The Issue The issue in this case concerns the application of Section 24.115(4), Florida Statutes, to a claim for payment of a $5,000.00 lottery prize where the winning lottery ticket was purchased by two individuals, one of whom has a substantial court-ordered child support arrearage, one of whom does not, and the prize claim form is submitted by the individual who owes child support. The Petitioners contend that only half of the prize should be subject to the outstanding child support debt. The Respondents contend that the entire prize should be subject to the outstanding child support debt. Shortly after the filing of the request for hearing in this case, the Office of the Comptroller filed a Motion To Join Indispensable Parties, by means of which it sought to join the Department of the Lottery and the Department of Health and Rehabilitative Services as parties to this case. Both of the last mentioned agencies agreed to being joined as parties and neither Petitioner objected to the joinder. Accordingly, the Department of the Lottery and the Department of Health and Rehabilitative Services were joined as parties respondent. At the hearing both Petitioners testified and also offered exhibits. The Respondents presented the testimony of several witnesses and also offered several exhibits. At the conclusion of the hearing, the parties were allowed ten days within which to submit proposed recommended orders. All parties filed post-hearing submissions containing proposed findings of fact. All proposed findings of fact are specifically addressed in the appendix to this recommended order.
Findings Of Fact Based on the testimony of the witnesses and the exhibits received in evidence at the hearing, I make the following findings of fact. Shortly after the Florida Department of the Lottery began selling lottery tickets, the two Petitioners, Lawrence R. Lindbom and Donald Johnston, began the regular practice of buying lottery tickets together. They agreed that they would make equal contributions to the cost of the lottery tickets and that they would share equally in the proceeds of any lottery prizes resulting from their co-purchased lottery tickets. On January 26, 1988, consistent with the foregoing agreement, Petitioner Lindbom purchased four instant game lottery tickets. Petitioner Johnston had contributed funds to pay half of the cost of the four tickets. Lindbom retained two of the tickets and gave the other two tickets to Johnston. At Johnston's place of employment, Lindbom scratched the two lottery tickets he had retained. One of the two was a $5,000.00 winning ticket. At the suggestion of some third party, Lindbom wrote his name on the winning ticket. He then showed the ticket to Johnston, and the other people present congratulated the two of them on their good fortune. The two Petitioners agreed that Lindbom would submit the ticket for payment in both of their names. On January 27, 1988, Lindbom traveled to the Jacksonville District Office of the Department of the Lottery, where he inquired about filling out a claim form in two names. He also inquired as to whether any money would be deducted from the prize. Upon being advised that only one name could be placed on the claim form and that no money would be deducted from the prize, Petitioner Lindbom called Petitioner Johnston to advise him of what he had been told at the Jacksonville District Office. Johnston told Lindbom to go ahead and file the claim in Lindbom's name and they would split the prize when it was received. Thereupon, Petitioner Lindbom filled out a Florida Lottery Winner Claim Form. The information he placed on the claim form included information about the lottery ticket and Lindbom's name, address, telephone number, and social security number. At the bottom of the claim form, Lindbom signed a printed statement reading as follows, in pertinent part. "Under penalty of law, I swear that to the best of my knowledge and belief, the name, address, and social security number correctly identify me as the recipient of this payment." The claim form and winning ticket were submitted to the Tallahassee office of the Department of the Lottery for validation and payment in accordance with that Department's procedures. The Department of the Lottery provided the Department of Health and Rehabilitative Services a list of $5,000.00 winners which contained the name of Lawrence Lindbom. DHRS determined from its records that there was an arrearage in child support payments by Lawrence Lindbom in the amount of $12,014.65. On February 1, 1988, DHRS certified the child support arrearage to the Department of the Lottery in accordance with Section 24.115(4), Florida Statutes (1987). On February 5, 1988, the Department of the Lottery forwarded the entire $5,000.00 claimed by Lindbom to the Office of the Comptroller of the State of Florida. On February 8, 1988, the Office of the Comptroller notified Lindbom by certified mail of its intention to apply the entire $5,000.00 prize toward Lindbom's unpaid court-ordered child support, with the result that no payment would be made to Lindbom. Following receipt of the letter from the Office of the Comptroller, Lindbom and Johnston jointly wrote a letter to the Comptroller protesting the proposed disposition of the prize and requesting a hearing. At all times material to this case, the Department of the Lottery had in effect Rule No. 53ER87-43, F.A.C., titled "Procedure for awarding prizes." That rule reads as follows, in pertinent part: (6) Until such time as a name is imprinted or placed upon the back portion of the lottery ticket in the designated area a lottery ticket shall be owned by the physical possessor of such ticket. When a name is placed on the rear of the ticket in the designated place, the person whose name appears in that area shall be the owner of the ticket and shall be entitled to any prize attributable thereto.
Recommendation For all of the foregoing reasons, it is recommended that the Office of the Comptroller issue a final order in this case providing for payment to the Department of Health and Rehabilitative Services of the entire $5,000.00 prize originally claimed by Petitioner Lindbom. DONE AND ENTERED this 9th day of June, 1988, at Tallahassee, Florida. MICHAEL M. PARRISH, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9th day of June, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-1176 The following are my specific rulings on all proposed findings of fact submitted by all parties. Findings proposed by the Petitioners The Petitioners' proposal consisted of a letter in which they assert three specific reasons that entitle them to the relief sought. The factual aspects of those three reasons are addressed below. The legal aspects have been addressed in the conclusions of law. Reason 1. Accepted as finding of fact. Reason 2. Rejected as subordinate and unnecessary details. Reason 3. Rejected as constituting argument rather than facts. Findings proposed by the Respondents The Respondents filed a joint proposed recommended order. The paragraph references which follow are to the paragraphs of the Findings of Fact section of the Respondents' proposed recommended order. Paragraphs 1 and 2) Accepted in substance, with the exception of the implication that the Petitioners were not co- purchasers of the lottery tickets. Paragraph 3: First sentence accepted. Second sentence rejected as inconsistent with the evidence. Paragraphs 4, 5, 6, and 7: Accepted. Paragraph 8: Omitted as unnecessary procedural details covered by introduction. Paragraph 9: Accepted. Paragraph 10: Accepted in substance. First unnumbered paragraph following Paragraph 10: Rejected as constituting subordinate and unnecessary details. Second unnumbered paragraph following Paragraph 10: Accepted. Third unnumbered paragraph following Paragraph 10: Rejected as irrelevant. Fourth unnumbered paragraph following Paragraph 10: Rejected as irrelevant or subordinate and unnecessary details. Fifth unnumbered paragraph following Paragraph 10: First sentence accepted. The reminder is rejected as argument rather than proposed findings of fact. COPIES FURNISHED: Mr. Lawrence R. Lindbom 3542 Tiara Way, West Jacksonville, Florida 32217 Mr. Donald Johnston 12888 Beaubien Road Jacksonville, Florida 32225 Jo Ann Levin, Esquire Senior Attorney Office of the Comptroller The Capitol, Suite 1302 Tallahassee, Florida 32399 Chriss Walker, Esquire Department of Health and Rehabilitative Services 1317 Winewood Blvd. Tallahassee, Florida 32399-0700 Thomas A. Bell, Esquire Department of Lottery 250 Marriott Drive Tallahassee, Florida 32301 The Honorable Gerald Lewis Comptroller The Capitol Tallahassee, Florida 32399-0350
Findings Of Fact Petitioner, Carolyn K. Peterson, entered a drawing held by Respondent, Department of Business Regulation, Division of Alcoholic Beverages and Tobacco (Division), on September 12, 1984, for priority entitlement to apply for one of thirteen new quota alcoholic beverage licenses to be issued for Seminole County. Peterson initially was not successful, having been ranked 15. Later, three applicants selected in the September 12 1984, drawing failed to qualify or file a proper application. By letter dated January 25,1985, the Division notified Peterson that her ranking now entitled her to apply For licensure. The January 25, 1985, letter informed Peterson "you must file a full and com- plete application within 45 days of the date of this letter pur- suant to Rule 7A-2.17, Florida Administrative Rule." The letter also notified Peterson: "Failure to file your complete application within such 45 day period will be deemed a waiver of your right to file for the new quota license." The Division consistently follows Rule 7A-2.17. On February 4, 1985, Peterson and her husband went to the Division's Orlando office to inquire concerning application for licensure. Peterson's husband, who had experience in applying for quota alcoholic beverage licenses, inquired whether it was necessary to jump through the procedural hoop of having a location selected and reflected in the application only to put the resulting license in escrow while seeking a more suitable license location within 180 days. The Division's representative, former employee Carolyn Thompson, responded that applicants no longer had to jump through that procedural hoop but could leave the designation of the location of the license blank on the initial application so long as a suitable location was selected and the application updated within 180 days. Thompson partially typed the application forms for Peterson, duplicated them so that Peterson could file the completed application in duplicate as required, and kept a copy for the Division's files. Thompson also gave Peterson, and kept a copy of, an instruction form for completion of Peterson's application. Thompson did not explicitly tell Peterson or her husband that Peterson could file the completed application after the expiration of the 45 day time limit. The Petersons confused the 45-day deadline for filing a full and complete application with the 180-day deadline for obtaining an appropriate location and zoning approval. As a result, the Petersons misunderstood and believed that the application was not required to be completed and filed within 45 days. After the February 4, 1985 meeting, the Petersons inquired about the process of finding a suitable location with suitable zoning. Meanwhile, they let the 45-day time limit ex- pire without filing a full and complete application.
