The Issue The issue is whether the proposed award of Invitation to Bid No. 06-DC-7727 to Communications Engineering Service Company is contrary to the Department of Correction’s governing statutes, rules, policies, or the specifications in the Invitation to Bid for the reasons alleged by Petitioner.
Findings Of Fact The Department issued ITB No. 06-DC-7727 on October 27, 2006. The purpose of the ITB was to solicit bids for maintenance and repair of radio equipment owned by the Department in each of its four regions. The original deadline for submitting bids in response to the ITB was November 30, 2006, but the deadline was extended to December 15, 2006, through an addendum to the ITB. First Communications, CES, and Motorola, Inc., submitted bids for Region I. Another company, Econo Communications, Inc. d/b/a Mobile Communications, also responded to the ITB, but it did not bid on Region I. It was stipulated that First Communications’ bid was responsive to the ITB. The Department determined that the bid submitted by Motorola was not responsive to the ITB. That determination was not challenged. The Department determined that the bid submitted by CES was responsive, despite the issues discussed below. CES was determined by the Department to be the lowest responsible bidder. The bid submitted by CES was $2,571 per month.1 First Communications was the next lowest bidder. Its bid was $3,408.85 per month,2 which is 32.6 percent higher than CES’s bid. Section 4.3.1 of the ITB states that “it is essential that bidders follow the format and instructions contained in the Bid Submission Requirements (Section 5 with particular emphasis on the Mandatory Responsiveness Requirements).” Section 5.1 of the ITB lists the “mandatory responsiveness requirements” for bids, and states that: The following terms, conditions or requirements must be met by the bidder to be considered responsive to the ITB. These responsiveness requirements are mandatory.Failure to meet these responsiveness requirements will cause rejection of a bid. Any bid rejected for failure to meet responsiveness requirements will not be further reviewed. (Emphasis in original). Nearly identical language is contained in Sections 1.7 and 4.3.6.1 of the ITB, and in the ITB Review Manual used by Department staff in reviewing the bids submitted in response to the ITB. Indeed, the ITB Review Manual refers to the mandatory responsiveness requirements as “fatal criteria.” The mandatory responsiveness requirement in the ITB that is most pertinent to this case is in Section 5.1.2,3 which states: It is mandatory that the bidder supply one original signed Bid and three (3) copies of the signed bid. . . . . (Emphasis in original). The bid package submitted by CES did not include the original signed bid. It only included the three copies of the signed bid. This omission was noted by Christina Espinosa, the procurement manager for the ITB who opened the bids on the afternoon of December 15, 2006. However, after Ms. Espinosa consulted with her supervisor and the Department’s legal staff, it was determined that the omission was not material and that CES should be given an opportunity to “cure” its failure to submit the original signed bid. As a result, Ms. Espinosa contacted CES and gave it 24 business hours to “cure” the deficiency. CES delivered the original signed bid to the Department on the morning of December 18, 2006, which is three days after the bid submittal deadline in the ITB, but within the 24-business hour deadline given by Ms. Espinosa.4 CES did not have a representative at the bid opening, and there is no evidence that CES knew it was the lowest bidder, either when Ms. Espinosa gave CES an opportunity to “cure” its failure to submit an original bid on December 15, 2006, or when it submitted the original bid on December 18, 2006. It is undisputed that the original signed bid submitted by CES on December 18, 2006, is identical in all respects to the three copies of the bid that were timely submitted by CES on December 15, 2006. Ms. Espinosa reviewed the bid submitted by CES despite its failure to include the original signed bid. According to ITB provisions referenced above, that omission should have resulted in the bid being rejected and not further reviewed. The CES bid included at least one other deviation from the specifications in the ITB. The bid stated in the “service delivery synopsis” that the turnaround time for the repair of fixed equipment would be 15 working days. A 15-day time period was referenced in the original ITB, but it was changed to eight days in an addendum. Ms. Espinosa contacted CES about this discrepancy, and on January 3, 2007, CES advised Ms. Espinosa by e-mail that it “acknowledges the change in repair times from 15 days to 8 days.” CES was not the only bidder that Ms. Espinosa contacted after the bids were opened to obtain clarification or information omitted from the bid. For example, she contacted First Communications to obtain copies of its articles of incorporation and business licenses that were not included in its bid; to get clarification regarding First Communications’ use of subcontractors; and to confirm that First Communications acknowledged the eight-day turnaround time for repair of fixed equipment since its bid did not contain a service delivery synopsis. Section 4.3.1 of the ITB authorizes the Department to “seek clarifications or request any information deemed necessary for proper review of submissions from any bidder deemed eligible for Contract award.” However, Section 4.3.1 also states that “no modifications by the bidder of submitted bids will be allowed.” The ITB authorizes the Department to waive minor irregularities and non-material deviations in bids, and on this issue, the ITB states: Rejection of Bids The Department shall reject any and all bids not meeting mandatory responsiveness requirements. In addition, the Department shall also reject any or all bids containing material deviations. The following definitions are to be utilized in making these determinations. Mandatory Responsiveness Requirements: Terms, conditions or requirements that must be met by the bidder to be responsive to this solicitation. These responsiveness requirements are mandatory. Failure to meet these responsiveness requirements will cause rejection of a bid. Any bid rejected for failure to meet mandatory responsiveness requirements will not be further reviewed. Material Deviations: The Department has established certain requirements with respect to bids to be submitted by the bidder. The use of shall, must or will (except to indicate simple futurity) in this ITB indicates a requirement or condition which may not be waived by the Department except where any deviation there from is not material. A deviation is material if, in the Department’s sole discretion, the deficient response is not in substantial accord with this ITB’s requirements, provides an advantage to one bidder over other bidders, or has a potentially significant effect on the quantity or quality of terms or services bid, or the prices submitted to the Department. Material deviations cannot be waived and shall be the basis for rejection of a bid. Minor Irregularities: A variation from the solicitation terms and conditions which does not affect the price proposed or give the bidder an advantage or benefit not enjoyed by the other bidders or does not adversely impact the interests of the Department. A minor irregularity will not result in a rejection of a bid. (All emphasis in original). The Department relies on these sections of the ITB as its authority to waive minor irregularities and non-material deviations in bids with respect to any provision of the ITB, including the mandatory responsiveness requirements. On January 4, 2007, the Department posted notice of its intent to award the contract for Region I to CES. In the same posting, the Department rejected all bids for the other three regions. The rejection of all bids for the other regions is not at issue in this case. First Communications timely filed a notice of protest and, then, a formal written protest challenging the intended award of the contract to CES. The Department provided notice of this proceeding to CES, as required by the Order of Pre-hearing Instructions. CES did not file a petition to intervene or otherwise seek to participate in this proceeding.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Department issue a final order dismissing First Communications’ protest. DONE AND ENTERED this 5th day of April, 2007, in Tallahassee, Leon County, Florida. S T. KENT WETHERELL, II 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 5th day of April, 2007.
The Issue The issues to be considered here are those associated with the appropriate disposition of RFP-DOT-88-01 (the RFP), related to proposals received from Planning Research Corporation (PRC), AGS Information Services, Inc., (AGS), and which originally involved the proposal by Cubic Western Data, Inc., (Cubic).
Findings Of Fact THE RFP In October 1988 DOT put out a RFP requesting responses from 52 potential offerors. This solicitation garnered responses from three offerors, PRC, AGS, and Cubic. Those responses were received in March 1989. As described in the RFP, DOT desires to acquire a new barrier and ticket toll collection system which would automate the toll collection operations and retrieval of toll audit data, having in mind increased reliability and performance. This project is principally one which envisions the purchase of commodities. It also has associated service requirements. Those service items are principally involved with training and maintenance. This purchase would update technology in the existing toll system which is basically 1950's technology. The existing equipment presents maintenance problems and accounting problems. Those accounting problems are associated with an inaccurate portrayal of the monies collected and the monies that were not collected. The latter item is significant as it relates to the opportunity for potential theft of toll revenue by employees. In addition, there are problems with traffic counts. There are problems with report processing time for management and revenue reports. In the southern end of the turnpike there is the specific problem wherein the DOT is converting from a ticket type system to a coin operated system, and until the barrier type or coin collection equipment contemplated under the RFP is installed, the DOT will be manning those toll collection lanes that are designed for automatic or machine operation. Those lanes are manned by OPS personnel. A copy of the basic RFP may be found as PRC Exhibit 3 admitted into evidence. It does not contain addenda. Within the RFP is found a form which is entitled "State of Florida Request for Proposal Commodities Acknowledgment Form." Under General Conditions, at paragraph 5, it directs the offerors to submit any questions concerning the provisions and specifications in writing to DOT for receipt at a time no later than ten days prior to the proposed opening. It cautions the offerors that if they dispute the reasonableness, necessity, or competitiveness of the terms and conditions in the RFP or the contract award recommendation, to offer that opposition in accordance with Rule 13A-1.006, Florida Administrative Code, and within the time requirements of Section 120.53(5), Florida Statutes. In that same form, paragraph 17 references the liability question and reminds the offerors that any contract resulting from this proposal is designed to hold and save the State of Florida harmless against claims by third parties that resulted based upon a contractor's breach of contract or negligence. Under Special Condition 2.04 DOT reserves the right to reject all proposals. It also speaks to the ability to waive minor irregularities which are seen as those variations from the terms and conditions of the RFP which are not price effective or advantageous to the offeror or beneficial in a way not enjoyed by other offerors or to the extent that the irregularities do not adversely impact the DOT. It reminds the offerors that departure from the RFP requirements other than minor variations cannot be waived. It further states that an offeror cannot modify its proposal after the opening. Special Condition 2.05 follows up the previous condition by stating that nonresponsive proposals will not be considered for the award. Proposals are seen as being subject to rejection in that they may be rejected if found irregular and not in conformance with the requirements and instructions set out in the RFP. Those items may be found to be irregular and nonresponsive in the instance of conditional proposals and indefinite or ambiguous proposals, among other things. Two Special Conditions which are involved with DOT's right to cancel the contract are as follows: Cancellation for Unappropriated Funds The performance by the Department of any of its obligations pursuant to this RFP is subject to and contingent upon the availability of monies lawfully appropriated for the purpose. If the Department deems at any time during the proceedings that funds are not available, the Department will notify the Proposers of such status, and all obligations of the parties, if any, shall end as cancelled by mutual consent. Cancellation for Other Causes A contract arising from this RFP may be cancelled by the Department at any time for failure of the Contractor to complete specified work in accordance with the provisions of the contract and this RFP. Cancellation for such cause shall occur immediately upon Contractor's receipt of written notification thereof from the Department to the Contractor by certified mail, return receipt request. Special Condition 2.12 identifies the terms of a general or prebid conference that calls for mandatory attendance of the offerors and indicates that the members of the Technical Review Committee will be available to respond to questions that the offerors have which relate to clarification of the details of the specifications. Affiliated with that section is Special Condition 2.13 which relates to the offerors' inquiries. It reminds those offerors to examine the RFP to determine whether the DOT requirements are clearly stated. It invites the offerors to state in writing any belief that the requirements of the RFP are restrictive to competition. If the offeror wishes to change any specification, it is required to identify that specification and describe why it is difficult to meet the specification and to give a detailed explanation of why the change is justified. The offeror in that instance also provides what is referred to as a recommended change to the specification. A suggested change must be received by the DOT no later than the date shown as the last date for inquiries and questions set out in the schedule of RFP events. Under the amended schedule of RFP events, the date for last inquiries and questions to the DOT was November 28, 1988. If an offeror failed to request the change by the deadline specified, the offeror is seen to accept the Department's specifications. The DOT is to decide which changes would be acceptable. If necessary, the DOT would issue an addendum reflecting acceptable changes to the RFP, as was done in the instances referred to before. Any changes through an addendum are sent to all offerors to make certain that the offerors are given the opportunity of making proposals that deal with a common set of specifications. Special Condition 3.04 identifies the fact that the price proposals would not be opened until after completion of the evaluation and rating of technical proposals. An offeror's price would not be considered if the technical proposal was rejected during the evaluation. Special Condition 4.01 identifies the stages of the evaluation process. The first stage examines the qualifications of all offerors. The second stage examines technical proposals. The third stage examines price proposals. The fourth stage looks at the remaining proposals in the review process and rates them to arrive at the best overall proposal. Special Condition 6.01.02 speaks to indemnification and states: The contractor shall indemnify, defend, save and hold harmless, the state, the Department and all of its officers, agents, or employees from all suits, actions, claims, demands, liabilities of any nature whatsoever arising out of, because of, or due to breach of, this Agreement by the Contractor, its subcontractors, agents or employees or due to any act or occurrence of omission or commission of the Contractor, its subcontractors, agents or employees. Neither the Contractor nor any of its subcontractors will be liable under this section for damages arising out of injury or damage to persons or property directly caused or resulting from the sole negligence of the Department or any of its officers, agents or employees. The parties agree that 1% of the total compensation [sic] to the Contractor for performance of this agreement is the specific consideration from the Department to the Contractor for the Contractor's indemnity agreement. Special Condition 6.01.03 deals with liabilities for wrongful or criminal act by the Contractor and its language is to this effect: The bond shall be subject to the additional obligation that the principal and surety executing the bond shall be liable to the State in any civil action which might be instituted by the Department or any officer of the State authorized in such cases, for double any amount in money or property the State might lose, or be overcharged, or otherwise be defrauded of by any wrongful or criminal act of the Contractor, his agent or his employees. The parties agree that 1% of the total compensation to the Contractor for performance of this agreement is the specific consideration from the Department to the Contractor for the Contractor's indemnity agreement. General Provision 5.07.02 deals with failure to remove and renew defective materials and work, and it states: Should the Contractor fail or refuse to remove and renew any defective materials used or work performed, or make necessary repairs in an acceptable manner and in accordance with the requirements of the specifications, within the time indicated in writing, the Engineer shall have the authority to cause the unacceptable or defective materials or work to be repaired, removed and renewed, as may be necessary; all at the Contractor's expense. Any expense incurred by the Department in making these repairs, removals, or renewals, which the Contractor has failed or refused to make, shall be paid for out of any monies due or which may become due the Contractor, or may be charged against the contract bond. Continued failure or refusal on the part of the Contractor to make any or all necessary repairs promptly, fully and in an acceptable manner shall be sufficient cause for the Department, at its option, to perform the work with its own organization, or to contract with any other individual, firm or corporation to perform the work. All costs and expenses incurred thereby shall be charged against the defaulting Contractor and the amount thereof deducted from any monies due or which may become due him, or shall be charged against the performance bond. Any work performed subsequent to forfeiture of the contract, as described in this section, shall not relieve the Contractor in any way of his responsibility for the work performed by him. Under General Provision 8.08 dealing with default and termination of contract, for reasons described, DOT has the right to take the contract work away from that Contractor and declare the contract in default within ten days of notice that the complained-of conditions have not been corrected. General Provision 8.09 speaks to the Department and states: Upon declaration of default the Department will have full power to appropriate or use any of all materials and equipment on the site which are suitable and acceptable, and may enter into an agreement with others for the completion of the work under the contract, or may use other methods which in the opinion of the Engineer are required for the completion of the work in an acceptable manner. All costs and charges incurred by the Department because of the Contractor's default, including the costs of completing the work under the contract, shall be charged against the Contractor. In case the expense so incurred by the Department is less than the sum which would have been payable under the contract if it had been completed by the defaulting Contractor, the defaulting Contractor shall be entitled to receive the difference. In case the expense exceeds the sum which would have been payable under the contract, then the Contractor and the surety shall be liable and shall pay the Department the amount of the excess. If after the ten calendar day notice period, and prior to any action by the Department to otherwise complete the work under the contract, the Contractor should establish his intent to prosecute the work in accordance with the Department's requirements. The Department may elect to permit the Contractor to resume the work, in which case any costs to the Department incurred by the delay, or from any reason attributable to the delay, will be deducted from any monies due or which may become due under the contract. General Provision 8.10 deals with the amount of liquidated damages and it states: Such liquidated damages shall be the amounts established in the following schedule which shall apply to each project and retainage. Daily Charge Per Original Contract Amount Calendar Day $50,000 and under ................. $ 200 over $50,000 but less than $250,000 ................... 300 $250,000 or more but less than $500,000 ........................ 400 $500,000 or more but less than $2,500,000 ...................... 550 $2,500,000 or more but less than $5,000,000 ...................... 650 $5,000,000 or more but less than $10,000,000 ..................... 750 $10,000,000 or more but less than $15,000,000 ................ 1,000 $15,000,000 or more but less than $20,000,000 ................ 1,250 $20,000,000 or over ............ 1,250 plus 0.005 percent per day for any amount over $20,000,000 Under the section in the RFP dealing with the Contract Agreement is found Section 14.00 which contains the language set out in Special Conditions 6.01.02 previously quoted. Under the Contract Agreement at Section 19.00 is found a statement of further emphasis about the ability of the DOT to proceed premised upon available funding wherein it is stated: The Department during any fiscal year, shall not expend money, incur any liability, or enter into any contract which, by its terms, involves the expenditure of money in excess of the amounts budgeted as available for expenditure during such fiscal year. Any contract, verbal or written, made in violation of this subsection shall be null and void, and no money shall be paid on such contract. The Department shall required a statement from the comptroller of the Department that funds are available prior to entering into any such contract or other binding commitment of funds. Nothing herein shall prevent the making of contracts for periods exceeding one year, but any contract so made shall be executory only for the value of the services to be rendered or agreed to be paid for in succeeding fiscal years, and shall be contingent upon an annual appropriate of the legislature. THE FIRST EVALUATION COMMITTEE: ITS DECISIONS The committee that was formed to evaluate the several responses had strong technical expertise and limited contractual or administrative experience. Its members were Debra Stemle, Deputy Director Office of Toll Operations; Richard Humphry, head of the facilities and equipment section with toll operations; Scott Love, a data processing manager in the Fort Lauderdale toll operation; Bernard Schmit, a toll technical supervisor; Herb Pressly, associated with the DOT information system and service office; and James Anderson, internal audit staff. Non-voting members included persons from the consulting groups, Post, Buckley, Shue, and Jernigan and Palmer and Associates. Woody Lawson from the DOT Office of Contractual Services served as a liaison to the evaluation committee to address contract questions should they arise. In the experience of DOT it is unusual to purchase commodities by use of an RFP. Moreover, it is unusual to have a commodities purchase in which the Purchasing Division within DOT is not involved. It was not involved on this occasion and the liaison and advisory functions concerning the purchase were through the Contractual Services Division. The evaluation committee began its work within a week of receipt of the proposals. After its first week of review it had made certain discoveries concerning the proposals that can be characterized as problem areas. Those discoveries are outlined in the memorandum prepared through the offices of Post, Buckley, Shue and Jernigan. The operative terms of that memorandum are based upon observations by the evaluation committee. A copy of that memorandum may be found as PRC Exhibit No. 4 admitted into evidence. Cubic's responsiveness was called to question for reasons outlined in the memorandum attachments. In addition, under paragraphs 21-27 attached to the memorandum, certain comments were offered about AGS and its suggestion of changes to the RFP filed with its proposal. A copy of those items that are alluded to in those paragraphs 21-27 may be found as PRC Exhibit No. 5 admitted into evidence. In the attachment to the memorandum, PRC 4, there were observations to the effect that AGS was taking exception to some of the terms of the RFP. Quoting from those paragraphs 21-27, they remarked: AGS - Special conditions Proposal Page No. FDOT TSC-1 Takes exception with RFP 2.008 Need Purchasing and Attorney's office to review. AGS - Special condition Proposal Page FDOT TSC-1 Request Addition to SEC. 2.09 AGS - Special Condition Proposal Pg FDOT TSC-1 Request changes in Section G.01.02 of RFP. [sic] AGS - Special Condition Proposal Pg. FDOT TSC-2 Request Changes in Section 6.01.03 of RFP. AGS - General Provisions Proposal Pg. FDOT TSC-2 Request Changes in Section 5.07.02 AGS - General provision Proposal pg FDOT - 2 Request changes - Section 8.08 Section 8.09 Section 8.10 Refer to Purchasing and Attorney AGS - Proposal Pg FDOT TSC-3 Request Contract Agreement Sec. 22.00 Sec. 14.00 Sec. 19.00 Go to cubic western data Vol 1 CWD Qualification Statement These relate back to sections within RFP already described. As can be seen the evaluation committee was persuaded that it needed the assistance of the Purchasing Division and attorneys within DOT to examine the problems with the AGS suggestions. This is somewhat misleading, because assistance was provided from contractual services, not purchasing. It also felt the need for consultation concerning the responsiveness of Cubic. Ms. Stemle's testimony describes the evaluation committee's reaction to the Cubic and AGS proposals as an attempt by Cubic to change the documentation of the DOT and for AGS to propose a language change to the contract document. In its effort to have the matters examined the evaluation committee contacted Woody Lawson and asked if the evaluation committee should have any real concern about Cubic and AGS. Lawson advised that the evaluation committee should move forward to examine the technical proposals of the three offerors and that the problems that had been seen in the responses might not in their own right constitute a matter of concern. The observation by Ms. Stemle was that this meant, if the proposals in their terms complied in all respects with the RFP, that DOT would be contracting with an offeror for what the RFP called for. This specifically refers to compliance with the technical aspects of the RFP. In essence, the method contemplated by Mr. Lawson's advice to the evaluation committee was one in which the issue of overall responsiveness in view of the problem language in the Cubic and AGS responses related to administrative or contractual requirements was set aside until the technical proposals could be examined. That examination revealed that the technical proposal by Cubic related back to the problems of changes to the contract format and caused the evaluation committee great concern about the responsiveness of Cubic. The technical aspects of AGS were not found to present sufficient problems, in the mind of the evaluation committee, to cause a re-examination of the contract or administrative issues that were addressed in the memorandum attachments within PRC No. 4 as they describe the suggestions in PRC No. 5 that had been promoted by AGS in its response. From Ms. Stemle's point of view, the, problems that existed with the AGS suggested contractual changes or administrative changes that could be addressed in the course of a negotiating phase leading to a contract should AGS be found to be the most advantageous offeror. Persons within DOT who might have a greater appreciation of the significance of the AGS suggestions, that is to say persons from the contracting services or legal arm within DOT did not make a critical examination of the AGS suggestions. By contrast to the circumstance with the AGS proposal, a meeting was convened to consider the responsiveness of Cubic following the assessment of its technical terms. Out of that meeting a decision was reached to reject the proposal of Cubic. These activities are described in the composite PRC No. 7, which includes a memorandum of May 16, 1989, concerning the meeting to discuss the responsiveness issue and a May 18, 1989 letter advising Cubic of the decision to reject its