The Issue The issue in this case is whether certain enumerated expenditures by Petitioner, Tampa Bay Workforce Alliance, Inc. ("TBWA"), were compliant with governing rules, and, if not, whether the expended funds must be repaid to Respondent, Agency for Workforce Innovation (the "Agency").
Findings Of Fact Florida's workforce system is a unique three-tiered system governed by state and federal law. The Agency is the workforce strategy and policy-setting board for the statewide workforce system. It provides oversight to 24 regional workforce boards in designing and implementing programs to develop a skilled workforce. TBWA is one of those 24 regional workforce boards. The Agency is the state administrative entity responsible for the receipt and distribution of federal workforce grant funds. The Agency receives funds from the Departments of Labor, Health and Human Services, and Agriculture. Those funds are distributed to the 24 regional boards for use in the performance of their services. Grant funds must be expended in compliance with state and federal guidelines. TBWA receives grants through the Workforce Investment Act, which serves adult, youth, and dislocated workers, and through the Wagner-Peyser Act, which funds Florida's job exchange which matches employers with job seekers. On an annual basis, TBWA receives grants from: Workforce Investment Act Cluster, which covers adult, youth, and dislocated workers, economically-disadvantaged adults and youth; Employment Services Cluster; and Welfare Transition Program grants, which are funded from a block grant and are focused on training and job assistance for individuals receiving government financial assistance. TBWA also receives grants targeted to veterans. TBWA provides a variety of services in its geographical area to persons seeking jobs and to employers seeking employable workers. TBWA operates four one-stop career centers in the Tampa Bay area. These are places where job-seekers can access a variety of employment and training services. The one-stop career centers provide job search, referral, and placement assistance; career counseling and educational planning; support services, including child care and transportation assistance to gain employment; employability skills training; adult education and basic skills training; technical training leading to a certification and degree; claim-filing for unemployment compensation services; and temporary income, health, nutritional, and housing assistance. TBWA is a Florida not-for-profit corporation that operates in the Hillsborough county area. It is responsible for assuring that all federal funds it receives are used in accordance with the requirements set forth in federal regulations, specifically the guidelines in Office of Management and Budget (OMB) Circular No. A-122, Cost Principles for Non-Profit Organizations. TBWA is also subject to OMB Circular No. A-110, Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations. The two circulars will be referred to as Circular A-122 and Circular A-110, respectively. In November 2009, the Agency's inspector general began an investigation of spending practices by TBWA. The investigation commenced as a result of "informational reports" received by the Agency. At about the same time, a report was published by local media concerning spending practices by non-profit entities, such as TBWA. It is the belief of TBWA that the media report instigated the Agency's investigation, but whether it did, or not, is not relevant to the findings made by the Agency. The Agency's investigation was done in two tiers: The first tier addressed certain food purchases made by TBWA for events that it had hosted. The Agency posted its findings for the Tier I investigation in a Final Report dated April 12, 2010. The second tier addressed expenditures discovered during the investigation of the Tier I matter. The newly discovered expenditures included costs for TBWA's Business Excellence Awards program, sponsorships or donations to public entities, money spent for entertainment and guest speakers at events, public outreach expenditures, and the purchase of certain promotional materials. The findings from the Tier II investigation were published in a letter dated April 29, 2010. The Agency reviewed $394,211.82 in expenditures by TBWA. Of the expenditures, $224,178.17 was initially questioned by the Agency as being potentially improper. TBWA allocates its costs to the various grants it receives through a cost allocation plan that is submitted to and approved by the Agency each year. The TBWA cost allocation plans submitted for the years relevant to this case were approved by the Agency. Nonetheless, the Agency went back and reviewed those years' expenditures as part of its investigations. As a result of its investigations, the Agency made a determination to disallow costs expended by TBWA in the following categories: $34,028.29 for unallowable expenditures related to food purchases (Tier I); $60,468.89 for unallowable costs associated with the Business Excellence Awards; $13,195.00 for disallowed sponsorships that were determined to be donations to support various events; $11,967.00 for disallowed entertainment costs for various events; $22,800.00 for unallowable public outreach expenditures; and $4,669.00 for unallowable expenditures for promotional materials; for a total of $147,128.18 in disallowed expenditures. TBWA challenged some of the disallowed costs in each of those categories. The challenged dollar amounts for each category of disallowed costs were as follows: $18,905.12 in costs related to various purchases of food items; $58,448.63 spent by TBWA in connection with its Business Excellence Awards, an internal awards program; $13,195.00 expended by TBWA to purchase sponsorships in various public endeavors; $7,817.00 used to purchase entertainment at various functions and corporate meetings; $22,800.00 expended for the purpose of funding public outreach efforts; and $4,669.00 spent to purchase promotional materials; for a total of $125,834.75 of challenged disallowances. Regional workforce boards have considerable responsibility and authority for establishing local service priorities, local service delivery design, and overseeing one-stop career centers. TBWA operates, in part, according to a strategic plan which it developed in 2003 (the "Strategic Plan") to fulfill its responsibilities to establish local service priorities. The Strategic Plan has been updated over the years and is still in full force and effect. The Strategic Plan sets out the goals of the organization and provides a strategy and roadmap for how TBWA will achieve its goals. TBWA attempts to engage in spending practices that are consistent with its Strategic Plan and with all federal and state regulations. Generally, if items or services are purchased to further the goals set forth in the Strategic Plan, TBWA considers them appropriate. The Strategic Plan addresses the following goals of TBWA: Improving employee relations; Improving communications among TBWA employees to ensure that grants and other resources are being utilized fully and properly; Improving employer penetration, i.e., identifying the number of employers within the geographic area actually using the workforce board's services; and Developing an integrated and cost-efficient media plan, including aggressive outreach and development of strategic partnerships. The Disallowed Expenditures An overview of the expenditures disallowed by the Agency follows: TBWA spent $8,138.78 for a year-end celebration held the evening of December 12, 2008. According to the documentation TBWA provided, the dinner menu for that event included rosemary grilled chicken breasts, mashed potatoes, vegetables, and black forest chocolate cake at a cost of $29.00 per person, a beverage fee of $7.00 per person, and a 21 percent service charge in the amount of $1,610.28. TBWA spent $5,161.25 for a corporate staff meeting held on January 24, 2009, and provided food from Caterings by the Family, including breakfast, lunch, beverages and dessert at a cost of approximately $49 per person. The documentation provided indicates that the meeting began at 9:00 a.m., concluded at 3:40 p.m., and was attended by TBWA staff. Breakfast was served from 8:45 a.m., to 9:00 a.m., i.e., before the meeting began. TBWA spent $5,673.00 for a corporate meeting held on March 30, 2009, at the Quorum Hotel. The event was scheduled from 8:15 a.m., to 12:25 p.m., and was attended by TBWA staff. This event included a brunch buffet at a cost of $19.00 per person, plus a 22-percent service charge. The agenda indicates that there was a 15-minute "star of the quarter" presentation, a 15-minute presentation about the American Recovery and Reinvestment Act, and a 15-minute presentation about the summer employment model. The remaining three hours and 25 minutes of the meeting was spent as follows: registration, welcome and remarks, military salute, introductions and acknowledgements, team-building activity, brunch, and a presentation by David Glickman, a full-time comedian and professional speaker. TBWA held two events called the Business Excellence Awards ("BEA"). In the 2008 BEA meeting, TBWA spent $17,476.50 on the Intercontinental Hotel, at a cost of approximately $87.00 per person and served a menu that included $3,200.00 for chocolate; $1,800.00 for a chilled raw bar; $1,150.00 for roast beef; and $2,400.00 for a potato martini bar, with a 22-percent service charge of $3,151.50. TBWA also spent $3,210.00 for table and chair covers, $81.76 on marketing items, $989.00 on invitations, $566.89 on awards, $265.00 on a photographer, $84.33 on sheer bags to distribute marketing items, and $1,200.00 on a solo pianist and string quartet. In the 2009 BEA meeting, TBWA spent $22,612.50 on the Intercontinental Hotel, at a cost of approximately $113.00 per person, spent $1,910.25 on awards, $10,000.00 on a video featuring award winners, $52.40 for supplies, and $500.00 on a solo pianist and string quartet. TBWA has a copy of the 2009 BEA video which was produced. However, TBWA did not produce the video at the final hearing or provide sufficient evidence as to its contents. TBWA said the purpose of the video was to produce high-energy video vignettes that would mirror the energy and excitement of a world class awards show. TBWA said it could use the video for outreach. However, TBWA did not specifically demonstrate how a video of award winners benefits one of its grants. TBWA suggests the expenditures to various vendors-- Cheers (table and chair covers), Uline (gift bags), Shorter Childs (invitations), John Kantor (photography), Tricycle Studios (2009 BEA video), IBEX (musicians), the Levy Awards, and costs of supplies--are allowable as costs incidental to a meeting. Peachey acknowledged that entertainment costs are not allowable, but said music is allowable because the music was incidental to the event. Peachey justified the Levy Awards as allowable public outreach, because employers put the awards in their offices and they could be a topic of conversation. TBWA paid $2,500.00 to Tampa Bay Technology Forum on July 1, 2007, for its Entrepreneurial Boot Camp. TBWA contends that this event provided entrepreneurial training for individuals through Tampa Bay Technology Forum. The sponsorship included having TBWA's logo published on the printed materials for the event. There is no indication that a representative or an employee of TBWA attended or participated in the program. TBWA gave $500.00 to the Tampa Organization of Black Affairs in November 2007 and $500.00 again in January 2009. TBWA provided some information about the events to the Agency. TBWA showed, for example, that it had reserved a table for its employees at the event. There is no other evidence as to whether a TBWA employee actually attended the event. TBWA paid $1,000.00 to the American Red Cross on April 5, 2008, indicated as a "donation" on the corresponding invoice. A table for eight persons was reserved, but there is no evidence that a TBWA employee attended the event. TBWA submitted documentation for the $4,500.00 it gave to the Tampa Bay Academy of Hope on April 5, 2008, and the $2,500.00 it gave on June 12, 2009. The funds were designated as sponsorships on the respective invoices provided by TBWA. The recipient of the funds provided TBWA a description of the advertising, marketing, and promotion opportunities the sponsorships would purchase. There was no evidence that TBWA engaged in any of the advertising or promotion activities. TBWA submitted documentation for the $1,100.00 it gave the Tampa Bay CEO Magazine on December 7, 2008, and the $575.00 it gave on January 30, 2009. The sponsored events were touted as an opportunity to mingle with influential business leaders in the community. No evidence was presented as to how the mingling would further the purposes for which grants had been given. TBWA spent $5,555.00 for a winter corporate meeting at the Tampa Improv Comedy Club on March 14, 2008. The documentation provided for this event indicates that the cost included $3,750.00 for food, $300.00 for room rental, and $750.00 for entertainment. The documentation that TBWA submitted in support of these costs indicates that the event was scheduled from 12:30 p.m., to 4:50 p.m., and was attended by the TBWA staff. The first item listed on the agenda is "[e]njoy food and refreshments" from 12:30 p.m., to 1:30 p.m. The agenda and speaking points make clear that the primary purpose of this event was not to disseminate technical information. These costs are directly associated with a social event, i.e., food and a show at the comedy club. TBWA spent $950.00 for a solo pianist and string quartet at the Scholars Reception on April 17, 2008. The purpose of the reception was to award youth with scholarships. TBWA contends that this cost is for recreation and that it is incidental to a meeting itself. TBWA documentation, including letters sent to attendees, established that this event was a bona fide business meeting. The musicians were incidental to the purpose of the meeting. TBWA spent $587.00 for a violin-guitar duo at the Governor's Diversification Awards on September 30, 2009. TBWA contends that this event was a meeting and, also, constituted outreach, and that the music was an incidental cost to the event. There is no evidence in the record to establish that this was a bona fide meeting. There is no agenda, and TBWA's documentation clearly indicates that it is a "networking breakfast." Likewise, there is no evidence in the record to establish how this was an outreach event. TBWA paid Issue Media Group $22,800 in July of 2009. At the time of payment, Issue Media Group had not launched its online magazine; it was seeking founding partners to provide initial funding for the project. Website pages taken from the magazine once it went on-line show the TBWA logo on the webpage; however, no information is included about any of TBWA's grant programs. A user could, however, click on the link to get to the TBWA website and find information about the programs that TBWA provides. TBWA does not have any documentation to show that TBWA received job postings as a result of this expenditure. Because the website pages contained only a link to the TBWA website and no information about any of the grant programs that TBWA administers, the website pages seem to primarily promote TBWA, rather than the grant programs. TBWA spent $2,283.81 to purchase 200 blankets that were given to staff as part of a corporate meeting to enhance employee morale. TBWA spent $2,085.19 to purchase 200 Tervis tumblers. Peachey testified that initially the tumblers may have been purchased to give to staff at a corporate meeting, but that they will now be used for outreach to employers. TBWA's Stated Rationale for the Expenditures Regional workforce boards have a responsibility and authority to establish local service priorities. They also establish local service delivery design and oversee one-stop career centers. To fulfill its responsibility, TBWA developed the Strategic Plan and strives to implement it. TBWA expects the Agency to consider the Strategic Plan when looking at the appropriateness of expenditures made by TBWA. All of the grants received by TBWA have a common singular purpose: To provide employers with a skilled workforce. To achieve that purpose, TBWA interacts regularly with the area business community. One of the ways it chooses to do that is by way of public meetings, e.g., its BEA events. The BEA dinners were used by TBWA to launch its employer outreach campaign and as a platform for one of its signature programs, the Competitive Edge Award. TBWA tracked the list of BEA invitees each year and the number of jobs orders placed by the attendees. TBWA identified improved employee relations as one of its targets in the Strategic Plan. Specifically, TBWA felt that it needed to improve employee morale and staff motivation to serve grant purposes through enhanced interaction with employers and job seekers. To that end, TBWA held parties and gatherings for its employees, with entertainment, food, and gifts (as set forth above). The BEA dinners catered to employers and public figures in TBWA's service area. It was TBWA's intent that the event would attract business, political and community leaders for the purpose of disseminating information about TBWA's programs. According to Peachey, the event had to be very upscale to attract these people. There was no credible evidence to support that contention. In order to minimize costs, TBWA did a cost benefit analysis and comparison shopping on many of the items and services associated with its BEA gatherings. TBWA does not consider the BEA gatherings to be entertainment, per se, because the event was not specifically directed to amusement or diversion of TBWA staff. The Tampa Bay Technology Forum sponsorship included the printing of the TBWA logo on event materials and an opportunity for a TBWA representative to make a presentation to attendees. However, there is no evidence that a TBWA representative attended the function or spoke to the attendees. Further, the TBWA logo does not necessarily address any of TBWA's programs paid for by grants. TBWA payments of $1,000.00 to the Tampa Organization of Black Affairs for two Martin Luther King, Jr., breakfasts were contemplated as a marketing tool. Although a table was purchased, there is no evidence that a TBWA employee actually attended the breakfasts. TBWA paid $1,000.00 as a Blue Sponsor for the American Red Cross dinner, but, again, there is no evidence that any employees attended the function. The same is true of the donations to the Tampa Bay Academy of Hope for its event; money was paid for a "sponsorship," but there is no evidence of active involvement. TBWA sponsored the CEO of the Year banquets in 2008 and 2009. While there is no evidence that an employee attended those events, there is evidence that some attendees actually posted jobs with TBWA. The on-line publication, 83 Degrees, to which TBWA contributed $22,800.00, is one medium chosen by TBWA for gaining exposure. It is part of the on-going public outreach that TBWA engages in regularly. The food provided at its corporate meetings was done for the purpose of employee morale. Further, TBWA believes the meetings were for the primary purpose of dissemination of technical information. There is, however, scant evidence to support that position.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by Respondent, Agency for Workforce Innovation, partially upholding its decision to disallow the challenged expenditures by Petitioner, Tampa Bay Workforce Alliance. The total amount of disallowed expenditures is $55,192.04, to be paid within 90 days of the entry of a final order. DONE AND ENTERED this 12th day of August, 2011, in Tallahassee, Leon County, Florida. S R. BRUCE MCKIBBEN 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 12th day of August, 2011.
