid to afford interested contractors an opportunity to file new proposals. DONE and ENTERED this 3rd day of February, 1997, in Tallahassee, Florida. STEPHEN F. DEAN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 3rd day of February, 1997.
The Issue Whether Respondent Department of Transportation’s intended decision to conduct negotiations with Xerox State and Local Solutions, Inc., under ITN-DOT-13/14-8001-SM is contrary to the Department’s governing statutes, rules, or policies or to the solicitation specifications.
Findings Of Fact The ITN The Department is an agency of the State of Florida charged with planning, acquiring, leasing, constructing, maintaining, and operating toll facilities and cooperating with and assisting local governments in the development of a statewide transportation system. § 334.044(16)-(22), Fla. Stat. (2013).1/ The Department is authorized to enter contracts and agreements to help fulfill these duties. See §§ 20.23(6) and 334.044(7), Fla. Stat. FTE is a legislatively created arm of the Department and is authorized to plan, develop, own, purchase, lease, or otherwise acquire, demolish, construct, improve, relocate, equip, repair, maintain, operate, and manage the Florida Turnpike System. § 338.2216(1)(b), Fla. Stat. FTE is also authorized to cooperate, coordinate, partner, and contract with other entities, public and private, to accomplish these purposes. Id. The Department has the express power to employ the procurement methods available to the Department of Management Services under chapter 287, Florida Statutes.2/ § 338.2216(2), Fla. Stat.; see also Barton Protective Servs., LLC v. Dep’t of Transp., Case No. 06-1541BID (Fla. DOAH July 20, 2006; Fla. DOT Aug. 21, 2006). OOCEA (now known as the Central Florida Expressway Authority), MDX, and THEA are legislatively created or authorized agencies of the State with the power to fix, alter, charge, establish, and collect tolls, rates, fees, rentals, and other charges for the services and facilities system. §§ 348.0003(1)- .0004(2)(e), Fla. Stat. Each of these authorities has the power to enter contracts and to execute all instruments necessary or convenient for the carrying on of its business; to enter contracts, leases, or other transactions with any state agency or any other public body of the State; and to do all acts and things necessary or convenient for the conduct of its business and the general welfare of the authority in order to carry out the powers granted to it by law. § 348.0004(2)(g), (h), (k), Fla. Stat. On November 1, 2013, the Department advertised the ITN, soliciting proposals from vendors interested in participating in competitive negotiations for the award of a contract to provide a CCSS and associated operations and maintenance. The ITN was issued pursuant to section 287.057, Florida Statutes. The purpose of the ITN is to replace the existing customer service center systems of FTE, OOCEA, THEA, and MDX with a CCSS that can be expanded over time to include other tolling and transit agencies in the State of Florida. The CCSS is expected to process nearly all electronic toll transactions in Florida. The successful vendor will enter a contract directly with the Department. The Department will then enter agreements with the other authorities to address coordinated and joint use of the system. Generally, the ITN sets forth a selection process consisting of two parts. Part one involves: (a) the pre- qualification, or shortlisting, of vendors in order to determine a vendor’s eligibility to submit proposals; and (b) the proposal submission, evaluation, and ranking. Part two is the negotiation phase. The instant proceeding relates only to part one. Part two -- negotiations -- has yet to occur. The TRT and Selection Committee – The Evaluators Cubic alleges that “not all of the members of either [the Technical Review or Selection Committee] teams had the requisite experience or knowledge required by section 287.057(16)(a)1., Florida Statutes.” Accenture alleges that “the Selection Committee did not collectively have expertise in all of the subject areas covered by th[e] ITN.” Section 287.057(16)(a) provides in part that the agency head shall appoint “[a]t least three persons to evaluate proposals and replies who collectively have experience and knowledge in the program areas and service requirements for which commodities or contractual services are sought.”3/ In accordance with the requirements of section 287.057(16)(a), the ITN established a Technical Review Team (TRT) that would be “composed of at least one representative from each Agency and may include consultant (private sector) staff.” The ITN also provided for a Selection Committee that would be “composed of executive management at the Agencies.” Each agency executive director appointed two individuals from their agency to the TRT. Each agency director was familiar with the background and qualifications of their appointees, who had experience in various aspects of tolling operations including tolling, software, finance, and procurement. The following individuals were appointed to serve on the TRT. Bren Dietrich, a budget and financial planner for FTE, has an accounting degree and has worked at FTE for 12 years in budget and financial planning. Mr. Dietrich has been a technical committee member for seven or eight procurements. Mohamed Hassan, a senior operations manager for FTE, has been in information technology for nearly 40 years and with FTE for 22 years handling all aspects of software development and maintenance for the state’s largest tolling authority. Mr. Hassan’s expertise is in software development and maintenance. Mr. Hassan oversees staff that is responsible for maintaining the database application systems, hardware, communications coming in and going out of the customer service center, and any development projects such as transaction processing or account management system upgrades. Steve Andriuk is a deputy executive director for MDX and oversees all tolling operations within MDX’s jurisdiction. Mr. Andriuk’s tolling background goes beyond his tenure at MDX, as he previously was an executive director at Chesapeake Bay Bridge Authority. Jason Greene, MDX’s comptroller of financial controls and budget manager, has a background in finance and accounting and in project management. Mr. Greene has been with MDX for 11 years. Lisa Lumbard, who has been with OOCEA for 16 years, is the interim chief financial officer and previously was the manager of accounting and finance. Ms. Lumbard runs OOCEA’s finance and accounting office and has both procurement experience and substantial experience in the financial aspects of back- office tolling. David Wynne is the director of toll operations of OOCEA and is responsible for the overall collection of all tolls and for the violation enforcement process. Mr. Wynne has held some iteration of this position for approximately 11 years and worked for OOCEA for 16. He also has both procurement and substantial tolling experience. Robert Reardon, THEA’s chief operating officer, is responsible for THEA’s day-to-day operations, including tolls. Mr. Reardon has been with THEA for six years and has experience as a technical evaluator for public procurements. Rafael Hernandez is THEA’s manager of toll operations and oversees all toll operations within THEA’s jurisdiction. The TRT members collectively have the requisite knowledge and experience in tolling, software, finance, and procurement. The following individuals constituted the Selection Committee. Diane Gutierrez-Scaccetti has been FTE’s executive director since 2011 and worked for the New Jersey Turnpike Authority for over 20 years, the last two as executive director and the previous 14 as deputy executive director. Laura Kelley is OOCEA’s deputy director over finance administration and the interim executive director. Ms. Kelly has 30 years’ experience in transportation finance and management, 15 of which occurred at the Department and eight of which occurred at OOCEA overseeing