proposal. This decision was met with a protest filed by Cubic. The terms of that formal written protest are described in the Cubic Exhibit No. 3 admitted into evidence. That protest was voluntarily dismissed on July 31, 1989 as shown in Cubic's Exhibit No. 4 admitted into evidence. The case had been forwarded to the Division of Administrative Hearings for consideration as Cubic Western Data, Petitioner vs. Department of Transportation, Respondent, DOAH Case No. 89-3852BID. With the advent of the notice of voluntary dismissal, the case was dismissed before the Division of Administrative Hearings by order, shown in Cubic Exhibit No. 5 admitted into evidence. Following the notice of voluntary dismissal of the Cubic protest the evaluation committee proceeded with the work of examining the remaining proposals and the office of contractual services opened the price proposals. The office of contractual services was made aware of the scoring in the technical aspects of the two remaining proposals and conducted the opening of the price proposals at a public session. The office of contractual services and the evaluation committee conducted independent examinations of the pricing. In doing this work those groups had an engineer's estimate of the cost which was based upon all unit rates which had been requested in the RFP. In effect, there was a comparison of the proposals against the engineer's estimate. The committee had in mind making certain that the pricing was in keeping with the technical proposal. Through this process DOT derived its proposal tabulation, a copy of which may be found as PRC Exhibit No. 8 admitted into evidence. It shows that out of a possible 2,000 points PRC achieved 1,830 and AGS 1,304. This document reminds those concerned that any intended award of the contract is contingent upon and subject to the Governor and Cabinet's approval under the authority of Section 287.073, Florida Statutes, and Rule 13N-1.005, Florida Administrative Code. This exhibit constituted a statement of the DOT intent to award to PRC. The bids had been opened on September 11, 1989, and the posting time ran from 8:00 a.m., November 21, 1989 until 8:00 a.m., November 28, 1989. CUBIC RETURNS Notwithstanding the voluntary dismissal of its challenge to the agency decision finding it unresponsive, as noticed July 31, 1989 and the resultant lack of involvement of Cubic in the review process associated with examination of the price quotation and comparison to the remaining offerors, Cubic attempted to resurrect its participation in the administrative process. This was done by a letter of protest on November 27, 1989, which may be seen as Cubic Exhibit No. 6 admitted into evidence, and a formal written protest dating from December 6, 1989, Cubic Exhibit No. 7 admitted into evidence. The case was referred to the Division of Administrative Hearings and became Cubic Western Data, Petitioner vs. Department of Transportation, Respondent, and Planning and Research Corporation, Intervenor, DOAH Case No. 89-6926BID. On January 2, 1990, the Hearing Officer recommended the dismissal of the protest by Cubic and by Final Order of January 22, 1990, the Secretary of DOT dismissed the protest and ordered that the contract be awarded to PRC. That order did not contain the caveat found in the notice of intent to award tabulation that reminded interested persons that the decision was contingent upon approval by the Governor and Cabinet pursuant to Section 287.073, Florida Statutes, and Rule 13N-1.005, Florida Administrative Code. A copy of the Recommended Order and Final Order may be found as Cubic Exhibit No. 8 admitted into evidence. Having determined to award the contract to PRC and in anticipation of that outcome, DOT provided documentation to the Director of the Division of Purchasing of the Department of General Services in support of its choice on November 15, 1989. A copy of that information with a transmittal letter may be seen as PRC Exhibit No. 10 admitted into evidence. This was followed by a February 7, 1990 letter to the Director of the Division of Purchasing of the Department of General Services requesting that the item be agendaed before the Governor and Cabinet for its February 20, 1990 meeting. The letter mentioned the fact that court action which had been commenced by PRC attempting to prohibit the disclosure of the details of its proposal had been dismissed. Thus, the cabinet aides and the Governor and Cabinet would be able to examine the details of PRC's submission. The correspondence points out that the Cubic price proposal had never been examined by DOT and remained unopened. The correspondence; included a copy of the January 22, 1990 Final Order dismissing the Cubic protest. A copy of the February 7, 1990 correspondence was admitted as PRC Exhibit No. 1. The record does not reveal that the Governor and Cabinet sitting as the State of Florida, Department of General Services has ever acted to approve or disapprove the intended contract award to PRC. As of the week of the final hearing it was still a deferred agenda matter in front of that body. Secretary Benjamin J. Watts, agency head for DOT, had his first involvement in this case in the summer of 1989 at about the time Cubic brought its initial challenge to the decision finding it unresponsive. In the absence of the then Secretary Kaye Henderson he spoke with the General Counsel to DOT, Tom Bateman, and advised Bateman to make the decision that Secretary Henderson contemplated; that decision being one where the agency moved forward with the decision making process concerning this RFP. Following that circumstance Watts received a number of telephone calls from different offices or individuals in the legislature inquiring about whether the DOT properly reviewed this case and if Cubic had been treated fairly. Watts replied in the affirmative. Sometime around Christmas of 1989, Watts met with Cubic, PRC and AGS to discuss the pending case and upon the advice of an attorney within DOT, Bob Daniti, decided to leave matters to the Hearing Officer. This pertained to Cubic's existing case which was eventually dismissed on January 22, 1990. Watts then received a telephone call on February 14, 1990, from Brian Ballard of the Governor's office. Watts had a meeting with Ballard to describe Watts' impression of the case. Ballard requested that DOT do a side-by-side comparison of the proposals based upon information that Cubic had supplied Ballard and his office, according to Ballard. Watts is unaware of who Ballard may have met with from the Cubic firm. This inquiry by Ballard was made at a time beyond which DOT had declared its intention to award the contract by entry of its Final Order on January 22, 1990. From what Ballard said to Watts, Cubic had given Ballard two or three exhibits out of the proposal and highlighted certain areas and within those exhibits told Ballard that if Cubic is being declared unresponsive, then some of the other firms should have been found unresponsive as well. The opposition to the DOT choice to award to PRC as expressed by persons who communicated their point of view to Watts was not based upon any concerns as to the technical analysis. It was premised upon concerns about procedures. Ballard also informed Watts that he wanted the review done and a recommendation made about this matter on Monday following that Wednesday, which would have been February 19, 1990. As Ballard expressed it this would allow him to get back with Cubic on February 20, 1990. Watts responded to these instructions by telling a second committee which he selected on February 14, 1990 to make a further review and that he wished to have their recommendations by February 19, 1990, if possible. He told them that if that was not possible, then their reasons should be provided by the end of the upcoming weekend. In anticipation of the discussion with the Governor's office, Watts told his personnel that he wanted them to give him some estimate of how long it would take. If the review could not be completed by the designated time, Watts said that he intended to simply go back to Ballard and tell him that it was not possible to give an impression of this case by the deadline which Ballard had imposed. In furtherance of the instructions which he had been given by Ballard, Secretary Watts convened the second evaluation committee which was constituted of persons who had stronger grounding in administrative and contract matters. This group included George Lovett, the General Counsel for District V; John Ellis, Professional Services Coordinator in that same District; Brant Hargrove, General Counsel for District II; Nodrie Moses, from the procurement office; Jack Monpetit, Professional Services Coordinator, District II and Marly Eichhoefler, from the DOT Auditor's office. Secretary Watts issued a memorandum which gave a written indication of his intentions about the duties of the second evaluation committee. A copy of that memorandum may be found as DOT Exhibit No. 1 admitted into evidence. He charged that group with the responsibility to review the RFP and all proposals, to include the Cubic proposal which had been rejected in the final order entered cutting off the participation of Cubic in the process. He told them to review and compare major elements of each proposal and determine how responsive each offeror had been in completing the RFP. He indicated that they should identify any problem areas, procedures, questions or etc. that revealed themselves. He allowed them to question the first review committee as well as others who had been involved in the process to gain information about background and technical matters, and provided a list of names of persons who could be contacted to include the members of the first evaluation committee. The Secretary did not intend that the second review committee look carefully at the technical side of the proposals. Being uncertain of their charge in that respect, the second evaluation committee came back to the Secretary early on in their review process and asked for clarification on that point and were told that they need not concern themselves with the particulars of the technical aspects of the proposals. It was not the intention of Secretary Watts that the second evaluation committee get involved in any in-depth discussion or analysis of the choices of the first evaluation committee or to offer a specific critique of the work done by that group. His intention was that the second evaluation committee operate independent of the activities of the first evaluation committee. Watts even went so far as to instruct his second evaluation committee not to ask questions of the first evaluation committee about what conclusions the initial group had reached and not to get information or documents from the first group that would reveal what the prior group had done. The second evaluation committee pursued its responsibilities for several days. On February 17, 1990, it wrote a memorandum to Secretary Watts with its recommendations. A copy of that memorandum may be found as DOT Exhibit No. 2 admitted into evidence. The second evaluation committee did not draw any different conclusions about the responsiveness of the Cubic proposal, nor ascertain any impropriety in treatment that Cubic received in the evaluation process. It did determine that AGS was also nonresponsive for reasons that will be discussed more thoroughly. The evaluation of the PRC proposal by the second evaluation committee lead to the conclusion that the PRC proposal was responsive. That perception was held by the first evaluation committee as well. It is accepted here, together with the opinion of the unresponsiveness of Cubic. After receipt of the report from the second evaluation committee, Secretary Watts held an exit interview with those persons. In the course of that exit interview the conclusions reached by the second evaluation committee were explained to Watts. It was at that point that Watts gave this group some insight into the history of the case in terms of the contentions that had been made about DOT and its first assessment of these proposals. At this juncture, he asked the second evaluation committee if they discovered anything improper with the bidding or anything in the way of influencing that process, taken to mean improper influence. The second evaluation committee told him that there did not appear to be any impropriety or undue influence. That perception is in accord with the assessment of the present record, in that it has not been revealed that the DOT participated in any impropriety or was susceptible to undue influence in the process of the initial evaluation of the responses. Likewise, nothing in the activities of the second evaluation committee is seen to be inappropriate in terms of the portions of this project that they examined related to the administrative or contractual portion of the RFP. The conclusions that they reached are correct in academic terms. Their ability to proceed to evaluate as a jurisdictional matter is not acceptable for reasons that will be discussed in the conclusions of law. More particularly, the second evaluation committee in its exit conference with Secretary Watts told him that their impression of those persons that they had spoken with from the first evaluation committee did not lead them to conclude that there was any pressure on or undue bias exercised by that group. Secretary Watts described for the second evaluation committee what he called rumors around Tallahassee of political influence used to find Cubic nonresponsive and apparently the suggestion that this would work somehow to the advantage of PRC. Again, to the extent that form of commentary was being pursued, it does not comport with the facts in this case. The second evaluation committee in its conclusions about the work of the first evaluation committee determined that the first group had not spent as much time in analyzing procedural and administrative issues as the second group did and saw this as being the reason the first evaluation committee did not discover the unresponsive nature of the AGS proposal. The second evaluation committee did not look closely at the AGS technical proposals to see how those might have an influence on its proposed contract language. Nonetheless, explanation of the AGS bid with the suggested contractual arrangement which AGS has advanced (See PRC Exhibit No. 5), reveals that a consideration of the technical aspects of the AGS bid would not save the proposal from a declaration that it is unresponsive. With the determination that AGS was not responsive, DOT was left with one responsive offeror. Secretary Watts had a conversation with Ronnie Thomas, Director of Purchasing for the Department of General Services. The recommendation that Thomas made to Watts was to re-advertise in that there were three offerors basically capable of doing the work and it would be in the best interest of the taxpayers to re-advertise. The choice to re-advertise would be in lieu of the award of the contract to PRC. That contract would not be for a sole-source purchase. In would be under the guise of what is referred to in Section 287.062(2), Florida Statutes, as a negotiated purchase. In addition to discussing the situation with the second evaluation committee, Secretary Watts sought the advice of his legal staff. He decided to re-advertise because he felt that DOT had not followed its own procedures, as it relates to examination of the AGS proposal by the original evaluation committee and its failure to deal with the problems in that proposal. Under the circumstances, Watts did not believe that he would be able to support the decision to award to PRC, before the public and the Governor and Cabinet. In his mind this outweighed any decision in favor of PRC as being an arrangement that would be advantageous to the State. He believes that there is a benefit to be derived by competition, whether re-advertising leads to a better price advantage or not. Secretary Watts believes that even though the matter has been referred to the Governor and Cabinet for its decision, DOT has the ability to reject all proposals and re-advertise. On February 21, 1990, all three offerors were informed of the agency decision to reject all bids. The correspondence directed to PRC may be found as PRC Exhibit No. 9 admitted into evidence. The correspondence directed to Cubic may be found as Cubic Exhibit No. 9 admitted into evidence. In its operative terms, that correspondence is the same and in pertinent part states: Further review of the proposals submitted in response to RFP-DOT-88-01, Toll Collection System, revealed that the proposals submitted by AGS Information Services, Inc., and Cubic Western Data were non-responsive. In order to have competitive offers there must be two or more offers submitted by responsive and qualified offerors. As a result, we do not have two competitive proposals. The Department has determined that the commodities which were the subject of this request for proposals are available from more than a single source. Therefore, the Department has decided to withdraw its notice of intent to award RFP-DOT-88-01 to Planning Research Corporation, which was contingent on Governor and Cabinet approval. This letter is your notice of our decision to reject all proposals. It is our intent to issue a new Request for Proposals for a Toll collection System. On that same date an amended final order was issued signed by the same person who had authored the letter notifying the parties of the decision to reject all proposals, as designee of Watts. The amended final order in its substance is associated with DOAH Case No. 89-6926BID and differs from the January 22, 1990 final order to the extent of reminding those parties that the award to PRC is contingent upon approval by the Governor and Cabinet in accordance with Section 287.073, Florida Statutes and Rule 13N-1.005, Florida Administrative Code. Secretary Watts perceives the amended final order as establishing a correction to the January 22 order, concerning advice to the parties that the contract must be approved by the Governor and Cabinet. He does not perceive this as being a continuing statement of the intention to award to PRC in the face of a contradictory decision to reject all bids, as evidenced in the correspondence of that same date. The DOT estimate concerning the time necessary to re-advertise contemplates an intent to award by December 7, 1990, with no time allowance for a protest from a disappointed offeror. PROBLEMS WITH THE AGS PROPOSAL Based upon an examination of the testimony of Secretary Watts, Terry Cappellini, Director of Purchasing within DOT, and members of the second evaluation committee, together with an analysis of the overall record concerning the RFP language and policy matters associated with the RFP process, the AGS proposal is not responsive. As alluded to before, PRC Exhibit No. 5 sets out the suggestions which AGS had in mind when it submitted its proposal. It calls them exceptions. In Special Condition 2.08, the language of which is found at page 6, AGS has recommended insertion of additional language to the affect that: In the event the Department cancels for unappropriated funds this RFP or any contract entered into with Contractor pursuant thereto, the Department will, within 30 days of notification of such cancellation, pay Contractor for all work actually performed. Such payment shall be in accordance with the payment terms specified in the Contract between the Department and the Contractor. Similar language is contemplated as being added to Section 19.00 under the Contract Agreement which language in the Contract Agreement has been recited at page 11 in the recommended order. In describing the reasons for the suggested additional language AGS states that it is requiring assurance that if the RFP or any contract with DOT and AGS is cancelled because of a problem of funding, AGS insists on being paid for work that is actually performed. In furtherance of that arrangement it recommends insertion of the above-quoted language. With respect to Special Condition 2.09, which is quoted at page 6 in this recommended order, AGS vies for cancellation after allowing AGS a reasonable opportunity to remedy the problems contemplated, instead of the right to cancel immediately. It recommends the insertion of additional language to the affect: In the event the Department intends to cancel a contract arising from the RFP due to Contractor's alleged failure to complete specified work in accordance with the provisions of the contract or this RFP, the Department shall notify Contractor of such intention, identifying the alleged deficiency, and allow the Contractor a period of 30 calendar days form the date of such notice to remedy the deficiency. In the event Contractor fails to remedy the deficiency within such 30 day period, the Department may cancel the contract effective immediately. Related to Special Condition 6.01.02 dealing with indemnification, as related on page 8 in the recommended order, AGS states that it finds that the idea of indemnification associated with the sole negligence of the Department is not appropriate and would recommend that the word "sole" be substituted for by "or primary." A similar change is recommended for Section 14.00 under the Contract Agreement which has the same language as Special Condition 6.01.02. In discussing Special Condition 6.01.03, the text of which is found at page 8 in the recommended order, AGS attempts to clarify that the one percent reference at special Condition 6.01.03 is in addition to the one percent total compensation for performance that is set out in Special Condition 6.01.02 by the insertion of additional language in Special Condition 6.01.03 in this way: Section 6.01.03 specifies that 1% of total compensation to the Contractor is the agreed compensation for performance by Contractor of the Indemnity Agreement set forth therein. AGS would like to make clear that this 1% is in addition to the 1% of total compensation for performance of the Indemnity Agreement set forth in Section 6.01.02. Accordingly, AGS recommends insertion of the following additional language in Section 6.01.03: `This 1% in addition to 1% of total compensation specified in Section 6.01.02 above.' General Provision 5.07.02 is associated with the failure to the contractor to remove or renew defective materials and work, the text of which section is set out at page 9 of the recommended order. AGS expresses the belief that the contractor should be given a reasonable period of time to remove or renew before rights of the DOT are triggered. It recommends the insertion of language to the effect: The Department's rights under this Section shall be triggered only in the event Contractor fails to remove or renew defective material and/or work within a reasonable period of time from the date of request for such removal or renewal. Engineer and Contractor shall agree upon the duration of such time period on a case by case basis. By remarks directed to General Provision 8.08 of the General Provisions related to the 10 day grace period to cure the defaults, AGS states its belief that 30 days is more reasonable and requests that the grace period be extended to 30 days. In discussion of General Provision 8.09 dealing with the ability of the DOT to complete work after default, found at page 10 of the recommended order, AGS describes its belief that contract law and equitable considerations mandate that DOT is required to use its best efforts to mitigate damages and recommends insertion of the language to the effect: The Department shall use best efforts to mitigate damages in performing or arranging to have work performed as provided in this Section. Discussion is made by AGS of General Provision 8.10, which is described at page 11 in the recommended order. AGS believes that the schedule of liquidated damages should discharge the contractors liability for acts or admissions unless the law requires otherwise. AGS commends insertion language to the effect: Except as otherwise provided by law, payment by Contractor of liquidated damages in accordance with this schedule shall fully discharge Contractor's liability for acts or omissions giving rise to such damages. In discussing the Contract Agreement AGS requires the addition of a Section 22.00 which has this language: In no event will contractor be responsible for any special indirect, incidental or consequential damages resulting from loss of use or opportunity, data or profits arising out of or in connection with the use or performance of the products or services proposed to be delivered hereunder, even if contractor was informed, knew or should have known of the possibility of such damages. In no event will the liability of contractor in connection with the work proposed to be performed hereunder exceed amounts paid by the Department to contractor for such work. This limitation applies to all causes of action in the aggregate, including, without limitation, breach of contract, breach of warranty, negligence, strict liability and other unintentional torts. Finally, under the Contract Agreement is found this comment by AGS wherein it says: AGS requires that the contract define the work AGS will perform. We have priced the work with the understanding that our Technical Proposal defines the work. If we will be required to do work not defined, we will be willing to review our price proposal. In the provisions within the RFP that were referred to in the initial discussion of its terms, the offerors were given adequate opportunity to discuss and clarify those provisions which they did not understand or agree with. Absent success in the attempt to try to persuade DOT to change its position concerning those items within PRC 5 that AGS takes exception to, it had the ability to make a timely challenge to those terms and conditions. From the record, AGS did not attempt to persuade DOT to make changes nor did it pursue challenges to the terms and conditions excepted to. As a consequence, according to Special Condition 2.13, AGS has acquiesced in the terms and conditions. Absent a challenge within 72 hours of the date for submitting requested changes, which date according to PRC Exhibit No. 3 was November 28, 1988, no challenge may be pursued. To allow AGS to advance these recommendations and requirements set out in PRC 5 through the submission of its proposal, would be to condone a material departure from the requirements of the RFP. These items constitute other than minor irregularities which may not be waived. As described in Special Condition 2.04 these arrangements which AGS promotes could affect the price of the proposal and give the offeror an advantage over the other offerors, benefits not enjoyed by the competition. Of course Cubic sought similar advantage, so it is PRC who bore the brunt of these attempts by the competition. To allow AGS to require items or bargain for items in its favor that are not enjoyed by its competitors at a time beyond the acceptable place at which these adjustments could have been allowed or mandated by a decision honoring a challenge to the specifications, would be violative of Special Condition 2.13. It would also adversely impact the interest of the DOT described in Special Condition 2.04, in that the items which AGS would change are extremely important to DOT as a policy matter. These are items that DOT would not wish to surrender through negotiation. This speaks in particular to changes to Special Condition 2.08, General Condition 8.09, the addition of Section 22.00 under the Contract Agreement and the required deference to the technical proposals of AGS instead of the RFP. Moreover, under Special Condition 2.05 the AGS attempt constitutes a nonresponsive proposal in that it is a conditional proposal and is indefinite and ambiguous. Under the scheme contemplated by the RFP, it would be inappropriate to wait until the time of intended contract award to AGS, as hypothetical winner, before making the final decisions on the recommendations that AGS had made to change the terms of the RFP. Regardless, in those instances which have been identified wherein AGS required a certain outcome associated with the RFP terms, this potential bargaining session is not contemplated and a decision on responsiveness would have to be reached without regard for such a bargaining session. In either event, whether referring to the recommended changes or required changes, AGS did not pursue these matters appropriately and they are items which are material, which may not be waived as minor irregularities and which cause the AGS bid to be unresponsive. As generally described before, in the event changes are requested as contemplated by Special Condition 2.13, DOT determines if those changes are acceptable and to the extent that they are found to be acceptable they are incorporated as an addendum to the RFP, thus allowing all offerors the opportunity to submit proposals to the same controlling specifications. When AGS mandated a different set of requirements or requested them, it deprived the other offerors of the opportunity to submit proposals associated with the same specifications. This created an advantage and benefit for AGS not enjoyed by PRC. In summary, none of the items that the first evaluation committee and the second evaluation committee discovered about the PRC proposal constituted other than minor irregularities. As described by Terry Cappellini, who is the Manager of the Office of Contractual Services for DOT, the PRC proposal is advantageous to the state in the sense of being the high technical low priced proposal.