Conclusions Having reviewed both the Amended Notice of Intent to Deny Renewal Application and an Amended Notice of Intent to Deny (both) dated May 3, 2013, and all other matters of record, the Agency for Health Care Administration finds and concludes as follows: 1. The Agency has jurisdiction over the above-named Petitioner pursuant to Chapter 408, Part II, Florida Statutes, and the applicable authorizing statutes and administrative code provisions. 2. The Agency issued the attached Amended Notice of Intent to Deny Renewal Application and an Amended Notice of Intent to Deny and Election of Rights form to the Petitioner. (Composite Ex. 1) The parties have since entered into the attached Settlement Agreement. (Ex. 2) Based upon the foregoing, it is ORDERED: 1. The Settlement Agreement is adopted and incorporated by reference into this Final Order. The parties shall comply with the terms of the Settlement Agreement. 2. The Petitioner shall pay the Agency an administrative fine of $8,000.00. If full payment has been made, the cancelled check acts as receipt of payment and no further payment is required. If full payment has not been made, payment is due within 365 days of rendition of this Final Order. Overdue amounts are subject to statutory interest and may be referred to collections. Please make checks payable to the “Agency for Health Care Administration”, include the AHCA ten-digit number, and send to: Office of Finance and Accounting Revenue Management Unit Agency for Health Care Administration 2727 Mahan Drive, MS 14 Tallahassee, Florida 32308 3. Each party shall bear its own costs and attorney’s fees. Any requests for administrative hearings are hereby dismissed, and the above-styled case is hereby closed. 1 Filed March 20, 2014 10:25 AM Division of Administrative Hearings ORDERED at Tallahassee, Florida, on this |(_ day of Mic ah , 2014. ~ Elizabegh Dudek, fedretary Agengy for Health*€are Administration
Other Judicial Opinions A party who is adversely affected by this Final Order is entitled to judicial review, which shall be instituted by filing one copy of a notice of appeal with the Agency Clerk of AHCA, and a second copy, along with filing fee as prescribed by law, with the District Court of Appeal in the appellate district where the Agency maintains its headquarters or where a party resides. Review of proceedings shall be conducted in accordance with the Florida appellate rules. The Notice of Appeal must be filed within 30 days of rendition of the order to be reviewed. CERTIFICATE OF SERVICE I CERTIFY that a true and at this ine was served on the below-named persons by the method designated on this/ 7 day of (aL , 2014. p, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Bldg. #3, Mail Stop #3 Tallahassee, Florida 32308-5403 Telephone: (850) 412-3630 Theodore E. Mack, Esquire Powell & Mack, P.A. 3700 Bellwood Drive Tallahassee, Florida 32303 (U.S. Mail) Finance & Accounting Revenue Management Unit Agency for Health Care Administration Electronic Mail) Warren J. Bird Office of the General Counsel Agency for Health Care Administration (Electronic Mail) Shaddrick Haston, Unit Manager Assisted Living Facility Agency for Health Care Administration (Electronic Mail) Jan Mills Facilities Intake Unit Agency for Health Care Administration (Electronic Mail)
The Issue The issues to be considered in the course of this Recommended Order concern the question of whether Baxter's Asphalt & Concrete, Inc. or White Construction Company, Inc. should be accepted as a successful bidder on State Project No. 53050-3514, Jackson County, Florida, as advertised by the State of Florida, Department of Transportation.
Findings Of Fact The State of Florida, Department of Transportation, (DOT), advertised for bids on State Project No. 53050-3514, Jackson County, Florida. This was a project in which DOT had determined that 10 percent of the funding within the State Department of Transportation Trust Fund, as allotted for the project, would be devoted to economically disadvantaged individuals, also referred to as Disadvantaged Business Enterprises (DBE). This decision was in keeping with Section 339.081, Florida Statutes. Consequently, interested bidders were called upon to submit bids reflecting a DBE participation of a minimum of 10 percent of the bid submitted. Baxter's Asphalt & Concrete, Inc. (Baxter) and White Construction Company, Inc. (White) responded to the bid opportunity. The bids were opened on July 25, 1984, and Baxter's bid was the apparent low bid. The bid amount was $882,641.25. White was the second low bidder offering a bid of $928,353. Both bids were within the DOT estimate of construction costs. When the bids were reviewed, Baxter's bid was rejected by DOT based upon the belief that the bid failed to meet the DBE 10 percent requirement or to offer explanation of good faith attempts by Baxter to comply with the DBE contract requirement amount. See Section 14-78.03(2)(b)4., Florida Administrative Code. No other claim of error was made by DOT on the subject of the acceptability of the Baxter bid. The White bid is conforming. In preparing the bid, bidders are required to use DBE Utilization Form No. 1 to reflect the amount of DBE participation as a percentage of the overall bid estimate. In submitting its form as part of its bid blank, Baxter indicated that the total project cost was $884,000, and indicated that Ozark Striping, a DBE subcontractor, would be given $20,000 of that work or 3 percent, and that Glenn Powell, DBE subcontractor, would be afforded 7 percent of the total contract in the amount of $55,000. The total percentage according to Baxter is 10 percent, thus meeting the required DBE participation. This form is found as part of the joint Exhibit No. 1 offered by the parties. In fact, the Ozark Striping participation was 2.26 percent, and the Glenn Powell participation was 6.22 percent, for a total of 8.48 percent of the estimate reflected in the Form No. 1. Contrasted against the actual estimate of $882,641.25, these projections constitute 8.49 percent of that estimate. Thus, they are less than the 10 percent required. Given the fact that this DBE projection is less than the 10 percent, and in the absence of any attempt to offer a good faith explanation why Baxter failed to comply with the requirement, the bid was rejected for this irregularity. The Contract Awards Committee of DOT, when confronted with the irregularity of the Baxter bid, then determined to recommend the rejection of all bids. This was in keeping with the fact that the difference between the unsuccessful apparent low bid, with irregularities, and the second low bid exceeded 1 percent of the contract amount. At the time of this decision to reject all bids, DOT felt that the difference would justify re-advertising the bids. That policy position had been abandoned at the point of final hearing in this cause, wherein DOT expressed the opinion that it would be better served to accept the bid of White, and not re-advertise, again for cost reasons. In the face of the initial action to reject all bids and in accordance with Section 120.53, Florida Statutes, Baxter and White appealed that decision and by that appeal requested recognition as a successful bidder. This led to the present Section 120.57(1), Florida Statutes hearing. Baxter has never attempted to offer a good faith explanation of its non-compliance. It chooses to proceed on the theory that the mistake in computation can be rectified by allowing Baxter to submit a supplemental Form No. 1, bringing its total above the DBE requirement. In its contention, Baxter indicates that Glenn Powell could have provided $126,000 of the DBE goal, which is in excess of the 10 percent requirement. Baxter also alludes to the fact that it had contacted other DBE enterprises, such as Oglesby and Hogg, Michael Grassing, and J.E. Hill. All told, Baxter indicates that if given the opportunity, it would allow $146,000 of DBE participation to include $126,000 by Glenn Powell, and $20,000 by Ozark. This comment is suspect, given the lack of compliance in the initial bid response, and the realization that within that bid response on the item related to Glenn Powell, the original amount of work attributed to Glenn Powell was $100,000, and was struck through in favor of the $55,000, leaving a fair inference that Baxter was attempting to meet the DBE goal with a projection as close to the 10 percent as could be achieved. They fell short because in adding the $20,000 for Ozark, and the $55,000 for Glenn Powell, the addition in the Form No. 1 showed $85,000, which is more than 10 percent of the $884,000 shown on the form, when in fact the two amounts were $75,000, and less than the 10 percent required. Baxter characterizes its mistake in computation as a technical error, which can be remedied without harm to the bid process. The Baxter position must be examined in the context of action by DOT relating to compliance with DBE requirements. Prior to June 1984, a time before the subject July 25, 1984 bid opening, bidders had been allowed to amend the Form No. 1 to show compliance with the DBE requirements or demonstrate good faith efforts of compliance. That amendment as to compliance through listing of the DBE subcontractors or submission of good faith effort documentation had to be offered within 10 days per former Section 14-78.03, Florida Administrative Code. Beginning with the June 1984 bid-lettings, all documentation had to be submitted with the bid, reflecting compliance or describing good faith efforts at compliance per Section 14-78.03(2)(b), Florida Administrative Code, effective May 1984. This change was brought about to prevent the apparent low bidder, as indicated at the point of bid-letting, from shopping the quotations by the DBE's found in its original quote against other quotes from DBE's not listed in the bid documents initially submitted, and by amendment to the DBE statement prejudicing the former DBE group. The change was also made to avoid the possibility that the apparent low bidder could evade his bid by rendering it non-conforming, in the sense of refusing to submit the required documentation of compliance with DBE requirements or to the offer of a good faith explanation of non-compliance after the bid-letting. The change of May 1984, removed the possibility of bid shopping and bid avoidance. Both versions of Section 14-78.03, Florida Administrative Code, pre and post May 1984, indicate that failure to satisfy the DBE requirements or offer a showing of a good faith attempt at compliance, would result in the contractor's bid being deemed non-responsive, and cause its rejection. Baxter has been able to comply with the DBE goals of DOT in its bidding prior to the present controversy.
Findings Of Fact Department of Transportation (DOT) Project #02000-3608 is a federal aid highway project requiring the replacement of a bridge on Kings Bay Drive over a canal near the Crystal River in Citrus County, Florida. The bridge is currently closed due to hurricane damage. The bid specifications were published, and a bid submittal deadline of March 28, 1990, was established. The bid specifications included a disadvantaged business enterprise (DBE) goal of 10%, and hiring goals of 6.9% female and 17.1% minority. The bid specifications also included the following special provisions related to DBE: PREPARATION OF PROPOSALS * * * 2-5.3.2 Submittals for Contracts with Goals: For all contracts for which DBE contract goals have been established, each contractor shall meet or exceed or demonstrate that it could not meet, despite its good faith efforts, the contract goals set by the Department. The DBE participation information shall be submitted with the Contractor's bid proposal. Award of the Contract shall be conditioned upon submission of the DBE participation information with the bid proposal and upon satisfaction of the contract goals or, if the goals are not met, upon demonstrating that good faith efforts were made to meet the goals. The Contractor's bid submission shall include the following information (Submitted on Forms Nos. 275-020-002-DBE Utilization Affirmative Action Certification, 275-020-003-DBE Utilization Summary and 275-020-004-DBE Utilization Form): The names and addresses of certified DBE firms that will participate in the contract. Only DBEs certified by the Department at the time the bid is submitted may be counted toward DBE goals. A description of the work each named DBE firm will perform. The dollar amount of participation by each named DBE firm. If the DBE goal is not met, sufficient information to demonstrate that the contractor made good faith efforts to meet the goals. * * * DISQUALIFICATION OF BIDDERS ARTICLE 2-11 (Page 11) is expanded as follows: (h) Failure to satisfy the requirements of 2-5.3. * * * (Petitioner's exhibit #2, emphasis added) DBE goals for projects to be bid are established at DOT by a committee which includes a representative from the agency's Bureau of Minority Programs. From a list of individual bid items, the committee determines which items are normally subcontracted. Those items are totalled to achieve a percentage of the job. The Bureau of Minority Programs then reviews the list to determine the number of DBEs, from the agency directory, which would be available to perform the subcontracted work in the relevant geographical area. The Bureau of Minority Programs then makes its recommendation to the goals-setting committee. For example, if 40% of the job would normally be subcontracted and DBEs were available to perform 50% of that work, the goal could be set at 20%. In practice, the goals are not set so high, and the most common goal is 10%, as that is the overall goal of the DOT. Goals vary, depending on the type of work, the location and the availability of DBEs. Hiring goals are also established for each project, but in contrast to the DBE goals, they are not considered in the award of a bid. Four firms responded to the bid advertisement for Project Number 02000- 3608. The Cone Corporation was the low bidder at $588,793.45. Cone Constructors, Inc. bid $629,736.85. Piling and Structures, Inc. bid $700,436.53; and Leware Construction Company bid $733,333.33. The Cone Corporation bid included DBE utilization forms indicating that $56,000.00 would be subcontracted to H.S. Thompson Construction Company for concrete and rebar work. This amounts to approximately 9.5% of its bid. The Cone Corporation did not submit any statement with its bid package as to how good faith efforts were made to comply with the DBE goal. A good faith effort committee of the department met to review the bids, and determined that it could not evaluate the Cone Corporation's good faith efforts because no information was provided. Cone Constructor, Inc., the next lowest bidder, provided a $70,000.00 subcontract with a DBE firm, D.A.B. Constructors, Inc., for various work items related to the project. This amounts to approximately 11% of its bid, and meets the specified 10% goal. Piling and Structures, Inc., provided for six DBE subcontractors for a total of $56,000.00, or approximately 8% of its bid; and Leware Construction Company, the highest bidder, provided for four DBE subcontractors, for a total of $76,887.45, or approximately 10.5% of its bid. Thus, two bidders met the specified DBE goal, and two did not. The good faith efforts committee recommended that Cone Corporation's bid be declared nonresponsive because the DBE goal was not achieved and documentation of good faith effort was not submitted. The committee noted that DBE utilization forms submitted by other bidders indicated that there were other DBE subcontractors available for work on the project. Bob Graham is vice-president of the Cone Corporation and has worked for the firm for ten years. He is responsible for the day to day management of the firm, and he prepared the project bid. Bob Graham concedes that the DBE subcontract in his bid does not meet the 10% goal. He solicited and received other DBE subcontract quotations, but rejected them as being higher than non-DBE quotations. Only one DBE subcontractor responded lowest in an area of work and Graham submitted that firm, H.S. Thompson, as part of his bid. Bob Graham also admits that he did not submit any good faith documentation with his bid to demonstrate that an effort was made to meet the DBE goal. Bids are commonly compiled at the last minute, with the bidders assembling various quotations and putting together final numbers to meet the bid deadline. Graham simply did not have time to add the good faith effort documentation. He made a considered business decision to reject all but one DBE subcontractor, in favor of being able to submit a lower bid. He knew at the time that his bid was submitted that the DBE goal was not met. His bid was approximately $41,000.00 lower than the next lowest bid. For an additional $2,800.00 he could have met the 10% goal. This, of course, was apparent only after the bids were opened.