Recommendation Based on the foregoing Findings Of Fact and Conclusions Of Law, it is RECOMMENDED that Respondent, Department of Business Regulation, Division of Alcoholic Beverages and Tobacco, deny the application of Petitioner, Carolyn K. Peterson, for a quota alcoholic beverage license. RECOMMENDED this 9th day of May, 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 9th day of May, 1986. COPIES FURNISHED: Ms. Carolyn K. Peterson 797 Pinetree Road Winter Park, Florida 32789 Thomas A. Klein, Esquire Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301 Thomas A. Bell, Esquire General Counsel. Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301 Howard M. Rasmussen, Director Division of Alcoholic Beverages and Tobacco 725 South Bronough Street Tallahassee, Florida 32301 James Kearney, Secretary Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301 APPENDIX To the extent Petitioner's written final argument contains proposed findings of fact, they are rejected as contrary to the greater weight of the evidence and the Findings of Fact. Respondent's proposed findings of fact 1 through 5 are accepted, but 4 is subordinate and 5 is unnecessary.
The Issue The issue in this case is whether Respondent should apply $5,000 won by Petitioner in the Florida Lottery toward child support and costs owed by Petitioner pursuant to Section 24.115(4), Florida Statutes (1997). (All chapter and section references are to Florida Statutes (1997) unless otherwise stated).
Findings Of Fact On November 7, 1997, the Circuit Court for the Seventh Judicial Circuit, in and for Volusia County, Florida (the "Circuit Court") entered a Final Judgement on Custody (the "Final Judgment"). The Circuit Court awarded custody of the minor child to Petitioner's ex-wife and ordered Petitioner to pay child support of $485.46 on the first day of each month. Petitioner failed to pay child support in accordance with the Final Judgement. Respondent brought an action to enforce the Final Judgement. On February 10, 1999, a Child Support Hearing Officer for Respondent entered a Report and Recommendation of Hearing Officer on Contempt (the "Contempt Report") determining that Petitioner owed an arrearage in the amount of $8,279.81. The Contempt Report required Petitioner to make timely payments of his monthly obligation for child support in the amount of $485.46 and to make a lump sum payment of $1,000 on or before March 12, 1999, to "purge" himself of contempt. An Income Deduction Order required Petitioner to pay child support of $485.46 each month to the clerk of the court. Petitioner filed a Notice of Exceptions to the Contempt Report and Income Deduction Order. On March 29, 1999, the Circuit Court conducted an emergency hearing to consider Petitioner's exceptions, to direct the Department of Revenue to Release Lottery Funds, and to consider Petitioner's motion to strike the paragraph in the Contempt Report requiring Petitioner to make a lump sum payment of $1,000. The Circuit Court granted Petitioner's Notice of Exceptions and struck the paragraph requiring Petitioner to pay $1,000 on or before March 12, 1999. The Circuit Court also ordered the release of Petitioner's lottery prize to his ex-wife to satisfy part of the arrearage Petitioner owes for child support. In relevant part, the Circuit Court stated: 2. That the [Petitioner'] lottery funds shall be released over to the [ex-wife] . . . . That the Department of Revenue is hereby ordered to release these funds directly to the [ex-wife] in an expedited manner as she is in dire need of said funds. On July 21, 1999, Respondent conducted an audit of the file and determined that Petitioner made some payments between February 10, 1999, and July 21, 1999. As of July 21, 1999, the arrearage of child support and costs owed by Petitioner was $7,395.09. Petitioner submitted no evidence that he has satisfied the arrearage in the amount of $7,395.09. Petitioner argues that he has appealed the order of the Circuit Court authorizing Respondent to disburse Petitioner's lottery prize directly to Petitioner's ex-wife and that DOAH is without jurisdiction.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a Final Order finding that Petitioner owes an outstanding obligation for child support in the amount of $7,395.09, through July 21, 1999, and applying the lottery prize to reduce the outstanding obligation of $7,395.09. DONE AND ENTERED this 2nd day of September, 1999, in Tallahassee, Leon County, Florida. DANIEL MANRY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 2nd day of September, 1999. COPIES FURNISHED: Larry Fuchs, Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100 Linda Lettera, General Counsel Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100 Chris Walker, Senior Attorney Department of Revenue Post Office Box 8030 Tallahassee, Florida 32314 Ubangi Hajj-Mak Post Office Box 269 2208 Southwest Road Sanford, Florida 32772-0269 Sue M. Cobb, Interim Secretary Department of Lottery 250 Marriot Drive Tallahassee, Florida 32301 Ken Hart, General Counsel Department of Lottery 250 Marriott Drive Tallahassee, Florida 32301
The Issue The State of Florida, Department of Lottery, (the Lottery), received responses to its request for proposals to provide for a gaming system and services for the Lottery, RFP No. 95/96-001/R (the RFP). GTECH Corporation (GTECH) and Automated Wagering International, Inc. (AWI) were respondents to the RFP. The respondents did not contest the Department's determination under Part I finding GTECH and AWI preliminarily responsible and responsive vendors in that the vendors had shown financial responsibility, security and integrity. The Lottery then considered the responses by GTECH and AWI to Part II, the technical proposals by the vendors. Part II also examined responsiveness, responsibility, financial responsibility, security, and integrity. Subsequently the Lottery determined to commence negotiations for the award of a contract to provide the gaming system and services called for in the RFP. AWI was the proposed awardee based upon higher scores it received in competition with GTech under Part II. GTECH opposes the decision to award a contract to AWI. In its challenge GTECH contests the proposed agency action to award to AWI based upon a claim that AWI is not a responsive or responsible bidder to Part II. GTECH also contests the manner in which the Lottery performed its evaluation to determine the proposed awardee based upon scores assigned for Part II, assuming that AWI was determined to be a responsive and responsible bidder. Finally, GTech challenges the Lottery proposed decision finding AWI financially responsible. The hearing de novo was conducted to determine whether the Department's proposed agency action was contrary to its governing statutes, rule or policies or specifications in Part II. This recommended order examines whether the proposed agency action as challenged by GTECH was clearly erroneous, contrary to competition, arbitrary or capricious. Section 120.57(3)(f), Florida Statutes (1996 Supp.).