information technology, finance, and procurement. Javier Rodriguez, MDX’s executive director, oversees all MDX operations, including planning, finance, operations, and maintenance functions. Mr. Rodriguez has been with MDX for seven years and was with the Department for over 15 years prior to his employment with MDX. Joseph Waggoner has been THEA’s executive director for approximately seven years. Prior to joining THEA, he was with the Maryland Department of Transportation for nearly 30 years, six of which were in tolling operations. ITN section 2.6.2 provides as follows: Following Proposal Oral Presentations by all short-listed Proposers (see section 2.25 Proposal Oral Presentations for additional details) the Technical Review Team members will independently evaluate the Proposals based on the criteria provided in Section 2.5.2 and will prepare written summary evaluations. There will then be a public meeting of the Selection Committee at the date, time and location in Table 1-2 Procurement Timeline. The Technical Review Team’s compiled written summary evaluations will be submitted to the Selection Committee. The Technical Review and Selection Committee will review and discuss the individual summary evaluations, and the Selection Committee will come to consensus about ranking the Proposers in order of preference, based on their technical approach, capabilities and best value. In addition to the Technical Review Team, the Selection Committee may request attendance of others at this meeting to provide information in response to any questions. The ITN is structured such that both the TRT and the Selection Committee have shared responsibility for evaluating proposals, with the Selection Committee having ultimate responsibility for ranking the Proposers for the negotiations stage of the procurement process. Combining the eight members of the TRT with the four members of the Selection Team means that there were a total of 12 individuals tasked with the responsibility of evaluating the proposals prior to the negotiations stage of the process. Pre-Qualification and Rankings In the pre-qualification portion of the ITN, interested vendors initially submitted reference forms to demonstrate that the vendors met the minimum project experience set forth in the ITN. Vendors meeting this requirement were invited to give a full-day Pre-Qualification Oral Presentation to the TRT in which each vendor was given the opportunity to demonstrate its proposed system. Under ITN section 2.6.1, A Technical Review Team will attend the Pre- Qualification Oral Presentations and will develop scores and written comments pertaining to the reviewed area(s) identified in Section 2.5.1. The Technical Review Team will be composed of at least one representative from each Agency and may include consultant (private sector) staff. The scores provided by each Technical Review Team member for each area of the Pre- Qualification Oral Presentations will be totaled and averaged with the scores of the other Technical Review Team members to determine the average score for an area of the Pre-Qualification Oral Presentation. The average score for each area of a Pre- Qualification Oral Presentation will then be totaled to determine a total Pre- Qualification Oral Presentation score. Each vendor’s Pre-Qualification Oral Presentation was then scored based on criteria set forth in ITN section 2.5.1. Any vendor that received a score of 700 or higher was “short- listed” and invited to submit proposals. Put differently, those receiving a score of at least 700 were deemed qualified to submit formal proposals. ITN section 2.5.1 provides that the “review/evaluation of the Pre-Qualification Oral Presentations will not be included in decisions beyond determining the initial short-list of Proposers to proceed in the ITN process.” Accordingly, the scores assigned in the pre-qualification phase were irrelevant after the short-listing. Six vendors submitted pre-qualifications responses, including Xerox, Accenture, and Cubic. On January 21, 2014, the Department posted its short-list decision, identifying that all six vendors, including Xerox, Accenture, and Cubic, were deemed qualified to submit formal written proposals to the ITN (the “First Posting”). As required by section 120.57(3)(a), Florida Statutes, the posting stated, “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.” This posting created a point of entry to protest, and no vendor initiated a protest. After the First Posting, short-listed vendors submitted technical and price proposals and made Proposal Oral Presentations. ITN section 2.24 provides detailed instructions for technical and price proposal preparation and submission. ITN section 2.25 (as amended by Addendum 8) sets forth the process for short-listed vendors to make Proposal Oral Presentations to the TRT. Short-listed Proposers will each be scheduled to meet with the Technical Review Team for Proposal Oral Presentations of their firm’s capabilities and approach to the Scope of Work and Requirements within the time period identified in Table 1-2 Procurement Timeline. Short-listed Proposers will be notified of a time and date for their Proposal Oral Presentation. Proposal Oral Presentation sessions are not open to the public. The Selection Committee will attend these Presentations. In advance of the Proposal Oral Presentations Proposers will be given detailed instructions on what the format and content of the Proposal Oral Presentation will be, including what functionality shall be demonstrated. The Department may also provide demonstration scripts to be followed. Proposers should be prepared to demonstrate key elements of their proposed System and Project approach and to respond to specific questions regarding their Proposals. These Proposal Oral Presentations will be used to present the Proposer’s approach and improve understanding about the Department’s needs and expectations. The Technical Review Team will participate in all Proposal Oral Presentations. After each Oral Presentation, each individual on the Technical Review Team will complete a written summary evaluation of each Proposer’s technical approach and capabilities using the criteria established in Section 2.5.2 in order to assure the Technical Proposal and Oral Presentations are uniformly ranked. The evaluation will consider both the Technical Proposal and the Oral Presentations. ITN section 2.5.2 is titled “Best Value Selection” and provides as follows: The Department intends to contract with the responsive and responsible short-listed Proposer whose Proposal is determined to provide the best value to the Department. “Best value,” as defined in Section 287.012(4), F.S., means the highest overall value to the state, based on objective factors that include but are not limited to . . . . ITN section 2.5.2 goes on to delineate seven “objective factors,” or evaluation criteria, on which proposals would be evaluated: Company history Project experience and qualifications Proposed Project approach to the technical requirements Proposed approach to the Project plan and implementation Proposed approach to System Maintenance Proposed approach to Operations and performance Price ITN section 2.6.2 explains the process for evaluation of technical proposals and Proposal Oral Presentations and states that: Following Proposal Oral Presentations by all short-listed Proposers (see Section 2.25 Proposal Oral Presentations for additional details) the Technical Review Team members will independently evaluate the Proposals based on the criteria provided in Section 2.5.2 and will prepare written summary evaluations. There will then be a public meeting of the Selection Committee at the date, time and location in Table 1-2 Procurement Timeline. The Technical Review Team’s compiled written summary evaluations will be submitted to the Selection Committee. The Technical Review Team and Selection Committee will review and discuss the individual summary evaluations, and the Selection Committee will come to consensus about ranking