Recommendation Based on the foregoing, it is hereby, RECOMMENDED That a Final Order be entered, dismissing the protest of Petitioner, the Cone Corporation. DONE AND RECOMMENDED this 9th day of July, 1990, in Tallahassee, Leon County, Florida. Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9th day of July, 1990. COPIES FURNISHED: W. Crit Smith, Esquire SMITH AND THOMPSON, P.A. 1530 Metropolitan Blvd. Tallahassee, FL 32308 John H. Beck, Esquire 1020 East Park Avenue Tallahassee, FL 32301 Paul J. Martin, Esquire and Susan P. Stephens, Esquire Department of Transportation Haydon Burns Building, M.S. #58 605 Suwannee Street Tallahassee, FL 32399-0450 Ben G. Watts, Secretary Attn: Eleanor F. Turner, M.S. #58 Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, FL 32399-0450 Thornton J. Williams, General Counsel Department of Transportation 562 Haydon Burns Building 605 Suwannee Street Tallahassee, FL 32399-0450 =================================================================
The Issue Are the intended contract awards by the Department of Juvenile Justice (Department) to Intervenor, Ramsay Youth Services, Inc. (Ramsay) under Request for Proposal (RFP) Numbers J5G01 and J5G02 contrary to the Department's governing statutes, applicable rules or policies, or the specifications of the RFPs?
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant findings of fact are made: Background On March 29, 2002, the Department issued RFP No. J5G01 for the operation of a 350-bed residential commitment program for high-risk males in Polk City, Florida (Polk Program). On April 5, 2002, the Department issued RFP No. J5G02 for the operation of a 74-bed, multi-level residential commitment program in Homeland, Florida (Bartow Program). CSC is the incumbent provider for both the Polk and Bartow Programs. On or about April 25, 2002, two proposals were submitted in response to the RFP for the Polk Program, one from CSC and one from Ramsay. On or about May 3, 2002, four separate proposals were submitted by CSC, Ramsay, Sescuricor New Century (Securicor), and Lighthouse Care Center (Lighthouse) in response to the RFP for the Bartow Program. On June 25, 2002, the Department posted separate notices of its intent to award contracts for the Polk and Bartow Programs to Ramsay. The Notice of Intended Contract Award for the Polk Program (RFP No. J5G01) lists Ramsay as the highest-ranked bidder with 655.3 average points, and CSC as the second-ranked bidder with 537 average points. The Notice of Intended Contract Award for the Bartow Program (RFP No. J5G02) lists Ramsay as the highest-ranked bidder with 590.3 points, followed by Securicor with 542.7 average points, CSC with 535.7 points, and Lighthouse with 233.3 points. All parties stipulated to the Department's scoring of the past performance portion of both CSC proposals. With the exception of Item C-3.7, all parties stipulated to the Department's scoring of the past performance portion of both Ramsay proposals. With regard to Item C-3.7, the parties stipulated the Department's scoring for Ramsay should have reflected 60 additional points because Ramsay's Manatee Adolescent Treatment Services program (Department's Contract No. F7027) met or exceeded the approved Performance Based Budgeting performance measure for recidivism for the past two years. In light of the corrections for Item C-3.7, Ramsay's total average score for the Polk Program should have been 715.3 (i.e., 655.3+60), compared to CSC's score of 537. Likewise, for the Bartow Program, Ramsay's total average score should have been 650.3 (i.e., 590.3 + 60), compared to CSC's score of 535.7. The Process Since at least the end of 2001, the Department has utilized two procurement methods: one provides for the scoring of costs; the other does not because the RFP specifies a fixed maximum contract price. When the fixed price method is used and costs are not scored the Department conducts a so- called "negotiation phase" after issuing notice of intent to award the contract. During the so-called "negotiation phase," the Department and offeror determine such things as the unfilled bed rate and maintenance rate, but the Department does not negotiate material terms of the technical proposal or allow the selected offeror to modify its proposal. The Department does not allow the selected offeror to increase the cost or price included in its proposal. However, if an error is discovered in the selected offeror's budget, the budget can be adjusted to redistribute expenses from one line item to another, so long as the proposed services are provided and the proposed cost or price is not exceeded. If the Department is unable to complete execution of the contract because the selected offeror is unable to provide the program services within the contract set forth in its proposal, the Department moves on to negotiate with the next offeror. Use of the "fixed price" procurement method has enabled the Department to reduce procurement process from 180 to less than 120 days on average, and often as low as 60 days. Speeding up the procurement process helps to ensure that services will continue to be provided and that legislatively appropriated funds do not go unused and, as a result, become subject to forfeiture. This is important because the State has a "waiting list" of committed youth who require program services. The "fixed price" method also allows the Department to place its principal emphasis on the quality of programs offered. In this case, the RFPs for both programs contemplate fixed priced contracts. Each RFP specifies a maximum contract dollar amount that the Department will award for each contract. The dollar amount is a "fatal criterion," meaning that any proposal with a cost exceeding that amount would be rejected. Both RFPs required each offer to submit a technical proposal (Volume I) setting forth an introductory statement and specific sections describing the offeror's management capability, the offeror's past performance, and the program services being offered. Both RFP's required offerors to submit financial data (Volume II) including, among other things, a total cost or price for the program and an itemized budget. The total costs submitted by Ramsay and CSC did not differ significantly; the difference was less than one dollar for the Polk Program and only two dollars for the Bartow Program. Both RFP's provided that zero points would be assigned for costs or price, indicating that costs or price would not be scored. Instead, the primary scoring criteria are "program services" and "past performance." Together, these criteria reflect 700 out of the 1000s total points available. Nothing in the RFPs requires the Department to evaluate budget details in conjunction with its review of the technical proposals prior to the notice of intended award. The Department uses the budget information primarily as a baseline to assist it in moving through the "negotiation phase." It enables the Department to determine if specific costs would not be incurred or not allowable. It enables the Department to negotiate the unfilled bed rate, which allows the Department to reduce the contract rate to account for costs that would not be incurred for beds that are not occupied. It also forces offerors to determine whether they can provide the required services within the maximum price before they submit proposals. Based on a Department document entitled "Briefing for SSET Team Members and Advisors," CSC claims that the "RFP Process" requires the Department to evaluate proposed costs for realism, reasonableness, and completeness. The "Briefing" document does state that "the contract administrator is responsible for evaluating the cost proposals of each offeror for completeness, reasonableness, and reality using the COST [PRICE] PROPOSAL EVALUATING form. However, the "Briefing" document is not a part of the RFP's and does not reflect official Department policy. The "Briefing" document is merely a guideline. In this case, the Contract Administrator, Marvin Floyd, did not sign the "Briefing" document and did not score or perform an extensive analysis of the specifics of the proposed budgets for realism, reasonableness, and completeness. However, Marvin Floyd did review each cost proposal to determine whether it included a total cost or price and whether the budget information in Attachment H was filled out. In that sense, Marvin Floyd did review the cost proposal for completeness. Similarly, Marvin Floyd also reviewed the proposed costs and price to determine whether it exceeded maximum contract dollar amount, which the Department had previously determined to be realistic and reasonable. In that sense, Marvin Floyd did review the costs or price for realisms and reasonableness. CSC failed to demonstrate that the evaluation process utilized by the Department provided a competitive advantage to Ramsay. To the contrary, the same evaluation process and guidelines were used for both CSC and Ramsay. Ramsay's Proposed Budget Based on isolated statements made in Ramsay's technical proposal and a review of Ramsay's budget, CSC's senior Vice President, Paul Donnelly, opined that Ramsay's proposal was somewhat "naïve" and a "virtual primer . . . for a novice[.]" However, Donnelly opinions must be weighed in light of the fact that CSC received "minimal performance" and "noncompliance" ratings for both the Polk and Bartow Programs in the latest Department Quality Assurance reviews. Furthermore, Donnelly himself testified in deposition that Ramsay submitted an "impressive technical proposal." The record demonstrated that Ramsay is an experienced provider that currently operates nine programs for the Department, including the Department's only contracted maximum-risk program. CSC contends that the budget included in Volume II of Ramsay's proposal for the Polk Program is not realistic, reasonable, or complete because it did not include specific line items for certain direct expenses, including start-up costs, overtime, employee expenses, and taxes, as well as certain indirect expenses, such as insurance and corporate overhead. CSC failed to demonstrate that the RFP specifications or the Department policy requires such budgetary detail. Moreover, Ramsay's Chief Operating Office, Jorge Rico, explained that Ramsay's budget did address most of the costs identified by CSC in other, more general line items. Whereas CSC's budget was more specific as to some items, Ramsay's budget was more specific as to others. For example, Ramsay included a specific line item for recruiting, but CSC addressed this expense in the general category of corporate overhead. Similarly, Ramsay included specific line items for nursing staff, whereas CSC addressed nursing staff in the general category of medical services. CSC also faulted Ramsay for not including start-up or "transition" costs in its budget for the Polk Program. But had such a line item been included, it would have been eliminated during the so-called "negotiation phase" because the Department does not allow start-up costs for existing programs. CSC's argument that Ramsay should have budgeted these costs amounts to a claim that CSC should be given a competitive advantage because, as the incumbent provider, CSC would not incur transitional costs and, therefore, would have no reason to budget them. Such an advantage would be contrary to competitive principles by favoring the incumbent provider over other offerors. The primary indirect expense that CSC criticized Ramsay for not including in its budget is corporate overhead. As Rico explained, however, corporate overhead is a fixed cost that will not increase with the addition of a new program. Ramsay made a business decision to put whatever funds that might be allocated as corporate overhead into the program itself. CSC claims that Ramsay cannot provide the services outlined in its proposal without incurring a loss. Rico acknowledged that Ramsay likely would incur losses for at least the first year of the programs, as is common when a new provider takes over an existing program. However, whether or not a provider makes a profit on a program is not the Department's concern and is not an award criterion. In fact, when corporate overhead is allocated as CSC suggests Ramsay should have in its budget, CSC itself incurred losses on both Polk and Bartow Programs over the twelve-month period ending July 2002. In its totality, the evidence indicates that the budgets submitted by Ramsay and CSC differ due to differences in management styles. Those differences do not render Ramsay's budget unrealistic, unreasonable, or incomplete. The differences in total costs proposed by CSC and Ramsay were negligible. In any event, budgets are estimates, actual expenses never match budget line items. The evidence does not support CSC's claim that Ramsay will need to make material changes to its budget in order to provide the program services at the cost or price set forth in its proposal. Ramsay is committed to providing the services described in its technical proposal at the cost set forth in its cost proposal. Staffing Ratio Based on a statement in Ramsay's technical proposal, CSC suggests that Ramsay would not meet the staffing ratios required for the Polk Program. However, Ramsay's technical proposal clearly states in bold lettering that Ramsay "will meet staffing requirements documented in the RFP (1:8 days and evening; 1:12 nights)." Moreover, Ramsay's budget includes enough positions and dollars to meet the required staffing ratios. In fact, with regard to "youth workers," who provide the core of the program staff, Ramsay's budget includes considerably more positions (186 full time equivalent or "FTEs"), than does CSC's budget (120.9 FTEs). Instructions to Evaluators CSC failed to demonstrate that the Department failed to provide its evaluators with specific and legally sufficient instructions regarding the scoring of proposals. To the contrary, the scoring sheets provided to the evaluators contain specific and detailed instructions on how each scoring criterion was to be evaluated. For example, in evaluating "Programs Services," the scoring sheets advise the evaluators to assess "soundness of approach" and "compliance with requirements" as follows: SOUNDNESS OF APPROACH: (Does the proposal reasonably and logically identify the proposed approach to perform the services as specified and required by the RFP, Attachment G, Exhibit 1, Scope of Services?) COMPLIANCE WITH REQUIREMENTS: (The degree to which the proposal complies with the requirement specified and required by the RFP, Attachment G, Exhibit 1, Scope of Services)(Does the proposal comply with all requirements for all service components, as identified in Attachment G, Exhibit 1, Scope of services, of the RFP?) The evaluators were then required to provide a numeric score ranging from 5 to zero. The scoring sheets provide specific criteria for determining the appropriate numeric score. For example, an "excellent" score of 5 would be appropriate if "[t]he proposal exceeds all technical specifications and requirements for all program components (and it) is innovative, comprehensive, and complete in every detail." Other Issues CSC failed to prove its allegations that the Departments' scorers evaluated and scored the proposals inconsistently or incorrectly or that the Department deviated from the RFP criteria in evaluating and scoring the proposals. CSC also failed to demonstrate that the Department's reduction in the number of beds for the Bartow Program from 74 to 50 beds after issuance of the RFP provided an unfair advantage to Ramsay or was otherwise contrary to competition.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a final order dismissing CSC's protests and awarding the contracts to Ramsay pursuant to RFP Nos. J5G01 and J5G01 as originally proposed. DONE AND ENTERED this 29th day of October, 2002. Tallahassee, Leon County, Florida. ___________________________________ WILLIAM R. CAVE 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) 921-6947 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 29th day of October, 2002. COPIES FURNISHED: Brian Berkowitz, Esquire Department of Juvenile Justice 2737 Centerview Drive Tallahassee, Florida 32399-3100 James C. Hauser, Esquire Warren Husband, Esquire Metz, Hauser and Husband, P.A. Post Office Box 10909 Tallahassee, Florida 32302-2909 Gary V. Perko, Esquire Hopping, Green, Sams & Smith 123 South Calhoun Street Post Office Box 6526 Tallahassee, Florida 32314 R. Terry Rigsby, Esquire Law Offices of R. Terry Rigsby, P.A. 215 South Monroe Street, Suite 505 Tallahassee, Florida 32301 Gary P. Sams, Esquire Hopping, Green, Sams & Smith Post Office Box 6526 Tallahassee, Florida 32314 William G. Bankhead, Secretary Department of Juvenile Justice Knight Building 2737 Centerview Drive Tallahassee, Florida 32399-3100 Robert N. Sechern, General Counsel Department of Juvenile Justice Knight Building 2737 Centerview Drive Tallahassee, Florida 32399-3100
The Issue Were the procedures followed by the Department of Labor and Employment Security (DLES) in evaluating the proposals for Diversity Training fraudulent, illegal or arbitrary?