Recommendation Based upon the Findings of Fact and the Conclusions of Law, it is, RECOMMENDED: That a Final Order be entered leaving in place the final order dated January 22, 1990 as amended by the February 21, 1990 order, in which the decision was made to recommend the intended award of a contract to PRC to the Governor and Cabinet; which sets aside the decision to reject all proposals, takes the necessary action to arrange for the item to be agendaed before the Governor and Cabinet; and foregoes further action until the Governor and Cabinet has made its decision. DONE and ENTERED this 22nd day of May, 1990, in Tallahassee, Florida. CHARLES C. ADAMS, 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 May, 1990. APPENDIX TO RECOMMENDED ORDER, CASE NO. 90-1583BID The following discussion is given concerning the proposed facts of the parties. Petitioner's Facts Paragraph 1 Reference to a September 23, 1988 publication in the Florida Administrative Weekly is not necessary in that the start-up date of October, 1988 has been Established in the recommended order and that suffices. Otherwise this paragraph is subordinate to facts found. Paragraphs 2 through 16 are subordinate to facts found. Paragraphs 17 and 18 are not necessary to the resolution of the dispute. Paragraph 19 in its first and third sentence is subordinate to facts found. The second sentence is not necessary to the resolution of the dispute. Paragraphs 20 through 25 are subordinate to facts found. Paragraph 26 is contrary to facts found. Paragraphs 27 through 31 are subordinate to facts found. Paragraph 32 is subordinate to facts found except to the extent it suggests that the AGS proposal is responsive. In that way it is contrary to facts found. Paragraph 33 is subordinate to facts found with the exception that the problem with the AGS proposal in its suggestive contract language were not answered by the review. In Paragraph 34, the impression by the initial evaluation committee that the AGS problem areas could be worked out later was erroneous. The discussion in Paragraphs 35 through 39 concerning the ability of the agency to reconcile the problems with the change to the specified contract language and conditions contained within the RFP does not comport with the facts in the recommended order. The idea of default by an awardee and collection of the bid bond does not come into play because there is no opportunity to wait that long before resolving the issue of responsiveness of the offer concerning those contract terms and conditions set forth in the RFP. Paragraph 40 is subordinate to facts found. Concerning Paragraph 41, notwithstanding the fact that the agency has no specific policy about indemnification language, if an offeror wanted to modify the suggested language within the contracts and conditions found in the RFP it had to do so in accordance with the discussion in the recommended order. Concerning Paragraph 42, even though there is no definitional statement of what an additional proposal may be, this does not preclude the opportunity to examine that issue on a case by case basis. That was done here. The suggestion by Paragraph 43 that the proposed section 22.00 is other than part of a conditional proposal by AGS is rejected, as is the notion that this language in the proposed section 22.00, described by AGS as required, can be rejected at the time of a contract execution with AGS. It would be inappropriate to wait that long to decide the issue of the acceptability of that proposed section 22.00. That arrangement is not in keeping with the discussion in the recommended order. Paragraph 44 is accepted with the exception that AGS and the DOT could not consider contract changes at the time of potential contract award to AGS. Paragraphs 45 through 48 are subordinate to facts found. Paragraph 49 is contrary to facts found. Paragraphs 50 through 52 are subordinate to facts found. Concerning Paragraph 53, the only thing unique about the Cubic circumstance is its prior participation in the process. Paragraphs 54 through 56 are subordinate to facts found. Paragraph 57 is subordinate to facts found with the exception of the significance of the failure of the second evaluation team to appreciate that the first evaluation team had some knowledge of the problems of the AGS proposal. A clear impression of what was done by the first evaluation team would not appear to have promoted a different result in the analysis made by the second evaluation team. Paragraphs 58 through 60 are subordinate to facts found. Paragraph 61 is contrary to the impression described in the recommended order, in that both Cubic and AGS were unresponsive. The suggestion in Paragraph 62 that a complete evaluation of the technical matters would have caused a different impression of the problems with the AGS proposal is not accepted. Paragraphs 63 through 65 are contrary to facts found. Respondent's Facts These facts are subordinate to facts found. Intervenor's Facts Paragraphs 1 through 21 are subordinate to facts found. Paragraph 22 in the sense of suggesting immediate availability of John Berry to advise the first evaluation committee is not an accurate portrayal and it is that immediate advice which became significant in this case. That advise was provided by Woody Lawson. Paragraph 23 is not necessary to the resolution of the dispute. Paragraphs 24 through 27 are subordinate to facts found. It is accepted that the original evaluation committee perceived the AGS proposed addition of section 22.00 in the Contract Agreement as a recommendation; however, the more pertinent concern was the overall attitude of the first evaluation committee and its actions pertaining to the entire set of issues that were described in PRC 5. Paragraphs 25 and 30 are subordinate to facts found. Paragraph 31 is accepted wherein it describes the lack of contact with the DOT legal office. It is not accepted where it suggests that there was not contact with the purchasing office as having any significance. It sufficed to contact the contractual services office for advice without resort to discussions with the purchasing office. Paragraphs 32 through 43 are subordinate to facts found. Concerning Paragraph 44 it is not considered unusual that in the posting of the proposals, there rating and the statement of intended contract award that mention would be made of the decision being contingent upon approval of the Governor and Cabinet. Paragraphs 45 through 52 are subordinate to facts found. Paragraph 53 is incomplete in its depiction of the reasons for the request of Watts to reevaluate responsiveness. A more complete explanation is set forth in the recommended order. Paragraphs 54 through 61 are subordinate to facts found. Paragraph 62 is not necessary to the resolution of the dispute. Paragraphs 63 through 76 are subordinate to facts found. Paragraph 77 is contrary to the impression of what Secretary Watts concluded. The impression given and found as fact in the recommended order is that his principal concern with the activities of the first evaluation committee were those associated with the failure to ascertain the problems with the AGS proposal. In determining responsiveness the steps for that determination were identified in the RFP as being offeror qualification, responsibilities of the technical proposal, price responsiveness, followed by decision in a comparison of those offerors who had met those first three requirements. In that sense as described in the recommended order declarations regarding Cubic's responsiveness were not dependent on the impression of AGS and the declaration of non- responsiveness of AGS was not dependent on the treatment of Cubic. To the extent that Cubic by the report of those suggested facts is trying to describe some perceived unfairness in the treatment that Cubic received by either evaluation committee or anything that was done in the process in the review of Cubic's proposal, it is rejected as an inferential fact. Paragraph 78 is rejected for reasons as stated above. Paragraph 79 is subordinate to facts found. Paragraph 80 is not necessary to the resolution of the dispute. Paragraphs 81 and 82 are subordinate to facts found. Paragraph 83 is not necessary to the resolution of the dispute. Paragraph 84 is subordinate to facts found with the exception of the statement by Secretary Watts with the ability to reject a contract award once it had been made. That circumstance does not exist here and is not reported factually. Paragraph 85 is not necessary to the resolution of the dispute. Paragraphs 86 and 87 are subordinate to facts found. Paragraph 88 is rejected to the extent that it suggests that Secretary Watts could not defend the award to PRC. More properly stated he chose not to defend an award to PRC. Paragraphs 89 through 92 are subordinate to facts found. Paragraph 93 is rejected for reasons described in discussion of Paragraph 77. Paragraphs 94 through 97 are subordinate to facts found. Paragraph 98 is envisioned by the overall facts found in the recommended order. While the facts suggested in Paragraph 99 are acknowledged, they are not found to be necessary factual findings for the recommended order. Paragraphs 100 and 101 are subordinate to facts found. COPIES FURNISHED: Ben G. Watts, Secretary Department of Transportation Haydon Burns Building, M.S.-58 605 Suwannee Street Tallahassee, FL 32399-0458 Deborah A. Getzoff, Esquire Hala Ayoub, Esquire Richard C. Bellak, Esquire Fowler, White, Gillen, Boggs, Villareal and Banker, P.A. 101 North Monroe Street Tallahassee, FL 32301 Paul J. Martin, Esquire Susan P. Stephens, Esquire Department of Transportation Haydon Burns Building, M.S.-58 605 Suwannee Street Tallahassee, FL 32399-0458 Frank A. Shepherd, Esquire Gary M. Pappas, Esquire Popham, Haik, Schnobrich and Kaufman, Ltd. 4100 One CenTrust Financial Center 100 Southeast Second Street Miami, FL 33131
The Issue The issue for determination is whether Respondent's intent to award a contract for bridge-tending services (RFP DOT 92/93 2088 REBID) to Intervenor constitutes fraudulent, arbitrary, capricious, illegal or dishonest action.
Findings Of Fact The parties stipulated to findings of fact set forth in paragraphs 1.-12., below. Stipulated Facts Respondent issued the RFP for bridge-tending services on May 14, 1993. Proposals submitted in response to the RFP were opened on June 16, 1993. Proposals were submitted by five firms, including Petitioner and Intervenor. All proposals were determined at the time to be responsive. A Technical Review Committee (TRC) was appointed to review the technical portion of the proposals. The three members of the TRC were Alan Hyman, J. L. Gillis, and Yingyong Sujjavanich. The members reviewed the technical portion of the proposals on June 17, 1993. The evaluation forms completed by the TRC and a summary score sheet were delivered to Respondent's purchasing office on the morning of June 18, 1993. The price proposal was evaluated by Respondent's purchasing office. The price evaluation of each proposal was performed by applying a formula which compared the submitted price quotations. After the scores for the technical proposal and the cost proposals were totalled, it was determined that Intervenor's proposal had earned the highest number of points. This result was presented to Respondent's District 2 Executive Committee and a recommendation was communicated by the Purchasing Director to award the RFP to Intervenor. The Executive Committee accepted the recommendation and directed that the contract be awarded to Intervenor. On June 18, 1993, at 4 p.m., the bid tabs were posted noticing Respondent's intent to award the contract to Intervenor. On or about July 6, 1993, Petitioner requested a meeting with Respondent's representatives regarding the RFP. That meeting was held on July 9, 1993. At the meeting, Petitioner raised an issue regarding an arithmetic error in the scoring of the technical proposals. Intervenor remained the proposer with the highest number of points. However, another proposal formerly ranked as number two was lowered to number three status and Petitioner, previously ranked number three, was raised to number two rank. On July 12, 1993, Respondent posted an amended bid tab indicating its intent to award the contract to Intervenor. Other Facts Respondent chose to score the bid pricing, a non- subjective task, in Respondent's District 2 office. Technical portions of the proposals were reviewed by the TRC, comprised of members from Respondent's District 5 office. This unusual step was taken by Respondent in order to reduce prejudice to any proposal in view of previous accusations made against District 2 employees. Bud Rosier, Respondent's employee, has overall responsibility for bridge determination that District 5 employees chosen as committee members were qualified to evaluate the proposals. Each response to the RFP contained a technical proposal and a price proposal. Intervenor's technical proposal received 1.33 points less than Petitioner's technical proposal. The price proposals, as noted above, were scored in accordance with a mathematical formula that compares price proposals to each other and does not take any subjective factors into consideration. Intervenor was awarded 5.55 points, compared to Petitioner who received no points for a proposal more than $140,000 higher for the initial year of the contemplated contract. Although members of the TRC were not given any background information by Respondent regarding the competing proposals, beyond that contained in the submitted bid packages, no information was withheld from the committee. The members were given adequate time to review the proposals and do any desired independent background checking regarding past performance of any proposer, although no requirement in the RFP mandated such a background review. At least one of the TRC members, Sujjavanich, chose not to independently research past performance of the Intervenor. No evidence was offered at hearing with regard to whether the other two members independently researched any of the proposers' past performances. Even if review of past performance, apart from the materials submitted by the proposers, were required by provisions of the RFP, failure of the evaluators to accomplish that task would result only in the loss to Intervenor of the 3.66 points awarded for past performance and Intervenor, with a remaining total of 81.89 points, would remain the highest ranked proposer. In view of the objective process used to arrive at the results of the evaluation of the prices of the competing proposals, there was no need to provide this information to the members of the TRC who were doing the technical proposal evaluation. Although the RFP provided that the TRC would be given such results, the failure of Respondent's personnel to provide this information to the evaluators could not have made any difference in the final result since the committee, using the objective price evaluation criteria, would have arrived at the same result as the purchasing office on cost scores. The admitted failure to provide the superfluous cost information to the TRC is inadequate to show that such omission resulted in prejudice to the final scores of any of the competing proposals and must be considered to be only a minor variation from the RFP by Respondent. Contrary to Petitioner's allegations, there is no competent substantial evidence to support any finding that the members of the TRC (Hyman, Gillis, and Sujjavanich) did not possess required background, experience or professional credentials adequate for evaluating proposals for bridge-tending services. All three members of the TRC were familiar with the RFP, attachments to the RFP, bridge-tending procedures and bridge-tending qualification procedures. There is no competent substantial evidence to establish that Intervenor's proposal is not financially feasible. Proposed utilization of 72 bridge-tenders by Intervenor for a total price of $673,333.44 does not mean that 72 bridge-tender positions would be established or filled, or that the positions would be paid at the rate proposed by Petitioner of $8.40 per hour. The evidence establishes that a proposer would need an optimum number of bridge requirements.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that a Final Order be entered granting the award of the bid in RFP DOT 92/93 2088 Rebid to Intervenor. DONE AND ENTERED this 4th day of October, 1993, in Tallahassee, Leon County, Florida. DON W. DAVIS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 4th day of October, 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-4271BID The following constitutes my specific rulings, in accordance with Section 120.59, Florida Statutes, on findings of fact submitted by the parties. Petitioner's Proposed Findings. 1.-12. Accepted. 13.-16. Rejected, relevancy. 17. Accepted. 18.-19. Rejected, relevancy. 20.-25. Accepted. 26.-27. Rejected, cumulative. 28. Rejected, credibility. 29.-33. Rejected, relevancy. 34.-35. Accepted. 36.-37. Rejected, argumentative and mischaracterization. 38.-46. Rejected, subordinate to HO findings. 47.-51. Rejected, relevancy. Intervenor's Proposed Findings. 1.-2. Rejected, cumulative. 3.-4. Accepted. 5.-6. Rejected, unnecessary. Rejected, cumulative. Rejected, unnecessary. Rejected, argumentative. 10.-11. Rejected, unnecessary. 12.-13. Adopted by reference. 14.-16. Accepted, but not verbatim. 17.-22. Adopted by reference. 23. Rejected, unnecessary. 24.-30. Adopted, but not verbatim. 31. Rejected, narrative. 32.-35. Rejected, cumulative. Respondent's Proposed Findings. 1.-11. Adopted. 12. Rejected, unnecessary. 13.-17. Adopted, not verbatim. 18.-19. Rejected, cumulative. 20.-22. Adopted. 23. Rejected, recitation of RFP. 24.-26. Adopted. 27. Rejected, recitation of RFP. 28.-29. Adopted in substance. COPIES FURNISHED: Thomas Cassidy, III, Esquire. John O. Williams, Esquire Renaissance Square 1343 East Tennessee Street Tallahassee, Florida 32308 Carolyn S. Holifield, Esquire Mark D. Tucker, Esquire Department of Transportation Haydon Burns Building, Mail Station 58 605 Suwanee Street Tallahassee, Florida 32399-0458 Timothy G. Schoenwalder, Esquire 204-B South Monroe Street Tallahassee, Florida 32302-3068 Ben G. Watts, Secretary Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32399 Thornton J. Williams General Counsel Department of Transportation Haydon Burns Building # 562 605 Suwannee Street Tallahassee, Florida 32399
Findings Of Fact At all times material to the allegations in the Administrative Complaint, the Respondent, Jean A. Ravenscroft, was licensed as a real estate broker in the State of Florida. At all times material to the allegations in the Administrative Complaint, the Respondent, Sundial Real Estate, Inc., was licensed as a corporate real estate broker in the State of Florida. Respondent Ravenscroft was the qualifying broker for Respondent Sundial Real Estate, Inc. At all times material to the allegations in the Administrative Complaint, the Respondents were members of the local board of realtors and had a contractual obligation with that board to list all listings in MLS except those specifically withheld by the owners. In June 1981, Daniel W. and Sandra S. Bodhaine, then living in Illinois, executed a listing agreement with the Respondents for a parcel of coastal property located in Fort Myers Beach, Florida. Subsequently, the Bodhaines executed a second listing agreement specifically in order to have the listing in a form acceptable for listing in MLS. Listing in MLS was material to the Bodhaines in listing their property with the Respondents. From June 1, 1981, through September 1, 1981, the three-month duration of the original listing, the Bodhaines' property was included in MLS. On August 18, 1981, Respondent Ravenscroft mailed a Listing Extension Agreement to the Bodhaines. The Listing Extension Agreement, which extended the listing for two months, was executed by the Bodhaines and mailed to the Respondents, who received it on August 29, 1981. The Respondents caused this listing to be placed with MLS prior to the expiration of the existing listing, September 1, 1981. Because the MLS employee responsible for placing such listings resigned on August 30, 1981, the listing was not marked as received by MLS until September 4, 1981. At that time, it was marked as having expired September 1, 1981. Expiration of the agreement was grounds for deletion from MLS. The fact that the listing was marked as expired was not communicated to the Respondents, who discovered that the listing was not in the MLS listing book when they received said book. After the resignation of its employee on August 30, 1981, MLS did not have any full-time regular employee during the remainder of the time relevant to this case. Respondent Ravenscroft spoke with the MLS representatives regarding the deletion of the listing and was told that the deletion was due to failure of MLS's computer to pick up the renewal and that the listing would appear in the next copy of the listing book; however, it did not. This state of affairs continued through the month of September 1981. During this time, the Respondents did not notify the Bodhaines that their property was not included in the MLS listing. The Respondents were aware by the first of October, 1981 that the property had been deleted because of expiration of the listing. Due to the situation at the MLS office at the time the renewal was filed, it is concluded that the initial renewal was not filed late. Prior to the expiration of the two-month Listing Extension Agreement, Respondent Ravenscroft sent the Bodhaines a second Listing Extension Agreement in order to extend the listing from November 1, 1981, to January 1, 1982. The second Listing Extension Agreement, on an MLS-approved form like the first, carried the same MLS number as was assigned to the original listing agreement and was timely signed and returned to the Respondents by the Bodhaines. This second extension of the listing agreement was received in October 1981, well before the expiration of the prior listing extension. This extension was not filed with MLS. On October 21, 1981, the Bodhaines received a note from the father of the man who supervised the MLS office and who was a real estate salesman or broker in the local area, offering to list the Bodhaines' property because he had noticed it was not in the MLS listing. Mr. Bodhaine called Respondent Ravenscroft and asked if the listing was in MLS. Respondent Ravenscroft advised Mr. Bodhaine that the property was in MLS. After receipt of the second extension agreement very shortly after October 21, 1981, the Respondents perceived from conversation with Mr. Bodhaine that the Bodhaines were close to selling their house in Illinois. It was the general understanding by the Respondents that if the Bodhaines sold their house in Illinois they did not want to sell their property in Florida. Respondent Ravenscroft's perception of this was confirmed on November 16, 1981, when the Bodhaines advised the Respondents not to sell their Florida property. Respondents' Composite Exhibit 3 has been examined in detail and reflects that: (a) those ads related to bayfront property across from the shrimp boat pier are not related to the property in question because of the dates involved and the advertising copy; and (b) there was significant advertisement of the property up to October 23, 1981, when the property ceased to be advertised, except for one ad which appeared on November 20, 1981, after the date everyone agrees the listing had been cancelled. The foregoing supports the Respondent's testimony that on or about October 21, 1981, the Bodhaines indicated they had a purchaser for their Illinois property and explains why the Respondents took no action regarding the MLS listing after that date. The Respondents never advised the Bodhaines that their Florida property had been deleted from MLS listing.
Recommendation Having found the Respondents, Jean A. Ravenscroft and Sundial Real Estate, Inc., guilty of one count of violation of Section 475.25(1)(b), Florida Statutes, by failing to advise clients that their listing had been deleted from MLS under circumstances in which said violation caused no economic hardship and in consideration of matters in mitigation, it is recommended that the Respondents receive a letter of reprimand and each be assessed a civil penalty of $500. DONE and RECOMMENDED this 12th day of October, 1983, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 Filed with the Clerk of the Division of Administrative Hearings this 12th day of October, 1983. COPIES FURNISHED: William M. Furlow, Esquire Department of Professional Regulation 400 West Robinson Street Orlando, Florida 32801 Charles R. Meador, Jr., Esquire 7401 Estero Boulevard Post Office Drawer D Fort Myers Beach, Florida 33931 Frederick Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Howard Huff, Executive Director Florida Real Estate Commission 400 West Robinson Street Orlando, Florida 32801 Randy Schwartz, Esquire Department of Legal Affairs 400 West Robinson Street Suite 212 Orlando, Florida 32801
Conclusions An Administrative Law Judge of the Division of Administrative Hearings has entered an Order Closing File in this proceeding. A copy of the Order is attached to this Final Order as Exhibit A.
Other Judicial Opinions OF THIS FINAL ORDER PURSUANT TO SECTION 120.68, FLORIDA STATUTES, AND FLORIDA RULES OF APPELLATE PROCEDURE 9.030(b)(1)(C) AND 9.110. TO INITIATE AN APPEAL OF THIS ORDER, A NOTICE OF APPEAL MUST BE FILED WITH THE DEPARTMENT'S AGENCY CLERK, 2555 SHUMARD OAK BOULEVARD, TALLAHASSEE, FLORIDA 32399-2100, WITHIN 30 DAYS OF THE DAY THIS ORDER IS FILED WITH THE AGENCY CLERK. THE NOTICE OF APPEAL MUST. BE SUBSTANTIALLY IN THE FORM PRESCRIBED BY FLORIDA RULE OF APPELLATE PROCEDURE 9.900(a). A COPY OF THE NOTICE OF APPEAL MUST BE FILED WITH THE APPROPRIATE DISTRICT COURT OF APPEAL AND MUST BE ACCOMPANIED BY THE FILING FEE SPECIFIED IN SECTION 35.22(3), FLORIDA STATUTES. YOU WAIVE YOUR RIGHT TO JUDICIAL REVIEW IF THE NOTICE OF APPEAL IS NOT TIMELY FILED WITH THE AGENCY CLERK AND THE APPROPRIATE DISTRICT COURT OF APPEAL. MEDIATION UNDER SECTION 120.573, FLA. STAT., IS NOT AVAILABLE WITH RESPECT TO THE ISSUES RESOLVED BY THIS ORDER. FINAL ORDER NO. DCA09-GM-333 CERTIFICATE OF FILING AND SERVICE I HEREBY CERTIFY that the original of the foregoing has been filed with the undersigned Agency Clerk of the Department of Community Affairs, and that true and corrgct copies have been furnished to the persons listed below in the manner described, on this 20 day of September, 2009. 4 Z gency Clerk Florida Department of Community Affairs 2555 Shumard Oak Boulevard Tallahassee, Florida 32399-2100 U.S. Mail: The Honorable Bram D. E. Canter Brenna M. Durden, Esq. Administrative Law Judge Lewis, Longman & Walker, P.A. Division of Administrative Hearings 245 Riverside Avenue, Suite 150 The DeSoto Building Jacksonville, Florida 32202 1230 Apalachee Parkway Tallahassee, FL 32399-3060 Kenneth B. Hutchins 22645 Fishcreek Highway Conrad C. Bishop, Jr., Esq. Perry, Florida 32384 The Bishop Law Firm, P.A. P.O. Box 167 Perry, Florida 32348 Hand Delivery: Matthew Davis, Esquire Assistant General Counsel Department of Community Affairs 2555 Shumard Oak Blvd. Tallahassee, Florida 32399
The Issue This is a bid protest proceeding pursuant to Section 120.57(3), Florida Statutes, in which the primary issue raised by the Petitioner (who is the second-ranked proposer) is that the subject contract should be awarded to the Petitioner because the first-ranked proposer submitted a non-responsive proposal. The Petitioner's alternative arguments challenge the manner in which the proposals were evaluated and assert, alternatively, that, if properly evaluated, the Petitioner would be the first-ranked proposer, or that the evaluation was so flawed as to require that all bids be rejected and that the agency embark upon a new request for proposals. The first-ranked proposer intervened to protect its substantial interests. The primary issues raised by the first- ranked proposer are that its own proposal is responsive, that any flaws in the evaluation process are insufficient in nature and number to warrant embarking on a new request for proposals, and that the second-ranked proposer lacks standing to challenge the proposed agency action because the proposal of the second-ranked proposer is asserted to be non-responsive. The third-ranked proposer intervened primarily in a defensive posture to protect its interests from any adverse consequences that might flow from the issues raised by the other two proposers, as well as to benefit from any windfall that might result from the challenges to the sufficiency of the other two proposals.