the Proposers in order of preference, based on their technical approach, capabilities and best value. In addition to the Technical Review Team, the Selection Committee may request attendance of others at this meeting to provide information in response to any questions. Of the six short-listed vendors, five submitted proposals and gave Proposal Oral Presentations, including Xerox, Accenture, and Cubic. The Department then undertook a ranking using the evaluation criteria delineated in ITN section 2.5.2. To perform this ranking, TRT members individually evaluated the proposals and prepared detailed, written evaluations that tracked the evaluation criteria factors. The TRT’s evaluations, together with proposal summaries prepared by HNTB, were provided to the Selection Committee in preparation for a joint meeting of the TRT and Selection Committee on April 9, 2014. At the April 9th meeting, the TRT and Selection Committee members engaged in an in-depth discussion about the bases for and differences between the individual TRT members’ rankings and evaluations. Thereafter, the Selection Committee made its ranking decision. On April 10, 2014, the Department posted its ranking of vendors, with Xerox first, Accenture second, and Cubic third (the “Second Posting”). The Second Posting also announced the Department’s intent to commence negotiations with Xerox as the first-ranked vendor.4/ If negotiations fail with Xerox, negotiations will then begin with second-ranked vendor Accenture, then Cubic, and so on down the order of ranking until the Department negotiates an acceptable agreement. Accenture and Cubic each timely filed notices of intent to protest the Second Posting and timely filed formal written protest petitions and the requisite bonds. Negotiations are not at Issue ITN section 2.26 provides: Once Proposers have been ranked in accordance with Section 2.6.2 Proposal Evaluation, the Department will proceed with negotiations in accordance with the negotiation process described below. Proposers should be cognizant of the fact that the Department reserves the right to finalize negotiations at any time in the process that the Department determines that such election would be in the best interest of the State. Step 1: Follow the evaluation process and rank Proposals as outlined in Section 2.6 Evaluation Process. Step 2: The ranking will be posted, in accordance with the law (see Section 2.27), stating the Department’s intent to negotiate and award a contract to the highest ranked Proposer that reaches an acceptable agreement with the Department. Step 3: Once the posting period has ended, the Negotiation Team will undertake negotiations with the first-ranked Proposer until an acceptable Contract is established, or it is determined an acceptable agreement cannot be achieved with such Proposer. If negotiations fail with the first-ranked Proposer, negotiations may begin with the second-ranked Proposer, and so on until there is an agreement on an acceptable Contract. The Department reserves the option to resume negotiations that were previously suspended. Negotiation sessions are not open to the public and all negotiation sessions will be recorded by the Department. Step 4: The Negotiation Team will write a short plain statement for the procurement file that explains the basis for Proposer selection and how the Proposer’s deliverables and price will provide the best value to the state. Step 5: The Department will contract with the selected Proposer. As Accenture and Cubic protested the decision by the Department to enter negotiations with Xerox (and because of the automatic stay provision of section 120.57(3), Florida Statutes) the negotiation phase of the procurement never commenced. Thus, this proceeding concerns the Department’s actions up to the Second Posting, and not what may happen during future negotiations. Second Posting and Intended Award Section 1.2 of the ITN sets forth the procurement timeline for the CCSS project. The ITN originally indicated that the “Posting of Ranking/Intended Award” would occur on March 31, 2014. By addendum issued on February 13, 2014, the date for “Posting of Ranking/Intended Award” was changed to April 10, 2014. Section 1.3.1 of the ITN provides an agenda for the April 10, 2014, “Meeting to Summarize and Determine Ranking/Intended Award.” Section 2.27 of the ITN is labeled “POSTING OF RANKING/INTENDED AWARD.” Section 2.27.1, Ranking/Intended Award, provides that “[t]he Ranking/Intended Award will be made to the responsive and responsible Proposer that is determined to be capable of providing the best value and best meet the needs of the Department.” Section 2.27.2 is labeled “Posting of Short- list/Ranking/Intended Award” and provides in part that “[a]ny Proposer who is adversely affected by the Department’s recommended award or intended decision must . . . file a written notice of protest within seventy-two hours after posting of the Intended Award.” Joint Exhibits 10 and 12 are copies of forms used to announce the rankings of the Proposers. It is not clear from the record if these forms are a part of the ITN. Nevertheless, the forms are identical in format. Each form has three boxes that follow the words “TYPE OF POSTING.” The first box is followed by the word “Shortlist,” the second box is followed by the word “Ranking,” and the third box is followed by the words “Intended Award.” The form also has three columns that coincide with the three boxes previously referenced. The three columns are respectively labeled, “X indicates shortlisted vendor,” “ranking of negotiations,” and “X indicates intended award.” With respect to the last two columns, explanatory comments appearing at the bottom of the form read as follows: ** Ranking: The Department intends to negotiate separately and will award a contract to the highest ranked vendor that reaches an acceptable agreement with the Department. The Department will commence negotiations with the number one 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 number one ranked vendor, negotiations may begin with the second-ranked vendor, and so on down the order of ranking until the Department is able to negotiate an acceptable agreement. *** Intended Award: “X” in the Intended Award column indicates the vendor whom the Department intends to award the contract to, but does not constitute an acceptance of any offer created by the vendor’s proposal or negotiations. No binding contract will be deemed to exist until such time as a written agreement has been fully executed by the Department and the awarded vendor. If irregularities are subsequently discovered in the vendor’s proposal or in the negotiations or if the vendor fails to submit required [b]onds and insurance, fails to execute the contract, or otherwise fails to comply with the ITN requirements, the Department has the right to undertake negotiations with the next highest vendor and continue negotiations in accordance with the ITN process, reject all proposals, or act in the best interest of the Department. On April 10, 2014, the Department issued a posting wherein the “Ranking” box was checked and the “Intended Award” box was not. According to Sheree Merting, it was a mistake to have only checked the “Ranking” box because the box labeled “Intended Award” should have also been checked. Petitioners contend that by not simultaneously checking both the “Ranking” and “Intended Award” boxes that the Department materially changed the process identified in the ITN. Protesters’ arguments as to this issue appear to be more related to form than substance. In looking at the plain language of the ITN, it reasonably appears that the Department intended to simultaneously announce the “Ranking” and “Intended Award.” The fact that the Department failed to combine these two items in a single notice is of no consequence because neither Cubic nor Accenture have offered any evidence establishing how they were competitively disadvantaged, or how the integrity of the bidding process was materially impaired as a consequence