Findings Of Fact In January 1994, the Department issued a request for proposals to provide diversity training. The Petitioners, Hallas and Lyca, and the Intervenor, Davis, all submitted proposals to DLES for evaluation. Intervenor, J. Davis and Associates represented by Julius Davis its principal officer, had presented proposals and bids earlier on previous Request for Proposals, and had complained informally to the Department about the procedures used which he had identified as unfair and potentially illegal. The Department posted the scores of its evaluation of the proposals and awarded the contract to New Day. Gail Hallas discovered that the scoring of the various elements of the proposals was not in accord with values established in the RFP. She also determined there were errors in the totalling of the scores in Hallas' evaluation. She brought this to the attention of Barbara Chance who was the procurement chief for the contract. Although Ms. Chance was initially incredulous, DLES determined there were errors, reevaluated the proposals and reposted the results. Hallas and Lyca both filed timely protests of the Department's conduct in evaluating the proposals and awarding the contract. The diversity training project manager was Aaron Weeks. Mr. Weeks participated in the conference held by the Department to present the RFP and answer questions. The daughter of Geraldine Thompson, the president of New Day which was awarded the contract, is or was engaged to Aaron Weeks. This relationship was made known previously to the contracting and procurement representative of DLES by Julius Davis, the Intervenor, and was the subject of articles in the local paper. Hallas also introduced a report of the Inspector General which brought this matter to the attention of the DLES. New Day included a portion of a letter from the Secretary of Labor on Department letterhead which was a testimonial about New Day's performance on prior contracts. When the evaluators reevaluated the proposals using the scale published in the RFP, the scores of evaluators Berryman and Branton differed inexplicably from their original evaluations, and were not a mathematical interpolation of the original scores. See Petitioner's Exhibit V, which is attached* and made a part of this order. *NOTE: Exhibits V is not a part of this ACCESS document but is available for review in the Division's Clerk Office. Lyca was the second lowest qualified bidder on the project. Lyca was an experienced diversity trainer and had experience in bidding for such projects. As part of its post bid process, Lyca sought certain information to which it was entitled to refine and improve its bidding/proposal process. Lyca was unable to obtain easily information generally provided to bidders. Hallas did the same thing and met with the same or similar impediments. When Lyca and Hallas sought to protest the award, they both got erroneous information from representatives of DLES and were unable to get appropriate information about filing a protest. Hallas accidently discovered the second posting and was able to timely file its protest. Ms. Carter's review of the evaluations forms of her proposal indicated that she was not a minority business enterprise. This was a scored point of evaluation. The forms did not indicate whether the evaluators had considered whether a business was a minority business enterprise. Evaluation of responses appeared to be based upon evaluation sheets and not on criteria in the RFP. There were numerous transpositions and similar arithmetic errors made by the evaluators. None of the errors inured to the benefit of the Petitioner Hallas. Lyca lost revenues and had expenses in filing the RFP. Hallas submitted a detailed proposal containing 111 pages. Her staff represented all areas of diversity, racial, gender, sexual orientation, disability and age. The RFP reflected that diversity of trainers was to be considered, however, Hallas scored lower than New Day which had only racial and gender diversity differences. The reevaluation was suppose to be conducted on the same proposals using the same criteria. Only the number of points assigned each element changed. Gail Hallas obtained copies of the evaluator's first evaluations and their reevaluations, and prepared an extract of their scores comparing the results. See Petitioner's Exhibit V, attached. This extract revealed that three of the evaluators made a mathematical conversion of their first scores to arrive at their second scores, one without error and the other two with minor errors. The evaluations of Berryman and Branton were significantly different on the reevaluation. A review of Exhibit V reveals, for example, that on the second evaluation, Branton evaluated Davis, Human X, and L.O. Wilson as having a total of 35, when Davis and Human X had 40 and L.O. Wilson had a 45 on the first evaluation. On the other hand, the scores for Hallas and Lyca remained almost identical: 27 vs. 29 and 67 vs. 67 respectively. More importantly, Branton's evaluation of Hallas on both occasions was much lower than the rating of the other evaluators (27 and 29), less than one half of score given Lyca (67) by Branton. While this may appear good for Lyca, it virtually eliminated Hallas from consideration. However, Berryman, whose scores of all the proposals were markedly lower than the other evaluators, scored Lyca as her third highest, but so low (28) as to eliminate Lyca. Only New Day received high scores from all the evaluators in both evaluations. All of the other competitors received at least one very low score, which effectively eliminated them from consideration, and the single low scores given by to Lyca and Hallas respectively by Berryman and Branton were inconsistent with their other assessments as indicated above. This technique had been used previously to insure that awards went to New Day, and had been the cause of Davis' earlier informal protest to the Department.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is, RECOMMENDED that: The subject contract not be awarded to New Day, The contract not be awarded to the next highest bidder which was Lyca because the manner in which the proposals were evaluated was tainted, and That prior to reinstituting the RFP, the process be sanitized and insulated from persons having any conflicting interests regarding this RFP and its evaluation. DONE and ENTERED this 19th day of July, 1994, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN, 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 19th day of July, 1994. APPENDIX CASE NO. 94-2354BID Petitioners' proposed findings were read and considered. The following list indicated which findings were adopted, and which were rejected and why: Paragraphs 1 through 6 Adopted Paragraph 7 Rejected as preliminary statement. Respondent's proposed findings were read and considered. The following list indicated which findings were adopted, and which were rejected and why: Paragraphs 1 through 4 Adopted. COPIES FURNISHED: Lyca Associates, Inc. Lynda V. Carter, President Suite B-6 4403 Vineland Road Orlando, FL 32811 The Hallas Group Gail Hallas, Owner 6822 22nd Avenue N, Suite 329 St. Petersburg, FL 33710 Mr. Julius Davis J. Davis and Associates, Inc. Human Resources Management Consultants 2371 Sunderland Avenue, Suite 4 Wellington, Florida 33414 Edward A. Dion, General Counsel Department of Labor and Employment Security 307 Hartman Building 2012 Capital Circle, S.E. Tallahassee, FL 32399-2189 and Carolyn Davis Cummings, Esquire Department of Labor and Employment Security 307 Hartman Building 2012 Capital Circle, S.E. Tallahassee, FL 32399-2189 Honorable Bob Crawford Commissioner of Agriculture The Capitol, PL-10 Tallahassee, FL 32308
The Issue The issue in this case is whether the proposed award of contracts by the Agency for Health Care Administration (AHCA) to Caremark, Inc. (Caremark), and Lynnfield Drugs, Inc., d/b/a Hemophilia of the Sunshine State (Lynnfield), pursuant to AHCA's Request For Proposal (RFP) 0507, was contrary to AHCA's governing statutes, AHCA's rules or policies, or the solicitation specifications.
Findings Of Fact AHCA is the state agency authorized to make payments for medical assistance and related services under Title XIX of the Social Security Act (the "Medicaid" program). There are approximately 250 Medicaid-eligible individuals ("beneficiaries") in Florida who have hemophilia. Hemophilia is a bleeding disorder caused by a deficiency in one of numerous clotting proteins or "factors" that contribute to the ability of a person's blood to clot. The disease is treated by administration of the deficient clotting factor to a person. The costs for hemophilia medicines ("factor products") and treatment for this relatively small group of beneficiaries are extremely high, estimated to be $46 million in 2005. Half of these costs are paid by Florida, half by the federal government. Section 287.057, Florida Statutes (2004),2/ requires an agency to make a written determination that an Invitation to Bid is not practicable for procurement of commodities or services prior to issuance of an RFP. On August 24, 2004, AHCA made the written determination that an Invitation to Bid was not practicable for procurement of the services called for in the MCHM program. Pursuant to Subsection 120.57(3)(b), Florida Statutes, a challenge to the terms and specifications of an RFP must be filed within 72 hours of notice of the posting of the RFP. There were no challenges filed to the terms and specifications of RFP 0507. RFP 0507 contemplates a statewide hemophilia management program that combines pharmaceutical management and disease management. Section 5.0 of the RFP identifies the two fundamental requirements for vendors responding to the RFP: The vendor must demonstrate that it has the capability to design, implement, monitor and evaluate a comprehensive hemophilia management program. The vendor must demonstrate that it has the experience in designing and implementing projects similar to the one prescribed in this RFP. Under the terms of the RFP, AHCA was to contract with up to three experienced vendors for a period of two years, with an option to extend the contract for an additional two-year period. Beneficiaries of the hemophilia services will be notified and instructed to choose one of the winning vendors or, for beneficiaries who do not make a choice, AHCA will assign a winning vendor on an equal, rotational basis. The RFP provides that the successful vendors will be paid on the basis of the factor products dispensed to eligible Medicaid beneficiaries. All other services required by the RFP must be delivered within the revenue provided by AHCA's reimbursement of factor product costs. Originally, RFP 0507 called for the submission of a technical proposal and a separate cost proposal. The cost to the State for the services provided was not to exceed the total cost of the factor products dispensed, discounted to the Average Wholesale Price (AWP) of the factor product, minus 39 percent. Cost proposals would have been scored separately from technical proposals, and then the two scores were to be combined to determine the ranking of the competing vendors. On January 21, 2005, prior to the deadline for responses to RFP 0507, AHCA issued Addendum 5 to the RFP, which eliminated the requirement for a separate cost proposal. All vendors were required to provide the technical services for the revenue they would receive under a reimbursement methodology set forth in Addendum 5. The reimbursement methodology makes AWP, minus 39 percent one of several measures of cost, the lowest of which determines the maximum reimbursement that Florida will pay the vendor. The change to RFP 0507 brought about by Addendum 5 did not change the fundamental nature of the RFP. Both the original RFP and the revised RFP created a competition among vendors to provide the best hemophilia management services to the State for a maximum cost. Addendum 5 changed the maximum cost from AWP, minus 39 percent, for factor products to a cost determined by the reimbursement formula. Under both the original RFP 0507 and the RFP as modified by Addendum 5, vendors could propose to provide factor products at a cost to the State lower than AWP, minus 39 percent. However, greater weight or importance would have been given to a proposal to provide factor products at a lower cost under the original RFP, because it called for cost proposals to be separately presented, evaluated, and scored. Based on the maximum scores attainable for the technical and cost proposals (1000 and 500, respectively), the cost proposal would have accounted for a third of a vendor's total score under the original RFP. Under the revised RFP, cost-saving measures offered by a vendor were relevant to only a few of the technical items in the RFP, such as those related to the management and dispensing of factor products. Even in the aggregate, these evaluation criteria allowed for the award of relatively few points for cost-saving measures contained in a proposal. AHCA received eight proposals in response to RFP 0507. One proposal was rejected by AHCA because it was determined to be non-responsive. The seven remaining proposals were made a part of the case record. Although RFP 0507 stated that up to three contracts would be awarded, AHCA decided to award contracts only to Caremark and Lynnfield. In a memorandum dated May 16, 2005, AHCA explained that "the points awarded indicate the top proposals scored significantly higher than the others. A difference of 124 points between the number two and the number three ranked proposal indicates a measurable difference in quality." The Organization of HHS's Proposal Section 6.0 of the RFP sets forth "Proposal Instructions." These instructions include a requirement to submit the proposal in a three-ring binder and to number the pages of the proposal. Another requirement imposed on the form of the proposal, as opposed to its content, was that the proposal had to use four tabs with specified titles. Tab 4 was to contain each vendor's technical response to the RFP. The RFP stated, "This is the most important section of the response with respect to the organization's ability to perform under the contract." Section 6.1E of the RFP describes the various categories of information that are required to be part of the vendor's technical response. There are eight general categories: Summary; Organizational Background and Experience; Project Staffing; Technical Approach; Innovations; Implementation Plan; Systems, Security and Confidentiality; and Certification Relating to Contracts. Some of these general categories were broken down further into separately numbered items of required information. For example, under the heading "Organizational Background and Experience," there are 11 numbered paragraphs describing the information required to be included in the proposal. Some of the numbered paragraphs are further divided into information requests identified by letter, such as item 9, which is divided into 23 information requests, lettered a through w. A logical manner in which to organize a proposal would be to present the information in the same order as the information is requested in the RFP, using the same headings, numbers, and letters that are used in the RFP. All the vendors, except HHS, organized their proposals so that the technical information required by Section 6.1E of the RFP was located under a divider or page labeled "Tab 4" or "Technical Proposal," and presented in the same order as the information was requested in the RFP. HHS's proposal has a "Tab 4" with a first page that includes the title "Technical Proposal" and begins with the required "Summary." Following the summary, however, HHS skips items 1 through 8 that were set forth in the RFP under the general category "Organizational Background and Experience" and presents a response to item 9. Then, HHS skips other items set forth in the RFP and presents information about "Innovations." At the end of HHS's Tab 4 is the heading "Additional Requested Information," followed by a list of seven appendices. Some of the information required to be in HHS's technical proposal is contained in these seven appendices. HHS's proposal included a table of contents that listed 31 other appendices, with subject titles, that contained more of the information that the RFP required to be included in each vendor's technical proposal. HHS chose to organize its proposal as it did because it believed the information it placed in the appendices was responsive to several parts of the RFP, and it would "irritate" the evaluators to see the same information repeated in several places. However, HHS's proposal did not always include notations that directed the evaluators to the appendices where relevant information was located. HHS acknowledged that it could have done "a much better job" in organizing its proposal. In the case of some items of requested information, very little effort was required for the evaluators to find the information in HHS's technical proposal. For example, it was relatively easy for an evaluator looking for information related to project staffing to find it in HHS's Appendix AG, entitled "Project Staffing." In other cases, however, greater effort was needed to find the information HHS says was relevant to a particular information request in the RFP. For example, HHS did not include behind Tab 4 a direct response to item 5 under "Organizational Background and Experience," which requests a detailed description of the vendor's organizational structure and ownership, and HHS did not refer the evaluator to a particular appendix. HHS contends the requested information is provided in Appendix AL, entitled "2004 Accredo Annual Report," which contains the Form 10-K for Accredo Health, Inc., HHS's parent company. Another example is HHS's response to item 8 under "Organizational Background and Experience," which requests a plan for the use of woman- or minority-owned businesses. HHS did not respond directly to this request under Tab 4 of its proposal, and its proposal merely contains a letter in Appendix AJ, entitled "Ethnically Diverse Utilization," from a woman-owned business to Accredo Health, Inc., acknowledging an existing relationship with HHS's parent company.3/ One of AHCA's evaluators said she gave HHS a score of zero for 27 evaluation criteria because she could not find the relevant information in HHS's proposal. The record evidence does not show that any other evaluator was unable to find information presented in HHS's proposal or failed to review the proposal in its entirety and score the proposal on its substantive merits. Whether HHS's Proposal Was Non-Responsive AHCA and the Intervenors claim that HHS's proposal was non-responsive to RFP 0507 because it does not include information required by Sections 7.2I and 7.2L of the RFP. Section 7.2 is entitled "Evaluation of the Mandatory Requirements of the Technical Proposal" and states in relevant part: During this phase, the Agency will determine if the technical proposal is sufficiently responsive to the technical requirements of the RFP to permit a complete evaluation. In making this determination upon opening the technical proposal, the overseer(s) will check each technical proposal against the following list: * * * Does the proposal include a table of contents listing sections included in the proposal and the corresponding sections of the RFP to which they refer? * * * L. Does the technical proposal