Findings Of Fact Preparation and issuance of the subject RFP The state agency involved in this dispute is AHCA. AHCA's powers and duties include the administration of Florida's Medicaid program. The Medicaid program provides medical services to eligible Medicaid recipients under Chapter 409, Florida Statutes, the United States Code Title 19, which involves Medicaid, and to children from birth until five years of age under United States Code Title 21, State Children's Health Insurance Program of the Social Security Act, through enrolled providers. On or about March 3, 2005, AHCA issued the subject RFP, which solicited proposals to develop the MMIS/DSS and to provide fiscal agent operations. The RFP required proposers to separately submit a technical proposal and a cost proposal. The RFP also required implementation of the new MMIS/DSS technical systems by July 1, 2007. However, the RFP permitted the implementation of some non-critical business functions after July 1, 2007. The RFP incorporated several separate addenda, numbered one through seven. Addendum Six, also had a separately issued Clarification Notice. Each addendum also included a list of questions asked by potential proposers concerning the RFP, and AHCA's answers to those questions. The questions and answers were part of the addenda in which they appeared and, therefore, became part of the RFP. Each proposer was required to include with its proposal a signed acknowledgement certifying its receipt of each addendum. Section 20.2 of the RFP includes the following: The State has established certain requirements with respect to responses submitted to competitive solicitations. The use of "shall", "must", or "will" (except to indicate futurity) in this solicitation, indicates a requirement or condition from which a material deviation may not be waived by the State. A deviation is material if, in the State's sole discretion, the deficient response is not in substantial accord with the solicitation requirements, provides an advantage to one respondent over another, or has a potentially significant effect on the quality of the response or on the cost to the State. Material deviations cannot be waived. The words "should" or "may" in this solicitation indicate desirable attributes or conditions, but are permissive in nature. Deviation from, or omission of, such desirable feature will not in itself cause rejection of a response. Sections 20.17 and 20.18 of the RFP read as follows: Correction of Proposal Errors If the Agency determines that a proposal contains a minor irregularity or an error, such as a transposition, extension or footing error in figures that are presented, the Agency may provide the Vendor an opportunity to correct the error. Information that is required to be included in the proposal and is inadvertently omitted shall not be accepted under this error correction provision. All information required to be included in a proposal must be received by the date and time that proposals are due to the Agency. The Agency reserves the right to seek clarification from a Vendor of any information contained in the proposal. Minor irregularities in proposals may be waived by the evaluators. A minor irregularity is a variation from the RFP terms and conditions that does not affect the price of the proposal or give one applicant an advantage or benefit not enjoyed by others or adversely affects the State's interest. Rejection of Proposals Proposals that do not conform to the mandatory requirements of this RFP shall be rejected by the Agency. Proposals may be rejected for reasons that are provided in Appendix M, Checklist of Mandatory Items; for failure to comply with any requirement of this RFP; when the proposal is conditional; or when in the Agency discretion, it is in the best interests of the Agency. The Agency reserves the right to reject any and all proposals. The three proposers ACS Parent, EDS Subsidiary, and Unisys each submitted a proposal in response to the subject RFP. EDS Parent did not submit a proposal in response to the RFP. A partnership or joint venture comprised of EDS Subsidiary and EDS Parent did not submit a proposal in response to the RFP. EDS Parent is not a party to this proceeding. A partnership or joint venture comprised of EDS Subsidiary and EDS Parent is not a party to this proceeding. In the MMIS area, EDS Parent and EDS Subsidiary frequently both sign the proposals and the contracts. EDS Parent and EDS Subsidiary as a matter of practice usually perform the EDS MMIS work together. As a general practice, EDS Parent stands behind the obligations of EDS Subsidiary as a guarantor of any unfulfilled liabilities of EDS Subsidiary, even when EDS Subsidiary is the only signer on a contract. And it may well be that EDS Parent and EDS Subsidiary intended to be co-proposers or joint adventurers on the subject RFP, but no such intention was set forth in the EDS Subsidiary proposal.2 EDS Parent and EDS Subsidiary are two separate legal entities. EDS Parent is a publicly traded Delaware corporation that was formed in the 1960s. EDS Subsidiary is a Delaware limited liability company that was formed in 1997. EDS Subsidiary is a wholly-owned subsidiary of EDS Parent. EDS Subsidiary was specifically established and has been operated as a separate business entity for the express purposes of obtaining the advantages of certain operational flexibilities, as well as certain tax advantages that may result from the operations of a separate business entity. During at least one period in its existence EDS Subsidiary owned assets valued at more than one billion dollars.3 Delivery of the proposals The RFP originally called for proposals to be submitted to AHCA's "Issuing Officer" at 2727 Mahan Drive, Tallahassee, FL 32308. Angela Smith was designated as the "Issuing Officer" of the RFP. Addendum Two to the RFP, which was issued on April 1, 2005, changed the delivery address for all proposals to: 2308 Killearn Center Boulevard, Tallahassee, Florida 32309. Proposals were required to be submitted at this new address by no later than 5:00 p.m. on June 2, 2005. EDS Subsidiary acknowledged receipt of Addendum Two. Section 20.08 of the RFP made it clear that it was each Proposer's responsibility "to obtain any issued addenda and to consider these materials in their response to the RFP." The RFP further expressly provided, "PROPOSALS RECEIVED AFTER THE SPECIFIED TIME AND DATE WILL NOT BE CONSIDERED AND RETURNED UNOPENED." In accordance with the requirements of the RFP, as amended by Addendum Two, ACS Parent and Unisys properly delivered their proposals to 2308 Killearn Center Boulevard, Tallahassee, Florida 32309. EDS Subsidiary's proposal consisted of 15 cartons. The proposal's cover letter and each carton were correctly addressed to 2308 Killearn Center Boulevard, Tallahassee, Florida 32309, but the proposal was never delivered to that address. Rather, EDS Subsidiary's proposal was delivered to AHCA's offices at 2727 Mahan Drive, Tallahassee, Florida 32308. Pat King, Marc Vandenbark, and Milt Ashford, employees of EDS Parent, delivered EDS Subsidiary's proposal to AHCA's 2727 Mahan Drive address at approximately 12:35 p.m. on June 2, 2005. Jason Kinchon, an AHCA employee, met Messers. King, Vandenbark, and Ashford outside of the AHCA office building and directed them to a second floor room in Building No. 2 where the EDS Subsidiary proposal was delivered. Mr. Kinchon brought a hand cart with him. Messrs. King, VanDenbark, Ashford, and Kinchon jointly loaded the proposal on a hand truck on multiple occasions near the rear entrance of the AHCA Contract Administration Office. It took three trips with the hand cart to move the proposal into AHCA Building Number 2 at 2727 Mahan Drive, Tallahassee, Florida. Messrs. Kinchon and King took the loaded hand cart into the AHCA Building Number 2 on the three trips into the building. Messrs. Kinchon and King placed the proposal in a room on the second floor of AHCA Building Number 2. Subsequent to delivery, AHCA secured the proposal to ensure that no unauthorized persons had access to the proposal. Messrs. King, VanDenbark, and Ashford attended the public proposal opening where they saw AHCA open the original proposal. At Mr. King's request, Mr. Kinchon provided a receipt for the EDS Subsidiary proposal bearing a date-time stamp and Mr. Kinchon's signature. After 5:00 p.m. on June 2, 2005, Angela Smith, AHCA's Issuing Officer for the RFP, called Mr. King to inquire about the status of EDS Subsidiary's proposal. Mr. King explained that he had delivered EDS Subsidiary's proposal to the incorrect Mahan Drive address and then faxed Ms. Smith a copy of Mr. Kinchon's receipt. After first conferring with legal counsel, Ms. Smith later informed Mr. King that AHCA would nevertheless accept the EDS Subsidiary proposal. The next day, at Ms. Smith's direction, other AHCA employees retrieved the EDS Subsidiary proposal from 2727 Mahan Drive, Tallahassee, Florida 32308, and delivered it to the AHCA office located at 1669 Mahan Center Boulevard, which was the address where AHCA planned to open, and in fact did open, all three of the proposals. On that same day, AHCA employees retrieved the ACS Parent proposal and the Unisys proposal from 2308 Killearn Center Boulevard and delivered those two proposals to the AHCA office located at 1669 Mahan Center Boulevard, at which address all three proposals were eventually opened. The delivery of the EDS Subsidiary proposal to an incorrect address did not confer any advantage to EDS Subsidiary, nor did it result in any detriment to either of the other proposers. EDS Subsidiary had no more time to prepare its proposal than its competitors and had no opportunity to see the bids of its competitors before submitting its own. The delivery to an incorrect address also did not result in any detriment to AHCA. On the day of the opening of the proposals, AHCA had to move each of the three proposals from the place where each proposal was received to the place where all of the proposals would be opened. It was no significant burden for AHCA to retrieve two proposals from one location and to retrieve the third from another location. The bid bond submitted by EDS Subsidiary On June 3, 2005, AHCA opened the technical proposals that were submitted by ACS Parent, EDS Subsidiary, and Unisys. Two AHCA employees, Angela Smith and Sally Morton-Crayton, presided over the opening. At the opening, Ms. Smith and Ms. Crayton reviewed each proposal to ensure the presence of those items required by the mandatory checklist located in Appendix M to the RFP. Section 70.4 of the RFP reads as follows: Each proposal will be reviewed for responsiveness to the mandatory requirements set forth in this RFP. This will be a yes/no evaluation. The purpose of this phase is to determine if the Technical Proposal is sufficiently responsive to the RFP to permit a complete evaluation. Mandatory requirements for the Technical Proposal are presented in a checklist in Appendix M. Failure to comply with the instructions or to submit a complete proposal will deem a proposal non-responsive, and will cause the proposal to be rejected with no further evaluation. The state reserves the right to waive minor irregularities. No points will be awarded for passing the mandatory requirements. As part of their review, Ms. Smith and Ms. Crayton did not actually read or analyze the mandatory items to determine whether the proposals complied with the RFP's requirements, but only looked to see if the items were present. The RFP required each proposer to submit a Proposal Guarantee with its proposal. In this regard, Section 20.12 of the RFP states: 20.12 Proposal Guarantee One proposal guarantee must be included in the sealed package with the original Technical Proposal. The original Technical Proposal shall be accompanied by a proposal guarantee payable to the State of Florida in the amount of $500,000.00. The form of the proposal guarantee shall be a bond, cashier's check, treasurer's check, bank draft, or certified check. If the proposal guarantee is a bond, the bond shall be written by a surety company authorized to do business in the State of Florida and signed by a Florida Licensed Agent. If a non-resident Florida Licensed Agent signs the bond, the bond shall be considered to have been made and executed in the State of Florida. All proposal guarantees shall be returned upon execution of a legal contract with the successful Vendor. If the successful Vendor fails to execute a contract within ten (10) consecutive calendar days after a contract has been presented to the Vendor for signature, the proposal guarantee shall be forfeited to the State. The proposal guarantee from the successful Vendor shall be returned only after the Agency has received the performance bond required under Section 30.24 of this RFP. The Proposal Guarantee submitted with the EDS Subsidiary proposal did not refer to any proposal submitted by EDS Subsidiary and did not name EDS Subsidiary as principal on the Proposal Guarantee. Fidelity and Deposit Company of Maryland is the surety that issued the Proposal Guarantee. The Proposal Guarantee named EDS Parent as the principal and the State of Florida as the obligee. On its face, the Proposal Guarantee provided security for a proposal submitted by EDS Parent (which proposal never existed), but not for a proposal submitted by EDS Subsidiary. The Proposal Guarantee does not indicate that EDS Parent, as the principal on the bond, is involved in a partnership or joint venture with any other entity, including EDS Subsidiary. Specifically, on its face, the Proposal Guarantee does not reference any entity, partnership, or venture other than EDS Parent as the principal. The Proposal Guarantee included in EDS Subsidiary's proposal does not guarantee EDS Subsidiary's proposal, but rather specifically references a proposal by EDS Parent; a proposal which never existed.4 Financial statements submitted by EDS Subsidiary Section 60.2.4(2) of the RFP required proposers to submit the following financial information: Corporate Financial Statements Audited financial statements for the legal contracting entity (and parent company if applicable) and subcontractors, sufficient to demonstrate the capability to perform this contract, shall be provided for each of the last three fiscal years. These shall include: Balance sheets; Statement of income; Statements of changes in financial position; Auditor's reports; Notes to financial statements; and Summary of significant accounting policies. If all of these are not provided, please explain why. The requirement quoted immediately above was amended by Addendum One, which included the following question and answer which became part of the RFP: Question: Audited financial statements are required in this section. However, many subcontracting firms may not be publicly held with the required forms available. What will the Agency accept for these financial requirements for non-public firms? Answer: If audited financial statements exist they are to be submitted. If audited financial statements do not exist, unaudited statements or financial information of the type that is contained in financial statements may be submitted with an appropriate explanation. (Emphasis added.) EDS Subsidiary's proposal did not include any financial information, audited or otherwise, from which the financial condition of EDS Subsidiary could be determined. Rather, the proposal only included consolidated audited financial statements for EDS Parent. In its proposal, under Tab 4, EDS Subsidiary explained: "EDS Information Systems (sic), L.L.C., will be the contract signing authority for the Florida Medicaid project. As a wholly owned subsidiary of EDS, EDS Information Systems (sic), L.L.C., is not a separate corporation and, as such, does not have separate financial statements. Throughout this RFP response, we will use the term ‘EDS’ to refer to this organization." While EDS Subsidiary may not have had audited separate financial statements, it certainly had "financial information of the type that is contained in financial statements." Without receiving any "financial information of the type that is contained in financial statements," AHCA has no information at all about the financial circumstances of EDS Subsidiary.5 In its proposal, on the title page under Tab 2, EDS Subsidiary stated that the vendor's name was "EDS Information Services, L.L.C." And in the transmittal letter under Tab 2 of the proposal, EDS Subsidiary states: "EDS Information Services, L.L.C., a subsidiary of the of Electronic Data Systems, (hereafter EDS), is pleased to submit our response to the Request for Proposal (RFP) 0514 issued by the Agency for Healthcare Administration." The transmittal letter also states: "EDS' federal tax identification number is 75-2714824." Tax identification number 75-2714824 is the tax identification number of EDS Subsidiary. The transmittal letter also lists "EDS Information Services, L.L.C." as the "Prime Contractor" and states that its "Corporate Charter Number" is M97000000533. That number is the document number assigned by the Florida Department of State to EDS Subsidiary. (The document number assigned by the Florida Department of State to EDS Parent is F96000001705.) The transmittal letter under Tab 2 of the EDS Subsidiary proposal also states: The following table reflects the exact amount of work in percentages to be completed by the Prime Contractor and each subcontractor. Company Percent of Work EDS Information Services, L.L.C. 76.5% First Health Services Corporation 21.8% APS Healthcare, Inc. 1.3% ProviderLink, Inc. .4% Cost proposal submitted with EDS Subsidiary's proposal Section 60.3 of the RFP required proposers to include in their Cost Proposal "a firm fixed price for each of the requirements contained on the pricing schedules within this section." Additionally, the mandatory checklist contained in Appendix M of the RFP required proposers to submit a "firm, fixed price without any additional stipulations or limitations." ACS Parent's Cost Proposal was $38 million less than the next least expensive Cost Proposal. ACS Parent submitted the lowest Cost Proposal and was awarded 600 points, consistent with the language of the RFP. The Cost Proposals for EDS Subsidiary and Unisys were awarded scores of 508 and 523, respectively, based on the application of a specified formula in the RFP and the ratio their prices bore to ACS Parent's price. Ms. Smith and Ms. Crayton oversaw the review and scoring of the proposers' Cost Proposals. During their opening of the Cost Proposals, Ms. Smith and Ms. Crayton did not analyze the Cost Proposal submitted with EDS Subsidiary's proposal to determine if it was submitted by the same legal entity. Ms. Smith and Ms. Crayton did not analyze EDS Subsidiary's Cost Proposal to determine whether it proposed a firm fixed price without additional stipulations or limitations. The Cost Proposal submitted with the EDS Subsidiary proposal identified a different legal entity, Electronic Data Systems, LLC, as the proposer. The Cost Proposal submitted with EDS Subsidiary's proposal included a firm, fixed price. The language in that proposal that described the "Cost Assumptions" underlying the Cost Proposal did not change the character of the Cost Proposal; it remained firm and fixed. Proposed EDS Subsidiary local operations facility Section 50.3.2.1 of the RFP reads as follows: 50.3.2.1 Location of Operations Facilities The Contractor's local facility shall be located within a five (5) mile radius of the State offices located at 2727 Mahan Drive, Tallahassee, Florida. The Agency prefers a location convenient to the Agency and will consider the location in the evaluation process. Consideration of potential expansion of operations should be given in choosing a site for the facility. The language quoted immediately above is rather ambiguous as to what must be included in the proposal regarding the proposer's local facility. It does not clearly state that a specific location must be identified in the proposal. The specific instructions in the RFP about what must be included under each tab of the proposals do not clearly require the inclusion of a specific address for the proposer's local facility. Further, the instructions in the Evaluation Manual do not appear to require the inclusion of a specific address. ACS Parent's proposal included a specific facility and address for its proposed operations facility location in Tallahassee. Unisys' proposal included the addresses for two possible locations, but did not include a specific proposed facility in Tallahassee. EDS Subsidiary's proposal did not include a proposed facility or an address for its operations facility in Tallahassee. EDS Subsidiary simply agreed to meet AHCA's requirements for a local facility. At its oral presentation, which occurred approximately six weeks after submission of the proposals, EDS Subsidiary first provided AHCA with a possible address for its local operations facility, at 325 John Knox Road in Tallahassee. Staffing information submitted by EDS Subsidiary The RFP required proposers to identify within their proposals certain individuals to fill various Named Staff positions. The Named Staff positions carried certain educational qualification requirements based on the type of work expected from each position. The Named Staff positions were separately identified because they were important positions and AHCA considered them critical to the success of the project. Addendum One to the RFP contained the following question and answer which became part of the RFP: Question: Will the State allow equivalent work experience in lieu of a bachelor's degree? Answer: The State will allow equivalent work experience, non-degree training and alternate certification in lieu of a required bachelors degree, provided the Vendor clearly identifies and explains the equivalence. Qualifications of proposed staff are an important consideration in the scoring of proposals. Several of the individuals that EDS Subsidiary and Unisys proposed to fill the Named Staff positions did not facially meet the minimal educational requirements as stated in the RFP. However, from resumes and other information submitted with the EDS Subsidiary and the Unisys proposals, AHCA could determine that the proposed staff at issue possessed degrees in related fields and/or had sufficient qualifications through extensive experience in the areas in which they would be working. Technical solutions proposed by EDS Subsidiary At paragraph 24 of the ACS Parent's amended petition, it asserts that EDS Subsidiary "failed to meet many of the mandatory technical requirements concerning the new FMMIS/DSS. . . ." In seven following subparagraphs the petition asserts seven specific alleged technical deficiencies in the EDS Subsidiary proposal. In view of the disposition of certain other issues in this case, it seems neither useful nor necessary to make detailed findings of fact (or conclusions of law) regarding these alleged technical deficiencies in the EDS Subsidiary proposal. In this regard it is sufficient to find that the technical solutions proposed in the EDS Subsidiary proposal were in compliance with the technical requirements of the RFP in all material matters. There are perhaps a few minor irregularities in a few minor details, but there is nothing in the technical solution proposed by EDS Subsidiary that deviates materially from the requirements of the RFP.6 The evaluation of the proposals In paragraph 26 of ACS Parent's amended petition, it is asserted that there were numerous irregularities in the manner in which the proposals were evaluated. The following paragraphs contain findings of fact related to those assertions. Gartner Report and Presentation AHCA hired Gartner, Inc. ("Gartner"), a third party company with technology expertise, to analyze the risk found in each of the technical proposals, and then produce a written report. The evaluators received and read the Gartner report before completing their final scores. The RFP did not disclose, and the proposers were never informed until after the proposed award was announced, that Gartner would conduct an analysis of the Technical Proposals. Gartner's written report visually displayed its final analysis through color coded comments (green, yellow, and orange). Gartner created its own criteria and sub-criteria to evaluate the proposals. The evaluators attended a presentation where the Gartner report's results were presented by Mr. Flowerree. The evaluators discussed these results at the presentation. This presentation on the Gartner report was neither publicly noticed or recorded, nor were any minutes taken at the meeting. AHCA did not give the proposers an opportunity to address the concerns and comments contained in the Gartner report and/or discussed at the presentation with the evaluators. The evaluators had the benefit of Gartner's analysis and conclusions when completing their scoring of the proposals. The evidence in this case is insufficient to determine whether the information in the Gartner presentation and report had any significant effect on the scoring of any of the proposals.7 ACS Parent's Corporate References Donna Eldridge. an AHCA employee, provided a corporate reference for ACS Parent which contained some errors, primarily errors of omission about matters of which Ms. Eldridge had no personal knowledge. There was also a corporate reference form from a Georgia official which contained a number of responses that were remarkably similar to the responses provided by Ms. Eldridge. The evidence in this case does not explain why the two responses were so similar. The evidence in this case is also insufficient to show that the information in either of the corporate references mentioned above had any material adverse impact on the evaluation scores of ACS Parent.8 Evenhanded evaluations During the course of their evaluation, to the best of their ability the evaluators applied the evaluation criteria in the same manner to all proposers. There is no persuasive evidence that the evaluators applied different criteria or different standards to different proposers. With regard to a related issue, the RFP required a critical path diagram for each phase. The proposal submitted by EDS Subsidiary had a critical path diagram for each of the phases. Organizational Conflicts of Interest Unbeknownst to the proposers, AHCA engaged Gartner to conduct an analysis of the proposals submitted in response to the RFP. As part of an earlier proposal submitted to the State of Texas, EDS Subsidiary proposed to hire Gartner as an "optional" subcontractor for the purpose of [I]ndependent assessment of governance processes." In that proposal, EDS Subsidiary described Gartner as having "[t]otal independence and objectivity--no ties to any one vendor or technology solution." EDS Subsidiary was not awarded the Texas contract, so the proposed use of Gartner as a subcontractor never happened. Site Visit Debriefing During the evaluation period, the evaluators attended multiple presentations and debriefings that covered different topics. AHCA did not publicly notice any of these meetings, and only one type of presentation, the proposers' oral presentations, was recorded or had any minutes taken. During their oral presentations, each proposer discussed its proposed solution and then answered questions posed by the evaluators. Evaluators also attended a briefing where they were presented with information gathered during AHCA's site visits to the proposers' operations in other states. This information included a presentation and a written site visit report compiling all of the site visit information into one document. Mr. Jay Ter Louw, an AHCA consultant, prepared the final site visit report. However, none of the evaluators attended any of the site visits. The evaluators relied upon the information presented during the site visit presentation and information contained in the site visit report to complete their assigned evaluations. The manner in which the site visits were conducted and reported was consistent with the provisions of the RFP. AHCA's Score Debriefings Section 70.3 of the RFP reads as follows: Evaluators will conduct a strictly controlled evaluation of the Technical Proposals submitted in response to this RFP. The evaluators will use prescribed evaluation criteria to score each proposal on its own merit regarding the Vendor's response to the requirements and adherence to the instructions in this RFP. The evaluators will not discuss the contents of the proposals with each other or anyone else during the evaluation process. The evaluators will be closely proctored to ensure that they follow the established rules of the evaluation. The evaluators attended numerous debriefings concerning their preliminary scoring. The stated purpose behind these debriefings was to give the evaluators an opportunity to discuss the reasons for their scores and where relevant information was located in the various proposals. The debriefing sessions were neither publicly noticed, recorded, nor were any minutes taken of these numerous sessions. While the evaluators did not discuss their scores with each other, they did discuss their evaluations and the contents of the proposals. All evaluators had the opportunity to change their scores based upon these discussions. At least one evaluator changed her scores after a debriefing session because of information she learned from other evaluators. Scoring After AHCA opened the proposals, it assigned various individuals to evaluate specific portions of the proposals. Some of the evaluators read the RFP and each proposal in its entirety, while others did not. The evaluators also reviewed an Evaluation Manual, an instruction manual produced by AHCA to guide agency staff and the evaluators through the evaluation process. After reading a proposal, an evaluator would generally assign preliminary scores for each of his or her assigned sections. The evaluators' scores were numeric and ranged from zero (worst) to ten (best). AHCA never gave the evaluators any instruction authorizing them to reject a proposal if it did not comply with the RFP's requirements. Rather, they were instructed to "score every section." Concerning the scoring of the Technical Proposals, Section 70.5.14 of the RFP provided, "[a] maximum of one thousand four hundred (1,400) points will be assigned to the highest passing Technical Proposal." The quoted provision is followed by a formula to be used to determine the number of points to be assigned to the other proposers for their Technical Proposals. It is clear from the formula that the formula only works if the highest passing Technical Proposal is awarded the full 1,400 points. Financial statements submitted by ACS Parent EDS Subsidiary asserts that the financial statements submitted with the ACS Parent proposal are deficient. The transmittal letter in the ACS Parent proposal contains a table reflecting the amount of work to be performed by the prime contractor and each subcontractor, as follows: Company Percent of Work ACS 97% Deloitte Consulting, LLP 1% FourThought Group, Inc. 0.2% Sun Microsystems, Inc. 1% Florida Pharmacy Association 0.4% KePRO, Inc. 0.4% There is no dispute about the sufficiency of the financial information submitted regarding ACS Parent, Deloitte Consulting, LLP, and KePRO, Inc. At page 4.4-5 of the proposal submitted by ACS Parent, Sun Microsystems includes the following: Per RFP Reference 60.2.4.2, we include our FY2004 Annual Report. The FY2004 Annual Report contains audited financial statements for fiscal years 2002 through 2004. These financial statements include information on the financial strength and stability of Sun including: Balance sheets Statement of income Statements of Changes in Financial Position Auditor's Reports Notes to Financial Statements Summary of Significant Accounting Policies The proposal submitted by ACS Parent also included information about both company and government web sites where additional financial information about Sun Microsystems could be found. With regard to the financial statements of the Florida Pharmacy Association, the proposal submitted by ACS Parent included the following: The Florida Pharmacy Association has not provided the above items [financial documents requested in the RFP] for submission with this proposal. Being a not-for-profit corporation we file an annual report with the Secretary of State and have enclosed a copy of our 2005 report in this section. We would be pleased to discuss additional details regarding our status with the Agency. The annual report included with the proposal did not contain any financial information regarding the Florida Pharmacy Association. FourThought Group, Inc., is a privately held corporation organized as an "S-Corporation." With regard to the financial statements of FourThought Group, Inc., the proposal submitted by ACS Parent included the following: FourThought Group has not provided the above items [financial documents requested in the RFP] for submission with this proposal. Being a privately held corporation, we do not routinely disclose our financials. We would be pleased to provide an overview of FourThought Group's financials to the agency. The information regarding FourThought Group, Inc., did not include any financial information. The ACS Parent cost proposal forms With respect to the cost proposal forms, RFP Section 60.4.3 states that "[w]here a signature block is indicated, pricing schedules must be signed and dated by an authorized corporate official." The pricing forms included in the RFP further state in all capital letters: "AN AUTHORIZED CORPORATE OFFICIAL OF THE VENDOR MUST SIGN THIS FORM. THE OFFICIAL'S TITLE AND THE DATE THIS FORM WAS SIGNED MUST BE ENTERED." The ACS Parent pricing schedules were all signed by John Crysler, who indicated that he was signing under the title and in the capacity of "Managing Director." When John Crysler signed the pricing schedules he was, and still is, a Senior Vice President and Assistant Secretary of ACS Parent. As such, when he signed the pricing schedules, Mr. Crysler was "an authorized corporate official of the vendor." The Unisys proposal The proposal submitted by Unisys (which was ranked third by AHCA) was responsive to the RFP in all material ways. No specific challenge to the responsiveness of the Unisys proposal was raised as an issue in the pleadings filed by either of the other two proposers. Similarly, AHCA did not file any pleading challenging the responsiveness of the Unisys proposal.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Agency for Health Care Administration enter a Final Order in this case rejecting the proposal of EDS Information Services, L.L.C., as non-responsive, and awarding the contract at issue in this case to Affiliated Computer Services, Inc. DONE AND ENTERED this 17th day of January, 2006, in Tallahassee, Leon County, Florida. S MICHAEL M. PARRISH Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings This 17th day of January, 2006.