Findings Of Fact The Lottery was created to implement the purposes of s. 15, Art. X of the Florida State Constitution to raise additional monies to provide for education through its operation of lottery games. The Lottery's responsibilities are described in Chapter 24, Florida Statutes. Included among its opportunities is the right to enter into contracts for the purchase, lease, or lease- purchase of goods or services necessary to carry out its function. Section 24.111, Florida Statutes (1996 Supp.). GTECH and AWI are foreign corporations authorized to do business in Florida. AWI is a wholly-owned subsidiary of Video Lottery Technologies, Inc., (VLT). The companies are engaged in the provision of goods and services as described in Section 24.111, Florida Statutes (1996 Supp.). AWI is the current provider of goods and services to the Lottery common to those sought by the RFP. OVERVIEW OF THE RFP The Lottery issued RFP No. 95/96-001/R entitled Request for Proposal for a Gaming System & Services for the Florida Lottery. GTECH and AWI submitted proposals. The RFP was divided into Parts I and II. Part I addressed the requirements that the proposers establish financial responsibility, security and integrity as contemplated by Section 24.111, Florida Statutes. Part II addressed management requirements, technical specifications, operations and security, marketing, Certified Minority Business Enterprise requirements (CMBE) and price proposals of the respective vendors. The Lottery issued Part II on September 29, 1995. GTECH and AWI submitted their proposals for Part II on December 15, 1995, together with supplemental information in response to Part I. On May 7, 1996, the Lottery issued its "Notice of Responsiveness and Notice of Responsible Respondents". The Lottery found both GTECH and AWI to be responsive and responsible offerors as contemplated by the requirements in Part I. No challenge was made to the agency decision related to Part I. There had been a challenge to the specifications set forth in Part I, which was later resolved. This intervening challenge caused a delay in opening of the responses to Sections 1 through 5 to Part II. The responses by GTECH and AWI were opened on August 23, 1996. But the cost proposals in response to Part II were sealed and not opened until all other responses to the remaining sections to Part II had been evaluated and scored. The vendors also submitted information in response to Part II, Section 6, calling for a commitment to provide services in accordance with the CMBE Program. That program calls for the commitment to use a percentage of services by CMBEs in delivering the goods and services through the principal contractor. On October 31, 1996, the Lottery issued its notice of award, responsiveness and responsibility declaring AWI to be the highest ranked vendor. Based upon this notice the Lottery intended to award a contract to AWI contingent upon the ability to successfully negotiate a contract with AWI to deliver the goods and services called for in the RFP. In arriving at its proposed decision the Lottery relied upon an evaluation committee to evaluate and score responses to Part II, Sections 2 through 5. Scoring for Part II, Sections 6 and 7 was performed by other persons employed by the Lottery not associated with the evaluation committee. Following receipt of notice of the proposed agency decision to award to its competitor, GTECH filed a formal written protest and petition for formal administrative hearing with the Lottery. The filing date was November 5, 1996. In its protest GTECH challenged the preliminary decision by the Lottery in many particulars. Eventually the case was referred to the Division of Administrative Hearings to conduct a hearing consistent with Section 120.57(1), Florida Statutes (1996 Supp.). While the case was pending before the Division of Administrative Hearings GTECH was allowed to file an amended formal written protest and petition for formal administrative hearing. Given the nature of the challenge to the proposed agency action, some attention is devoted to the terms in Part II that describe the manner in which the vendors must provide information in their proposals and the Lottery shall evaluate that information in deciding between competing proposals. Part II, Section 1 is entitled: PURPOSE AND GENERAL INFORMATION. Subsection 1.1, INTRODUCTION, states: This request for proposal ("RFP") has been issued by the Florida Department of Lottery ("Lottery") to obtain sealed proposals for Gaming System and Services. This is a Major Procurement as defined in Section 24.103, Fla. Stat. * * * Sections 2, 3, 4 and 5 of this RFP, Part II, define the gaming system and services that the Lottery requires in terms of the desired outputs (i.e. functions, game style, reports). Section 6 [sic] requires each Respondent to provide a price proposal for providing and operating the total system. . . . The Lottery reserves the right to select the proposal(s) or concept that is in the best interest of the State, and 'provides the greatest long-term benefit to the State with respect to the quality of the products or services, dependability and integrity of the vendor(s), dependability of the vendor's products or services, security, competence, timeliness, and maximization of gross revenues and net proceeds over the life of a contract' Chapter 24.105(14), Fla. Stat. Respondents who are determined to be responsive and responsible pursuant to RFP Part I, and whose technical proposals under RFP Part II are determined to be responsive to the requirements of RFP Part II, will have their technical proposals submitted to an evaluation committee for evaluation. Thereafter, price proposals will be opened, responsiveness determined, tabulated and points awarded as provided herein. Contracts negotiations may then be commenced with the Respondent with the highest overall score. Part II, Subsection 1.2 LOTTERY OBJECTIVES, states the purpose of the solicitation: . To obtain a gaming system and related services to meet the needs of the Lottery for the term of the contract. . To obtain a gaming system and related services that are operationally sound, incorporate a high level of integrity and security, and minimize risks to the Lottery. . To convert retailer terminals to the new gaming system. Part II, Subsection 1.3 GLOSSARY OF TERMS, includes the following definitions: Responsible Respondent - A Respondent judged by the Lottery to be fully capable of providing the services required, considering security, integrity and financial condition. Responsive Proposal - A proposal submitted which conforms in all material respects to the RFP. Part II, Subsection 1.7 TIMETABLE, states, in part: Part II technical proposals will remain sealed until the Lottery makes a determination of responsiveness and responsibility of the RFP Part I submissions and posts a notice accordingly. After the notice has been posted, the Lottery will open the Part II technical proposals. The weights to be accorded to the evaluation criteria will be announced and posted prior to the opening of the technical proposal. The Lottery will make a determination of RFP Part II technical responsive proposals and responsible Respondents. Responsive technical proposals of responsible Respondents will be presented to an Evaluation Committee to evaluate and score in accordance with the criteria as specified herein. During evaluation of technical proposals, the Evaluation Committee may, at its sole discretion, require oral presentations or demonstrations as described in Section 3.11, of all responsible Respondents who submitted responsive technical proposals. Part II, Subsection 1.18, MANDATORY REQUIREMENTS, states: The Lottery has established certain mandatory requirements which must be included as part of any proposal. The use of the terms "shall", "must" or "will" (except to indicate simple futurity) in this RFP indicate a mandatory requirement or condition. The words "should" or "may" in this RFP indicate desirable attributes or conditions, but are permissive in nature. Deviation from, or omission of, such a desirable feature will not by itself cause rejection of a proposal. Part II, Subsection 1.19, NON-RESPONSIVE PROPOSALS, NON-RESPONSIBLE RESPONDENTS, states: Proposals that are deemed non-responsive and proposals that are submitted by non- responsible Respondents will be rejected. A non-responsive proposal is one that does not meet all material requirements of the RFP. Material requirements of the RFP are those set forth as mandatory or without which an adequate analysis and comparison of proposals is impossible, or those which affect the competitiveness of proposals or the cost to the State. The Lottery reserves the right to determine which proposals meet the material requirements of this RFP. A non-responsible Respondent is one who fails to demonstrate financial responsibility, security and integrity. * * * Subsection 1.20, SUBMITTAL REQUIREMENTS, states in part: Technical Proposal The Respondent must completely describe, in detail, the Respondent's methodology, equipment, software, and the benefits of using the Respondent's system and the proposed communications network. The technical proposal shall support the Respondent's basic capability to convert/implement, operate, and maintain the proposed system. CMBE Proposal The Respondent shall submit its CMBE utilization proposal in format of Attachment "C" to this RFP. The CMBE utilization proposal shall not be submitted in any other format. The CMBE utilization proposal must be separately sealed. Subsection 1.21 ACCEPTANCE OF PROPOSALS BY THE LOTTERY, states in part: . . . The Lottery may reject any proposal if it is conditional, incomplete, fails to meet mandatory requirements, or contains any irregularities. The Lottery may cancel the RFP if it is deemed by the Lottery to be in its best interest. Issuance of this RFP in no way constitutes a commitment by the Lottery to award a Contract. Subsection 1.35 CHANGE OF FINANCIAL CONDITIONS, states: If a Respondent who has submitted a proposal in response to this RFP experiences a material adverse change in financial condition prior to the award of the Contract or if the Contractor experiences a material adverse change in financial condition during the term of the Contract with the Lottery, the Contract Manager must be notified in writing at the time the change occurs. Part II Subsection 1.46, ADDITIONAL INFORMATION AND COMMENTS, states: The Lottery reserves the right to request additional information from the Respondent in order to make a thorough review and fair comparison of all proposals submitted. Part II, Section 2 is entitled: MANAGEMENT REQUIREMENTS. Subsection 