include a description of the vendor's corporate background and experience at the level outlined in Section 6.1E of the RFP? Section 7.3 states that only those technical proposals determined to meet the mandatory technical requirements set out in Section 7.2 will be further evaluated. Presumably, AHCA determined that HHS's technical proposal included all mandatory requirements, because the proposal was not rejected. The table of contents in HHS's proposal accurately describes the information that is presented in its proposal. However, it does not list all the headings and information items as they appear in the RFP. There are over 30 itemized information requests in Section 6.1E related to the vendor's background and experience. HHS's proposal included information about its corporate organization and experience. However, the organization of the proposal made some of the information difficult to find. Sandra Berger, the AHCA employee who has coordinated contracts and procurements for the Medicaid program, stated that AHCA's policy regarding the review of RFPs is that the evaluator is to review the entire proposal; and if information is not found where it should have been presented, the evaluator will look elsewhere in the proposal for the information. AHCA's expectation is that the evaluator will read every sentence in every paragraph of each proposal. AHCA's Consideration of HHS's Guarantees HHS contends that three cost-saving measures that it offered in its proposal were not considered at all or not fairly considered by the evaluators. HHS offered an "assay management guarantee," an emergency room visit guarantee, and an outdated product guarantee. Because clotting factors are proteins or "biologics," the manufacturers of factor products cannot create a precise potency; they can only target potency. In the same sense that ore is assayed to determine its content of gold or other mineral, factor products are assayed to determine their content of clotting factor (potency). A manufacturer of factor products will generally produce products with low range, mid-range, and high-range potencies. Even within a targeted range, there will be variances of potency between particular vials of product that are dispensed. The recommended potency for some hemophilia treatments, such as a prophylactic regimen, is less than for others, such as for break-through bleeding. Therefore, "assay management" for factor products is a fundamental component of the current treatment of hemophilia. AHCA has established 105 percent as a threshold for evaluation of assay management. That means AHCA has an expectation that the factor dispensed to a patient will generally deviate less than five percent above the factor assay or potency prescribed for the patient by the physician. The 105 percent figure is a monitoring and evaluation threshold, not an absolute maximum. The State is required to pay for factor products exceeding the 105 percent threshold if they were medically necessary. HHS offered an "assay management guarantee" to repay AHCA on a quarterly basis for the cost of factor product that exceeded 102 percent of the target dose. Based on an HHS study done with 56 patients, the guarantee would have created a cost savings of $154,000. If a similar savings rate were realized for the approximately 250 Medicaid-eligible hemophilia patients in Florida, the savings would be approximately three times greater. Caremark also offered an assay management guarantee, but structured differently. However, AHCA does not view this particular type of guarantee as necessarily beneficial. AHCA believes it could create an incentive for the provider to withhold care, not based on medical considerations, but on financial considerations. A provider might reduce factor products dispensed to the patient in order to avoid exceeding a guarantee and having to repay the State. HHS also offered an emergency room visit guarantee so that AHCA would not have to pay for unnecessary emergency room visits. HHS defined unnecessary emergency room visits as those caused by the patient not having the correct amount or type of factor or a sufficient amount or type of infusion "ancillaries." HHS offered to credit AHCA $500 for each unnecessary visit. Another cost-saving measure offered in HHS's proposal was to replace outdated product without cost to AHCA. AHCA did not dispute that these two cost-saving measures would be of benefit to the State. No evidence was presented regarding the estimated value of the benefit. Few of the evaluation criteria for RFP 0507 related directly to the cost-saving measures offered by HHS. HHS presented information about its assay management guarantee in items 9.j and l, under "Organizational Background and Experience." Information about HHS's outdated product guarantee was presented under item 9.k. Information about HHS's emergency room visit guarantee was presented under item 9.v. The maximum score that HHS could have received for these four items was 20 points, out of a total score of 1000 for all criteria.4/ The Scoring Criteria For purposes of evaluation and scoring of proposals, AHCA formed the technical requirements of the RFP into 50 separate criteria, each worth from zero to 10 points, for a maximum possible score of 1000 points. The scoring scale for the 50 criteria was as follows: Points Vendor has demonstrated 0 No capability to meet the criterion 1-3 Marginal or poor capability to meet the criterion 4-6 Average capability to meet the criterion 7-9 Above average capability to meet the criterion 10 Excellent capability to meet the criterion Each of the 50 criteria was set forth on a separate evaluation sheet used by the evaluators. Each evaluation sheet identified from where in the RFP the criterion came. The 50 criteria in the evaluation sheets, however, did not correspond to 50 evaluation criteria, identified as such, in the RFP. RFP 0507 rarely uses the term "criteria." Instead, the itemized information requests in the RFP are alternately referred to as "instructions" (Section 6.0), as "specifications" (Section 6.1E), and as "requirements" (Section 7.3). In seven instances, two or more itemized information requests in the RFP were combined to form one criterion on an evaluation sheet. An example is page 13 of the evaluation sheets that grouped together items 9.e, f, g, and h, under "Organization Background and Experience." Judith Saltpeter, the AHCA employee who was principally responsible for the creation of the evaluation sheets, grouped these items together because they all related to vendor assistance to "physicians, specialists and other providers." Another example is the combination of items 9.j, k, and l into one criterion for scoring on page 15 of the evaluation sheets. These three items were combined by Ms. Saltpeter because they were all related to the vendor's proposed handling of factor products. There were two instances in which a single information request in the RFP was divided into more than one criterion for scoring on the evaluation sheets. For example, the evaluation criteria on pages 25, 26, and 27 of the evaluation sheets are derived from a single paragraph of the RFP under "Project Staffing": 2. Identification of staff along with details of training and experience of those individuals who will serve as the Project/Contract Manager, Clinical Pharmacist Coordinator, and Care Management Coordinator. Resumes and relevant licensure of all identified/named staff shall be included in an appendix to the proposal. AHCA made each of the three positions named in this paragraph a separate criterion for evaluation and scoring because of the perceived importance of these positions to the quality of the vendor's performance. The 50 evaluation criteria used for RFP 0507 were almost identical to the 50 evaluation criteria used for RFP 0403, in which HHS participated. Section 7.3 of the RFP, entitled "Evaluation of Technical Proposals," states in relevant part: Only those technical proposals determined to meet the technical requirements of this RFP will be further evaluated. Evaluation of technical proposals will involve the point scoring of each proposal by component specified in the RFP. The Agency will evaluate the extent to which the services offered in the proposal and the procedures and methods for performing such services meet the requirements of the RFP. For this purpose, evaluators will judge a vendor's description and explanation of the services it will perform to meet the service requirements of each component. Included in Addendum 5 to RFP 0507 and made a part of the RFP are "Agency Responses to Bidders' Questions," which include questions asked by the vendors at the vendors conference held prior to submittal of proposals and AHCA's answers. Two questions and answers are relevant here: Question: How will scoring for the technical proposal be evaluated? Do some [technical] questions have higher weight: If so provide weighting. Answer: All technical items have equal weight. Question: What specific factors will be used for the technical proposal evaluation pursuant to Section 7.3 of the RFP? What will be the relative weight of each factor? Answer: Equal consideration will be given to all items found under Section 6, excluding 6.3 Cost Proposal Requirements and 6.4, Cost Proposal Instructions. The organization of the technical requirements of the RFP into itemized lists and AHCA's statements to the vendors that "All technical items have equal weight" and "Equal consideration will be given to all items found under Section 6," communicated to the vendors a scoring process that was not followed by AHCA. There is nothing in the RFP that informs prospective vendors of the scoring process that was actually used. The combining and dividing of the information requirements in the RFP for scoring purposes affected their relative importance, but no prospective vendor would know from reading RFP 0507 that some of the requirements of the technical proposal would be combined for scoring and other requirements would be divided for scoring. No prospective vendor would know which items in the RFP would be worth up to 10 points, which items were worth only 1/3 or 1/4 as much and which items were worth twice as much. There is no evidence that AHCA acted arbitrarily or capriciously in combining and dividing the technical requirements of the RFP to create the 50 evaluation criteria. There was a rationale behind the combinations and divisions. However, RFP 0507 did not indicate the relative importance of the criteria. Their relative importance was only determinable by reviewing the evaluation sheets, which were not made a part of the RFP. Nevertheless, HHS failed to demonstrate that this error by AHCA made any difference to the contract awards under RFP 0507. The combining and dividing of technical requirements affected all vendors equally. Adjusting the scores so that every itemized technical requirement from the RFP is given equal value would not change the rankings. For example, if an evaluator gave a score of "5" for a criterion that was created from four requirements set forth in the RFP, the score was adjusted to 20 (four times five), and this kind of adjustment was made to all scores for all affected criteria, HHS would still finish in sixth place. Even if the actual scores might have varied from the adjustment just described, there is no evidence to explain how the variance could be more than de minimus or could change HHS's ranking. A related issue concerns item 3 under "Project Staffing" and item 20 under "Technical Approach," also related to staffing, that did not become evaluation criteria for scoring purposes. HHS claims that AHCA's decision to not make these items evaluation criteria was prejudicial to HHS because its proposal regarding project staffing was superior to what was offered by the other vendors. However, if these two items had become two evaluation criteria, they would have been worth a maximum of only 20 points. Even assuming that HHS had been given the highest points by all four technical evaluators for these two items, HHS's ranking would not have changed. Scoring by the Evaluators The four AHCA employees who evaluated the technical proposals were Linda Barnes, a registered pharmacist (Scorer "A"); Maresa Thomas, a registered nurse (Scorer "B"); Bruce McCall, who holds a doctorate in pharmacy (Scorer "C"); and Nancy Knox, a registered nurse (Scorer "D"). Kay Newman, a certified public accountant, reviewed only the financial information provided by the vendors. The evaluators were each provided a copy of the seven proposals, the original RFP, Addendums 5 and 11 to the RFP, an evaluation packet, and a conflict of interest form. The technical evaluators were given an instruction sheet and verbal instructions for evaluating the technical proposals. The instruction sheet distributed to the evaluators provided that the evaluators "should" justify their scores in the "comments" section of the score sheets. Some of the evaluators made comments, others did not. Each evaluator worked independently. The evaluators did not confer with each other or with anyone else during their evaluation of the proposals. The evaluators conducted their evaluations over a period of three weeks. Because each evaluator worked independently, the scores on each proposal differed. It can be expected, and was true in this case, that some evaluators will generally assign lower scores than other evaluators; some evaluators will tend to assign higher scores. There was no evidence that any evaluator for RFP 0507 was inconsistent in the application of his or her scoring approach to all proposals. In addition to the points awarded by the technical evaluators for the 50 criteria, each proposal also received "Financial Audit" points (between one and ten) from Kay Newman. Ms. Newman scored the seven proposals as follows: Caremark 9 Lynnfield 9 AmeriHealth 0 OptionCare 8 Maxim 8 HHS 9 PDI Pharmacy 4 Points were also assigned to the vendors based on telephone "reference reviews" conducted by AHCA employees Hope Chukes and Patricia Morena. Two references were selected for each vendor from the references listed in the proposals. The reviewers used a form with questions related to whether the vendor had fulfilled its obligations under previous contracts. In most cases, three points were given to the vendor when the reference reported that the vendor had performed the particular obligation; otherwise, a score of zero was given. The maximum score that could be obtained for the reference review was 19 points. Some questions on the reference review form were not relevant to the previous contract between the vendor and the reference organization. In those instances, Ms. Chukes was directed to give vendors a score of "3" for the question, rather than penalize the vendors with a score of zero. Because the reference reviews indicated that all vendors had performed their obligations under previous contracts, AHCA gave all vendors the maximum total score of 19. Following the conclusion of the technical evaluations, Ms. Chukes tallied the scores from the four technical evaluators, the financial audit scores from Ms. Newman, and the reference review scores. The resulting total scores and ranking of proposals were as follows: 1 Caremark 1437.2 2 Lynnfield 1384.9 3 AmeriHealth 1207.83 4 OptionCare 1107 5 Maxim 964.3 6 HHS 889.3 7 PDI Pharmacy 774.55 There are some fractional scores, because Ms. Thomas (and only Ms. Thomas) scored multi-part criteria by initially assigning a score to each subpart, using the zero-to-ten scale, and then averaging the result. Although this scoring approach would have caused a variance, in some cases, from the score that Ms. Thomas would have assigned if she had simply scored the criterion as a whole, the variance would have been de minimus. It would not have changed HHS's ranking. For reasons not explained in the record, AHCA manipulated the raw scores by averaging them, assigning the highest ranked vendor a score of 1000, and dividing the average scores of the other vendors by 1000. These manipulations did not change the ranking that resulted from the total raw scores as indicated above. None of the evaluators ranked HHS higher than fourth. One evaluator ranked HHS fourth, one ranked HHS fifth, and two ranked HHS seventh (last). Scoring by Ms. Thomas Ms. Thomas assigned HHS's proposal a zero for 27 of the 50 evaluation criteria. In her notes on the evaluation sheets and in her testimony at the hearing, Ms. Thomas explained that she gave HHS zeroes because she could not find HHS' responses for these criteria, and she assumed they had been omitted. For example, because she did not see information under Tab 4 of HHS's proposal numbered 1 through 7 to correspond to paragraphs 1 through 7 of the RFP, she assumed that the information had been omitted from HHS's proposal. Ms. Thomas did not always look through HHS's entire proposal to determine whether the information she expected to see in Tab 4 was located in an appendix or elsewhere. When she did not find information where she expected it, she often made a notation "nothing presented" on the evaluation sheet and assigned a zero for the criterion. There was no evidence that any other evaluator did the same. The other three evaluators apparently looked through HHS's entire proposal, found the relevant information, and assigned points for each criterion based on their review of the information. As stated above, AHCA's policy regarding the review of a proposal is that the evaluator is to review the entire proposal and, if information is not found where it should have been presented, the evaluator will look elsewhere in the proposal for the information. AHCA's expectation is that the evaluator will read every sentence in every paragraph of each proposal. There is no evidence that Ms. Thomas was biased either for or against any particular vendor. However, it was the duty of the evaluators to read each proposal in its entirety. Nothing in the RFP instructions authorized the evaluators to ignore information in a proposal if it were in the "wrong" place. In most cases, the information Ms. Thomas claims she could not find required little effort to find and was found by the other three evaluators. Ms. Thomas' failure to consider all the information presented in HHS's proposal when assigning scores under the 50 evaluation criteria was contrary to agency policy. Her assignment of a zero to HHS in 27 categories was arbitrary. However, HHS failed to demonstrate that, but for the arbitrary scoring by Ms. Thomas, HHS would have been awarded a contract under RFP 0507. If all of Ms. Thomas's scores are deleted, HHS still ranks sixth. If all of the zeroes that Ms. Thomas gave HHS were converted to tens, HHS would only move up to fourth place and would still not win a contract under RFP 0507. HHS complained of other aspects of the evaluation process used for RFP 0507, such as the separate financial audit performed by Ms. Newman and the reference review. However, HHS failed to prove that if all these alleged errors by AHCA were eliminated, HHS would have been a winner under RFP 0507.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Heath Care Administration enter a final order awarding contracts under RFP 0507 to Caremark, Inc., and Lynnfield Drugs, Inc. DONE AND ENTERED this 2nd day of December, 2005, in Tallahassee, Leon County, Florida. S BRAM D. E. CANTER 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 2nd day of December, 2005.