The Issue The issue in this case is whether Respondent's intended award of a contract to Intervenor pursuant to Request for Proposals No. 10-DC-8200 is contrary to Respondent's governing statutes, Respondent's rules and policies, and the specifications of the Request for Proposals.
Findings Of Fact The State of Florida has, by legislative enactment, developed programs to electronically supervise offenders sentenced under a community control alternative to prison, and to supervise, register, and monitor designated sexual offenders and predators under the Jessica Lunsford Act. The Department of Corrections is the agency charged with the implementation of the electronic monitoring program, and to ensure that probation officers and other community supervision personnel have access to offender monitoring data. Pro Tech and BI are both well-recognized and established providers of electronic monitoring devices and monitoring and reporting services to federal, state, and local law enforcement and correctional agencies in Florida and across the United States. Pro-Tech is the incumbent vendor to the Department for electronic monitoring services. RFP 10-DC-8200 On August 30, 2010, the Department issued RFP 10-DC- 8200, the purpose of which was to select a contractor to provide active Global Positioning Satellite (GPS) electronic monitoring services for supervision of offenders sentenced under a community control alternative to prison, and to monitor designated sexual offenders and predators under the Jessica Lunsford Act. As of June 30, 2010, the Department was utilizing approximately 2,538 active GPS units to monitor offenders. The Department projected that within three years, as many as 3,015 offenders would be on active GPS monitoring. The scope of work for the contract was detailed in section 3 of the RFP. Briefly, the winning vendor is expected to ?provide active [GPS] services 24 hours a day, 7 days a week, which shall include a monitoring system that is capable of being accessed through a secure internet connection and fully supported by a secure database for transactional records.? Provisions of the RFP that are material to this proceeding include, by section number, the following (all emphasis is in the original): 1.13 Mandatory Responsiveness Requirements: Terms, conditions or requirements that must be met by the proposer to be responsive to this RFP. The responsiveness requirements are mandatory. Failure to meet the responsiveness requirements will cause rejection of a proposal. Any proposal rejected for failure to meet mandatory responsiveness requirements will not be evaluated. Material Deviations: The Department has established certain requirements with respect to proposals to be submitted by Proposers. The use of shall, must or will (except to indicate simple futurity) in this RFP indicates a requirement or condition which may not be waived by the Department except where any deviation therefore is not material. A deviation is material if, in the Department's sole discretion, the deficient response is not in substantial accord with this RFP's requirements, provides an advantage to one Proposer over other Proposers, or has a potentially significant effect on the quantity or quality of items or services proposed, or on the cost to the Department. Material deviations cannot be waived and shall be the basis for rejection of a response. Because this is an RFP, the Department will apply this definition liberally in reviewing responses in regard to service delivery. Minor Irregularity: A variation from the RFP terms and conditions which does not affect the price proposed or gives the proposer an advantage or benefit not enjoyed by the other proposers or does not adversely impact the interests of the Department. 5.2.9 The Proposer shall provide for both the Contractor and Contractor‘s personnel, copies of any and all documents regarding complaints filed, investigations made, warning letters or inspection reports issued, or any disciplinary action imposed by Federal or State oversight agencies within the past five (5) years. Narrative/Record of Past Experience As indicated in Section 2.2 and Attachment 1, it is a mandatory responsiveness requirement that the Proposer has at least three (3) years of business/corporate experience within the last five (5) years relevant to providing electronic monitoring services and equipment similar to the services described in this RFP, to correctional, criminal justice or law enforcement agencies. Details of the Proposer‘s experience that meet this requirement shall be provided in narrative form and in sufficient detail so that the Department is able to judge its complexity and relevance. Specifically include: provide a description of past years‘ experience providing electronic monitoring equipment and services. provide a description of past experience and the specific length of time providing Active GPS services (as identified in this RFP). identify all current and/or past (or within three (3) years) federal, state or government contracts for the provision of electronic monitoring services, and the number of active GPS units utilized for each. provide a narrative summary of contract performance in the above-identified contracts, including any major adverse findings. provide the name and telephone number and address for the specified federal, state, or government contract manager. provide a summary of any exemplary or qualitative findings, recommendations, or other validations, demonstrating operational experience. (i.e., specialized accreditation, grant awards, etc.). The proposer shall provide a detailed description of the General Equipment specifications that meets or exceeds all requirements in Section 3.7.2 and specifically: provide manufacturer‘s specifications and literature on all equipment proposed, including equipment which is acquired from any other source than the proposer; describe the process utilized to notify the Department and/or the offender when a low battery condition exists in any component of the equipment (transmitter or receiver dialer); describe and list the tools necessary for installation of any of the monitoring unit equipment; and provide copies of required licensing by the Federal Communications Commission for the equipment proposed. The proposer shall provide a detailed description of the Contractor‘s method and approach for meeting or exceeding all Monitoring Center requirements in Section 3.13, and specifically: provide a copy of the staffing plan for monitoring services twenty four (24) hours a day, seven (7) days a week, including holidays; and provide a copy of the Disaster Recovery plan. The proposer shall provide a detailed description of the approach to meeting or exceeding all Training requirements in Section 3.16, and specifically: provide a description of the method(s) for securely sizing and installing the transmitter securely to offenders; provide a copy of the training curriculum; and provide a copy of proposed course/instructor evaluation form. Please note - final evaluation form to be approved by Contract Manager and/or designee. As part of the RFP process, each interested vendor was allowed to submit questions regarding the terms of the RFP, and the services being sought. The Department responded to each of the 72 questions submitted. On November 2, 2010, the responses, along with revised RFP pages resulting therefrom, were provided to each prospective vendor as RFP #10-DC-8200 Addendum #1. Among the questions for which the Department provided answers were the following: Question #11: Sections 5.3.2.3 & 5.3.2.4 on Page 38 requires that we: ?identify all current and/or past (or within (3) years) federal, state or government contracts for the provisions of electronic monitoring services, . . . .? And that we ?provide a narrative summary of contract performance in the above identified contracts,. . .? In the case of Pro Tech, this would amount to more than a hundred contracts resulting in a voluminous response. Perhaps a more reasonable requirement would be to provide the information for our 10 largest or 10 most similar contracts. Answer #11: These requirements remain as stated in the RFP. Question #16:5.3.2. Narrative/Record of Past Experience identify all current and/or past (or within three (3) years) federal, state or government contracts for the provision of electronic monitoring services, and the number of active GPS units utilized for each. Question: Since it is feasible that Proposers could have several hundred current/past contracts, will Florida Department of Corrections consider revising the requirement to be “Provide the total number of current and/or past (or within 3 years) federal, state or government contracts?” Answer #16: This requirement remains as stated in the RFP. Question #17: provide a narrative summary of contract performance in the above-identified contracts, including any major adverse findings. Question: Since it is feasible that Proposers could have several hundred current/past contracts, will Florida Department of Corrections consider revising the requirement to be “Provide a performance summary of all contracts past/present?” Answer #17: This requirement remains as stated in the RFP. Question #28: Should respondents view ?shall? and ?must? language as mandatory requirements? Answer #28: This question is confusing different terms. See Section 1.13 that defines ?Mandatory Responsiveness Requirements?. See Section 1.15 that defines ?Material Deviations? which explains the terms ?shall and must?, and should not be confused with Section 5.1 Mandatory Responsive Requirements/ Fatal Criteria. Each proposed vendor signed an Addendum Acknowledgement Form for RFP #10-DC-8200 Addendum #1, and included it as part of its proposal. By signing and submitting the Addendum Acknowledgement Form, the vendors understood that the changes reflected in the Addendum ?are applicable to the original specifications of the above-referenced RFP? and that ?this addendum now becomes a part of the original RFP.? No prospective vendor filed a protest of any of the terms, conditions, or specifications of the RFP or Addendum #1. Proposals in Response to the RFP Proposals were submitted on November 22, 2010, by Pro Tech and BI, as well as five other electronic monitoring vendors, G4S Justice Services, LLC, iSecureTrac Corporation, Satellite Tracking of People, LLC, SecureAlert, and SOS International. BI proposed using its ExacuTrack One monitoring device to monitor offenders in Florida. The ExacuTrack One is a single piece device that is affixed to the offender‘s ankle. The unit contains a GPS signal receiver, a transmitter, cellular capability to transmit data to the monitoring center, a speaker for transmitting warnings, a device for the offender to transmit acknowledgement signals, and a rechargeable battery. The ExacuTrack One device meets the specifications of the RFP. When offenders go into prohibited areas, or when tracking capabilities are interrupted, either through shielding of the GPS signal or unauthorized tampering with the device, an alert is transmitted to the monitoring center. Each customer has a time interval set by contract by which a notification is sent to the customer, which may vary based on the nature of the alert. For example, if an offender strays into a prohibited area, an alert is transmitted to the monitoring center. If the offender exits the area before the contractual time interval is exceeded, a violation report is not required. The ExacuTrack One device has the ability to transmit an audible alert to the offender when the offender enters into an exclusion zone or otherwise violates the terms of his or her release. When an audible alert is given, the offender is required to acknowledge receipt of the alert, and to exit the area. The ExacuTrack One units are fully capable of meeting the requirements of the RFP operating on their own. However, in order to provide an option to conserve battery life of the ankle device, BI proposed to use a radio frequency ?Beacon.? When an offender is in range of his or her Beacon, generally being within the perimeter of the offender‘s home, the GPS feature goes into a low power state, and data is transmitted through the Beacon, thus extending the battery charge. BI considered the Beacon to be an optional device that exceeded the requirements of the RFP, and that could be provided at no additional cost at the discretion of the Department. Monitoring of the ExacuTrack One device may be accomplished in one of two ways. The monitoring system and devices can be sold to an agency which then provides its own monitoring, referred to as a ?local host? facility. The more commonly used system and that proposed for Florida, is one in which the monitoring devices are provided to the agency, with the resulting data sent to the BI monitoring center. The data is then stored and made available through the TotalAccess case management system. Department staff, correctional and probation officers, and other authorized users can access the system to perform a number of tasks, and are notified according to contract when monitoring alerts are transmitted to the monitoring center. The BI monitoring center has fully redundant capabilities, with all data being replicated both at the primary monitoring center in Boulder, Colorado, and at the backup center in Anderson, Indiana. Review of the Proposals Mandatory Responsiveness Requirements Review The Department initially reviewed each of the proposals to determine if Mandatory Responsiveness Requirements were met. Pursuant to section 5.1 of the RFP, the only Mandatory Responsiveness Requirements/Fatal Criteria were: a) that the complete proposal be submitted on time; and b) that the certification and cover sheet be signed. No prospective vendor was determined to be non-responsive for either of the Mandatory Responsiveness Requirements. Material Deviations/Minor Irregularities Review The procedure by which the Department was to begin the process of review of those proposals that survived the Mandatory Responsiveness Requirements/Fatal Criteria review was for procurement staff to review the proposals ?for compliance with the items required in the . . . Proposal Submissions outlined in Section 5 of the RFP.? The purpose of the compliance review was to determine whether the proposals contained any deviations from the terms, conditions, and specifications of the RFP, and whether such deviations were material deviations requiring rejection of a response, or whether they were waivable minor irregularities. If a deviation was determined to be a minor irregularity, the Department reserved the right to require additional information prior to the contract award. Kelly Wright was the Department staff person who was directly, and almost exclusively, responsible for the RFP. Ms. Wright was, in consultation with the Department‘s subject matter experts, the primary drafter of the RFP. She was responsible for vendor questions and for preparing the Addendum #1 in which those questions were answered. She prepared the evaluation manual, trained the evaluators, and compiled their scores. She performed the review of the proposals for compliance with the mandatory requirements/fatal criteria, and reviewed the executive summaries and transmittal letters. It was also Ms. Wright‘s responsibility to identify deviations from the RFP requirements and initiate the process by which such deviations were resolved. Gail Hillhouse, who is Ms. Wright‘s supervisor, and is an active participant in the decision-making process for other procurements, was not materially involved in Request for Proposals No. 10-DC-8200. She did not assist Ms. Wright in the review of responses, nor was she involved in the process of resolving deviations of the proposals from the terms of the RFP. Ms. Hillhouse never reviewed the BI proposal at any time prior to the posting of the award. If during the course of the pre-evaluation review of the proposals, or otherwise during the selection process, a deviation from the terms, conditions, and specifications was discovered, Ms. Wright was to take it directly to her bureau chief, Robert Staney. Mr. Staney‘s practice was to consult with the Department‘s legal staff, and then make a determination as to whether the deviation was a non-waivable material deviation under section 1.15 of the RFP, or a waivable minor irregularity under section 1.16 of the RFP. The Department appointed an Evaluation Committee to evaluate the proposals. The evaluators were charged with scoring the proposals as they were provided to them. The evaluators were not asked to determine whether any provision of the responses constituted a material deviation from the terms, conditions, or specifications of the RFP, and none did so. The evaluators were provided with scoring sheets that established the factors, referred to as ?considers,? that were to go into each individual score by section. Most sections contained multiple ?considers? that were to be evaluated to determine the overall score for that section. In the event a proposal was ?completely utterly unresponsive? as to the ?considers? listed for a particular section, a score of zero could be assigned. A zero would generally be an indication that some item had been omitted, thus triggering a ?material deviation? review. The scoring was to be performed as a composite, and the ?considers? within a section were not to be scored individually. Therefore, even if an element of a section was omitted in its entirety, a score of greater than zero would be required as long as there was information provided regarding the other ?considers.? That was so even if the omitted ?consider? would -- standing alone -- constitute a material deviation from the terms, conditions and specifications of the RFP. Only if an evaluator assigned an overall section score of zero would a review be undertaken to determine whether that section of the proposal materially deviated from the requirements of the RFP. Neither Pro Tech nor BI scored a zero for any section. Since there were no zeros, no ?material deviation? review was made. Ms. Wright did not review the BI proposal from beginning to end until the evaluation and scoring was completed, and the award to BI was ready to be posted. The evidence in this case demonstrates that, except as related to the financial documentation discussed herein, no one in the Department reviewed the proposals to determine if they contained deviations, material or not, from the terms, conditions or specifications of the RFP, nor was any such determination made prior to the posting of the intended award. Financial Documentation Review Each prospective vendor was required to submit financial documentation of its ability to perform the contract pursuant to section 5.4 of the RFP. The financial documentation was not a Mandatory Responsiveness Requirement/Fatal Criteria pursuant to section 1.13. Rather, section 5.4.4 provided that the ?proposer shall provide financial documentation that is sufficient to demonstrate its financial viability,? and listed the items to be included in the proposal. The RFP further provided that ?[f]ailure to provide any of the aforementioned financial information may result in proposal disqualification.? The financial documentation for each proposal was reviewed by an independent Certified Public Accountant, who determined its sufficiency under section 5.4 of the RFP. Three of the responses, those of iSecureTrac Corporation, SecureAlert, and SOS International, failed to pass the Financial Documentation review, and were disqualified from further review and consideration. The CPA determined that the G4S Justice Services, LLC financial statement had several deficiencies, including the omission of items required by section 5.4.1 of the RFP. The information was provided by the CPA to the Department‘s procurement office. After consultation with legal staff, the Department determined the deficiency to be a minor irregularity, and it was therefore waived. Evaluation Each member of the evaluation committee had experience in the field of electronic monitoring. There are no disputed issues of fact regarding the qualifications or training of the evaluation team, the procedures by which the RFP scoring was performed, or of any individual score. Therefore, further findings or conclusions regarding the evaluators or the scoring of the proposals are unnecessary. Proposed Award As a result of the process of evaluating and scoring the proposals, the Department determined that BI was the highest scoring proposer. Pro Tech was the second highest scoring responsive proposer. Satellite Tracking of People, LLC and G4S Justice Services, LLC were ranked third and fourth, respectively. The final scores were calculated, and the proposers were ranked as follows: Proposers Actual points received by Proposers (X) Highest points received by any Proposal (N) Awarded Points (Z) CATEGORY 1 - Business/Corporate Experience - Maximum 300 Points - (X/N x 300 = Z) BI 209.64 253.39 248.20 G4S 186.07 253.39 220.30 Pro Tech 253.39 253.39 300 STOP 196.43 253.39 232.56 CATEGORY 2 - Technical Specs & Service Delivery Approach - Maximum 400 Points - (X/N x 400 = Z) BI 241.96 285.54 338.95 G4S 246.96 285.54 345.96 Pro Tech 285.54 285.54 400 STOP 248.57 285.54 348.21 Proposers Proposed Per Diem Unit Price (X) Lowest Verified Per Diem Unit Price of All Proposals (N) Awarded Points (Z) CATEGORY 3 - Cost Proposal - Maximum 300 Points - (N/X x 300 = Z) BI $3.00 $3.00 300 G4S $6.88 $3.00 130.81 Pro Tech $5.20 $3.00 173.08 STOP $4.15 $3.00 216.87 Total Proposal Points and Ranking Proposers Total Proposal Points Ranking BI 887.15 1 G4S 697.07 2 Pro Tech 873.08 3 STOP 797.64 4 On December 17, 2010, the Department posted its intent to award the contract to BI. The ?October 5, 2010 Incident? BI has contracts with the Department of Homeland Security, several states, and numerous political subdivisions under which persons are monitored with BI-supplied equipment. The data from the monitoring devices is transmitted to a centralized monitoring location. All of the BI GPS devices, as well as a number of radio frequency and alcohol monitoring devices, were monitored through BI‘s ?TotalAccess? system. On October 5, 2010, at approximately 7:30 a.m. MDT, the number of records contained in the ?identity column? field in the TotalAccess database, which operated on a 32-bit platform, exceeded the capacity of that field. As a result, the monitoring center could no longer receive data from any of the 16,000 devices using the TotalAccess system, which included all of BI‘s almost 9,000 GPS devices. The ?outage? lasted approximately 12 hours. Although the monitoring devices continued to collect and store data on the whereabouts of the offenders during that period, the data could not be sent to the monitoring center or accessed by officers. Offenders had no direct way of knowing that the monitoring devices were not transmitting data. When the system came back on-line at approximately 7:25 p.m. MDT, the data was transmitted from the affected devices to the monitoring center. No data was permanently lost as a result of the outage. Officers were notified of any activities that would have triggered an alert during the period of the outage. If any questions arose as to the movements of an offender during the outage, that data could be retrieved and examined after the fact. During the outage, BI customers were alerted, either by e-mail or by telephone, and advised of the problem. The customers were updated throughout the outage period. The resolution of the issue was achieved by rewriting the ?identity column? data file from 32-bit, with a capacity of 2.1 billion records, to a 64-bit file, with a capacity of 9 quintillion records. In addition, a customized monitor was developed and installed so that a warning will be provided in the future if the system nears capacity. Thus, it is unlikely that this particular problem will recur. The October 5, 2010, incident was, by BI‘s own admission, the single worst event in BI‘s operational history. Protest Issues Petitioner, Pro Tech, timely filed a protest of the award of the contract to BI. The January 3, 2011, protest petition identified the issues that formed the basis for its protest of the award of the contract to BI.1/ The issues alleged by Petitioner are: Whether BI failed to comply with section 5.3.2 of the RFP by failing to: identify all of its federal, state or government contracts under which it provided electronic monitoring services and the number of active GPS units utilized for each; and provide a narrative summary of contract performance for each contract so identified, including major adverse findings; Whether BI failed to comply with section 5.2.9 of the RFP by failing to disclose ?complaints filed, investigations made, warning letters or inspection reports issued, or any disciplinary action? by governmental entities, specifically related to the outage of service that occurred on October 5, 2010; Whether BI failed to comply with section 5.5.13 of the RFP by refusing to provide a copy of its Disaster Recovery Plan. Whether BI failed to comply with section 5.5.15 of the RFP by failing to provide a copy of its training curriculum; and Whether BI failed to comply with section 5.5.5 of the RFP by failing to provide a copy of the FCC Grant of Authorization for the ?Beacon? device identified in its proposal. Pro Tech alleged that each of the deficiencies identified in its protest petition constituted a Material Deviation from the terms, conditions, and specifications of the RFP that, pursuant to section 1.15 of the RFP, could not be waived and that warranted rejection of the BI response. On November 15, 2011, BI filed its Petition for Leave to Intervene, in which it raised, as a disputed issue of fact and law, ?