2.1, EXPERIENCE OF RESPONDENT, states in part: The Respondent shall describe in detail its experience and that of its substantial subcontractors in operating lottery on-line games and instant ticket gaming systems. . . Subsection 2.1 goes on to describe the specific information required to comply with the statement of experience called for in the subsection. Part II, Section 3 is entitled: TECHNICAL REQUIREMENTS. Within Part II, Section 3 is Subsection 3.1, PURPOSE AND INTRODUCTION, which states in part: The requirements that follow represent the Lottery's current and planned business practices. . . . These Lottery gaming system and services include: . On-line games; . Instant ticket validation and accounting; . Primary and back-up computer system and facilities; and . Repair, maintenance, and updates of equipment and software. Each Respondent must describe and discuss in detail its proposed solution to each of the requirements. The Lottery is interested in realizing the benefits of new mainstream technology. The Respondent is to describe clearly what benefits its systems derive from new mainstream technologies and how these benefits will be delivered by these systems, wherever applicable. Because this RFP contemplates a contractual relationship with the Contractor to achieve the common goal of maximizing the long-term proceeds from the Lottery going to education in the State of Florida, the Respondent shall describe any additional or alternative functionality which it can offer in setting this goal. Respondent shall at a minimum offer to provide any lottery gaming systems, equipment, games or play styles that it provides or offers to provide to any other Lottery. Included within the Part II, Section 3, TECHNICAL REQUIREMENTS are the broad categories of systems and equipment to be proposed. This includes Subsections 3.2 SYSTEM CONFIGURATION REQUIREMENTS, 3.3 COMMUNICATIONS NETWORK REQUIREMENTS, 3.4 TERMINAL REQUIREMENTS, 3.5 ONLINE TICKET AND GAMING REQUIREMENTS, 3.6 INSTANT TICKET GAMING REQUIREMENTS, 3.7 INTEGRATION WITH LOTTERY SYSTEMS, 3.8 REPORTING REQUIREMENTS, 3.9 SOFTWARE QUALITY REQUIREMENTS, 3.10 ACCEPTANCE TEST REQUIREMENTS and 3.11 PRESENTATION OF THE PROPOSED SYSTEM. Under Subsection 3.2 SYSTEM CONFIGURATION REQUIREMENTS is found 3.2.1 General System Requirements, which states in part: The Respondent must propose a system capable of meeting the Lottery's current needs and expanding to meet the Lottery's needs as they expand throughout the term of the contract. . . . * * * All the computers, peripherals, terminals and communications equipment proposed by the Respondent must be new and reflect current technology. Under the SYSTEM CONFIGURATION, 3.2.6 describes System Performance as: The Contractor's system must provide at a minimum, the following levels of system performance at all times during the life of the Contract . Throughput of one hundred-fifty thousand (150,000) transactions per minute continuously. . Each single play ticket must be produced in no more than four (4) seconds from completion of data entry ("send" button is pressed or play slip is inserted) to completion of the ticket printing (cut). . Variable length, multi-play [up to ten (10) panels] tickets must be produced within six (6) seconds after completion of data entry. . Validation of on-line and instant tickets within five (5) second after the ticket is read (for dial-up transactions, the clock starts after the communications session is established). . Cancel tickets within five (5) seconds after the ticket is inserted. . Process inventory transactions within five (5) seconds after the completion of data entry. . Dial-up terminals should complete dialing and establish a communications session in twenty (20) seconds or less. Within Subsection 3.3 COMMUNICATIONS NETWORK REQUIREMENTS is 3.3.2 Design Requirements which states: The Network Design Requirements include, but are not limited to the following: * * * The specific requirements are then detailed. Under Subsection 3.4 TERMINAL REQUIREMENTS is set forth 3.4.1 Retailer Terminals which describes the number of on-line and instant ticket retail terminals contemplated for delivery at various intervals within the contract period. Within the description of requirements for retailer terminals are eighty specific categories of features that are identified as “MANDATORY REQUIREMENTS TERMINAL FUNCTION/CHARACTERISTICS” which pertain to on-line and instant ticket retailer terminals, but not in all instances. Under 3.4.1 Retailer Terminals prior to the language “Mandatory Requirements Terminal Function/Characteristics” the vendors are instructed that: . . . The Respondent must indicate and describe its ability to meet each mandatory requirement. The Respondent shall also describe any additional features which are available. There is a description at 3.4.2 MANAGEMENT TERMINALS which details the numbers of management terminals to be provided. About these terminals it is stated: All management terminal workstations must be a new manufacture using the most current technology and possess the following features and capabilities. It then describes the specific requirements for features and capabilities. Other provisions within Section 3 describe specific requirements for minimum compliance with the terms of the RFP, for example, 3.6.13 Retailer Terminal Functions-Instant Ticket System states that: The instant ticket functionality of the retailer terminals must include, at a minimum: This is followed by the requirements envisioned by Part II. It can be seen that the provisions include both minimum requirements and the expectation that the proposals in response to the RFP may contain additional features that exceed the minimum expectations and alternative features. Within Subsection 3.11 PRESENTATION OF THE PROPOSED SYSTEM is 3.11.1 Technical Support which states in part: The Lottery requires that all equipment and software proposed at a minimum, be capable of a demonstration which indicates the Respondent's ability to meet or exceed the Lottery's requirements for a Lottery gaming system(s). Evidence of the Respondent's technical ability and its capability to implement Lottery games functions is expected. It is desired that every software item in the proposed configuration currently be operational in some lottery setting. However, hardware products proposed must be in manufacture or ready for manufacture and delivery to customers. The demonstration(s) may consist of an on- line gaming simulation at one of the Respondent's operations facilities, or presentations at some other appropriate and mutually agreeable venue. The Lottery will allow a maximum of one (1) business day, exclusive of travel, for the Respondent's demonstration. The Respondent must include in the proposal the recommended site to be used for demonstration(s). The Lottery reserves the right to require additional or extended site visits. The items to be demonstrated are not limited in any way; however, the following areas should be included: The RFP goes on to describe what must be demonstrated. Again, it is anticipated that the vendors must meet but can exceed the Lottery’s requirements for the Lottery gaming systems and offer alternatives. Part II, Section 4 is entitled: OPERATIONS AND SECURITY. It includes Subsections 4.1 CONSUMABLE SUPPLIES, 4.2 FACILITIES, 4.3 FIELD OFFICES, 4.4 FIELD SERVICE, 4.5 SUPPORT SERVICE, 4.6 CORPORATE SUPPORT AND CAPABILITIES, SUBSECTION 4.7 “RETAILER HOTLINE” SERVICES, 4.8 SECURITY, 4.9 BUSINESS RECOVERY, 4.10 INCIDENTS AND ANOMALIES, 4.11 OFF-SITE DATA STORAGE REQUIREMENTS AND 4.12 CONVERSION PLAN. Part II, Section 5 is entitled: MARKETING REQUIREMENTS. Within Section 5, Subsection 5.1 MARKETING SUPPORT, states in part: . . . [t]he respondent shall describe its experience with lottery marketing programs and the type of support the Contractor proposes to provide the Lottery. Subsequent subsections within Section 5 discuss the vendor’s need to describe the proposed development of on-line lottery games, promotions at the retailer terminal, remote sales and training for retailers and lottery staff. Part II, Section 6 is entitled: CERTIFIED MINORITY BUSINESS ENTERPRISE UTILIZATION. That section makes it incumbent on the vendors to propose the use of ten percent (10%) CMBEs. The vendors could get credit for an additional ten percent (10%) CMBEs in scoring their respective proposals. Section 6 states in part: The Contractor will be required to annually expend to CMBE's during the life of the Contract a minimum of ten [percent (10%) of the compensation paid to the Contractor by the Florida Lottery. Each Respondent will provide as part of its technical proposal a CMBE Utilization Plan. The plan shall be clear, direct, and unambiguous, show an appropriate understanding of its purpose, and include: . An unequivocal commitment to a definite percentage of expenditure of funds to State of Florida CMBEs; . Identification of type of goods and services utilizing CMBE utilization; . Identification of each CMBE to be utilized (Provide copy of current Minority Commission certificate or application); . A full range of strategies to ensure maximum minority utilization; and . Identify the amount projected to be paid to each CMBE. Each Respondent shall ensure that the amount of its price proposal cannot be deduced by calculation from the details of its CMBE utilization plan. * * * A respondent may receive up to five (5) bonus points for proposing a CMBE utilization percentage that exceeds the required ten percent (10%) minimum of the Contractor's compensation to be paid to CMBEs. One (1) bonus point will be awarded for each two percent (2%) increment that exceeds the ten percent (10%) minimum for up to five (5) bonus points. Any partial percentage proposed which is less than a two percent (2%) increment will not receive a point award. Additional CMBE utilization shall be proposed on Attachment "C" hereto. In computing percentages, the Respondent is to assume annual on-line sales of one billion seven hundred ten million and five hundred fourteen thousand dollars ($1,710,514,000.). Attachment “C” was provided to the vendors in the following format: [Name of Respondent] will expend annually at least percentage of compensation to CMBEs, above the required ten percent (10%). Identified below are the names and addresses of the CMBEs to be utilized and the types of services to be performed. Part II, Section 7 entitled: PRICE PROPOSAL explains the manner in which the vendors should analyze, prepare and quote the proposed price as a percentage of net on-line sales. Attachment “B” which is referred to in Section 7 breaks out those percentages for the five