Findings Of Fact Petitioner, E. J. Strickland Construction, Inc. (Petitioner), submitted to Respondent, Department of Transportation (Department), a bid on State Project No. 75030- 3518. Petitioner's was the lowest bid received by the Department. Petitioner's bid failed to meet the D.B.E. goals on State Project No. 75030-3518. The D.B.E. goal was 12 percent; under Petitioner's bid, only .04 percent of the contract would be performed by economically disadvantaged business enterprises. The only effort Petitioner made to secure bids of certified D.B.E. contractors to incorporate in its bid to the Department was to run a legal advertisement in the Orlando Sentinel on January 18, 19 and 20, 1986. The Department was scheduled to open all bids on January 22, 1986. Petitioner documented only the advertisements and the fact that it incorporated the only response to the advertisements in its bid in an effort to demonstrate good faith effort to meet the D.B.E. goals. 2/ There is no evidence that Petitioner acted with specific discriminatory intent in preparing its bid on State Project No. 75030-3518. Petitioner proved that it acted in this case precisely as it acted in the only other Department job on which it bid. In that case, Petitioner ordered from the Department plans and specifications and was sent plans, specifications and a bid package and was placed on the Department's list of prospective bidders. In accordance with the custom in the industry, the Florida Transportation Builders Association (FTBA) obtained from the Department the list of prospective bidders as of ten days before the bid letting date and distributed the list to its members. In accordance with the custom in the industry, several DBE and WBE contractors contacted Petitioner, verified that Petitioner was bidding on the project and submitted proposals for inclusion in Petitioner's bid. In that way, Petitioner received enough response from certified DBE and WBE contractors to meet the DBE and WBE goals on the job. In this case, in accordance with the Department's normal practice, the Department only sent Petitioner plans and specifications in response to Petitioner's December 30, 1985 request for plans and specifications. Also, since Petitioner did not specifically request a bid package, the Department did not include Petitioner on its list of prospective bidders. For that reason, no FTBA members, including the certified DBE contractor who bid on Petitioner's previous job with the Department, received notice that Petitioner was a prospective bidder on State Project No. 75030-3518. Had Petitioner been included on the FTBA list, Petitioner probably would have received enough response from certified DBE contractors to meet the DBE goals on this job, too. All four of the other bidders on State Project No. 75030-3518 met the DBE goals. One of them relied entirely on the FTBA list to notify prospective certified DBE contractors. One of them -- including the next lowest bidder, Cone Constructors, Inc. -- also sent a written request for a proposal to Pary, Inc., the same certified DBE contractor who previously had contracted with Petitioner on a Department job that was still ongoing. Another of the bidders on State Project No. 75030-3518 telephoned Pary, Inc., and asked for a proposal. Petitioner is not a member of the FTBA and did not inquire whether it was listed as a prospective bidder on the FTBA list. Petitioner did not make any effort to use the Department's DBE directory to directly contact certified DBE contractors concerning the job. Petitioner did not even contact Pary, Inc., to request a bid although Pary, Inc., was working for Petitioner at the time and had not responded to Petitioner concerning State Project No. 75030-3518. Petitioner's small effort to meet the DBE goals on State Project No. 75030-3518 did not rise to the level of good faith efforts. The evidence that Petitioner acted in this case precisely as it acted in the only other Department job on which it bid does not prove that Petitioner made a good faith effort in this case. To the contrary, it proved only that Petitioner was lucky to meet the DBE goals on the prior contract.
Recommendation Based upon the foregoing Findings Of Fact and Conclusions Of Law, it is RECOMMENDED that Respondent, Department of Transportation, dismiss the bid protest of Petitioner, E. J. Strickland Construction, Inc., and award the contract in State Project No. 75030-3518 to the lowest responsive bidder, Cone Constructors, Inc. RECOMMENDED this 25th day of April, 1986, in Tallahassee, Florida. J. LAWRENCE JOHNSTON Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 25th day of April, 1986.
The Issue Whether the selection was arbitrary because evaluators were not state employees and were not technically trained? Whether the selection was arbitrary to the extent non-price criteria were used in comparing proposals? Whether Urban Media's proposal was non-responsive because no organizational chart was supplied, because it contained no financial statement or any "statement of work" or a statement incorporating all specifications? Whether Blue Chip's $2500 estimate of administrative costs was responsive? Whether Blue Chip's proposal was non-responsive for failure to quote an unconditional price or to state specific objectives? Whether Blue Chip's financial statements were acceptable, being based on estimates pertaining to a construction company or to a "systems-management" company? Whether Blue Chip had adequate organizational capability to gather the staff to perform the contract? Whether its proposal was sufficiently definite or based on impermissible estimates?
Findings Of Fact By request for proposals No. 88-277, HRS solicited offers to create a statewide media campaign publicizing its "One Church, One Child Program," an effort to enlist churches with African American congregations in placing African American children for adoption with African American families. Proposals Responsive Three days after the June 24, 1988 deadline, Pamela Ann Eby opened every proposal that had been filed on time. She and two other HRS employees reviewed the proposals for responsiveness. Before referring them to an evaluation committee, comprised principally of members of the One Church, One Child Program Board of Directors, they determined that all four were "technically adequate." This included Urban Media's proposal, Joint Exhibit No. 1, which contained a "statement of work," HRS Exhibit No. 9, financial statements, HRS' Exhibit No. 10, a statement of objectives, HRS' Exhibit No. 12, and a timetable both for production and for media exposure. HRS' Exhibit No. 13. Blue Chip's own witness acknowledged that signing the proposal, including ancillary forms, as Urban Media's representatives did, incorporated all specifications called for in the request for proposals, by reference. Nothing was improper or deficient about the "administrative expense" Urban Media budgeted. Although Blue Chip produced a witness who took issue with the level of detail in some items of Urban Media's proposal, the witness testified that he could not say any deviations he perceived were material. Urban Media's proposal was responsive to the request for proposals. Clear Choice Before deliberating as a group, each committee member evaluated each proposal individually, using the form "proposal rating sheet" that had been furnished to the proposers as part of the request for proposals. The Rev. Messrs. R. B. Holmes, W. O. Granger, Elroy Barber, Willie C. Bell, Jr., the Rev. Ms. Cynthia Parker, who has had experience with media and public relations, and Dr. Juanita Clay, the HRS employee who is state coordinator of the Program, served as the committee that assessed the proposals' comparative merits. The proposal rating sheets asked raters to assign points for various criteria. Of 104 possible points, Blue Chip received scores ranging from 21 to The lowest score any committee member gave Urban Media exceeded Blue Chip's highest score by 27 points. At least one committee member gave Urban Media a perfect 104 score. When they met to make their decision, the committee unanimously chose Urban Media. The committee wanted a "top quality" media campaign. Blue Chip is a construction company that has also installed computers. They questioned Blue Chip's ability to deliver at all, and remarked the lack of any previous work of this kind. One committee member reportedly said, "If we're adding on to a building, maybe Blue Chip is who we want to use." The committee recommended that new proposals be solicited, if necessary, rather than making an award to Blue Chip, even though they ranked Blue Chip's Second. By letter dated July 6, 1988, Ms. Eby notified Urban Media that its proposal had been selected. Award of the contract has not been accomplished pending the present proceedings.
Findings Of Fact Stipulated facts The School Board issued a Request for Proposals (RFP No. 96-029S) March 24, 1995, to solicit bids for its group vision care. The RFP requires parties to file a notice of intent to protest the conditions of the RFP within 72 hours of receipt of the RFP. Optiplan did not file a protest of the conditions of the RFP. Optiplan and VSP, among others, submitted proposals which constituted offers. The Superintendent formed an Insurance Committee of fourteen individuals, consisting, among others, of School Board members, School Board employees, representatives of the three employee unions, and public representatives to review proposals submitted pursuant to the RFP. The Insurance Committee met a total of twelve times, beginning on February 17, 1995, and ending on July 25, 1995. Each meeting lasted between 3 and 10 hours. The Insurance Committee conducted its scoring on the various proposals using a score sheet prepared by Siver on the "Ready and Willing" category at the July 25, 1995, meeting. The scores were divided into three categories: Price [45 points], Ready and Willing [45 points], and Minority/Women Business Enterprise (M/WBE) [10 points] at the July 25, 1995, meeting. The Insurance Committee voted on July 25, 1995, and recommended that VSP be awarded the RFP. VSP was the highest ranked proposal on the evaluation. Optiplan filed a timely formal protest to the School Board's recommendation. Optiplan has standing in this bid protest proceeding to protest the award of the proposed contract. VSP as the successful proposer has standing in these proceedings as an Intervenor. VSP filed a timely Motion for Leave to Intervene and was granted intervention by the Hearing Officer. The Broward County VSP office is a marketing and/or sales office. VSP has only one employee in its Broward County Office. That one employee is a white male. The parties Respondent, the School Board of Broward County, Florida, operates the second largest school system in Florida; and the seventh largest system in the United States. It has approximately 21,000 eligible employees. Petitioner, Optiplan, is a managed vision care program which has been in operation for over eight years. Optiplan's proposal to provide a Group Vision Care plan for the School Board was the second highest ranked proposal. Intervenor, VSP is a not-for-profit Florida corporation which provides group vision service plans. VSP is the incumbent provider and has provided group vision care to the School Board since October 1987. The Insurance Consultant and The Superintendent's Insurance Committee Siver Insurance Management Consultants (the Insurance Consultant or Consultant) acted as independent risk and insurance management consultants for the RFP process, including the RFP development and proposal evaluation. The Superintendent of the School Board formed a committee (the Insurance Committee) to develop requests for proposals for multiple group insurance plans for School Board employees, to develop evaluation factors, to evaluate the proposals submitted, and to make recommendations to the School Board for the award of the insurance contracts. Optiplan had a team of paid lobbyists who met with Insurance Committee members outside of Committee meetings, provided information to Committee members, and represented Optiplan at Committee meetings. Committee Member Brown, President of the Federation of Public Employees, did not like or respect Jack Tobin, one of the Optiplan lobbyists. Mr. Brown did not score the proposals or vote on any of the vision issues. Mr. Brown's alternate, Jim Silvernale, was responsible for voting on the proposals. Mr. Brown's instructions to Mr. Silvernale were that in voting on the subject proposals, Mr. Silvernale should vote his own conscience based on the information presented to the Committee members. The Request for Proposals The Insurance Committee developed the RFP and the School Board issued Request for Proposal No. 96-029S (the RFP), March 24, 1995, to solicit proposals for provision of group vision care to School Board employees and their dependents. The RFP reserved the right of the School Board to reject any or all proposals with or without cause, and to accept the proposal which in its judgment would be in its best interest. The RFP gave the Insurance Committee and the School Board very broad discretion to consider and evaluate vendor proposals and to select the proposal which would best serve the School Board's needs. The RFP provided a description of the current vision group plan, and directed proposers to submit proposals which would meet or exceed current plan coverage, benefits, and plan provisions. Further, the RFP requested an "alternate" proposal which would increase the frequency (from the current plan's frequency of once every 24 months) of the "Frames Only" coverage to once every 12 months. In an addendum to the RFP, the School Board clarified that it was seeking both a proposal for a plan that would include "Frames only" coverage every 12 months and a proposal for a plan that would include "Frames Only" coverage every 24 months. The RFP stated that proposals would initially be evaluated in accordance with the criteria set forth in the RFP and advised that proposers should structure their proposals in a manner to properly address each of the evaluation criteria. The Proposal Forms section of the RFP required proposers to complete forms to provide information on the proposer's identification and address, group representative or account representative and address, administrative and claims payment facility, experience, proposed plan benefits, providers, M/WBE participation and certification, employee statistics, and willingness to provide the RFP's requested Model Program, as well as additional information. Proposal Forms were provided to solicit information which would be used in the application of the evaluation criteria to the proposal. However, proposers were admonished that the Proposal Forms may not address all, or may not fully address some, of the criteria. Proposers were solely responsible for addressing each of the evaluation criteria. At the April 18, 1995, meeting of the Insurance Committee, the Insurance Committee voted to make the minutes of its March 20, 1995, meeting an addendum to the RFP's to clarify for proposers the concern and intentions of the Insurance Committee relating to evaluating the M/WBE component. In this way, the Insurance Committee clarified and/or amended the RFP to clearly provide that remuneration was not the determinative factor for M/WBE participation evaluation. RFP Evaluation Criteria The "Evaluation Criteria and Selection Factors" section of the RFP states: The School Board reserves the right to select that proposal, if any, which in its judgment will be in its best interest. The Insurance Committee will rank all responsive proposals in accordance with listed evaluation criteria. The following factors will be considered in evaluating and ranking the responsive proposals: Projected cost and rate guarantee period - 0 to 45 points. Extent to which Proposer is willing and able to provide products and services as specified in the RFP - 0 to 45 points. For the purposes of evaluating criteria, the primary factors may be: Degree of relevant experience of the Proposer with respect to comparable clients located in Florida; and Degree to which Proposer matches the current plan provisions, coverages and services required; and Capability of network to provide proposed care and services. Extent to which minorities and women will participate in the providing of services - 0 to 10 points. For the purposes of evaluating this criteria, the primary factors may be: Degree to which minorities and women participate in the services to be performed; and Estimated amount of