of the omission. In other words, Sheree Merting’s confessed error of not checking the “Intended Award” box contemporaneously with the “Ranking” box is harmless error. See, e.g., Fin. Clearing House, Inc. v. Fla. Prop. Recovery Consultants, Inc., Case No. 97-3150BID (Fla. DOAH Nov. 25, 1997; Dep’t of Banking & Fin. Feb 4, 1998)(applying harmless error rule to deny protest where agency initially violated provisions of section 287.057(15), Florida Statutes, by selecting two evaluators instead of three required by statute, but later added required evaluator). Sequential Negotiations As previously noted, section 2.26 of the ITN provides that following the ranking of the short-list proposers, the “Negotiation Team will undertake negotiations with the first- ranked Proposer until an acceptable Contract is established . . . [and] [i]f negotiations fail with the first-ranked Proposer, negotiations may begin with the second-ranked Proposer, and so on until there is an agreement on an acceptable Contract.” Petitioners assert that the Department has abandoned the sequential negotiation process set forth in section 2.26 and has announced “that it will conduct the procurement negotiations only with Xerox as the number one ranked proposer” and that the process of negotiating with only one proposer is contrary to the law because section 287.057(1)(c) “requires that the Department negotiate with all proposers within the competitive range.” Diane Gutierrez-Scaccetti testified as follows (T: 1119): Q: Now, you understand that as a result of the rankings that were posted on April 10th, negotiations under this ITN are to proceed with only a single vendor, is that right? A: I believe the ITN provided for consecutive negotiations starting with the first-ranked firm and then proceeding down until we reached a contract. Contrary to Petitioners’ assertions, the evidence establishes that the Department intends to follow the negotiation process set forth in section 2.26. Petitioners’ contention that section 287.057(1)(c) does not authorize sequential negotiations is a challenge to the terms, conditions, and specifications of the ITN and should have been filed within 72 hours after the posting of the solicitation as required by section 120.57(3)(b). Petitioners have waived their right of protest with respect to this issue. Petitioners’ waiver notwithstanding, section 287.057(1)(c) does not preclude the type of sequential negotiation process set forth in section 2.26 of the ITN. Section 287.057(1)(c) provides in part that “[t]he invitation to negotiate is a solicitation used by an agency which is intended to determine the best method for achieving a specific goal or solving a particular problem and identifies one or more responsive vendors with which the agency may negotiate in order to receive the best value.” (Emphasis added). Section 287.057(1)(c)4. provides that “[t]he agency shall evaluate replies against all evaluation criteria set forth in the invitation to negotiate in order to establish a competitive range of replies reasonably susceptible of award [and] [t]he agency may select one or more vendors within the competitive range with which to commence negotiations.” (Emphasis added). The opening paragraph of section 287.057(1)(c), which is essentially the preamble portion of the ITN provisions, expresses the purpose for which the ITN process was developed, to wit: “to determine the best method for achieving a specific goal or solving a particular problem.” In furtherance of the stated purpose, the Legislature instructs, in the preamble, that the process should “identif[y] one or more responsive vendors with which the agency may negotiate in order to receive the best value.” If the preamble is read in statutory isolation, then one could reasonably conclude that if the agency identifies more than one responsive vendor then the agency should negotiate with each of the vendors “in order to receive the best value.” Arguably, the preamble merely looks at vendor “responsiveness” as the guidepost for determining with whom the agency shall negotiate. Mere “responsiveness” however, is clearly not the only standard for selecting a vendor through the ITN process and illustrates why this portion of the statute cannot be read in isolation. As previously noted, subparagraph four of section 287.057(1)(c), provides that the agency “shall . . . establish a competitive range of replies reasonably susceptible of award,” and once this is done, “[t]he agency may select one or more vendors within the competitive range with which to commence negotiations.” (Emphasis added). By using the word “may” in subparagraph four, the Legislature is authorizing agencies to exercise discretion when selecting vendors with whom to negotiate. In exercising its discretion, agencies can decide to negotiate with a single vendor or with multiple vendors. An agency’s exercise of its discretion is not absolute and the “check” on the exercise of its discretion, in the context of the instant case, is a bid protest whereby an unsuccessful bidder can attempt to prove that the procurement process was impermissibly tainted. Contrary to Petitioners’ allegations, the sequential negotiation process utilized by the Department in the present case does not run afoul of section 287.057. Petitioners forcefully argue that they have been shutout of the negotiation process because neither of them was ranked first. This assertion mischaracterizes the nature of the sequential negotiation process used by the Department. The evidence shows that if the Department fails to come to terms with Xerox, then negotiations may begin with the second-ranked vendor, and so on down the order of ranking until the Department negotiates an acceptable agreement. The truth of the matter is that neither of the protesters has been shutout of the negotiations. It is simply the case that neither occupies the preferred position of being the highest ranked, short-listed vendor. Petitioners also argue that the Florida Department of Transportation Commodities and Contractual Services Procurement Manual – 375-040-020, prohibits sequential negotiations. For invitations to negotiate, the manual provides: There are two general negotiation methods used: Competitive Method A – Vendors are ranked based on technical qualifications and negotiations are conducted commencing with the first ranked vendor. Competitive Method B – Vendor qualifications are evaluated and vendors may be short-listed. Negotiations of scope and price will be conducted with short-listed or all vendors. An award is made to the vendor with the best combination of proposal, qualifications, and price. According to Petitioners, the ITN does not comport with either Method A or Method B. Again, Petitioners failed to timely challenge the ITN specifications regarding sequential negotiations and thus have waived this argument. Even if the merits of the argument are considered, Petitioners’ argument fails. The methods described in the manual are not the only methods available to the Department; in fact, the manual, by stating that “there are two general negotiation methods used (emphasis added),” recognizes that the methods are subject to refinement or modification as the Department deems best to meet the perceived needs of a particular solicitation as long as the final method complies with section 287.057(1), Florida Statutes. Further, the procurement manager for the ITN, Sheree Merting, testified that the shell, or template, provided by the Department’s central office, and used when drafting an invitation to negotiate, contains a combination of the manual’s methods A and B, which is referred to as A/B. The order of negotiations provided for in the ITN and reiterated in the First and Second Postings is not, therefore, inconsistent with the Department’s policies or procedures. Best Value Decision Petitioners contend that the Department, via the Second Posting, has already (and improperly) determined which vendor will provide the best value to the State even though negotiations