years contemplated by the contract and the two renewal terms which are two years each. The formula for scoring the price proposals is detailed in Subsection 8.4 EVALUATION OF PRICE PROPOSALS which states: After the technical evaluation process has been completed, the price proposals will be opened and future year's prices will be reduced to present value. Points for the qualifying price proposals will be assigned based strictly on the formula detailed below. LC/PC Weight = Score Where: Weight = twenty percent (20%). LC = The lowest cost offered in any proposal being evaluated. PC = The cost offered in proposal being scored Although Attachment “B” carries forward the percentage estimate for net on-line sales through the two renewal terms, the Lottery in response to a question posed by GTECH stated that only the base five years in the original contract would be considered in scoring the price proposals. In fact, when the price proposals were evaluated and scored the Lottery took all nine years into account. The Lottery changed its approach based upon requirements set forth in Section 287.057(2), Florida Statutes, that makes it necessary for the agency to consider the entire price proposal by a vendor for all periods. In reliance upon the answer to its question GTECH submitted its price proposal believing that only the first five years would be used to evaluate its price proposal. Part II, Section 8 is entitled: EVALUATION. It explains in a limited manner the nature of the process to determine the winner in the competition for the contract. Subsection 8.1 INTRODUCTION states in part: The Lottery will conduct a comprehensive, fair and impartial evaluation of responsive proposals of responsible Respondents. To make this determination, an evaluation committee will be established to evaluate the management, technical, operations/security, and marketing proposals. The purpose of the evaluation committee will be to review the proposals and assign point values to each of the scoring criteria. The evaluation process may include the following phases: . Examination for compliance with proposal submission requirements and the contractual provisions. . Evaluations of Technical, Management, Operations/Security, and Marketing requirements. . On-site inspections and demonstrations. . Evaluation of the Price Proposal. . Evaluation report and recommendation. . . Subsection 8.2 EXAMINATION FOR COMPLIANCE states: The purpose of this review is to determine if each proposal has complied with RFP instructions, and is responsive. Proposals that do not satisfy the mandatory requirements or that are so incomplete as to preclude evaluation, will be rejected. Further 8.3 EVALUATION OF PROPOSALS states: The following proposal Sections will be evaluated: Management Proposal (Section 2) - weight fifteen percent (15%) - Consideration will be given, but not limited, to the following elements: . Respondent's relevant experience . Respondent's relevant disclosures Technical Proposal (Section 3) - weight forty percent (40%) - Consideration will be given, but not limited, to the following elements: . Terminal Capability (On-Line and Instant) . On-Line System Capability . Instant Ticket System Capability . Gaming Software Operations/Security Proposal (Section 4) - weight fifteen percent (15%) - Consideration will be given, but not limited, to the following elements: . Facilities Management Capability . Security Plan . Business Recovery Plan . Conversion Plan Marketing Proposal (Section 5) - weight ten percent (10%) - Consideration will be given, but not limited, to the following elements: . Marketing Support Proposal . Respondent's Relevant Experience in Game Development and Enhancement . Terminal Promotions . Training The weight factors assigned represent a portion of 100 hundred percent (100%). The scores assigned to each Section under Section 8.3 will be totaled and added to the score assigned under Section 8.4 and 8.5 to arrive at a total score for each proposal. Subsection 8.5 EVALUATION OF CMBE PROPOSALS states: The bonus points to be awarded each Respondent will be determined in accordance with Section 6. Subsection 8.6 TOTAL SCORE states: The total score for each Respondent shall be the sum of the scores determined in Sections 8.3, 8.4, and 8.5 above. The Respondent with the highest score will be ranked as the preferred source. The maximum total score will be one hundred and five (105) points: eighty (80) points for technical, twenty (20) points for price, and five (5) bonus points for CMBE utilization. Within Subsection 8.7 RECOMMENDATION AND NEGOTIATION is 8.7.1 Recommendation which states: Upon completion of the evaluation and scoring, the Evaluation Committee shall rank the proposals in the order of preference deemed to be the most highly qualified to perform and provide the requested gaming system and services. The ranking will be provided to the Contracting Officer. EVALUATION CHECKLIST AND OTHER DETAILS In addition to the explanations given in the RFP which have been detailed concerning proposal requirements and evaluation methods, the Lottery provided each evaluator of the evaluation committee with a form referred to as a “Gaming System and Services Evaluation Checklist.” This form was intended to assist the evaluators in performing their duties. In its introduction the evaluation checklist states: The technical proposals are to be evaluated based upon the criteria set forth in the RFP. They are not to be evaluated based on criteria not set forth in the RFP. Each and every criterion expressed in the RFP is to be applied by all members of the Evaluation Committee to each proposal considered. In each scored area, award points available corresponding to: Outstanding A percentage of points which is 81-100% of points Good 61-80% of points Fair 41-60% of points Poor 0-40% of points The evaluation checklist then contained a summary of the various sections to be evaluated by the evaluators with a line provided for the entry of scores for those sections under consideration. To further assist the evaluators, information was provided which established the range of points that could be awarded for each section depending upon whether the assessment led to the conclusion that the proposal was outstanding, good, fair or poor in relation to a specific section. For example, Section 2 carried a maximum of fifteen points. Therefore, outstanding would be 12 to 15 points, good 9 to 12 points, fair 6 to 9 points and poor 0 to 6 points. In the final analysis the evaluators used the evaluation checklist to record points for those sections that they were responsible for evaluating, Sections 2 through 5. The overall method of the establishment of scores for the respective sections to Part II comports with the requirement at Subsection 1.7 E that weights be accorded the evaluation criteria and be announced and posted prior to the opening of the technical proposals. The term "criteria" refers to the requirements set out in Part II. The Lottery must then assign the points described in Section 8 as percentages, through a competitive process to arrive at the highest ranked competitor. This task must be accomplished in a manner that is other than clearly erroneous, contrary to competition, arbitrary or capricious. The information in Section 8 concerning weights to be assigned the respective sections to Part II, as augmented, also comports with Section 287.057(2), Florida Statutes, related to the need to include the criteria, requirements, for determining acceptability of the proposals. Outside the evaluation performed by the committee members for Sections 2 through 5, Marvin Doyal, Inspector General, Florida Department of the Lottery, determined the points assigned to the price proposals related to Section 7. Patti Osburn, Purchasing Manager for the Lottery, evaluated the vendor responses to Section 6. In doing so Ms. Osburn used a responsiveness checklist related to the CMBE utilization plan for the vendor. Notwithstanding that Part II contemplated that the proposals submitted by GTECH and AWI would be compared to determine the best proposal, the evaluation committee through the exercise of independent judgment by the individual committee members was allowed to determine occasions when proposals would be considered solely on the basis of meeting minimum standards established in Part II and those occasions where a more subjective analysis would be made to decide which vendor had the better proposal in a given section under evaluation. No direction was given the evaluators by the Lottery concerning those instances where the aspect of the proposal under consideration would be examined for responsiveness to minimum standards and those instances in which additional assessment would be performed in comparing the proposals, where consistent with Part II, the vendors have proposed to do more than the minimum requirements. The individual committee members were left with their own devices in making this determination. The only reasonable construction that may be given to Part II and its intentions concerning responses to Part II would be to determine compliance with minimum requirements outlined, and to also examine the responses in those particulars where the vendor proposes more than a minimum response. The committee members might conclude that the features proposed by the vendors beyond any minimum expectations outlined in Part II were not useful. Nonetheless, the committee members were obligated to examine those features in the respective proposals which were more than the minimum. Then if found useful, they should have compared those additional or alternate features to any comparable proposal by the competitor for scoring purposes or unilaterally credit the vendor where there were no comparables. This approach was not discretionary. Moreover, Part II in great measure was devoid of particulars in establishing specific requirements for proposals. In those instances the vendors were expected to suggest their solutions and they were to be assessed and scored comparatively, typical of RFPs. Ultimately, having prepared themselves to perform the evaluation, by means that will be described in more detail, the evaluation committee convened in a meeting and examined the proposals for Sections 2 through 5, section by section. This process was a free ranging discussion and committee members could raise any concerns which they had. The scoring that was done in relation to a given section was performed individually by having the committee member identify the number of points which he or she intended to assign for each section and its subordinate parts related to each vendor. By this process, the subparts to