remuneration to qualified M/WBE. [Emphasis supplied.] The RFP, additionally contained a section entitled, "Minority/Women Business Enterprise Participation" which advised proposers that the School Board has a specific goal of at least 20 percent minority participation in the delivery of services for which the RFP addresses. M/WBE participation is part of the evaluation criteria. * * * Proposer shall also provide a detailed state- ment of its Affirmative Action and M/WBE Prog- rams, its commitment to these programs at both the corporate and local level, and a detailed statement concerning the staffing of the Proposer's Broward County office(s) that will be responsible for the administration of the contract. A greater amount of evaluation credit will be given to Proposers with a Broward County office(s) whose employee composition by ethnicity and gender reflects the Broward County population as defined by the 1990 census. Less evaluation credit will be given to Proposers with administrative office(s) located outside Broward County and/or whose office(s) do not have the employee composition by ethnicity and gender that reflects the Broward County population as defined by the 1990 census. . . . [Emphasis supplied.] Establishment by the Insurance Committee of Evaluation Factors and The Initial Evaluation and Ranking of the Proposals While the RFP established the evaluation criteria, the Insurance Committee established the factors which would be considered in determining whether and to what extent the evaluation criteria had been met. The factors for scoring the "Willing and Able" criterion were selected at the May 15, 1995, meeting. The Insurance Consultant suggested the factors, and the Committee accepted the factors with some revisions. Attachment Number 3 to the Insurance Committee meeting of May 15, 1995, included the following language: "Maximum Suggested Points means that points may be awarded up to the stated maximum for each criteria." This reflected the consensus of the Insurance Committee that in scoring each of the criteria each Committee member could award points anywhere within the range of points assigned to each of the criteria. The Insurance Committee initially scored and ranked the vision proposals on June 9, 1995. The proposals were analyzed by the Insurance Consultant prior to evaluation by the Committee. The Insurance Committee accepted the analysis and recommended scoring of the Insurance Consultant on the Cost and Willing and Able Criteria, and adopted the scoring as its own without individual scoring by Committee members. At the June 9, 1995, scoring of the proposals, the Insurance Consultants recommended that VSP receive the Insurance Committee's recommendation. The reasons for the recommendation included: lowest overall cost for current plan; lowest proposed family rate for current plan; employee satisfaction reported to be high; and there appeared to be no compelling reason to change. At the June 9, 1995, meeting, the M/WBE Office staff suggested factors to be considered in evaluating the M/WBE RFP component and presented her preliminary analysis of the proposals' submitted M/WBE data. The Committee reviewed the suggested factors, and requested modifications based upon what the Committee thought the factors should be. At the June 9, 1995, meeting of the Insurance Committee, Ms. Dudley handed out documents entitled, "Evaluation Criteria," "M/WBE Participation Analysis," and "Workforce Environment Analysis." The Insurance Committee members had a number of questions concerning the criteria used by Ms. Dudley. Ms. Dudley agreed to return to her office to expand her M/WBE participation analysis to include additional scope of services information. When Ms. Dudley returned, she presented her Workforce Environment evaluation which showed Optiplan and VSP with 4 points. Ms. Dudley was uncomfortable making a recommendation on the M/WBE Participation section. She felt there was a disparity in the nature of the M/WBE companies (one company had 2 employees; another company had 35 employees.) There was considerable discussion relating to the amount of remuneration and the related value of services. The Insurance Committee finally voted to give all proposers 4 points across the board. There is no reflection in the minutes of the Insurance Committee meetings that the Insurance Committee voted to accept Ms. Dudley's June 9, 1995, evaluation factors for determining whether the RFP's M/WBE criteria had been met. Rescoring of the Proposals After the initial scoring of the proposals by the Insurance Committee, Optiplan representatives and lobbyists met with the Superintendent to object to the evaluation and recommendation of VSP. After the meeting, Optiplan sent a letter dated June 16, 1995, to the Superintendent stating its objections. After Optiplan objected to the initial scoring, the Insurance Committee voted to re-score the proposals. At the July 25, 1995, meeting, the Insurance Committee re-scored the vision proposals. For the re-scoring, the Insurance Consultant reviewed the Optiplan objections and presented the Insurance Committee with a "Revised Comparison of Proposals - Willing and Able to provide Products and Services." The Insurance Committee conducted its scoring on the various proposals using a score sheet prepared by Siver (the Insurance Consultant) on the "Ready and Willing" category at the July 25, 1995, meeting. At the July 25, 1995, meeting, Ms. Dudley handed out a tally sheet as well as evaluation criteria for the M/WBE component. This was the only material handed out concerning the M/WBE evaluation that day. The materials were the same as those previously prepared for the health plan proposals. Ms. Dudley advised that the Workforce Environment analysis was the same as was provided in the earlier meeting. She had added the location of administrative offices. The third sheet was a summation of the M/WBE remuneration and the scope of work proposers had identified. The Insurance Committee voted to change the point allocation from 5 points for Workforce Environment and 5 points for M/WBE Participation to 3 points and 7 points respectively. Mr. Gentile asked whether there was clarification on which firm VSP had selected. Mr. Thomas advised that McKinley Financial Services had been selected. The Insurance Committee did not, either by vote or consensus, set a threshold amount of M/WBE remuneration for awarding points. The RFP did not dictate to the Insurance Committee that proposals with the greatest amount of remuneration of M/WBE firms receive the maximum points or greater points. The Insurance Committee did not determine that maximum remuneration, or meeting a threshold of in excess of $40,000, meant that a maximum of 7 points would be assigned. The Insurance Committee considered both the amount of remuneration and the scope of M/WBE work in providing services under the contract. The Insurance Committee scored on a range of points up to a maximum of 7 points for M/WBE Participation. Upon re-scoring of the RFP on July 25, 1995, VSP was again declared the winner of the contract with a score of 43.58 points for the Cost component of the RFP, 39.74 points for the RWA component, and 8.67 points for the M/WBE component, for a total score of 91.98 points. Optiplan was awarded the second highest score with a score of 45.00 points for the Cost component, 36.37 points for the RWA component, and 8.30 points for the M/WBE component, for a total score of 89.68 points. Of 100 possible points, VSP and Optiplan were separated by only 2.30 points. Analysis of the Optiplan Protest by the School Board The Insurance Consultant was asked to review and to respond to Optiplan's protest. The Insurance Consultant performed an analysis of the vision RFP evaluation in accordance with each of the points raised in Optiplan's protest. This analysis was provided to the School Board for its consideration of the Optiplan protest. In performing its analysis of the vision RFP evaluation, the Insurance Consultant changed some of the scoring in light of Optiplan's protest assertions, in order to give Optiplan the benefit of the doubt. The Insurance Consultant concluded and advised that the results did not change, and that VSP would still be ranked higher than Optiplan. The Insurance Consultant advised the School Board that there was no basis for rejecting the Insurance Committee's recommendation of VSP over Optiplan. VSP's Underwriting Loss and Financial Viability Since the inception of its contract with the School Board through the end of March 1995, VSP had experienced an overall underwriting loss of approximately $483,300 on the School Board contract. VSP acknowledged this in its proposal. $293,135.00 of the loss were monies held in reserve to service claims. VSP President Allen Garrett advised the School Board that VSP was willing to stay with the School Board, and even enhance benefits, even though it had lost money because VSP was a nationwide concern with 15 million insured, and a contract with the second largest fully accredited school board in the nation was desirable and good for VSP business. Prior to the School Board's decision to reject Optiplan's protest and to award the contract to VSP, it was advised by its Insurance Consultant that VSP's willingness to continue to provide the group vision care program at the prices proposed was "neither unusual nor unexpected." This advice was based upon the Insurance Consultant's belief that VSP, and other vendors, could hope and expect that, by having a large employee base and resulting network, they would be able to lever- age their ability to serve other clients on a profitable basis. VSP's proposal included a Balance Sheet which clearly demonstrates that VSP is a financially viable company with assets as of December 31, 1994, of $10,256,448, an increase from $7,752,255 in December 1993; Net Income of $2,393,136; and a Fund Balance and General Reserves of $8,369.020. Eye exam appointment waiting time The RFP required proposals to provide eye exam appointments within 3 weeks. Optiplan's proposal stated that the average waiting time for an eye exam appointment is two weeks. VSP's proposal stated that the average waiting time for eye exam appointments for VSP patients is 1-3 days. VSP's authorization process is described in its proposal. The Insurance Consultant's analysis used by the Insurance Committee for re-scoring the proposals noted, in abbreviated fashion, that members first telephoned for a benefit form to be sent by mail; then obtained appointments within 1-3 days after calling for an appointment. Insurance Committee members could score proposals on a range from zero to a maximum of 3 points for the average waiting period for an eye exam appointment. Optiplan did not propose two separate plans for the frequency of the "Frames Only" coverage as requested by the RFP, but instead proposed the alternate plan only. Employees would be able to obtain a "frame only" benefit every 12 months for $55.00. Optiplan stated this as a benefit enhancement. The Optiplan proposal also allowed employees to elect a specific brand of contact lenses, Prosite, in lieu of eye glass benefits, without additional co-payments. Optiplan stated this as a benefit enhancement. The Insurance Consultant's Revised Comparison notes the Optiplan "enhancements." VSP's proposals provided the following plan enhancements: Credit of $293,135.00 IBNR reserves already established as a result of the current contract. Improved frame availability by increasing the frame allowance 56 percent from the current frame allowance. Panel doctors will accept a 10 percent discount for total cost of covered elective contact lenses after applying the $85.00 flat allowance. Insurance Committee members could score proposals on a range from zero to a maximum of 5 points based upon their evaluation of how and to what extent proposals exceeded the current plan's benefits and exclusions. Membership satisfaction surveys VSP performs member satisfaction assessments by mailing satisfaction questionnaires to every 25th patient. The Insurance Consultant's Revised Comparison notes this method of assessment of VSP. The scoring factors for Criterion No. 11 were as follows: Frequency of employee satisfaction Maximum points assessments Point of service +2 Monthly/quarterly +1 Semi-annually/annually 0 No assessments -2 VSP's methodology for satisfaction assessments does not fit neatly into any of the scoring factors itemized above. Inasmuch as VSP does have an assessment methodology, it would appear to be inappropriate to score it as a -2 on this criterion. Viewed on a frequency basis, a satisfaction assessment survey of every 25th patient would, depending on the number of patients seen, result in an assessment frequency more frequent than annually and perhaps as frequent as daily. Accordingly, it would appear to be within the discretion of the Insurance Committee members, depending on how they interpreted VSP's satisfaction assessment methodology, to have scored VSP on this criterion anywhere within a range from +0.1 points to +2 points. Proposers' experience/references Although Optiplan could not state exactly, it estimated that in excess of 200 employers receive Optiplan benefits. Volusia County, a reference provided by Optiplan, rated Optiplan "5-6" (on a ten point scale). Optiplan did not have a contract with a comparable size government group. Optiplan's proposal provided references indicating that it provides vision services to several HMO's with memberships of as high as 60,000. VSP has satisfactorily provided group vision care services to the School Board since October 1987. VSP also has contracts with 442 employers in Florida, including contracts to provide group Vision care to at least five other school boards in Florida. VSP's references gave it high ratings of "8-9" and "10." Local offices Optiplan has offices in Broward County. VSP clearly indicated in its proposal that its corporate headquarters are in Tampa. It clearly indicated that it had a Broward County office where its Group Representative or Account Executive for the School Board contract was located. VSP's administration and claims payment facility is located at its Tampa location. All materials provided to the Insurance Committee to be used in scoring proposals accurately stated the locations of VSP's offices. M/WBE RFP Component Prior to the due date for submission of proposals, the Insurance Committee discussed the M/WBE component of the RFP's and evaluation factors several times. The Insurance Committee discussed the M/WBE component of the health and vision care RFP's at length during the March 20, 1995, Insurance Committee meeting, which took place during the development process of the RFP's and prior to the issuance of the Group Vision Care RFP. The Committee was concerned that if the points available for the M/WBE component were inflated, proposers conceivably would subcontract with minority firms for questionable services, thus increasing costs. The discussion included comments that the past practice was to require insurance carriers to bid directly without agents and to furnish salaried service representatives for open enrollment and continuing in- house service. There had been a recent newspaper expose dealing with agent commissions within the county government group. At the April 18, 1995, meeting, the Insurance Committee voted to make the minutes of its March 20, 1995, meeting an addendum to the RFP's to clarify for proposers the concern and intentions of the Insurance Committee relating to evaluating the M/WBE component. In this way, the Insurance Committee clarified and/or amended the RFP to clearly provide that amount of remuneration was not the determinative factor for the M/WBE participation evaluation. M/WBE Workforce Environment The RFP requested proposers to complete a chart to provide employment statistics on the proposer's workforce. This chart provided for the submission of data from "Corporate, Home Office, Regional Office, Local Office." The chart did not limit proposers to supplying information only on Broward County Offices. VSP provided employee statistics as required by the RFP. It clearly identified that the statistics were for its "Corporate," "Home Office," and for its "Local Office." The "Local Office" was identified as a sales office with two non-Hispanic white males. VSP's minority statistics revealed that it has at least 80 percent women/minority employees in its offices. While VSP's administrative office is located outside of Broward County, it's offices have a high percentage of women/minorities as employees. M/WBE Participation The RFP