have not yet occurred. This contention is not supported by the evidence. ITN section 2.5.2 states the Department’s intent to contract with the vendor whose proposal is determined to provide the best value and sets forth the statutorily mandated objective factors, or criteria, on which proposals will be evaluated. ITN section 2.6.2 provides that the TRT and Selection Committee will review and discuss the TRT members’ individual summary evaluations and the Selection Committee “will come to consensus about ranking the Proposers in order of preference, based on technical approach, capabilities and best value.” The evidence reflects that the evaluation factors were applied during the evaluation process to formulate a best value ranking, but the question of which vendor ultimately provides the best value to the State will not be conclusively determined until after negotiations are concluded. See § 287.057(1)(c)4., Fla. Stat. (“After negotiations are conducted, the agency shall award the contract to the responsible and responsive vendor that the agency determines will provide the best value to the state, based on the selection criteria.”). As testified by Ms. Gutierrez- Scaccetti, “[t]he Selection Committee agreed upon the ranking of firms. It has not made an award.” This is consistent with the ITN and Florida law, which require award to the best value proposer after negotiations. Evaluation Criteria Properly Followed As explained above, ITN section 2.5.2 sets forth the evaluation factors that the TRT and Selection Committee were to use in evaluating proposals. Petitioners allege that the TRT and Selection Committee did not follow the ITN and based their evaluations and rankings on factors other than those listed in ITN section 2.5.2. The evidence establishes that the TRT did in fact use these factors, as evidenced by the detailed evaluation summaries prepared by each of the eight TRT members, which almost uniformly tracked these factors. Seven of these summaries are organized by headings that mirror the seven criteria of section 2.5.2. The remaining summary, prepared by TRT member Mohamed Hassan, was formatted in terms of pros and cons, but nonetheless addressed all of the section 2.5.2 evaluation criteria. Reflective of the TRT’s approach, TRT member David Wynne prepared detailed, typed proposal summaries that are four pages long and single-spaced for each proposal. Mr. Wynne’s summaries capture his deliberate thought process in ranking the proposals and include headings that directly tie back to the evaluation criteria in the ITN. His summaries include specific details from each proposal justifying his qualitative assessment of the proposals. For example, he discusses the benefits of Xerox’s Vector 4G tolling platform, Xerox’s proposed project schedule, and maintenance. Mr. Wynne even included a breakdown of the pricing and his thoughts on how the pricing compared to the other vendors. The other TRT members had equally detailed summaries. When read as a whole, these summaries demonstrate that the TRT engaged in a rational, deliberative, and thoughtful evaluation of the proposals based on the ITN criteria. Additionally, the TRT members testified that they applied the ITN section 2.5.2 factors in conducting their evaluations. Thus, the evidence demonstrates that the TRT members did as instructed in the ITN and evaluated proposals based on ITN section 2.5.2’s factors. There is no credible basis to find that the section 2.5.2 criteria were not the bases of the TRT’s evaluations, rankings, and narratives. The evidence also establishes that the Selection Committee applied ITN section 2.5.2 factors in reaching its decision. The Selection Committee reviewed the TRT summaries, along with a detailed notebook prepared by HNTB, the Department’s consultant. The HNTB notebook was a comprehensive summary of information compiled from the vendors’ voluminous proposals and organized in a digestible format to aid the Selection Committee’s review, including helpful summaries providing head-to-head objective comparisons of vendor pricing, software development, and vendors’ exceptions and assumptions. The HNTB notebook of materials objectively compiled the content taken directly from the vendors’ own proposals and included no editorial comments or opinions by the Department’s consultants. Moreover, the HNTB notebook contained a chart summarizing the TRT’s rankings by TRT member, along with copies of each TRT member’s detailed written summaries. It also contained a detailed, 36-page pricing summary that pulled price information directly from the vendors’ proposals and summarized the information in a manner that allowed for easy side-by-side comparison. The notebook also included a systems matrix summary that was prepared by taking proposed systems information directly from the vendors’ proposals and combining it in a format that could be easily processed. In fact, the notebook even included pages copied directly from the proposals. Armed with the comprehensive TRT summaries and the HNTB notebook, the Selection Committee then engaged the TRT in a thoughtful and detailed discussion and analysis of the qualitative merits of each vendor’s proposal -- all within the bounds of the section 2.5.2 criteria. Petitioners contend that during the TRT and Selection Committee’s discussions, issues such as risk were improperly considered. Although “risk” was not a separately labeled criterion under section 2.5.2 (“risk of solution” is, however, referenced as a sub-bullet), risk is inherently a significant consideration in each of the evaluation factors. Stated differently, the concept of risk is integral to the ITN section 2.5.2 factors, and the Department properly considered such risks. For example, a vendor’s prior project experience -- whether it has successfully completed similar projects before -- was a listed criterion, which is directly relevant to the risk the Department would take in selecting a vendor, that is, the risk that the vendor’s experience is or is not sufficient to assure a timely project completion and quality services under the ITN. Indeed, section 287.057(1)(c) requires that the Department consider prior experience. Another example of risk considered by at least one Selection Committee member was the potential that Accenture’s project manager would not be assigned solely to this project, but might be shared with Accenture’s Illinois tolling project (“local presence commitment” is referenced as a sub-bullet in section 2.5.2). The evidence shows that Accenture stopped short of saying without qualification that its project manager would be released from Illinois and solely assigned to CCSS. This uncertainty raised a risk concern whether the critical project implementation would be properly managed. Considerations such as these are rational and reasonable. There is a Reasonable Basis for the Department’s Ranking Petitioners further contend that there was no reasonable basis for the Department’s intended decision to begin negotiations with Xerox. However, as explained above, the evidence demonstrates the opposite as the TRT and Selection Committee collectively discussed and considered the evaluation criteria and the Selection Committee reached consensus on moving forward to negotiations with Xerox. Moreover, there is ample evidence that the Selection Committee’s decision was rational and reasonable. The TRT and Selection Committee’s discussion at the April 9, 2014, meeting where the ranking decision was reached, demonstrates the studied analysis by which the evaluations were conducted. At the meeting, the four Selection Committee members, who had already reviewed the TRT members’ individual rankings and evaluations, each questioned the TRT members about their assessments of the proposals. Selection Committee members asked about the bases for the differences between the individual TRT members’ evaluations, and the TRT members explained why they ranked the vendors the way they did. The discussion revolved around the top three ranked