the individual sections were examined but no instructions were given to the evaluation committee that led the members to assign specific points for a subpart in a given section. The guidance was that within the maximum available points for a section the individual evaluator had to determine the number of points to award the vendor, using his or her own method to determine the importance of subparts and how those subparts might affect the score for the section. In performing their task the evaluators had the advantage of the scoring chart which referred to percentages of the points for outstanding, good, fair or poor proposals related to a section. The committee members did not discuss the scores that they individually intended to assign to sections within the proposals while taking part in the evaluation meeting. No committee member was the dominant figure in this process. Nothing in the statutes, rules, RFP or policies utilized by the Lottery in evaluating responses to requests for proposals prohibits the Lottery from having individual committee members independently evaluate the proposals consistent with the expectations set forth in the RFP. The consequences associated with this technique, would be, to the extent that the individual evaluators misapprehend their assignment and act contrary to the controlling statutes, rules, policies or the RFP, when performing the evaluation of the proposals, that conduct could be considered clearly erroneous, contrary to competition, arbitrary or capricious. In that instance the Lottery would be made to suffer the decision not to impose a more uniform approach to the task of evaluation. Given the extremely technical nature of Part II, the evaluators needed to be sufficiently informed about the technology within the proposals to conduct a meaningful comparison of the proposals. ACTIVITIES THAT PRECEDED EVALUATION AND SCORING Frank Carter is the Director of Security for the Lottery. As part of the evaluation process he had his staff create a responsiveness checklist to compare proposals against specific requirements within Part II. Mr. Carter instructed his staff to go through Part II and based upon its terms prepare a list of items that were to be included in the responsiveness checklist. Staff members involved with the initial review of the proposals and execution of the checklist were Lyn Jones, Jodie Clark and Jeanette Austin. The level of understanding by the staff members assigned by Mr. Carter to prepare the checklist and compare the proposals to that checklist was sufficient to determine whether a response had been given in the proposal to a requirement set out in Part II. Staff members were not technically qualified to judge the merits of the response. Their activity involved a review for completeness of the proposals, not an assessment of the quality of the proposals made in response to the Part II. At a subsequent meeting of the Lottery staff, not including the evaluation committee members, a more discrete evaluation of proposals was made but not for all items. This limited review was designed to examine whether certain items within the proposals were responsive to Part II. The meeting which convened to consider particular aspects of the proposals included Mr. Carter, Mr. Doyal, David Columbo, the Lottery Assistant Secretary for Operations, Denise Rodenbough, Information Resource Manager II for the Lottery and John Stacklyn. No other attempt to determine the overall responsiveness of the proposals to the requirements of Part II was made prior to the hearing de novo. In September 1996, the evaluation committee had been formed and began to undertake its assignment leading to the evaluation and scoring of the proposals. In a meeting of the evaluation committee conducted at the inception of the process leading to the evaluation and scoring of the proposals, the committee members were provided with copies of the proposal. Remarks by Kenneth Hart, General Counsel for the Lottery, reminded committee members that they should not meet outside of the framework of a convened session of the committee for purposes of discussing the proposals. At an early meeting, Mr. Hart told the evaluation committee that if it needed to acquire information of a technical nature to assist in understanding the proposals, the committee could have someone who was expert in a particular technical area come and talk to the evaluation committee, as well as benefiting from the technical insights held by committee members. In this process Mr. Columbo also conducted a class in what is referred to as "Lottery 101". This class was primarily for the benefit of committee members who were not employed by the Lottery. In the "Lottery 101" course Mr. Columbo gave an overview of the current operation of the Lottery and the lottery industry as a whole, together with a historical perspective of contemporary lotteries. In this instruction Mr. Columbo discussed in general terms the nature of the instant and on-line portions of the Lottery as it operated at the time of the explanation. Following the "Lottery 101" meeting, a meeting was held to address technical aspects of the proposals. The principal presenter at the meeting was the committee member William Hunter. He was called upon to address the committee based upon his understanding of the current Lottery System and its basic technical features. This presentation was made in addition to answering questions that other committee members had about the pending proposals. Mr. Hunter provided the committee members with a graphic depiction of the information resource management currently employed by the Lottery. This diagram set forth the models of equipment, the location of the equipment, with the division of that equipment between the Lottery and AWI and the control of specific equipment being portrayed. The diagram also showed the interfaces of the equipment through a "ring network". As with other evaluators who spoke at this meeting, and on other occasions, when the evaluation committee was assembled, William Hunter was expected to distinguish between his remarks that he offered that were described as factual and the remarks that constituted his opinion. The attempt at explaining the chart that described the current lottery operation was not as a means to contrast that experience with what had been requested for proposals to Part II. In the discussions Mr. William Hunter told the committee members that the mainframe environment proposed by GTECH in its response had two operating systems whereas AWI had one operating system. William Hunter explained to the committee members that in the Lottery's experience it is more difficult to manage multiple operating systems in that the Lottery staff would have to have competence to operate both systems. In reality, GTECH had proposed operating systems in the mainframe environment that depicted one operating system for which the Lottery employees would be responsible. However, at hearing William Hunter explained that the data base machine depicted as an operating system that was prospectively run by GTECH would be moved to allow the Lottery employees to operate the equipment, making the Lottery ultimately responsible for two operating systems in the mainframe environment. William Hunter offered this comment on the basis that the Lottery and GTECH would negotiate to move the data base machine from GTECH to the Lottery if GTECH was selected. AWI had proposed the IBM RS6000, Model 24 as its primary processing unit (CPU). Alternatively, it proposed the IBM RS6000, Model 30. GTECH proposed DEC Alpha 2100 as its primary processing unit. In discussing the relative merits of the CPUs at the meeting, William Hunter limited his comments to a general question about scaleability or expandability of the competing systems to the effect that the competing proposals were both adequately scaleable for foreseeable needs. This meant that the proposed CPUs would both respond to the computing needs that the Lottery had for the foreseeable future, in his opinion. In the context of Part II this refers to the basic contract period with the two periods of extension. No detailed discussion was given concerning the basic architecture of the CPUs during the meeting. In the meeting William Hunter told the other committee members that the centralized data base, Oracle, proposed by AWI was the preeminent data base. The centralized data base proposed by GTECH was described as being the preeminent data base in the past, but not at the time the meeting was held. William Hunter did not further explain what he meant by preeminent. Nor did he make any comparative analysis of the two centralized data bases. In the meeting William Hunter explained that at the time the present operating environment was changed to that contracted for under the RFP, should GTECH win the competition, two retailer terminals would be in place for a period of time during the conversion period and that this would be inconvenient for the retailers. This remark was made in response to a question about the conversion from the current system run by AWI to a system run by GTECH, if GTECH won the bid. He told committee members that counter space was in very high demand at most of the retailer locations and that the least amount of disruption in use of counter space would be better for the retailer. During this presentation the only comments about telecommunications proposed by the vendors was related to the intention to set up a meeting with someone else to explain telecommunications in general terms. In connection with the need for the proposers to comply with the requirements for dual security numbers on lottery tickets, William Hunter made the statement that GTECH might not have understood the reasons why the Lottery had framed its requirement on dual security numbers. That requirement was that the instant ticket transaction not go through the central system controlled by the vendor. He explained to the other committee members that the intent of the RFP was to provide security from compromise by the vendor. The reason for Mr. Hunter's belief in the uncertainty as to GTECH's understanding of that requirement was in association with the GTECH detailed description of a solution that allowed the vendor to control the instant ticket transaction with an alternative solution that did not allow that control. Mr. Hunter offered similar remarks concerning a GTECH proposal for the instant ticket logging system. William Hunter attended a seminar in Orlando, Florida, following the technical presentation made to the evaluation committee. Other evaluation committee members did not attend that seminar. The seminar was presented by