[w]hether Pro Tech‘s RFP reply met all of the requirements of the RFP and/or was materially non-responsive.? The responsiveness of Pro Tech‘s proposal was not preserved as an issue remaining for disposition in the Joint Pre-Hearing Stipulation.2/ Issue 1: Failure to comply with past experience requirements Section 5.3.2. requires that details of the proposed vendors‘ experience ?shall be provided in narrative form and in sufficient detail so that the Department is able to judge its complexity and relevance,? and as part of that directive, the proposed vendor was required, in part, to ?identify all current and/or past (or within three (3) years) federal, state or government contracts for the provision of electronic monitoring services, and the number of active GPS units utilized for each,? and to ?provide a narrative summary of contract performance in the above-identified contracts, including any major adverse findings.? (emphasis added). The subsections directing the vendors to provide supportive information, including 5.3.2.3. and 5.3.2.4., can be reasonably read in no way other than to be inclusive of the requirement that such information ?shall be provided in narrative form and in sufficient detail . . .? As part of the scheduled process of refining and clarifying the terms, conditions, and specifications of the RFP, potential responding vendors were allowed to submit questions to the Department. The requirement that prospective vendors provide information regarding all government contracts was worrisome to two vendors, including Pro Tech, due to the fact that such a requirement would involve at least a hundred, and up to ?several hundred? contracts. As a result of its concern with the extent of the work necessary to identify all of its electronic monitoring contracts, Pro Tech made the specific inquiry as to whether it would be allowed to ?provide the information for our 10 largest or 10 most similar contracts.? Similarly, another vendor sought to limit the scope of the specification by requesting to ?provide the total number of current and/or past (or within 3 years) federal, state or government contracts,? rather than identifying them individually, and to provide an aggregated, rather than an individual, narrative summary of contract performance. To each question, the Department responded that ?[t]hese requirements remain as stated in the RFP.? The answers were posted by the Department, and became part of the RFP‘s terms, conditions, and specifications. The only reasonable construction of the Department‘s response is that it remained ?a requirement or condition? of the RFP for vendors to identify all electronic monitoring contracts, specify the number of GPS units utilized in each contract, and provide a narrative summary of contract performance. While that requirement may appear to be burdensome, it nonetheless is the requirement. If a proposed vendor believed the requirement to be overly broad or unnecessary, it was obligated to challenge the specification. The specification was not challenged. Failure to identify all contracts In response to section 5.3.2.3, BI responded as follows: ?While BI currently has contracts for EM equipment and services with approximately 1,000 customers, as directed by the requirements in Section 5.3.2 we are providing contracts that are similar in size and scope to those specified in this RFP only.? BI thereupon listed seven contracts, the largest of which used approximately 3,500 ExacuTrack One GPS units, and the smallest of which used 100 ExacuTrack One GPS units. BI believed that listing all of its contracts was not necessary for it to show that it had the requisite experience to perform the Florida contract. Mr. Murnock testified that ?[i]t was clear we did not respond with all one thousand contracts,? and that BI‘s deficient response was made with ?[t]he risk of being scored lower, yes, is one of the risks.? The decision to limit the information to be provided in response to what is an objectively clear requirement was made with considerable forethought and calculation. With regard to the decision to identify seven of its approximately 1,000 customers, Mr. Murnock testified that ?there's certain things that we did not put in this response. We provided our answers to that because we knew, at the risk of getting a lower score, it was a risk-risk situation, you know, where do I expose contracts, do I expose my customer list that could -- while being protected by confidentiality we don't trust, we have seen that breached in other jurisdictions, we've seen that breached here in Florida, I was not going to expose information that we feel to be protected. I answered the specification as I defined it.? (emphasis added). Mr. Murnock stated that BI‘s decision to limit contract disclosure was, in part, the result of a desire to avoid the risk of exposing its customer list because ?[t]here are some customers that don‘t like their information being disseminated.? The suggestion that BI‘s decision was driven by an altruistic concern for the interests of its customers is unconvincing. The Department requested only ?federal, state or government contracts.? No explanation was offered as to why the existence of a government contract would be confidential, or a narrative of BI‘s performance under that contract would be a problem. Regardless of the purported reasons for non-compliance, the options when faced with a clear, direct, and unambiguous requirement of a public procurement to disclose ?sensitive? information are to: a) protest the specification; b) submit the information under the procurement‘s confidential information provisions; or c) choose not to submit a proposal. Picking and choosing what required information to provide, and what not to provide, is not among the acceptable or competitive options. Section 5.2.3 of the RFP is clear and unambiguous. BI‘s response was not in substantial accord with the RFP's requirements. The suggestion that vendors are free to unreasonably ?define? terms so as to meet their subjective desires is contrary to a fair and even-handed procurement process. All vendors are expected to comply with the terms, conditions, and specifications in the same way so as to present an equal playing field. BI‘s decision to provide only a tiny percentage of its government contracts tilted the field in its favor by allowing it to devote the time saved by not compiling the required information -- time spent by the other complying vendors -- to other sections of its proposal, a result that is contrary to competition. BI‘s representation that it provided contracts ?similar in size and scope? is itself questionable. The contract with the Wisconsin DOC was described as an Electronic Home Detention Program. Wisconsin uses the BI 9000, the HomeGuard 200, and the Sobrietor systems. Those systems were not described in the proposal. There was no indication of whether they are active GPS units or whether they are comparable to the ExacuTrack One system proposed for Florida. In short, the proposal failed to provide any information that would allow the reader to conclude that the Wisconsin DOC contract is similar in scope to the services being sought by the Florida DOC. The contract with the Delaware DOC does not include monitoring of the field units, as is called for in the Florida contract. The lack of a monitoring component makes the Delaware contract dissimilar in scope from the proposed Florida contract. The information provided with regard to the Broward County, Florida contract failed to indicate whether that contract utilizes BI monitoring services. Furthermore, the Broward County narrative indicated that the Broward Pretrial Services Division ?uses BI ExacuTrack AT, HomeGuard 200, GroupGuard Plus, and BI VoiceID,? but failed to describe those units or indicate their comparability to units proposed for the Florida contract. The undersigned will presume that the ?ExacuTrack AT? is a version of the ExacuTrack One. However, the narrative failed to list the ?number of active GPS units? as required by the specification, so it is unknown how many are in service. There was little information provided that would allow a determination that the Pennsylvania contract is ?similar in size and scope? to the proposed Florida contract. The RFP proposal states that ?the Pennsylvania Office of Probation and Parole Services have been operating its own offender monitoring center . . . .? Mr. Murnock confirmed that Pennsylvania was not affected by the October 5, 2010, incident because it used its own local host monitoring system. The lack of a monitoring component makes the Pennsylvania contract dissimilar in scope from the proposed Florida contract. The proposal also indicated that Pennsylvania ?has 450 HomeGuard units and 649 BI 9000‘s units, operating through a GuardServer 750 system.? None of those units, or the GuardServer 750 system, are described in the proposal, and they are not the devices or services proposed for the Florida contract. As such, the proposal fails to provide any information that would allow the reader to conclude that the Pennsylvania contract is similar in scope to the services being sought by Florida. In addition to the fact that Wisconsin, Delaware, Broward County, and Pennsylvania contracts are not, based on the information provided in the RFP, of the same scope as the Florida proposal, the Delaware DOC contract (175 ExacuTrack One units), the Broward County, Florida contract (an unknown number of ExacuTrack AT units), the Fayette County Adult Probation contract (120 ExacuTrack One units), and the City and County of Denver contract (100 ExacuTrack One units, along with 300 radio frequency and 70 alcohol monitoring units) do not approach the size of the Florida contract. As a result of BI‘s decision to forego its duty to identify all of its contracts, as required by the RFP, the Department was left with precious few contracts ?similar in size and scope? to that proposed for Florida with which to compare. BI was a party to other contracts that included BI monitoring and the use of the GPS device proposed for Florida that it elected not to disclose. BI has a contract with the state of Missouri that includes BI monitoring services and, in part, the ExacuTrack One field device. BI failed to list its contract with the state of Missouri in its response to section 5.3.2, purportedly because it consisted predominantly of alcohol and radio frequency monitoring, with ?a few GPS, but I couldn‘t tell you the count.? However, at section 5.5.19 of its proposal, BI noted that the Missouri Department of Corrections ?awarded BI with a contract for GPS, alcohol monitoring and radio frequency? that included the use of the same ExacuTrack One unit proposed for Florida. BI touted the Missouri contract as an example of its ability to rapidly implement the Florida contract. By tucking away information regarding the Missouri contract (along with contracts with agencies in California and Illinois) in section 5.5.19, BI was not obligated to provide a narrative summary of contract performance, or contact information that would allow the Department to follow up if it so chose. The reasoning for excluding the Missouri contract is disingenuous, considering that BI listed its contract with the City and County of Denver, in which GPS monitoring is a small percentage of the total monitoring devices in that contract. Because of BI‘s failure to disclose, it is not known how many other contracts among the 1,000 include features proposed for Florida, and which may have been of value to the evaluators. BI made a calculated decision not to disclose all of its contracts. Petitioner‘s allegations that BI ?cherry-picked? the contracts it chose to disclose is a harsh assessment, but it is an assessment that is supported by the evidence of this proceeding. BI made similar decisions to limit disclosure of its contracts in past procurements, with other agencies, without the consequence of disqualification. Therefore, BI decided to stay with its practice, in the words of Mr. Murnock, to ?disseminate it as we see fit? and chose not to disclose all government electronic monitoring contracts ?at the risk of being scored low.? The fact that BI was ?allowed?3/ to proceed, despite the fact that its response was not in substantial accord with the RFP's requirements, provided a competitive advantage to BI over other proposers. The first advantage is the immeasurable advantage conferred by withholding information on its contracts, and possible problems related thereto. The more direct advantage is the time saved by BI as a result of its decision to forego the work necessary to compile the contracts, and provide a narrative summary of their performance. The competitive advantage conferred on BI was, in this case, significant. Petitioner‘s President, Mr. Chapin, testified that Pro Tech devoted two full- time employees for approximately two weeks to collect the data necessary to fully respond to section 5.2.3, in addition to the time devoted by contract account managers in verifying contract performance matters. That was time not expended by BI –- and was time that BI could use to bolster and enhance other sections of its proposal. In addition to the direct competitive advantage conferred on BI, the Department‘s failure to enforce the clear and unambiguous requirements, especially when its ?decision? was made after the preliminary results of the evaluation were known, and when the deviation benefitted the vendor proposing a lower price, fosters an appearance and opportunity for preferential treatment that compromises the integrity of the competitive process.4/ The response to section 5.2.3.3. of the RFP provided by BI is clearly deficient, is not in substantial accord with the RFP's requirements, and is a material deviation from the terms, conditions, and specifications of the RFP. The Department‘s failure to enforce the requirement in accordance with the terms of section 1.15 was clearly erroneous, contrary to competition, arbitrary, and capricious. Failure to provide a narrative summary of contract performance Section 5.3.2.4 of the RFP required proposed vendors to provide a narrative summary of their contract performance, including major adverse findings. The summaries were not limited to major adverse findings. Rather, contract performance goes beyond adverse findings, and includes the manner and efficiency in which the contract services are accomplished, whether good or bad. BI provided narrative summaries of the few contracts it chose to identify, but little information as to contract performance. The evidence in this case demonstrates that the October 5, 2010, incident was, without question, the worst single operational event in BI‘s history, and among the two or three most significant failures in the history of the electronic monitoring industry. It affected at least one of the contracts identified by BI, that being with the state of Wisconsin. It occurred while the RFP proposal was being prepared, and approximately six weeks prior to its submission. It is absurd to believe that the October 5, 2010, incident was not a significant element that should have been disclosed in any discussion of contract performance. It may well be, as asserted by BI, that its customers were satisfied with its response to the October 5, 2010, incident. If so, it would have been a simple matter to provide an assessment of the satisfaction of BI‘s customers with its response, and with a description of the remedial measures taken to ensure that it would never recur. BI did not. Although several customers, including the state of Wisconsin, expressed their concern with the situation in writing, and BI offered credits to its customers, there do not appear to have been any ?major adverse findings? as that term may be narrowly construed. As a measure of ?contract performance,? Mr. Murnock testified that the October 5, 2010, incident ?is certainly not a good incident to occur. But when you look at the specifications, we interpreted them exactly the way they were listed.? That is not the case. Rather, the decision to withhold any mention of the incident came about by a careful and measured parsing of words. BI witnesses testified that the October 5, 2011, incident was no secret, and that it had put out media coverage and press releases because it ?wanted to be an open book? regarding the incident. However, as to the ?threshold? of the items that would have to be disclosed as a significant issue of contract performance, Mr. Murnock testified that ?that would be a very long list of performance items, whether it be from a billing issue that may have been raised, to this October 5th issue.? The equation of a simple ?billing issue? with the October 5, 2010, incident -- the single worst event in BI‘s history -- serves to highlight the attitude that allowed BI to willingly avoid disclosure of a direct, material, and significant element of contract performance that affected the very goods and services being proposed for Florida. The incident was enough of a secret that no evaluator was aware of it. The evaluators acknowledged that the event was significant, and could have affected their scores on the performance section of the RFP, though none could state whether the effect would have been positive or negative. It may well be that the explanation of the prompt remedial measures would have been well received by the evaluators, and that no reduction in scores would have resulted. It may also be that the event, given its severity, would have negatively affected their scores.5/ The testimony of Department witnesses that the October 5, 2010, incident was not necessarily something that it would have wanted to know about rings hollow. There is absolutely no reason why that information would not be pertinent and material to this RFP. The suggestion that the October 5 incident was something the Department viewed with ambivalence goes more to its desire to support the contract award than it does to the sufficiency of the BI narrative of contract performance.6/ Despite what is clearly a designed and calculated effort on the part of BI to withhold information regarding the incident from the Department -- and the Department‘s inexplicable lack of concern regarding the withholding of material information regarding subject matter of the RFP -- the fact is that BI‘s proposal included ?narrative summaries,? thereby meeting the minimal requirement established in section 5.3.2.4. Despite a lack of candor on the part of BI that raises significant concern, the undersigned cannot conclude that the deficiencies in the narrative summaries constituted an issue of basic responsiveness. Therefore, the undersigned cannot find that BI‘s omission of information regarding the goods and services proposed for Florida is a material deviation from section 5.3.2.4. of the RFP. Issue 2: Failure to disclose ?complaints? related to the October 5, 2010 event Section 5.2.9. of the RFP requires proposed vendors to provide ?any and all documents regarding complaints filed, investigations made, warning letters or inspection reports issued, or any disciplinary action imposed by Federal or State oversight agencies within the past five (5) years.? Pro Tech asserts that an October 7, 2010, ?deficiency notice? from the Missouri Department of Corrections regarding the October 5, 2010, incident, and follow-up correspondence through December 23, 2010, fell within the class of governmental action that should have been disclosed, but was not. The October 7, 2011, letter from the Missouri DOC identifies itself as a ?letter of notification to BI of a deficiency notice,? and requested of BI ?a written response within 7 calendar days identifying the problem area(s) which led to the failure and what steps BI intends to initiate to ensure that the system failure is not repeated.? BI witnesses testified that a ?deficiency notice? was not one of the specific items listed in section 5.2.9 of the RFP, and that it was therefore not obligated to disclose the Missouri letter under its very narrow reading of the items requested. BI‘s candor with regard to the October 5, 2010, incident as expressed in its response to section 5.2.9. is roughly approximate to that evident from its response to section 5.3.2.4.7/ Section 5.2.9. uses very specific terms. It is doubtful that the Department intended potential vendors to disclose only those documents with the words ?complaint,? ?investigation,? ?warning letter,? ?inspection report,? or ?disciplinary action? splashed prominently across the document. Rather, a fair reading of the requirement, coupled with an interest in being open and forthright regarding performance -- an ?open book? as stated by Mr. Murnock -- would clearly include a ?deficiency notice? to be within the class of items being requested. However, since the specific RFP language listed specific items, without a more inclusive descriptor, such as ?including but not limited to,? or ?in the nature of,? the undersigned will not broaden the specific RFP requirement. Since the Missouri letter did not include the words ?complaint,? ?investigation,? ?warning letter,? ?inspection report,? or ?disciplinary action? within the body of the correspondence, despite its being plainly within the general class of those documents, the response provided by BI to section 5.2.9. was not a material deviation from that requirement of the RFP. Issue 3: Failure to provide a copy of the Disaster Recovery Plan The RFP, at section 5.5.13., provides that ?[t]he proposer shall provide a detailed description of the Contractor‘s method and approach for meeting or exceeding all Monitoring Center requirements in section 3.13, and specifically . . . provide a copy of the Disaster Recovery plan.? The requirement is clear, direct, and unambiguous. BI did not file a protest of the specification, nor did it question the submission of its Disaster Recovery Plan during the process that resulted in the issuance of Addendum #1. In response to section 5.5.13. of the RFP, BI responded as follows: ?Because of security reasons, the Disaster Recovery Plan is not included with this response. For an outline of the Disaster Recovery Plan, see „3.13.4? beginning on page 148.? BI‘s refusal to provide the Disaster Recovery Plan is reiterated in its response to section 3.13.10. There is no industry standard as to what constitutes a Disaster Recovery Plan. However, BI clearly understood what constituted its Disaster Recovery Plan, and made the calculated decision that it was not going to submit it. The response provided by BI is clearly deficient, and is not in substantial accord with the RFP's requirements. BI decided that it would not provide its Disaster Recovery Plan to the Department ?because it has always been a practice that we not provide that unless it is outside of the production of the RFP, upon request.? The decision to ignore the requirement was made with calculated and matter-of-fact intent, relying on the assumption that it would entail at most a scoring reduction. In lieu of providing the Disaster Recovery Plan as required, Ms. White testified that elements of the plan were ?listed within the RFP itself in several different sections, about 30 different pages.? Thus, according to BI, various elements of what one might expect to find in a Disaster Recovery Plan lay flung about in unrelated sections of its RFP proposal, awaiting the efforts of the intrepid evaluators to uncover their existence and significance. BI‘s assertion that it intended those far-flung elements to meet the RFP‘s requirement that it provide its Disaster Recovery Plan is belied by its express statement that, with knowledge of its action, it elected to omit the Disaster Recovery Plan. The evaluation of a procurement proposal is not akin to a game of hide-and-seek. It is unreasonable to expect evaluators to scour each proposal to glean information scattered throughout, when there is a clear, unmistakable, and mandatory direction to provide the Disaster Recovery Plan as a single, stand-alone document. Compliance with a mandatory item of a public procurement, particularly one designed to ensure that the proposing vendor can adequately reply to a disaster scenario when its services are arguably most needed, cannot be left to the chance that an evaluator might be able to sift through the proposal, and to thereby piece together an understanding of what disaster preparedness measures are proposed. The fact that the Disaster Recovery Plan contains confidential and proprietary information does not lessen the obligation to provide that information. Section 4.3.20. of the RFP provides the procedure by which confidential, proprietary, or trade secret material may be subject to protection under the Constitution and laws of Florida. If a proposed vendor believes the protections to be insufficient, it has a hard decision to make as to whether to submit or not submit a proposal. That decision does not include whether to ignore a mandatory requirement of the RFP on the chance that the consequence would be insignificant. It is clear that the Department never determined whether BI‘s admitted failure to disregard the Disaster Recovery Plan requirement was a material deviation from the terms, conditions, and specifications of the RFP. When Ms. Wright finally reviewed the BI proposal immediately before the posting of the award of the contract, she noted that BI had not submitted a copy of its Disaster Recovery Plan as required by the RFP. Ms. Wright did not follow the established procedure of discussing the issue with Mr. Staney, nor was legal staff consulted. Rather, Ms. Wright called Douglas Smith, who was an evaluator. Ms. Wright indicated that, despite BI‘s express statement that it was not submitting a copy of its Disaster Recovery Plan as required, she wanted ?to check with Mr. Smith on if he felt comfortable with what they had shared about the Disaster Recovery Plan, and was it sufficient.? Mr. Smith recalled his conversation with Ms. Wright, and indicated that ?it wasn‘t so much the Disaster Recovery Plan specifically, she was asking about the elements we reviewed. Are you comfortable with the score that was given? Are they adequate, satisfactory to be able to perform the services based on the contract?? Based on her discussion with Mr. Jones, Ms. Wright unilaterally determined that she did not need to take the issue of the omission of the Disaster Recovery Plan to Mr. Staney or to legal staff. Notably, Ms. Wright admitted that she did not make a determination of whether BI‘s admitted failure to provide a copy of its Disaster Recovery Plan, as required by the RFP, was a material deviation or a minor irregularity. Vendors with an interest in the Florida contract may have been discouraged from submitting proposals because of similar concerns with the security of their Disaster Recovery Plans, or because they did not have a stand-alone Disaster Recovery Plan. It generally cannot be known how many, if any, potential proposers may have been dissuaded from submitting a proposal because of one project specification or another. However, although the effect of an agency choosing to ignore a clear and unambiguous requirement for one proposer that is applicable to all other proposers confers a competitive advantage that is difficult to calculate, it is nonetheless real. Furthermore, withholding its Disaster Recovery Plan until after the posting of the award gave BI the opportunity to review the other proposals. If it then determined that its proposal was less than advantageous, it could effectively pull itself from the procurement by maintaining its refusal to submit its Disaster Recovery Plan when requested by the Department. Thus, the failure to submit the Disaster Recovery Plan when required was a material deviation that conferred a competitive advantage on BI that was not enjoyed by the other compliant proposers. In addition to the foregoing, the refusal to enforce the clear and unambiguous requirement that BI submit a copy of its Disaster Recovery Plan, particularly when such a waiver has occurred outside of the Department‘s normal practice of evaluating deviations from the requirements of the RFP, and after the preliminary outcome of the evaluation was known, raises the distinct appearance of favoritism and preferential treatment towards BI. BI‘s failure to provide a copy of its Disaster Recovery plan is not in substantial accord with the RFP‘s requirements, and is a material deviation from the terms, conditions, and specifications of the RFP. The Department‘s failure to enforce the requirement in accordance with the terms of section 1.15 was clearly erroneous, contrary to competition, arbitrary, and capricious. Issue 4: Failure to provide a training curriculum The RFP, at section 5.5.13, provides that ?