vendors, Xerox, Accenture, and Cubic, which one TRT member described as being “head and shoulders above the rest” -- that is, above the vendors ranked fourth and fifth. As noted above, the Selection Committee members’ primary focus in these discussions was on risk assessment -- the financial risks, operations risks, and information technology risks that the TRT members believed accompanied each proposal. Major Selection Committee items of discussion included modifications to the existing systems, proprietary versus off- the-shelf software issues, and the vendors’ proximity to Florida. Additional discussion points included the risk associated with Accenture’s use of multiple subcontractors and Cubic’s lack of experience with certain tolling systems. From these discussions, it appears that the overriding factor behind the Selection Committee’s ranking decision at the April 9 meeting was Xerox’s proven experience with other similar and large tolling projects, including some of the country’s largest tolling systems, which Accenture and Cubic simply did not possess.5/ As one Selection Committee member expressed, Xerox brought a “comfort level” that did not exist with Accenture and Cubic. Moreover, Xerox, with 78 percent, is the leader in the evaluative category that looks at the percentage of the company’s existing baseline system that meets the CCSS requirements -- more than Accenture’s and Cubic’s combined percentages. As the percentage of existing baseline system compliance increases, the implementation risks decrease. Selection Committee members Diane Gutierrez-Scaccetti and Joseph Waggoner expressed the importance of this based on their firsthand experience with existing tolling systems in use for their respective agencies. In sum, this analysis and assessment is a valid and reasonable basis for the Department’s decision. Cubic also contends that such analysis is improper because the ITN allowed transit firms to submit proposals, thus making tolling experience an irrelevant evaluative factor. This contention fails because by prequalifying transit firms to bid, the Department was not precluded from considering a vendor’s specific tolling experience as part of the evaluative process. Contrary to Cubic’s allegation, the factors listed in ITN section 2.5.2, including “Project Experience and Qualifications,” contemplate tolling experience as being part of the relevant analysis. Therefore, the Selection Committee was fully authorized under the ITN to consider the benefits of a proven commodity -- a firm with Xerox’s extensive tolling experience. The Selection Committee’s qualitative assessment that, on the whole, Xerox was the better choice for commencing negotiations was supported by reason and logic and was wholly consistent with the ITN specifications. Petitioners further argue that the Department’s ranking decision is inconsistent with the pre-qualification scoring, where Accenture and Cubic each scored slightly higher than Xerox. This argument fails as ITN section 2.5.1 expressly provides that the evaluations and scoring of the Pre-Qualification Oral Presentations will not be included in decisions beyond determining the initial short-list. Regardless, these three vendors were essentially tied in that scoring: Accenture’s score was 885.38, Cubic’s was 874.75, and Xerox’s was 874.00. Petitioners also contend that the Selection Committee’s ranking decision is inconsistent with the ranking decision of the TRT majority. The ITN is clear, however, that the Selection Committee would be the final arbiter of ranking. No Demonstrations Were Cancelled The procurement timeline in the original ITN allotted ten business days for Proposal Oral Presentations. The revised timeline in Addendum 8 allotted two days. Cubic asserts that this reduction in presentation time occurred because the Department, without explanation, cancelled planned vendor demonstrations that were to occur during Proposal Oral Presentations, thus placing Cubic at a disadvantage as it was unable to present its demonstrations to Selection Committee members. Cubic also asserts that the cancellation of demonstrations is an indication that the Department had already made up its mind to select Xerox. The ITN and the testimony are unequivocal that no demonstrations were “cancelled.” ITN section 2.25 contemplates that the Department may request demonstrations in the proposal evaluation phase but in no way states that demonstrations will be held. Section 2.25 also provides that if any demonstrations were to be held, they would be as directed by the Department. Thus, the ITN did not guarantee Cubic any presentation, as Cubic suggests. Moreover, all vendors were treated equally in this regard. Further, the evidence reflects that the decision to hold demonstrations only during the Pre-Qualification Presentations was made when the ITN was released and that the Department never planned to have vendor demonstrations at the Proposal Oral Presentations. Indeed, during the mandatory pre- proposal meeting, the Department informed all vendors of the planned process, to include one demonstration at the pre- qualification phase and an oral presentation and question-and- answer session during the proposal and ranking phase. In short, Cubic presented no credible evidence in support of its allegations regarding the alleged cancellation of the demonstrations or any resulting harm. Exceptions and Assumptions were properly considered The ITN required vendors, in their technical proposals, to identify assumptions and exceptions to contract terms and conditions. Significantly, the ITN states that the Department is not obligated to accept any exceptions, and further that exceptions may be considered at the Department’s discretion during the evaluation process. ITN Technical Proposal Section 9 provides, in its entirety: Technical Proposal Section 9: Exceptions and Assumptions If Proposers take exception to Contract terms and conditions, such exceptions must be specified, detailed and submitted under this Proposal section in a separate, signed certification. The Department is under no obligation to accept the exceptions to the stated Contract terms and conditions. Proposers shall not identify any exceptions in the Price Proposal. All exceptions should be noted in the certification provided for in Proposal Section 9. Proposers shall not include any assumptions in their Price Proposals. Any assumptions should be identified and documented in this Section 9 of the Proposal. Any assumptions included in the Price Proposals will not be considered by the Department as a part of the Proposal and will not be evaluated or included in any Contract between the Department and the Proposer, should the Proposer be selected to perform the Work. Failure to take exception in the manner set forth above shall be deemed a waiver of any objection. Exceptions may be considered during the Proposal evaluation process at the sole discretion of the Department. Petitioners allege that the ITN did not clearly set forth how vendors’ exceptions and assumptions would be treated and that the Department accordingly failed to consider such exceptions and assumptions. This is a belated specifications challenge and therefore has been waived. Regardless, the evidence demonstrates that both the TRT and Selection Committee did, in fact, consider the exceptions and assumptions in the evaluation and ranking of proposers. The TRT and Selection Committee were instructed to consider exceptions and assumptions and to give them the weight they deemed appropriate subject to staying within the confines of the ITN’s section 2.5.2 criteria. Consistent with these instructions, some TRT members included comments regarding exceptions and assumptions in those members’ evaluation summaries, reflecting that exceptions and assumptions were considered during the evaluation process. Other TRT members considered the exceptions of minimal significance given that the Department would address them during negotiations and was not bound to agree to any. Indeed, the