requested proposers to "identify the M/WBE firm or firms who will be working with you on this engagement." The RFP also required proposers to Indicate . . . the extent and nature of the M/WBE's work with specificity, as it relates to Service Requirements detailed in Section III, including the percentage of total engagement cost/fee/commission which will be received by the M/WBE firm in connection with the work to be performed on this engagement. In response to the RFP M/WBE information request, Optiplan identified More Financial Services, Inc., as its M/WBE firm, and attached a document outlining the extent and nature of work that More Financial would be performing under the contract. More Financial was to receive 3 percent of all employee premiums. The amount of estimated remuneration to Optiplan's M/WBE firm was calculated to be approximately $47,163 per year for the life of the contract. VSP identified a printing firm as one of its M/WBE firms with total amount of remuneration to be "$17,568 (3 yr. estimate) depending on volume printed per job." VSP also identified More Financial Services, Inc., or McKinley Financial Services, Inc., as another M/WBE firm. It clearly indicated that it would be More Financial Services, Inc., or McKinley Financial Services, Inc. Either one of these companies, if selected as the M/WBE contractor, would perform the same services for VSP and would receive the same amount of remuneration. The estimated remuneration was stated to be "$31,200 (3 yr. estimate) based on 3/4 of 1 percent of annualized premium." By letter of July 6, 1995, Allen Garrett notified Richard Thomas, The School Board Benefits Director, that VSP had selected McKinley Financial Services, Inc. as the VSP M/WBE participant. The letter was copied to Anthony Gentile, Chairman, Insurance Committee. The extent and nature of work to be performed by More Financial Services, Inc., for either Optiplan or VSP, as stated in the Optiplan and VSP proposals, was the same. Mr. Collymore, President of More Financial Services, Inc., prepared the work statements which were included in the proposals of each of the three firms he contacted. After the June 9, 1995 scoring of the proposals and before the July 25, 1995 re-scoring, Mr. Collymore wrote to the Insurance Committee Chairman, Anthony Gentile, to "urge the Members of the Insurance Committee to use the total M/WBE dollar remuneration as the measure when allocating points based on remuneration." Mr. Collymore explained to the Insurance Committee that the actual work to be performed might be more. He provided examples of why the remuneration might be more for the different proposals. Mr. Collymore wrote the letter because there was a discussion on June 9, 1995, by Shelia Dudley of the EEO Office that the scope of work was the same for all the proposals, but the remuneration was different. Copies of Mr. Collymore's July 10, 1995, letter were passed out to Insurance Committee members at the July 25, 1995, meeting. Optiplan's selection as the contractor would be the most advantageous selection for Mr. Collymore due to the larger amount of remuneration. The RFP does not specify that proposers must provide the type of services which Mr. Collymore testified he would provide for Optiplan. VSP had discussions with minority vendors concerning the provision of services contingent upon an award of the group vision contract. VSP had contacted vendors and had estimated the amount of remuneration. After VSP was initially recommended for the award of the contract, it executed a Commission Agreement with McKinley Financial Services, Inc. The remuneration under this agreement was the same amount as quoted in the VSP proposal. Some general observations The evidence in this case is sufficient to show that at least a few of the members of the Insurance Committee made a few scoring decisions on the basis of mistakes in their understanding of the facts. Those few scoring decisions made on the basis of mistaken understanding of the facts have not been described in detail in these Findings of Fact because the impact of those few scores on the average scores is de minimus. If all of the average scores were to be recalculated to take into account the few scores that were proved to be based on mistake, there would be no significant change in the ranking of the parties. There were some scores by some members of the Insurance Committee that, on the record in this case, appear to be what can best be described as unexplained aberrations. Because they are unexplained, the evidence is insufficient to establish that these apparent aberrations were based on arbitrary considerations. It is possible they were merely honest mistakes. It is possible there is some logical explanation for some or all of the apparent aberrations, which explanation is not part of the record in this case because the members who made those scores were not called as witnesses or, if called, were not asked about those scores. Unexplained aberrations are an insufficient basis upon which to conclude that a bidding process is arbitrary.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the School Board enter a Final Order dismissing the Formal Written Protest filed by Optiplan, Inc. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 22nd day of December 1995. MICHAEL M. PARRISH, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of December 1995 APPENDIX The following are the specific rulings on all proposed findings of facts submitted by all parties: Proposed findings submitted by Petitioner: Paragraphs 1 through 8: Accepted in whole or in substance. Paragraph 9: Rejected as consisting of subordinate and unnecessary details and as not fully consistent with the greater weight of the evidence. Paragraphs 10 and 11: Accepted in substance. Paragraph 12: Rejected as consisting of subordinate and unnecessary details. Paragraph 13: Rejected as consisting of subordinate and unnecessary details and of argument. Paragraphs 14 through 19: Accepted in whole or in substance. Paragraphs 20 and 21: Rejected as subordinate and unnecessary details, or as irrelevant, because the Insurance Committee did not use the sub- classifications in Petitioner's Exhibit 3 during their re-scoring on July 25, 1995. Paragraph 22: Rejected as subordinate and unnecessary details and as, in any event, not fully consistent with the greater weight of the evidence. Paragraph 23: Rejected as consisting primarily of argument. Paragraph 24: The first two sentences of this paragraph are rejected as consisting of subordinate and unnecessary details. The last sentence is rejected as irrelevant because it is inconsistent with the scope of services described in the Optiplan response to the RFP. Paragraph 25: Rejected as consisting primarily of argument; specifically, argument which is inconsistent with the greater weight of the evidence. Paragraphs 26 through 28: Rejected as subordinate and unnecessary details or as irrelevant, because the Insurance Committee did not use the Dudley sub- classifications proposed in Petitioner Exhibit 3 when it scored the proposals on July 25, 1995. Paragraph 29: Rejected as consisting of subordinate and unnecessary details and as argument. Paragraph 30: Rejected as consisting of subordinate and unnecessary details and as not fully supported by the greater weight of the evidence. Paragraph 31: Rejected as consisting of subordinate and unnecessary details and as argument. Paragraph 32: Accepted. Paragraph 33: Accepted up to the word "organizations." The remainder is rejected as a proposed conclusion of law, rather than a proposed finding of fact. Paragraphs 34 through 39: Accepted in whole or in substance, with some unnecessary editorial comments deleted. Paragraph 40: Accepted in substance that Optiplan and More Financial Services had some form of understanding about the terms on which the latter would provide services if Optiplan received the subject contract. The evidence is insufficient to show that an enforceable contract was entered into. Paragraph 41: Accepted. Paragraphs 42 and 43: Rejected as contrary to the greater weight of the evidence; the cover letter is part of the response. Paragraphs 44 through 46: Accepted. Paragraph 47: Rejected as consisting of subordinate and unnecessary details. Paragraph 48: The portion from the beginning to the second comma is rejected as subordinate and unnecessary details. The remainder is accepted. Paragraph 49: Rejected as consisting of subordinate and unnecessary details. Paragraph 50: Rejected as consisting of subordinate and unnecessary details and as argument. Paragraph 51: Rejected as consisting of subordinate and unnecessary details. Paragraph 52: Rejected as argument. Paragraph 53: First sentence accepted in substance. The remainder is rejected as irrelevant; the RFP did not require contracts with proposed M/WBE firms. Paragraphs 54 through 57: Rejected as consisting of subordinate and unnecessary details or as irrelevant. Paragraph 58: First sentence accepted. The remainder is rejected as consisting of subordinate and unnecessary details. Paragraphs 59 and 60: Rejected as consisting of subordinate and unnecessary details or as irrelevant. Paragraph 61: Accepted. Paragraphs 62 through 64: Rejected as consisting of subordinate and unnecessary details or as irrelevant. Paragraph 65: Rejected as comprised primarily of argument, rather than proposed findings of fact. Paragraphs 66 and 67: Accepted in whole or in substance. Paragraphs 68 through 72: Rejected as consisting of subordinate and unnecessary details or as irrelevant in view of the re-scoring. Paragraph 73: Rejected as consisting of subordinate and unnecessary details about status of the record. Paragraphs 74 through 76: Accepted in whole or in substance. Paragraphs 77 through 81: Rejected as consisting primarily of argument and as, to the extent it proposes facts, as contrary to the greater weight of the evidence. Paragraph 82: Rejected as contrary to the greater weight of the evidence. Paragraph 83: Rejected as consisting of subordinate and unnecessary details which do not support the inference for which they are offered. Paragraph 84: Rejected as contrary to the greater weight of the evidence. Paragraph 85: Rejected as consisting of subordinate and unnecessary details or as irrelevant. Paragraph 86: Rejected as consisting of subordinate and unnecessary details and as not fully supported by the evidence. Paragraph 87: Rejected as argument and, to the extent it proposes facts, as being contrary to the greater weight of the evidence. Paragraph 88: Rejected as consisting of subordinate and unnecessary details or as irrelevant. Paragraph 89: Rejected as consisting primarily of argument. Paragraph 90: Rejected as consisting of subordinate and unnecessary details. Paragraph 91: First sentence is accepted in substance. Second sentence is rejected as contrary to the greater weight of the evidence; there were no thresholds in effect at the July 25 re- scoring of the M/WBE criteria. Paragraph 92: Rejected as argument; specifically, argument based on incorrect facts. Paragraph 93: Rejected as in part irrelevant and in part not fully supported by the persuasive evidence. Paragraph 94: Rejected as irrelevant because the description of the proposed services to be performed by More Financial Service is the same in the proposals submitted by Optiplan and VSP. Paragraphs 95 and 96: Rejected as argument; specifically, argument not supported by the greater weight of the evidence. Paragraph 97: Accepted in substance. Paragraphs 98 and 99: Rejected as consisting primarily of argument. Paragraphs 100 and 101: Rejected as primarily argument and as not fully supported by the persuasive evidence. Paragraphs 102 and 103: Rejected as primarily argument and as consisting of subordinate and unnecessary details. Paragraph 104: Rejected as argument. Paragraph 105: Rejected as consisting of subordinate and unnecessary details and as argument; specifically, argument in support of a conclusion that is not warranted by the greater weight of the evidence. Paragraph 106: Rejected as argument; specifically, argument in support of a conclusion not fully supported by the greater weight of the evidence. Paragraphs 107 through 118: Rejected as irrelevant because the issue to which the proposed facts relate was not raised with specificity in the formal protest. (Several of these paragraphs are also rejected as being primarily argument.) Paragraphs 119 through 132: Rejected as consisting of subordinate and unnecessary details and as argument not fully warranted by the greater weight of the evidence. Also rejected as irrelevant because the issue to which the proposed facts relate was not raised with specificity in the formal protest. Paragraphs 133 and 134: Accepted in substance. Paragraphs 135 through 147: Rejected as consisting primarily of argument regarding issues that were not raised with specificity in the formal protest. Paragraphs 148 through 150: Accepted in substance. Paragraph 151: First sentence accepted in substance. Second sentence rejected because the Insurance Committee members had discretion to award more or less than one point depending on their interpretation of VSP's satisfaction assessment methodology. Paragraph 152: Rejected as consisting of subordinate and unnecessary details. Also rejected as not fully supported by the evidence. Paragraph 153: Rejected as argument; specifically, argumentnot warranted by the greater weight of the evidence. Paragraphs 154 through 158: These paragraphs are rejected as consisting of subordinate and unnecessary details and as irrelevant because they address issues not raised with specificity in the formal protest. Paragraphs 159 through 174: These paragraphs are rejected for several reasons. First, they are irrelevant because the issue of whether Committee member Brown was biased against Optiplan was not raised in the formal protest. Second, even if relevant, most of the facts proposed would be subordinate and unnecessary details because Mr. Brown did not participate in the July 25 re- scoring of the proposals and the evidence is insufficient to show that Mr. Silvernale's scoring was tainted by Mr. Brown's attitude towards Optiplan or its representatives. Paragraphs 175 through 179: Rejected as irrelevant because the proposed facts relate to an issue that was not raised in the formal protest. Paragraphs 180 through 184: Rejected as irrelevant because the proposed facts relate to an issue that was not raised in the formal protest. Also irrelevant because the facts proposed, even if accepted, would not warrant the inference for which they are offered. Paragraphs 185 through 188: Accepted in substance that the evaluation factors were adopted after the responses to the RFP were distributed to the Committee members. The conclusion that this was in and of itself improper is rejected. Paragraphs 189 through 200: Rejected as consisting primarily of argument about the weight of the evidence, rather than proposed findings of fact. Paragraphs 201 through 216: Rejected as constituting primarily argument about legal issues or proposed conclusions of law, rather than proposed findings of fact. Proposed findings submitted by Respondent: Paragraph 1 (including its subparts) through 43: Accepted in whole or in substance. Paragraphs 44 and 45: Reject as being comprised primarily of legal argument or proposed conclusions of law, rather than proposed findings of fact. Paragraph 46: Accepted. Proposed findings submitted by Intervenor: Paragraph 1 through 23: Accepted in whole or in substance. Paragraph 24: Rejected as subordinate and unnecessary details. Paragraph 25 through 50: Accepted in whole or in substance. Paragraph 51: First sentence accepted. Second sentence rejected as irrelevant. Paragraph 52 through 67: Accepted in whole or in substance. Paragraph 68: Rejected as subordinate and unnecessary details. Paragraph 69 through 85: Accepted in whole or in substance. Paragraph 86: Rejected as an over-simplification or as subordinate and unnecessary details. Paragraphs 87 through 103: Accepted in whole or in substance. COPIES FURNISHED: Edward J. Marko, Esquire Broward County School Board 1401 East Broward Boulevard, Number 201 Post Office Box 4369 Ft. Lauderdale, Florida 33338 Mitchell Berger, Esquire Holiday Russell, Esquire Berger & Davis 100 Northeast 3rd Avenue Suite 400 Ft. Lauderdale, Florida 33301 Leonard A. Carson, Esquire Rosa H. Carson, Esquire Carson & Adkins 2873 Remington Green Circle, Suite 101 Tallahassee, Florida 32308 Frank R. Petruzielo, Superintendent Broward County School Board 600 Southeast 3rd Avenue Fort Lauderdale, Florida 33301-3125