[t]he proposer shall provide a detailed description of the approach to meeting or exceeding all Training requirements in section 3.16, and specifically: . . . provide a copy of the training curriculum.? In response to section 5.5.15 of the RFP, BI provided a summary of the topics to be covered in its course for training officers and other employees in the use of the monitoring system. The summary described the outline for the training to be provided, but did not go into detail as to manner in which the training would be provided. The RFP does not define the term ?curriculum.? In general, a curriculum is defined as ?the courses offered by an educational institution? or ?a set of courses constituting an area of specialization.? MERRIAM-WEBSTER DICTIONARY, at http://www.merriam-webster.com. In this case, there is a single training course. The information provided by BI described the basic course that it intended to provide. What appears to be the subject of Pro Tech‘s complaint is that BI did not provide a complete syllabus, or the complete set of materials, for the training course that was to be provided. A syllabus or training materials were not required. The RFP, at section 3.16, provided that: [t]he training curriculum . . . [is] hereby adopted as the approved curriculum . . . to be utilized for all training purposes under this Contract. Said curriculum . . . [is] incorporated herein as if fully stated. Any changes to these documents shall be approved in writing by the Department‘s Contract Manager. Based on that provision of the RFP, a credible argument can be made that the intent of the provision was for the proposer to submit a document far more comprehensive than provided by BI. The Department‘s proffered explanation that the ?curriculum? provided by BI was what was intended by the RFP is not convincing, and generally runs contrary to the requirements of section 3.16. However, the description of what was to constitute a curriculum was imprecise and ambiguous. The information provided by BI describes the training course offering, and may reasonably be construed -- in a broad sense of the term -- to be a curriculum. The response provided by BI to section 5.5.15 is in substantial accord with the RFP's requirements as stated, and was not a material deviation from those requirements. Issue 5: Failure to provide the FCC license for the ?Beacon? Section 5.5.5 of the RFP requires the proposed vendors to provide the Department with ?a detailed description of the General Equipment specifications that meets or exceeds all requirements in section 3.7.2,? and ?provide copies of required licensing by the Federal Communications Commission for the equipment proposed.? The equipment proposed by BI as responsive to the general equipment specifications of section 3.7.2 consists of the ExacuTrack One single piece GPS tracking unit. The ExacuTrack One meets or exceeds all requirements established in section 3.7.2. The FCC grant of equipment authorization was provided for the ExacuTrack One unit. The ?Beacon? was identified in section 5.5.21 of the RFP as a value-added service that was above and beyond the RFP‘s minimum service delivery requirements and specifications. The Beacon is not a necessary component of the equipment for tracking offenders as established in section 3.7.2, but serves as a home-base unit to transmit location and data, and conserve battery power. Section 5.5.5, is reasonably construed to require that the FCC ?license? be provided only for the general equipment proposed pursuant to section 3.7.2 of the RFP. BI complied with that requirement. Based on the terms, conditions and specifications of the RFP, the response provided by BI to section 5.5.5 is in substantial accord with the RFP's requirements, and was not a material deviation from those requirements. Ultimate Findings of Fact Based on the foregoing, the BI response to Request for Proposals, Solicitation Number 10-DC-8200, materially deviated from the mandatory terms, conditions, and specifications of sections 5.3.2.3. of the RFP, as supplemented by Addendum #1, and section 5.5.13 of the RFP. The items that rendered the BI proposal non-responsive, and that materially deviated from the terms, conditions, and specifications of the RFP, gave BI an advantage or benefit not enjoyed by the other proposers, were not minor irregularities, and could not be waived under the terms of the RFP. Based on the foregoing, Pro Tech demonstrated by a preponderance of the evidence that the award of the contract to BI was clearly erroneous, contrary to competition, arbitrary, and capricious. The undersigned is not unmindful of the fact that BI proposed the lowest cost, and that the rejection of the BI proposal will result in a higher overall cost for offender monitoring services to the state. Perhaps the fact that Pro Tech proposed a system that was scored higher based on its business experience and technical merits will offset any concerns. Regardless, the decision as to whether BI met the clear and unambiguous requirements of RFP 10-DC-8200 cannot, in the interests of fair and open competition, be the result of preferential treatment afforded to BI based on one element of a multi-factored RFP.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent, Department of Corrections, enter a final order that adopts the Findings of Fact and Conclusions of Law set forth herein. It is further recommended that the contract issued in response to Request for Proposals, Solicitation Number 10-DC-8200, entitled "Global Positioning Satellite Electronic Monitoring Services" be awarded to Petitioner, Pro Tech Monitoring, Inc. as the highest scoring responsive vendor. DONE AND ENTERED this 4th day of April, 2012, in Tallahassee, Leon County, Florida. S E. GARY EARLY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 4th day of April, 2012. 1/ The protest petition initially alleged that the evaluation team members did not meet the experience and knowledge requirements of section 287.057(16)(a), and that the price proposed by BI was unrealistically low, thereby jeopardizing the ability of BI to provide service under the contract. Both of those issues were withdrawn prior to the final hearing. 2/ If the issue of the responsiveness of the Pro Tech proposal had not been waived, the undersigned would have found and concluded that BI failed to demonstrate that the Pro Tech proposal was not responsive to the terms, conditions, and specifications of the RFP. The responsiveness issue was related solely to whether Pro Tech identified its contracts, provided narrative summaries, and disclosed complaints related thereto, in violation of sections 5.3.2. and 5.2.9. of the RFP. The only evidence of such non-responsiveness was related to a contract between G4S Justice Services, LLC, and the state of Connecticut, for which Pro Tech was a subcontractor. The RFP contained no requirement that a proposer disclose or discuss its subcontracts with other vendors, but rather required only the disclosure of ?all current and/or past (or within three (3) years) federal, state or government contracts.? Therefore, Pro Tech‘s failure to disclose its subcontract with G4S -- despite its disclosure of a different subcontract to which it was a party in Missouri - - was not a deviation from the terms, conditions, and specifications of the RFP. 3/ The suggestion that the Department ?allowed? the BI proposal to pass through the review process, or that the Department made such a decision, is a bit inaccurate. The evidence clearly demonstrates that the Department made no decision as to whether BI‘s proposal contained material deviations until faced with the issue in the context of litigation. However, for ease of reference, the terms ?allowed? and ?decision? will be used when describing the effect of BI‘s decisions to submit less information than required under the terms, conditions, and specifications of the RFP, and the Department‘s after-the-fact litigation strategy to support its determination to award the contract to BI. 4/ In Syslogic Technology Servs., Inc. v. So. Fla. Water Mgmt. Dist., Case No. 01-4385BID, at 61, n.19, (Fla. DOAH Jan. 18, 2002; SFWMD Mar. 6, 2002), Judge Van Laningham was similarly faced with a situation in which the agency failed to make a determination as to whether a deviation from the procurement specifications was material until after the proposals were scored and ranked, and the preliminary outcome known. His analysis is instructive and well-written, and is adopted, with full attribution, by the undersigned. The reason for this should be clear: If the decision on materiality were made from a post facto perspective based on extrinsic factors, then the temptation would be great to base the determination on reasons that should not bear on the issue. In particular, the materiality of a deviation should not depend on whether the deficient proposal happens to be highest ranked. To see this point, imagine a close football game in which, at the start of the fourth quarter, one team scores a go-ahead touchdown -- if the receiver came down in bounds. Would anyone think it fair if the referees awarded the points provisionally and reserved ruling on whether the touchdown should count until after the end of the game? Of course not. In a contest, potentially determinative decisions involving a competitor's compliance with the rules need to be made when the outcome is in doubt, when the effect of the decision is yet unknown; otherwise, the outcome may be manipulated. 5/ The Department would treat the failure to disclose the October 5, 2010, incident as a minor irregularity, thus allowing it to be treated as a scoring issue. However, the October 5, 2010, incident cannot be treated as a scoring issue due to BI‘s failure to disclose. Captain Yossarian would have made an appropriate evaluator of Request for Proposals No. 10-DC-8200. 6/ Again, with a tip of the hat to Judge Van Laningham: When an agency asserts for the first time as a party litigant in a bid protest that an irregularity was immaterial, the contention must be treated, not with deference as a presumptively neutral finding of ultimate fact, but with fair impartiality as a legal argument; in other words, the agency is entitled to nothing more or less than to be heard on an equal footing with the protester. Phil‘s Expert Tree Service v. Broward Co. Sch. Bd., Case No. 06- 4499BID at 42, n.13, (Fla. DOAH Mar. 19, 2007; BCSB June 11, 2007). 7/ To BI‘s credit, it did disclose an investigation by the state of New Jersey into its billing practices which, not surprisingly, ?concluded that BI was not at fault,? and for which BI included 23 pages of supportive information. COPIES FURNISHED: J. Stephen Menton, Esquire Rutledge, Ecenia, and Purnell, P.A. 119 South Monroe Street, Suite 202 Post Office Box 551 Tallahassee, Florida 32301 smenton@reuphlaw.com Christopher Ryan Maloney, Esquire Foley and Lardner Suite 1300 1 Independent Drive Jacksonville, Florida 32202 cmaloney@foley.com Benjamin J. Grossman, Esquire Foley and Lardner, LLP Suite 900 106 East College Avenue Tallahassee, Florida 32301 bjgrossman@foley.com Jonathan P. Sanford, Esquire Florida Department of Corrections 501 South Calhoun Street Tallahassee, Florida 32399 sanford.jonathan@mail.dc.state.fl.us Ken Tucker, Secretary Department of Corrections 501 South Calhoun Street Tallahassee, Florida 32399-2500 Jennifer Parker, General Counsel Department of Corrections 501 South Calhoun Street Tallahassee, Florida 32399-2500
The Issue Whether the Petitions for Formal Administrative Proceeding should be dismissed.
Findings Of Fact In July of 1997 a notice of an application for an environmental resource permit (ERP) was issued in conjunction with a project identified as 4-061-0164A-ERP. This project proposed to develop six single-family homesites and required the filling of 5.79 acres of wetlands. The project was reviewed by the permitting authority, the District, and was recommended for approval. On February 20, 1998, the District sent a written notice of Intended District Decision on permit application 4-061-0164A- ERP to interested persons. Such persons include those who have requested notice of all District ERP projects or those who have requested notice of District ERP projects by county which, in this instance, is Indian River County. Additionally, on February 25, 1998, a notice of the District's intended agency action appeared in a newspaper published at Vero Beach, Indian River County, Florida. Such notice provided, in pertinent part: The District gives notice of its intent to issue a permit to the following applicant(s) on March 10, 1998: HORSE'S HEAD, LTD. ATTN: CHARLES M. BAYER, JR., 1 JOHN ISLAND DRIVE, VERO BEACH, FL 32963, application #4-0610164A-ERP. The project is located in Indian River County, Section 13, Township 32 South, Range 39 East. The ERP application is for CONSTRUCTION OF FIVE RESIDENTIAL LOTS, WHICH WILL RESULT IN THE FILLING OF 5.79 ACRES OF MANGROVE SWAMP WITHIN THE EXISTING JOHN'S ISLAND DEVELOPMENT (LTVC PROPERTY). The receiving waterbody is the INDIAN RIVER LAGOON * * * The District will take action on each permit application listed above unless a petition for administrative proceeding (hearing) is filed pursuant to the provisions of sections 120.569 and 120.57, F.S., and section 40C- 1.511, F.A.C. A person whose substantial interests are affected by any of the Districts [sic] proposed permitting decisions identified above may petition for an administrative hearing in accordance with sections 120.569 and 120.57, F.S. or all parties may reach a written agreement on mediation as an alternative remedy under section 120.573. Choosing mediation will not adversely affect the right to a hearing if mediation does not result in a settlement. The procedures for pursuing mediation are set forth in section 120.573, Florida Statutes, and rule 28-106.111 and 28-106.401-.405 Florida Administrative Code. Petitions must comply with the requirements of Florida Administrative Code Rule 40C-1.521 and be filed with (received by) the District Clerk, located at District Headquarters, Highway 100 West, Palatka, Florida 32177. Petitions for administrative hearing on the above application(s) must be filed within fourteen (14) days of publication of this notice or within nineteen (19) days of the District depositing notice of its intent in the mail for those persons to whom the District mails actual notice. Failure to file a petition within this time period shall constitute a waiver of any right such person may have to request an administrative determination (hearing) under sections 120.569 and 120.57, F.S., concerning the subject permit application. Petitions which are not filed in accordance with the above provisions are subject to dismissal. Because the administrative hearing process is designed to formulate final agency action, the filing of a petition means that the Districts [sic] final action may be different from the position taken by it in this notice of intent. Persons whose substantial interests will be affected by any such final decision of the District to become a party to the proceeding, in accordance with the requirements set forth above. (Emphasis added) On February 27, 1998, the District sent Horse's Head, Ltd., the permit applicant, a notice of intended agency action to issue the ERP to fill approximately 5.79 acres of wetlands on John's Island in the Town of Indian River Shores, Indian River County, Florida, to create five residential lots in an existing residential development commonly known as "John's Island." Subsequent to the foregoing, a group of homeowners whose properties are adjacent to the applicant's site timely challenged the intended agency action. This group, designated in this record as the Prosser petition, sought an administrative hearing and the matter was forwarded to the Division of Administrative Hearings for formal proceedings. The Prosser petition was assigned to Administrative Law Judge Linda Rigot as DOAH Case No. 98-1784. The Prosser challengers and Horse's Head eventually reached an amicable resolution. Horse's Head agreed to modify the subject application by reducing the filling of wetlands on the project site; by reducing the number of proposed residential lots; by undertaking additional mitigation activities on Hole-in- the-Wall Island, which is owned by Horse's Head; and by placing additional acreage under a conservation easement previously created for the subject permit application. Pursuant to the stipulated settlement agreement referred to in the previous paragraph, Horse's Head agreed to request, and did request, the District to modify its ERP application as follows: Reduce the wetland impacts for Parcel A (see composite Exhibit "A" to Exhibit "4") from ? 2.45 acres to ? 1.03 acres. Reduce the wetland impacts to Parcel B (see Exhibit "B" to Exhibit "4") from ? 3.34 acres to ? 1.63 acres. Eliminate the northernmost of the proposed lots in Parcel B, thus reducing the total number of lots proposed for development in Parcel B from 4 to 3 lots. Create an additional 1.77 acres of wetlands by removing the Florida Power & Light ("FP&L") roadbed/power line easement on Hole-in-the-Wall Island and scraping down 0.6 acres of spoil banks within the conservation easement. Perform the rotational impoundment management "RIM" mitigation plan previously proposed for Hole-in-the-Wall Island, with the exception that clearing of nuisance exotic species on the perimeter dike has been deleted. Incorporate the majority of the northernmost of the four lots originally proposed in Parcel B into the revised and expanded area subject to a conservation easement for that parcel. Place approximately 78 acres under a conservation easement consistent with the terms and provisions of the conservation easement previously created for this application. Pursuant to the stipulated settlement agreement, the Prosser petition was voluntarily dismissed on or about February 25, 1999, and Case No. 98-1784 was closed by Judge Rigot on or about March 1, 1999. Prior to the dismissal of DOAH Case No. 98-1784, Petitioner, Edna Wieler, sent a letter to the District to contest the instant application. The Wieler letter, dated October 1, 1998, included a collection of signatures of those who reportedly opposed the applicant's proposed development. Petitioner Wieler had not timely filed a petition to challenge the applicant's project in March of 1998. Moreover, Petitioner Wieler had not sought to intervene in the proceeding which had been timely filed (DOAH Case No. 98-1784). Petitioner Wieler sent a second letter to protest the instant ERP on October 20, 1998. Because of the Wieler letters in opposition to the project, the District added Petitioner Wieler's name to the data base of those persons claiming an interest in the subject permit application. Mark Gronceski is an environmental specialist employed by the District responsible for reviewing ERP applications for projects located in Indian River County. As such he was instrumental in the agency's review of the instant project. On December 15, 1998, Kenneth Oertel wrote to Mr. Gronceski with regard to the subject project. Mr. Oertel's letter provided: On behalf of the Town of Indian River Shores I would request that you send me a copy of the final staff report prepared for the above-referenced application and any notice that this matter will be placed on the Governing Board agenda. I would like to be furnished with these documents in sufficient time to evaluate whether a petition, pursuant to Chapter 120, F.S., will be filed. On February 12, 1999, the District sent a written notice of Intended District Decision on Permit Application 4-061- 0164A-ERP to Interested Parties including Petitioners Wieler and Kenneth Oertel. On February 18, 1999, a second notice of the District's intended action in this case was published in the Vero Beach Press-Journal. This notice mirrored the first notice published. It did not reference the modifications to the permit application which had been reached through the settlement of DOAH Case No. 98-1784. On March 2, 1999, the District staff sent the applicant a notice of intended agency action to approve the Horse's Head ERP permit as modified pursuant to the above-referenced stipulated settlement agreement. On March 5, 1999, the Town of Indian River Shores and Wieler filed Petitions for Formal Administrative Proceeding challenging the District's intent to approve the Horse's Head ERP permit as modified by the stipulated settlement agreement. The District uses three forms of notice regarding ERP applications. When an ERP application is submitted, notice of receipt of such application is posted in each District service center. Further, a copy of the posted notice is provided by mail to persons or organizations who have requested notice of ERP applications. These "interested persons" receive notice based upon District-wide interests or for a requested county interest. The District is aware that some persons simply want notice of all ERP applications. Organizations in this category include the Florida Audubon Society and the Pelican Island Audubon Society as well as others. The District considered Petitioner Wieler and Mr. Oertel "interested persons" to whom notice of the application should be sent. When the District is prepared to agenda an ERP application for Board intended action, the District publishes a notice for the public of the proposed action and sends a second notice to the interested persons in its data base. This second type of notice provides a point of entry for interested persons to contest the proposed action. A third type of notice used by the District is termed a "sunshine notice." This notice makes interested persons aware of items on a Board agenda. It is sent to all persons in the data base but does not offer a point of entry for agenda items. It merely lets interested persons know what topics will be on the Board agenda. In this case, the District erroneously issued the second type of notice to the interested persons in its data base. Consequently, instead of the sunshine notice which should have been issued to Petitioners, they received the second type of notice. Petitioners claim a point of entry based upon the language of the second notice. The District Board did not formally determine Petitioners are entitled to be "parties" to an administrative review of the subject project. The issuance of the notice to Petitioners was no more than a clerical oversight. None of the Prosser group who timely challenged the applicant's project have supported Petitioners' efforts in this matter. The modified permit application as currently endorsed by the District and requested by Horse's Head does not constitute a substantial deviation from the original permit application noticed in February 1998. Petitioners have stipulated that the modified permit application is less impacting than the original design.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the St. Johns River Water Management District issue a enter a final order dismissing the instant Petitions. DONE AND ENTERED this 7th day of June, 1999, in Tallahassee, Leon County, Florida. J. D. PARRISH 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 7th day of June, 1999. COPIES FURNISHED: Mary Jane Angelo, Esquire Charles A. Lobdell, III, Esquire St. Johns River Water Management District Post Office Box 1429 Palatka, Florida 32178-1429 Timothy P. Atkinson, Esquire Kenneth G. Oertel, Esquire Oertel, Hoffman, Fernandez & Cole, P.A. 301 South Bronough Street Fifth Floor Post Office Box 1110 Tallahassee, Florida 32302-1110 William L. Hyde, Esquire Gunster, Yoakley, Valdes-Vauli & Stewart, P.A. 215 South Monroe Street, Suite 830 Tallahassee, Florida 32301 Henry Dean, Executive Director St. John's River Water Management District Post Office Box 1429 Palatka, Florida 32178-1492
The Issue The issues to be resolved in this proceeding are delineated with particularity in the Joint Pre-hearing Stipulation executed by all parties; however, the issues generally are as follows: Whether Experior has standing to challenge the RFP Process. Whether Promissor was a qualified or responsive proposer. Whether Experior's cost proposal was entitled to the maximum points if Promissor's proposal is determined to be unqualified or non-responsive. Whether the scoring of the proposals by Evaluator three was affected by his bias or was so aberrant as to be unsupportable or illogical or in violation of the RFP. Whether DBPR's award of MBE/WBE preference points to Experior and PSI was inappropriate and should be eliminated. Whether Experior suffered an unfair competitive disadvantage.