evidence was that it was the Department’s intent to sort out the exceptions and assumptions in the negotiation process and, again, that the Department need not agree to any exceptions initially set forth by the vendors. Thus, the Department acted rationally and within the bounds of the ITN and its discretion when considering exceptions and assumptions. The Selection Committee Reached Consensus Accenture alleges that the Selection Committee failed to carry out its duty to reach a “consensus” in ranking vendor proposals. The evidence establishes the exact opposite. The ITN provides that the Selection Committee will come to “consensus” about ranking the vendors in order of preference, based on technical approach, capabilities, and best value. A consensus does not require unanimity. According to the testimony of Selection Committee member Javier Rodriguez, who was the only Selection Committee member who voted for Accenture as his first choice, “at the end, Xerox got three votes from the Selection Committee; Accenture got one. So for me, consensus meant: Are we in consensus to move forward with Xerox? And as I said at the selection meeting, I didn’t object. So from a consensus standpoint, we’re moving on to starting negotiations with Xerox, and that was the intent.” Therefore, the unrebutted evidence is that the Selection Committee did, in fact, reach consensus. Subject Matter Experts Accenture contends that the TRT and Selection Committee made use of subject matter experts in the course of the evaluation and ranking in violation of Florida statutory requirements and governing procurement policies. The record, however, is void of any substantial competent evidence in support of these allegations. Tim Garrett is the tolls program manager for HNTB under the General Engineering Consulting contract for FTE. Mr. Garrett was the overall project manager assigned to support FTE in the development and execution of the ITN. He and other HNTB employees, such as Wendy Viellenave and Theresa Weekes, CPA, provided support to both TRT and Selection Committee members in regards to summarizing proposals and defining the process. There is no evidence that any employee of, or sub-consultant to, HNTB communicated qualitative assessments or opinions about any of the competing proposals to TRT or Selection Committee members. Rather, the evidence shows that HNTB facilitated the TRT’s and Selection Committee’s evaluation work by presenting to the committee members data in the form of summaries, charts, and recapitulations pulled from the voluminous technical and price proposals submitted by the five competing vendors. Other than the support provided by HNTB, the record is essentially devoid of evidence that proposal evaluators made use of subject matter experts.6/ But in any event, neither Petitioner has made a showing that the use of subject matter experts is proscribed by governing statutes, rules, policies, or the specifications of the ITN. Although the use of subject matter experts was not addressed in the ITN itself, the Department, before the Pre- Qualification Oral Presentations in early January 2014, issued written “Instructions to Technical Review Committee.” These instructions authorized TRT members to confer with subject matter experts during the procurement process on specific technical questions and subject to certain additional parameters, as follows: Subject Matter Experts Subject matter experts are authorized to support the TRC on specific technical questions that the TRC members may have throughout the procurement process. Subject matter experts may respond to questions on any aspect of the procurement or proposal, but may not be asked to, nor will they support, the evaluation of proposals, which is the responsibility of each TRC member. A subject matter expert can discuss the specific elements of the ITN and a vendor’s proposal with a TRC member, but they cannot meet with more than one TRC member at a time, unless in a public meeting – subject to the Procurement Rules of Conduct stated above. The subject matter experts are fact finders. A subject matter expert cannot disclose the specific questions asked by another TRC member. No evidence has been presented to establish that the Instructions to Technical Review Committee, as to the use of subject matter experts, violated Florida law or the terms of the ITN, or that any subject matter expert -- whether affiliated with HNTB or not -- failed to perform within the parameters set forth in the Instructions.7/ Both Petitioners devoted significant hearing time to the FTE consultancy work of John McCarey, McCarey Consultants, LLC, and John Henneman, an employee of Atkins Engineering, Inc., and sub-consultant to HNTB. There has been no showing by Petitioners that either Mr. McCarey or Mr. Henneman served as a subject matter expert to any member of the TRT or Selection Committee or that either had improper contacts in regards to the evaluation or ranking of the vendors. The undisputed evidence is that Mr. McCarey did not serve as a subject matter expert for any of the evaluators. As for Mr. Henneman, although one TRT member testified in deposition that he “believe[d]” Mr. Henneman was a technical expert or considered one of the subject matter experts, there is no evidence that Mr. Henneman served as a subject matter expert for any of the evaluators -- TRT or Selection Committee. In sum, there is simply no evidence that any of the subject matter experts had any improper influence on the TRT or Selection Committee members.8/ No Improper Contacts, Attempts to Influence, or Bias Cubic alleges that there was improper contact between the Department and Xerox during this protest that violates the statutorily imposed “cone of silence” for procurements. Cubic also asserts that there were attempts by Xerox to influence the evaluations or rankings based on the Department’s, or the other agencies’, past or existing relationships with Xerox or Xerox’s acquired entities. There simply is no record support for the assertions that there was any improper contact or any attempt by any person to influence the Department’s evaluations or rankings based on past or existing relationships between the Department and Xerox or Xerox’s acquired entities. Xerox’s counsel did not have any contact with the TRT or the Selection Committee prior to the filing of the protests and the attendant “stop” of the procurement process pursuant to section 120.57(3)(c), Florida Statutes. The only contact Xerox’s counsel had with TRT or Selection Committee members was as a participant with the Department’s counsel in pre-deposition meetings with some witnesses designated by Petitioners -- all in the context of ongoing litigation following the filing of Accenture’s and Cubic’s protest petitions. This contact is essentially no different than Petitioners’ contact with Department personnel in depositions and the trial, as well as during the section 120.57(3)(d)1., Florida Statutes, settlement conference with the Department. Furthermore, all such contact was after both the TRT’s and the Selection Committee’s work under the ITN was completed and the said contact was of no import to the procurement process. In short, there is no evidence of attempts by Xerox to influence the process, improper contact between Xerox and the Department, or Department bias in favor of Xerox. Responsiveness of Xerox’s Proposal The evidence, at best, is that the Department has yet to fully vet the representations made in the proposals by the respective Proposers, including Xerox. Protesters suggest that such a full vetting is a condition precedent to negotiations. Such an argument, however, ignores ITN section 2.12, which has to be reconciled with ITN section 2.9.1 b). ITN section 2.9.1 b) provides in part that “[t]he Proposer shall have Key Team members with the following experience at the time of Proposal submission.” The section then goes on to list several positions that fall within the “Key Team Personnel” category. Petitioners contend that the Contract Project