the Gartner Group. The Gartner Group analyzes the data processing market and sells data processing information. The Lottery, through the State of Florida, has access to the services provided by the Gartner Group in data processing. While at the Orlando seminar William Hunter spoke with Jay Poltz, a presenter for the Gartner Group. This conversation was contrary to the admonitions by Dr. Mann, Mr. Hart and the terms of the RFP which were designed to protect the confidentially of the RFP process from disclosure to persons outside that process. William Hunter spoke to Mr. Poltz based upon the belief that Mr. Poltz would be able to advise Mr. Hunter concerning telecommunications networks called for by the RFP. William Hunter carried the proposals by AWI and GTECH in response to Part II, Section 3, with him to the seminar. Mr. Hunter let Mr. Poltz see the diagram in the AWI proposal at page 3-85 related to the proposed telecommunications network, together with text associated with the general design described in that diagram. The conversation about the AWI telecommunications proposal held with Mr. Poltz did not include discussion of the radio communications that made up a part of the AWI proposal. William Hunter also showed Mr. Poltz information from the GTECH proposal related to telecommunications to include charts and text. Concerning the GTECH proposal, Mr. Poltz told William Hunter that the telecommunications proposal by that vendor was a “doable solution.” Mr. Poltz did state that one of the possible areas of concern to the Lottery should be the time delay of any system that went through a satellite, such as the GTECH proposal. He told Mr. Hunter that the satellite system in the down-link transmission was subject to possible “fading” during heavy rainstorms. Mr. Poltz told William Hunter that the wireless/satellite type of telecommunications network was generally used for economic reasons as a way to by-pass more costly land line communications provided by local telephone companies. In particular Mr. Poltz told William Hunter that K- band satellite was subject to fading due to heavy thunderstorms. Mr. Poltz told William Hunter that the AWI proposal was also “doable.” Mr. Poltz characterized the AWI proposal as more conservative. Mr. Hunter did not ask Mr. Poltz to specifically state an opinion concerning the reliability of the proposed telecommunications systems offered by the vendors. This conversation between Mr. Hunter and Mr. Poltz lasted about fifteen minutes. At a later meeting with the committee William Hunter basically described the information that he had been given by Mr. Poltz. This information should have been disregarded by the evaluators having been obtained outside the normal channels employed in the evaluation process and without the ability for other evaluators to participate directly with Mr. Poltz. At the suggestion of George Banks, a committee member, the Lottery invited Glenn Mayne, Director, State of Florida, Department of Management Services, Division of Communications to speak to the evaluation committee concerning the telecommunications systems employed by Florida government. Before taking a position with the Department of Management Services involving communications, Mr. Mayne had worked with the state university system running the communications network among the universities. Mr. Mayne has had experience working for a computer manufacturer, specializing in data communications products. He holds a degree in mathematics and physics. In responding to the request to make a presentation to the evaluation committee, Mr. Mayne did not resort to an examination of the proposals by the vendors. He was not requested to examine those materials. Mr. Mayne spoke of transport of information by voice, data and video signaling. He explained how the State of Florida used existing facilities to provide communications in those media. He explained the ability of the State of Florida to get different forms of service through providers in the telecommunications industry in Florida. He remarked that the SUNCOM network uses digital communications. He explained that there exists digital land line capability throughout Florida down to the local level within the experience of Florida government. The experience of Florida government has been that the local telephone companies want to move from analog to digital land line communications. The industry trend, to his knowledge, is to provide digital communications in that it requires less maintenance and has fewer inherent problems than analog communications. Nonetheless, Mr. Mayne recognizes that provision of digital communications at the local level is somewhat dependent upon the ability to bring enough business to the local telephone company in the area to warrant provision of digital communications. In his presentation Mr. Mayne outlined the basic function of land-based communications versus satellite communications. He also discussed radio frequency communications. Mr. Mayne drew a diagram on the board in the room where the committee was assembled to point out the difference in the implementation of a land-based communications system and the implementation of a system using radio frequency. Upon inquiry from a member of the committee Mr. Mayne then introduced the addition of satellite communications into the drawing on the board. A rough approximation of this drawing as recounted by Mr. Mayne during a deposition may be found as GTECH exhibit 117. Mr. Mayne discussed some of the questions of reliability involved with the various technologies, land-based, radio or satellite. He talked in terms of the possible points of failure in those systems that might have to be considered in engineering the system without describing the needed engineering. In discussing the land-based system he spoke of the need to account for the level of service that the user wanted from the serving wire centers, back through the various central offices together with the facilities associated with the user. He spoke of the radio based communications as to transmitting capability out of the site and the receiving capability. There was not a great deal of discussion about reliability of satellite communications, other than to say that the experience that the State had with that form of communication had been highly reliable. The evaluation committee explained to Mr. Mayne that the alternatives being proposed by the vendors were in a general sense related to a land-based system versus one involving radio frequency and some satellite. In particular in describing the land-based communication system Mr. Mayne referred to data terminal equipment which would go into an access line and then would go into a serving wire center; from there the signal would go to the public switch network and to another serving wire center to another access line and a data center on the other end. In his explanation, the radio frequency transmission went from the data terminal equipment which involves introduction of a radio frequency modem which would then go back to some collection point, some tower site, that would pick up the signal and bring the signal down from the tower and from there back through a serving wire center and through an access line. Mr. Mayne understood, in conversation with the evaluators, that there was going to be beyond that point, transmission to a satellite and down from the satellite and after the down-link from the satellite back through a wiring center ending in a data center. Mr. Mayne explained that in adding radio frequency and satellite that you were introducing another order of magnitude in engineering that had to be considered, as contrasted with a system that strictly used a circuit that involved land lines through the public switch network. The diagram drawn by Mr. Mayne in his explanation was hypothetical in nature. In a limited respect it explains the use of the various forms of telecommunications, land-based, radio frequency and satellite. The hypothetical system was explained to be reliable if engineered properly. In the final analysis, Mr. Mayne’s presentation on telecommunications has limited utility when taking into account his failure to be exposed to the specifics of the telecommunications proposals by the vendors. The information he imparted was not intended and did not serve the function to educate the evaluators concerning the engineering in the proposed systems, especially as the engineering might address the possible points of failure which Mr. Mayne briefly addressed in his remarks to the committee. In arriving at their scores assigned in the evaluation, the evaluators took into consideration the presentations by Messrs. William Hunter and Mayne. Although the vendors had proposed recommended sites for demonstration of their technical capabilities when the proposals were submitted on December 15, 1995, as called for by Part II, at 3.11.1, by September, 1996, AWI was no longer serving the lottery in Arizona, the site that it initially proposed for demonstration of its technical proposal. The Lottery denies that this had any influence in its decision to offer the opportunity for the vendors to change the original recommended demonstration sites; however, it would not have been possible for AWI to demonstrate its technical proposal in Arizona, no longer being the vendor serving that lottery jurisdiction. Nothing in the language of Part II at 3.11.1 prohibits the demonstration being made at a mutually agreeable venue other than initially proposed by the vendors. In accordance with the overture by the Lottery both vendors selected different venues than had been originally recommended. GTECH chose Washington State for its demonstration. AWI selected Maryland. Beyond the obvious recognition that AWI could not demonstrate its technical proposal in Arizona, the Lottery reasoned that 10 months had passed since the proposals had been submitted and that it felt that newer technology may have been employed in some other jurisdiction than had been recommended initially by the vendors and that the demonstration of the newer technology might be beneficial both to the Lottery and the vendors. The Lottery decision to change the site locations for demonstrating the technical proposals was acceptable under the terms of the RFP. Consistent with Part II, at 3.11.1, the Lottery required the vendors to demonstrate their equipment and software proposed. To this end the evaluation team spent one day in a site visit at Washington State where GTECH normally provided services for the Washington State Lottery. Subsequently, the evaluation committee spent one day in Maryland in a site visit where AWI normally performed services