Findings Of Fact The Department first decided to seek proposals for computer-based testing (CBT) services on March 29, 2002, when it issued RFP 01-02-001. General Condition Number Seventeen of that RFP stated that any material submitted in response to the Request for Proposal will become a public document pursuant to Section 119.07, including any material which a responding proposer might consider confidential or a trade secret. Any claim of confidentiality was waived upon submission. Experior never protested that General Condition Number Seventeen in that first RFP. The cost proposals submitted by all proposers in response to that first RFP became public record after the Department posted the notice of intent to award the contract to Experior on September 17, 2002. Promissor and PSI filed notices of intent to protest and formal written protests. In response to those protests, however, the Department decided to reject all proposals. Experior then challenged the rejection of all proposals by filing a notice of intent to protest on October 24, 2002, but ultimately withdrew that protest on October 31, 2002. Thereafter on January 13, 2003, the Department issued requests for proposal RFP 02-03-005 (the RFP), seeking proposals for the provision of computer-based testing services for several professions regulated by the Department. That is the RFP with which this case is concerned. Questions arose by potential vendors at a Pre-Proposal Conference, which was held on January 21, 2003. Representatives of the Department, Experior, Promissor, and PSI attended. Amendment One to the RFP grew out of that conference and was issued on February 3, 2003. This amendment contained the written questions and the Department's answers and the minutes of the Pre-Proposal Conference. The Department appointed certain employees to serve on the evaluation committee. The employees who were appointed were Karen Campbell-Everett; Steven Allen; Mollie Shepard; Alan Lewis; Milan Chepko (alternate) and Joe Muffoletto (alternate). Additionally, Department employee Valerie Highsmith was appointed to evaluate proposer references. Ultimately, alternate evaluator Joe Muffoletto replaced evaluator Steven Allen due to the death of Mr. Allen's father. Amendment One to the RFP then identified the evaluators and informed all proposers that the educational and professional background of each evaluator could be obtained by making a public records request. The protest filed by Experior alleges that evaluator Joe Muffoletto was not appropriately qualified. Experior did not file a challenge to the evaluators within 72 hours after they were identified in RFP Amendment One. Realistically this would have been difficult to do unless they already knew what the objections to qualifications might be, since Amendment One, in identifying the evaluators, informed the proposers that they would need to make a public records request to obtain the educational and professional background of each evaluator. In any event, preponderant evidence shows that Mr. Muffoletto's experience is sufficient to constitute "experience and knowledge in program areas and service requirements" for the CBT contract within the meaning of Section 287.057(17)(a) (which only requires that evaluators "collectively" have such experience). Mr. Muffoletto has a bachelor's degree, with a major in English and a minor in psychology. He holds a master of science degree in education and master of arts degree in multi- disciplinary studies and has completed the graduate level course called "assessment of learning outcomes" at Florida State University. Before working for DBPR, in 1996, he was a junior high and high school English teacher for 30 years. He has worked as a computer trainer for students taking the New York State Regents Competency Exam. In 1996-1997 he was an OPS test editor with DBPR and from 1997 to 1999 worked for the Florida Department of Education as a coordinator of test development, where he trained consultants on how to write test items, review test items, and amend test content outlines and blue prints. While in that position, he also wrote an RFP and developed a set of exams. Since 1999 he has been a psychometrician with DBPR and currently develops computed-based examinations for landscape architects and auctioneers and regular examinations for electrical contractors. Promissor, Experior and PSI each submitted responses to the second RFP. The technical proposals were distributed to members of the evaluation committee for review sometime after a standardization session for evaluators was conducted on February 11, 2003. The members of the evaluation committee separately conducted an analysis of each proposal and awarded points based on their review. Each evaluator submitted his or her completed technical evaluation guides or score sheets to Lyra Erath, who then forwarded the score sheets to the lead evaluator, Molly Shepard. The evaluation of the proposer references was completed by Valerie Highsmith and her score sheets for such evaluations were submitted to Bobby Paulk. On February 27, 2003, the Department opened the cost proposals, which reflected the following prices proposed per hour: Promissor: $9.00; Experior: $10.50; PSI: $11.35; and NCS Pearson: $14.75. The score for each cost proposal was calculated in accordance with a mathematical formula set out in the RFP. Promissor proposed the lowest cost and thus received the maximum cost score of 175 points. Experior received 150 points, PSI 138.77 points, and NCS Pearson 106.79 points. Upon concluding the evaluation process established by the RFP, Promissor's proposal was ranked first with 490.08 points out of a maximum available 555 points. PSI was second place, being awarded 461.40; Experior was awarded 440.03 points and NCS Pearson, 305.16 points. The bid/proposal tabulation was posted by the Department on March 12, 2003. Therein it indicated its intent to award the contract for CBT Services to Promissor. On March 17, 2003, Experior and PSI filed notices of intent to protest the intended award to Promissor. Experior thereafter timely filed a formal written protest, although PSI did not. ISSUES TO BE RESOLVED The Time Period for Contract Implementation Experior's protest alleges that the time period for contract implementation was allegedly "too aggressive" (short). The RFP however, repeatedly notified all proposers that they would waive any protest of the terms and specifications of the RFP unless they filed such protest within 72 hours of receiving notice of the specifications, as provided in Section 120.57(3). Similarly, RFP Amendment One informed the proposers that the RFP was amended to include "changes and additions" and that failure to file a protest within the time specified in Section 120.57(3) would constitute a wavier of Chapter 120 proceedings. RFP Section V, states "A. DBPR estimates that the contract for the RFP will be effective on or about March 17, 2003, and the testing services begin May 19, 2003." The 30- day periods the protest claims were "too aggressive" (i.e. too short) were specifically disclosed in RFP Section X concerning "scope of services." The time period of which Experior now complains was apparent on the face of the RFP. Indeed, when Experior's personnel first read the RFP, they had a concern that the time period might give Promissor a competitive advantage. At the Pre-Proposal Conference on January 21, 2003, Mark Caulfield of Experior even expressed concern that the 60 days allowed for implementation was a very aggressive schedule and asked the Department to reconsider that time period. The concern over the implementation schedule was documented in written questions which DBPR answered in Amendment One, telling all proposers that the implementation schedule was fair, in its view, and would not be changed. Experior did not protest the RFP's implementation time period within 72 hours of first reading the RFP and never filed a protest to any term, condition or specification of RFP Amendment One, including the Department's notice that it felt that the implementation schedule was fair and that it would not be amended. Thus, any challenge to the implementation schedule was waived. Even had Experior not waived its challenge to the implementation schedule, there is no persuasive evidence that the schedule would give Promissor an unfair competitive advantage over Experior and PSI. The DBPR tests are already finalized and would simply have been transferred to a new vendor if a new vendor had been awarded the CBT Services Contract. Experior failed to adduce persuasive evidence to show that any proposer was advantaged or disadvantaged by the implementation schedule which applied to all proposers. Evaluation of the MWBE Submittals RFP Section XIV.Q. encouraged minority and women-owned businesses (MWBE) to provide work goods, or services associated with services contemplated by the RFP. Proposers were to be awarded additional points for committing to use MWBEs, based on the percentage of the business under the contract the MWBE would perform. Experior, Promissor and PSI each proposed to use MWBEs to supply goods or services needed to perform the CBT contract. Promissor indicated that it would use one MWBE for 30 percent of the contract value. Resultingly, the Department awarded Promissor 16.5 MWBE preference points (30 percent x 55 maximum points). Experior presented no persuasive evidence showing how the Department interpreted and applied the MWBE provisions of the RFP or showing that the Department acted in excess of its authority in determining the award of MWBE points, as described in Amendment One. Experior offered no evidence concerning whether the Department considered or applied the "two subcontractor" limitation in RFP Section VI.5 ("no more than two subcontractors may be used") when it evaluated the Experior and PSI MWBE proposals, nor how it applied that limitation. Experior and PSI both indicated they would use three MWBE vendors. Experior proposed to use JR Printers (Printing Services); Colamco, Inc. (computer equipment for testing centers); and Workplace Solutions, Inc. (furniture for testing centers). (Furniture is a commodity, not a service.) PSI proposed to use Victoria and Associates (staffing services); Franklin's Printing (printing/mailing services); and National Relocation Services, Inc. (furniture, computers, delivery and installation [commodities, not services]). Based on the proposals, the Department awarded Experior 7.15 points and awarded PSI 17.48 points. Although Experior claims that it and PSI each exceeded the two subcontractor limitation by proposing to use three MWBEs, RFP Section XIV.Q. did not specifically require that proposed MWBEs be subcontractors, but rather only required that MWBEs be utilized by the primary vendor (contractor) to provide work, goods or services. Thus a vendor of goods or a supplier of services could qualify as an MWBE (and, implicitly, not necessarily be a subcontractor). Experior did not prove that any of the MWBEs proposed by PSI or Experior were actually subcontractors on an ongoing basis. The parties stipulated that the companies that each proposed to use were vendors. Moreover, when questioned about the provisions of Section VI regarding sub- contracting of services under the RFP, Jerome Andrews, chief of purchasing and human resources, differentiated the purchase of services from the purchase of commodities as being defined by statute. (See Sections 287.012(4) and 287.012(7).) Experior did not explain or offer persuasive evidence relating to its allegation that PSI's proposal for MWBE services was misleading. Experior did not show that PSI's MWBE proposal did not conform to the RFP requirements or, if there were a defect, how many points, if any, should be subtracted from PSI's total. Moreover, to the extent that Experior claims that the proposal was defective because PSI's proposed suppliers would not provide services over the course of the entire contract, Experior's proposal suffers the same defect, as Experior's proposal admits that "[c]omputer equipment and furniture services will be performed during the implementation phase of the contract." Thus, if PSI's MWBE point award had to be reduced, so would Experior's. Experior fail to carry its burden to show any error in the scoring of the PSI MWBE proposal. It did not establish that these vendors were subcontractors and thus did not establish that the relevant vendors were of a number to exceed the subcontractor limitation in the RFP. It did not persuasively establish that such would have been a material defect, if it had been exceeded. Completion of Evaluation Sheets Some of the RFP's evaluation criteria identified the number of points available and state that such points would be "awarded as a whole and not broken down by sub-sections." In contrast, the remainder of the evaluation criteria simply stated that a specific number of points was available for each specified criterion. In each instance where the evaluation criteria stated that points are "awarded as a whole and not broken down by subsections," the corresponding section of the RFP was broken down into two or more subsections. In each instance where the evaluation criteria simply listed the number of points available, the corresponding section of the RFP was not broken down into subsections. Experior alleged that the evaluators did not properly score Experior's proposal in instances where the evaluation sheet indicated "points are to be awarded as a whole and not broken down by subsections." Experior offered no proof regarding how the Department interpreted that provision or the manner in which the scoring was actually conducted, however. The score sheets reflect that the evaluators actually did award points "as a whole," not broken down by subsections, for those evaluation criteria where that was required. The record does not support any finding that the Department or its evaluators violated the requirements of the RFP, Department policy or controlling law and rules in this regard. Issue of Bias on the Part of Evaluator Three Experior contends that Evaluator Three, Mr. Muffoletto, was biased against Experior. The persuasive evidence does not support that allegation. During his employment with the Department, Mr. Muffoletto interacted with Experior on one occasion regarding reciprocity of an out-of-state examination. This experience left him with the impression that Experior was "proprietary" because it was protective of the content of its examinations. The evidence did not show he had any other impressions, positive or negative, concerning Experior or misgivings about Experior being selected in the first RFP. The mere fact that his total score for Experior was lower than those awarded by other evaluators does not establish bias or irrationality in scoring. The evidence shows that Mr. Muffoletto scored the proposals in a rational manner. He appeared to evaluate criteria comparatively and gave a proposer more points if that proposer was more convincing than another on a particular criteria or point of evaluation. He gave lower scores when the proposer simply copied the text of the RFP and then stated that the proposer would meet or exceed the criteria; in accordance with instructions that evaluators could give lower scores in such cases, so long as the scoring was consistent between proposals. Mr. Muffoletto gave higher scores when the proposers gave more individualized responses, provided more thorough statistics and ways to interpret those statistics, gave numerous specific examples and had a more attractive presentation. Even if Mr. Muffoletto had been biased, it has not been persuasively shown that such would have a material impact on the outcome of the evaluation. If the scores of Evaluator Three were completely eliminated for both PSI and Experior, which is not justified, PSI's point total would be 459.12 and Experior's point total would be 453.54. If Evaluator Three were deemed to give Experior scores equivalent to the highest scores awarded to Experior by any other evaluator, PSI's total would be 461.42 and Experior's point total would be 458.87. Even if Evaluator Three had given Experior the maximum points for each criterion, PSI's point total would have been 461.42 and Experior's point total would have 461.12. Issue of Prior Knowledge of Experior's Prior Cost Proposal Experior contends that Promissor's knowledge of Experior's cost proposal submitted in response to the first RFP in 2002 gave Promissor an unfair competitive advantage. Experior waived that challenge, however, when it withdrew its protest to the rejection of all bids submitted in response to the first RFP. Experior knew when it filed and withdrew its protest to the first RFP decision that all cost proposals had become public record and so it was incumbent on Experior to have challenged the issuance of a second RFP, if it had a legal and factual basis to do so. At the latest, Experior should have challenged the second RFP specifications when issued (within 72 hours) as Experior had already obtained the other proposers' cost proposals and so it knew then that the prior cost proposals were available to all for review. Even if Experior had not waived that challenge, the evidence does not support a finding that Promissor gained any competitive advantage. Although Experior attempted to show, through the testimony of Mark Caulfield, that Promissor could not perform the CBT Services Contract at a profit at the $9.00 per hour price it proposed, Mr. Caulfield actually testified that it would be possible for a company to perform the services for $9.00 per hour, and he did not know what Promissor's actual costs were. Moreover, there is no persuasive evidence that Experior's prior cost proposal played any role in Promissor's determination of its bid for the second RFP or, if it did, that such consideration would have violated any provision of the RFP, governing statutes or rules or Department policies, under the prevailing circumstances, if it had occurred. Alleged Improper Scoring of Experior's Proposal with Respect to Criterion VII.A. Experior alleged that Evaluator One should have awarded 15 points instead 11 points for Experior's proposal format, criterion VII.A., but Experior did not offer the testimony of Evaluator One or any other evidence supporting that allegation. Experior failed to carry its burden of showing that the award of 11 points to Experior for criterion VII.A., was irrational or violated the requirements of the RFP or controlling policies, law or rules of the Department. Even if Evaluator One had awarded 15 points for that criterion, Experior admitted it would have no material impact on the outcome of the procurement, given the more than 21 point advantage PSI enjoyed over Experior. Responsiveness and Qualification The preponderant evidence does not establish that Experior was entitled to but did not receive the additional 21.38 points that it would have to earn to score higher than PSI and move into second place. Experior did not establish error in the evaluation or scoring of its proposal or PSI's proposal that alone, or collectively, would be sufficient for Experior to overtake PSI. As a result, Experior could only prove its standing ahead of PSI by having the Promissor proposal disqualified, which would move it to the first-ranked position because of accession of the full 175 points for having what, in that event, would be the lowest cost proposal. Experior's objection to the Promissor proposal is not meritorious. Its protest alleges that "because Promissor will [allegedly] subcontract for services representing more than 33 percent of contract value, Promissor is disqualified from submitting its proposal and its proposal must be stricken from consideration." Experior did not allege any error in the scoring of Promissor's proposal and so Promissor's highest score cannot be changed. Indeed, even if Experior were awarded the maximum technical score of 325 points, Experior's score would be 482.15 points, still less than Promissor's score of 490.08 points. Experior, as a practical matter, cannot earn enough points because of the disparity in final cost proposal scores to overtake Promissor, unless it can prove Promissor should be disqualified. Experior's proof did not amount to preponderant, persuasive evidence that the Department erred in determining that Promissor's proposal was responsive and that Promissor was a qualified proposer. The Department did an initial review of the proposals to determine if they were responsive to all mandatory requirements, and any proposer determined non-responsive would have been excluded at that point. Promissor's proposal contained all required information in the required format and was deemed responsive. The preponderant evidence shows that the Department's determination that Promissor was responsive and qualified comported with the requirements of the RFP and controlling policy, rules and law. Promissor expressly stated that it would comply with the RFP's subcontracting guidelines upon performing the contract wherein it stated "Promissor agrees and commits to meet the requirement of the RFP." Promissor's proposal stated its intent to subcontract less than 33 percent of the contract value, and that was all that was required for the proposal to be responsive. There is nothing in the Promissor proposal that indicated that Promissor would not comply with the subcontracting guidelines. Experior's entire challenge to the Promissor proposal is based on the contention that Promissor intended to use a subcontractor to provide call center services under the Florida contract but did not say so in its proposal. The Promissor proposal actually stated that Promissor would use its "proprietary scheduling system" or "proprietary reservation system" to service the Department's contract as it was currently doing, not that it would use any particular call center. These representations appear to be true, as Promissor's "scheduling system" or "reservation system" (the proprietary software Promissor uses to take reservations) that it said it would use for the new Florida contract is the same system used under the prior contact with the Department. Ordinarily, whether or not Promissor would actually comply with the subcontractor guidelines could not be determined until Promissor actually performs the contract. It is an issue of contract compliance and not responsiveness or qualification. Here the evidence shows that Promissor was in compliance with the 33 percent maximum subcontracting requirement before the originally scheduled contract implementation date. Since Promissor wished to obtain the maximum points for minority participation, Promissor decided to subcontract to the maximum possible extent with an MWBE. In doing so, Promissor wanted to assure that the use of Thompson Direct, Inc., for call center services did not make it exceed the 33 percent subcontractor standard. Thus, Promissor decided, before it submitted its proposal, to perform the call center services from one of its three regional centers and this decision was communicated internally before Promissor prepared its proposal. Promissor initially intended to perform the call center services from its regional offices in Atlanta, Georgia. In order to implement that decision, senior executives of Promissor, including its president, toured that office in early March, before the Department posted its notice of intent to award to Promissor. After the notice of award was posted on March 12, 2003, Promissor promptly posted an employment advertisement on its website seeking persons to act as call center representatives to service the Florida contract from the Atlanta office. That advertisement was posted on March 14, 2003, a day before Experior filed its notice of intent to protest. In early to mid-April, the manager of the Georgia regional office prepared a project plan that revealed that the Georgia regional office might not be ready to perform call center services by the May 20th contract implementation date. Promissor then decided to use its Maryland regional office to perform the call center services. Regardless of the location of the call center, the scheduling system used by Promissor would be the same as under the prior contract and the same as Promissor promised in its proposal. The Scranton call center and the three regional offices use the same proprietary scheduling system provided by Promissor and run from servers located at Promissor's headquarters in Bala Cynwyd, Pennsylvania. Even at the Scranton call center that was previously used, Promissor trained all of the employees, who handle calls only for Promissor, wrote the scripts for their use and provided the proprietary scheduling software. The Maryland call center was actually accepting all calls for the Florida programs to be serviced pursuant to the RFP by May 19th, before the May 20th contract implementation date. Since the call center services were actually being provided by Promissor's Maryland regional office before the contract implementation date, Experior's claim that Promissor would provide those services through a subcontractor is not supported by preponderant evidence. Allegations that Promissor Made Misrepresentations Regarding Subcontractors In light of Promissor's actual provision of call center services from its regional office before the contract implementation date, Experior's contention that alleged misrepresentations occurred in the Promissor proposal are without merit. Even if Promissor had not actually performed, however, Experior failed to prove that Promissor made any misrepresentations or was unqualified. In support of its claim that Promissor was unqualified, Experior introduced into evidence three proposals that Promissor or ASI (a corporate predecessor to Promissor) had submitted to agencies in other states in the past three years. Experior argues that Promissor/ASI made misrepresentations in the other proposals and, therefore, Promissor made misrepresentations in the proposal at issue in this proceeding. Its basis for alleging that Promissor made misrepresentations in the Florida proposal at issue is its contention that Promissor/ASI made misrepresentations in other proposals to other states. No evidence was offered that Promissor had made a misrepresentation to the Department as to this RFP, however. In light of Promissor's actual performance in accordance with its proposal and the RFP requirements, the proposals from the other states have little relevance. Experior did not prove that Promissor made misrepresentations in the other proposals, particularly when considering the timing of those proposals and Promissor's corporate history. Promissor's corporate history must be considered in evaluating the claim of misrepresentation to the other state agencies in other states. In 1995, Assessment Systems, Inc., or "ASI," was acquired by Harcourt Brace Publishers. In June of 2001, ASI was sold with a number of other Harcourt companies, including a company called Harcourt Learning Direct, to the Thompson corporation. Harcourt Learning Direct was re-named Thompson Education Direct. Soon after, the federal government required, for anti-trust reasons, that Thompson divest itself of ASI. Accordingly, ASI was acquired by Houghton Mifflin Publishers in December 2001, and its name was later changed to Promissor. Up until December 2001, the entity now known as Promissor and the entity now known as Thompson Education Direct were corporate affiliates under the same corporate umbrella. The Kansas Proposal Experior's Exhibit five was ASI's Proposal for Agent Licensing Examination Services for the Kansas Insurance Department dated May 8, 2000. A letter that accompanied the proposal stated that ASI would not engage a subcontractor for examination development or administration services. Mark Caulfield testified that he did not know whether or not what was said in this letter was true on the date it was written. He testified that he did not know if ASI was using any subcontractors or any outside contractors for any purpose in May of 2000. In fact, as of May 2000, ASI did not subcontract for any call center services; at the time that the letter was written, all of the representations in the letter were true. ASI was awarded the Kansas contract and Experior did not protest. Experior did not offer any evidence related to the requirements in the Kansas RFP and is not aware of any issues between Kansas and Promissor regarding the contract. There is no evidence that the Kansas request for proposals had any subcontracting limitations in it. The proposal that ASI submitted to Kansas in May 2000 listed a phone number for ASI's call center. In preparation for the hearing, witness Mark Caulfield called that phone number and claimed that a person answered the phone "Promissor," and said she was located in Scranton, Pennsylvania. Experior did not show that the person that answered the phone was an employee of Promissor. Whether or not the person who answered the phone in that example was or was not an employee of Promissor and could or could not bind Promissor with any statement as a party admission, is beside the point that it has not been shown who would have answered the phone in May 2000, or where they would have been located, as to whether or not that person was the employee of Promissor or its immediate corporate predecessor in interest or whether that person was employed by some subcontractor. That is immaterial, however, in the face of the fact that it has not been proven that the Kansas request for proposals had any subcontracting limitations in the first place and, therefore, no misrepresentation in the Kansas situation has been proven on the part of Promissor. The Maine Proposal Experior's Exhibit seven is ASI's proposal to provide real estate examination administration and related services for the Maine Department of Professional Regulation and is dated August 1, 2001. As of August 1, 2001, ASI did not subcontract for call center services. On pages 2-10 of the Maine proposal, there is a reference to ASI having an extensive network of program-specific, toll-free telephone lines and program-dedicated customer care representatives. This statement was shown to be accurate and was an accurate statement when made on August 1, 2001. The statement refers to the monitoring of the reservation process done by ASI management. Experior admitted that it had no reason to believe that in August of 2001, ASI did not have an extensive network or program-specific toll-free telephone lines and program-dedicated customer care representatives, and Experior did not prove that to be currently untrue. Experior's Exhibit eight is Promissor's Real Estate Candidate handbook regarding the Maine procurement dated April 2003. As of April 2003, the statements made in the handbook were accurate and correct. The handbook listed on page 11 a customer care phone number of 877-543-5220. Experior provided no evidence as to the location where that phone number rang in April of 2003. Experior did not show persuasive evidence regarding the requirements in the Maine RFP and there is no evidence that the Maine RFP had any subcontracting limitations as are in question in the instant case. The Oklahoma Proposal Experior's Exhibit nine was Promissor's response to Bid No. N031354 for License Testing Services for the Oklahoma Insurance Department. It is dated December 18, 2002. Promissor did not state in the proposal that it would not use subcontractors. There is no need to reference subcontractors in the Oklahoma proposal as the Oklahoma RFP did not contain subcontracting limitations. Oklahoma has approved the manner in which Promissor is performing under that contract and Experior did not establish that the statements in Promissor's proposal were false when made or now. The Texas Proposal Experior's Exhibit twelve is Promissor's press release titled "Texas Selects Promissor as Exclusive Provider for Insurance License Testing," dated October 1, 2002, in which Promissor referred to "the Promissor Call Center." Experior did not establish that Texas was not served by a Promissor call center or that Promissor was not performing in the manner its Texas proposal promised. In fact, Texas has approved Promissor's performance under the Texas contract. Even if the proposals Promissor offered had stated that Promissor would provide call center services through a specified entity (which they did not do), and then Promissor later performed such services through another entity, such evidence would be insufficient to prove that Promissor would not comply with the Florida RFP's subcontracting guidelines, especially given Promissor's actual performance in accordance with its proposal. Experior did not establish with preponderant evidence a "routine business practice" of Promissor to make misleading or false promises in proposals to evade subcontracting guidelines. There is no evidence in any of the four states concerning which Experior provided evidence, that they had any subcontracting limitation in their RFPs. The evidence showed that the statements in each of these proposals were undoubtedly accurate at the time they were made; to the extent that the provision of call center services differs from what was promised (although the evidence does not establish that), such difference is explained by the changes in corporate structures that have occurred since the proposals were submitted. Additionally, the evidence established that Promissor has submitted between 70 and 120 proposals since the beginning of 2000 across the nation. The documents relating only to other proposals to other states that were not even proved to have requirements similar to Florida's are insufficient to establish that Promissor had a "routine" practice of making misleading promises about its call center services. Accordingly, the Petitioner has not offered preponderant, persuasive evidence that Promissor is unqualified as a proposer.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses and the pleadings and arguments of the parties, it is, therefore, RECOMMENDED that a final order be entered by the Department of Business and Professional Regulation denying the Petition and approving the intended award of the contract to Promissor, Inc. DONE AND ENTERED this 22nd day of August, 2003, in Tallahassee, Leon County, Florida. S P. MICHAEL RUFF 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 Clerk of the Division of Administrative Hearings this 22nd day of August, 2003. COPIES FURNISHED: Wendy Russell Weiner, Esquire Mang Law Firm, P.A. 660 East Jefferson Street Tallahassee, Florida 32301 Joseph M. Helton, Jr., Esquire Michael J. Wheeler, Esquire Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-2022 Paul R. Ezatoff, Esquire Katz, Kutter, Alderman & Bryant, P.A. 106 East College Avenue, Suite 1200 Tallahassee, Florida 32301 Michael P. Donaldson, Esquire Carlton Fields Law Firm 215 South Monroe Street, Suite 500 Tallahassee, Florida 32301 Hardy L. Roberts, III, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-2202