Manager, Quality Assurance Manager, and Human Resources Manager proposed by Xerox fail to meet the “Qualifications of Key Team Personnel” set forth in ITN section 2.9.1 b), thus rendering the Xerox proposal nonresponsive. ITN section 2.12 provides in part that “[a]fter the Proposal due date and prior to Contract execution, the Department reserves the right to perform . . . [a] review of the Proposer’s . . . qualifications [and that] [t]his review will serve to verify data and representations submitted by the Proposer and may be used to determine whether the Proposer has an adequate, qualified, and experienced staff.” Xerox’s omission, at this point in the process, amounts to a non-material deviation from the ITN specifications given that ITN section 2.12 reserves in the Department the right to review key personnel representations made by Xerox, and any other short-listed Proposer, at any time “prior to Contract execution.” Cubic also contends that Xerox and Accenture submitted conditional Price Proposals rendering their proposals non- responsive under ITN section 2.16. The analysis turns on the provisions of Technical Proposal Section 9: Exceptions and Assumptions, which provides a detailed description of how exceptions and assumptions are to be provided by vendors, and explains that “[e]xceptions may be considered during the Proposal evaluation process at the sole discretion of the Department.” As provided by the ITN, all vendors included a detailed listing of exceptions and assumptions in their Technical Proposal. Consistent with the discretion afforded to the Department under ITN Technical Proposal Section 9 to consider listed exceptions during the Proposal evaluation process, the Department then made the following inquiry of each of the Proposers: Please identify whether your price proposal is based on the Department’s acceptance of the Exceptions in Section 9 of your technical proposal? Please identify whether your price proposal is based on the Department’s acceptance of the Assumptions in Section 9 of your technical proposal? Xerox responded to both inquiries as follows: “The Xerox price proposal is based on the assumptions and general risk profile created by the inclusion of Section 9. We assume the parties will reach mutual agreement on the issues raised in Section 9 without a material deviation in the price proposal.” In addition to providing written answers to the questions, the vendors also addressed these issues in the Proposal Oral Presentations in response to questions by the Department. By the end of the Proposal Oral Presentations, all three vendors had made clear to the Department that resolution of exceptions and assumptions would not affect the proposed price. For example, Xerox’s senior executive in charge of the procurement, Richard Bastan, represented that there is no financial implication to any of the exceptions and that Xerox would honor the terms and conditions and the scope of services in the ITN for the price set forth in the Price Proposal. Accordingly, none of the proposals were improperly conditioned, and Xerox, Accenture, and Cubic were treated equally. Cubic also contends that Xerox’s proposal was nonresponsive as Xerox allegedly failed to meet the stated experience minimums for transactions processed and accounts maintained. There is, however, no credible evidence to support this contention. Indeed, the evidence is that the Department, through its consultant HNTB, verified these requirements by calling the referenced projects. Moreover, Xerox met or exceeded the stated minimums with its New York project reference. The Department’s decision that Xerox was responsive on this issue is logical, reasonable, and supported by the evidence. Price Proposals ITN section 2.5.2 lists “price” as a factor to consider in determining “Best Value.” The vendors’ price proposals were presented to the TRT members for purposes of conducting their evaluations. Price was also an appropriate factor for consideration by the Selection Committee. Accenture argues that “[t]he ITN does not indicate how pricing will be considered by FDOT during the selection process.” Accenture’s contention that the ITN failed to disclose the relative importance of price is a challenge to the terms, conditions, and specifications of the ITN and should have been filed within 72 hours after the posting of the solicitation, as required by section 120.57(3)(b). Accenture has waived its right of protest with respect to this issue. Conflict of Interest Accenture complains that “[n]either Mr. Henneman nor Mr. McCarey submitted conflict of interest forms as required under the Department’s Procurement Manual . . . [because both] were present during the oral presentations made by the vendors in connection with this procurement.” Accenture also complains that Wendy Viellenave never disclosed that her husband works for TransCore, a company that is a subcontractor for Xerox. Ms. Viellenave’s husband currently works for TransCore as a maintenance and installation manager in California and has not worked in Florida in nearly twenty years. There is no credible evidence that Ms. Viellenave, through the relationship with her husband, has any “significant” direct or indirect -- financial or otherwise -- interest in TransCore that would interfere with her allegiance to the Department. The fact that Ms. Viellenave is married to an individual that works for a Xerox subcontractor is insufficient, in itself, to establish a real or potential conflict of interest. Jack Henneman currently runs the back office operation for FTE at its Boca Raton facility. His future role for the CCSS is as project manager for the implementation of the CCSS. Mr. Henneman became aware of the CCSS procurement through his work on a Florida Transportation Commission Report that culminated in 2012. This report documented the cost efficiencies for all of the tolling authorities in Florida. Mr. Henneman attended some of the Pre-Qualification Demonstrations as his schedule would permit because he is the “go-forward” project manager for the CCSS implementation. Mr. Henneman formerly worked for ACS from 2002 – 2009, and met Ms. Gutierrez-Scaccetti during his employment with the company. Mr. Henneman was the transition manager for the transfer of the back office operation of the New Jersey Turnpike from WorldCom to ACS. Mr. Henneman did not have any contact with Ms. Gutierrez-Scaccetti from approximately 2009 to 2012. In his capacity as the “go-forward” project manager, Mr. Henneman reviewed the technical proposals submitted by the vendors in the instant proceeding but he did not have any discussions with the TRT members or the Selection Committee members about the proposals. He reviewed the technical proposals for the purpose of educating himself so that he would be better prepared to carry out his functions as the “go-forward” project manager. John McCarey is a sub-consultant to FTE general engineering contractor, Atkins. Mr. McCarey has a future role as being a part of the negotiations group for the CCSS. Mr. McCarey formerly worked for Lockheed for approximately 25 years and then spent 5 years working for ACS. Mr. McCarey was the chief financial officer for ACS’s State and Local Solutions Group at one time. Mr. McCarey left the employment of ACS in 2006. Mr. McCarey currently assists with various functions, including work on issues with the consolidation of the back office systems of OOCEA and FTE. For approximately 10 years before becoming a sub-consultant, Mr. McCarey had not had any contact with Ms. Gutierrez-Scaccetti. As it relates to the CCSS project, there is no persuasive evidence that Mr. McCarey provided recommendations to the TRT or the Selection Committee.
Recommendation Based on the Findings of Fact and Conclusions of Law, it is recommended that Petitioners’ protests be dismissed. DONE AND ENTERED this 4th day of September, 2014, in Tallahassee, Leon County, Florida. S LINZIE F. BOGAN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 4th day of September, 2014.