for the Maryland State Lottery. The purpose of the visits was to examine the proposed equipment and software consistent with the test items described in Part II at 3.11.1, as well as any other available functions which the evaluators desired to have the vendors demonstrate. At the site visits the evaluators were provided explanations concerning the respective proposals and allowed to ask questions of those persons making the presentations. Certain equipment was also available for examination. Government representatives from the Washington and Maryland State Lotteries were available to explain their experience with the vendors who served those states. At the Washington site visit GTECH made the evaluators aware that, in addition to its satellite down-link in Rhode Island where its hub-center was located, GTECH intended to build a new hub-center in Austin, Texas. For a transaction to be completed under the proposed GTECH system in that portion using radio/satellite, the transaction would go from a satellite dish installed at a retailer location to the satellite, from the satellite to the hub-center in Rhode Island, from the Rhode Island hub-center to a local land line, from the local exchange to a long distance carrier's land line, from the long distance carrier to another local exchange, from the local exchange to the Tallahassee data center for the Lottery and return. In the event that the retailer site did not have a satellite dish installed at the retail location and had a radio installed instead, a radio transmission would be made to a master radio through a satellite antenna and from there to the satellite. These two approaches for communication would comprise as much as twenty-four percent of the GTECH communications network. The remaining communications would be land-based communications. Of the radio/satellite component within the GTECH proposal approximately 2,054 terminals would be connected, with 250 to 300 of those using satellite dishes at the retail facility. In conversation between the evaluation committee and the Washington lottery staff, the Washington lottery staff told the evaluators that Washington had experienced some problems with their telecommunications network which employed satellite technology. The problems allegedly had to do with what was described as satellite outages. The basis for the Washington lottery staff claim of satellite telecommunications problems related to the satellite were allegedly in relation to bad weather on the east coast that affected the hub-center in Rhode Island. The Washington lottery employees reported that any time there was a major storm on the east coast there were consequences because part of their system was dependent upon satellite technology connected with the east coast. The only east coast storm referred to was a hurricane that the Washington Lottery staff did not report as affecting more than five percent of the retail sites. When a representative of GTECH was asked about down- time in the Washington operation based upon the tele- communications network, that individual stated that there was no problem of that sort. Don Stanford, Chief Technical Officer for GTECH was at the Washington site visit. He is the person who denied problems with the satellite portion of the telecommunications network in Washington. Subsequently he provided a letter to explain what he believed to be the explanation for downtime. This information was received by the evaluation committee after the Washington site visit and before the meeting that was held to discuss and score the proposals. In the correspondence reference is made to the report by the Washington lottery that 13 of the 350 installed GSATs which formed the communications up-link with the satellites had been exhibiting outages as of October 11, 1996. According to the correspondence, the hub-center in West Greenwich, Rhode Island measured inbound carriers (transmissions) within operational guidelines. When the hub-center turned the outbound carriers (transmissions) up this alleviated the problem for the GSAT installations in Washington at the retailer sites. It was determined by GTECH, as described in the letter, that the issue created by the inadequate performance was not related to weather. It was related to mistakes in the installation of the GSATs. Those problems were being corrected. This correspondence also makes reference to the installation of another hub-center antenna in Austin, Texas. The letter of explanation is credited. The misimpression created by the Washington lottery staff that the problem with the telecommunications network was caused by weather-related difficulties at the Rhode Island hub-center was satisfactorily addressed in the follow-up correspondence by Mr. Stanford. One evaluator, Mr. Estevez believed that the problem was with a single storm, while Mr. Bailey referred to the Washington Lottery officials describing that problems arose anytime there was a storm, the connotation being that there was more than a single storm. Taking their testimony in context, it is concluded that a single storm had occurred following the conversion of the Washington Lottery to a system provided by GTECH and that the incident which the Washington Lottery officials attributed to bad weather was in fact related to improperly installed equipment, not the storm. Mr. Estevez determined that GTECH had not satisfied him that weather problems would not present obstacles to the performance of the GTECH telecommunications network in that portion that uses satellite, given the experience reported by the Washington lottery employees and his knowledge of Florida weather. During the Maryland site visits to allow AWI to demonstrate its proposal, questions were posed concerning the intention by AWI to use radio telecommunications. In particular, questions of what type radio, the number of licenses needed to operate the radios, and number of licenses obtained to that point in time were raised. The response given was that those details had not been determined to that point and would be provided in the event that AWI was successful in the competition and entered into contract negotiations with the Lottery. After the site visit, in addition to the basic information that had been provided in the proposal, AWI wrote the Lottery to answer questions about the intended use of radio in the proposed telecommunications solution, among other items which AWI responded to after the site visit. In its remarks through the correspondence AWI stated that it would employ radio technology only when other more reliable means of telecommunications are not available. In no event did AWI intend to employ radio technology for more than five percent of the total on-line terminal population in Florida. It identified the band widths within which it might operate as under 2400bps with a capability to run at 4800bps. It was not explained in the correspondence what was meant by a means of telecommunications more reliable than radio technology. It is assumed this reference is to digital land line which was described in the AWI proposal. At the site visit AWI did not demonstrate any radio equipment or antennas that would be used as part of a the tele- communications network. AWI did not indicate the geographical location of any radio that it intended to use in Florida. This is contrasted with very specific information which GTECH provided about its intended use of radio for telecommunications as described in its proposal and at the site visit. In its proposal AWI had addressed the topic of digital radio in discussing a number of telecommunications technologies. In summarizing its view of digital radio it stated: . . . AWI believes that selected implementation of digital radio is a cost effective network alternative in certain applications when utilized in proper augmentation with traditional terrestrial facilities. In its discussion concerning digital radio, AWI had detailed what it considered to be the relative merits and demerits of the use of that technology, in addition to discussing other possible technologies, to include digital land line which constituted its principal technology of choice. The system proposed by AWI to meet the vast majority of the Florida telecommunications needs is a four wire Digital Data Service with SONET infrastructure. The telecommunications network that was employed during the site visit was not one for which AWI was accountable. The Maryland state lottery was responsible for that system. The evaluators did not place an emphasis on the comparability of the Maryland telecommunications network to what AWI proposed for Florida. It is not clear from the record whether any portion of the Maryland Lottery telecommunications network employed radio as part of the network. In contrast there was definite comparability between the GTECH telecommunications network proposal for Florida and the telecommunications network demonstrated in Washington state. Nonetheless, the available telecommunications network in Maryland was sufficient to allow the Lottery to observe the integral equipment and software proposed by AWI operating in a test environment, which appears to be the emphasis in Part II at 3.11.1, requiring a demonstration of select functionality in the overall proposed Lottery Gaming System. In addition AWI made persons available to the evaluation committee who could explain details of the telecommunications proposal for Florida. At the Maryland site visit, it was revealed that the Lottery operation in that state employed Master Link 3.0, a different generation of software than had been employed in Arizona and proposed for Florida in response to Part II. The AWI proposal for Florida referred to Master Link 2.0. But this change comports with the expectation in Part II that current technology be made available. During the Maryland site visit AWI also referred to its use of Master Link 3.0 in its services provided to the state of Minnesota. Among the items demonstrated for the evaluators in the Maryland visit was the Ovation Integra terminal. This was one of the on-line retailer terminals described in the proposal by AWI to meet the terms of the Florida RFP. The demonstration was by benchmark tests designed to confirm the functionality of the retailer terminal. That model would also read instant tickets. While at the site visit the evaluators observed the Ovation Modular terminal, another on-line retailer terminal that reads instant tickets, while operating at a retail site. The critical components of the Ovation Modular terminal are the same as found in the Ovation Integra terminal. The Ovation Modular terminal is also depicted in the proposal presented by AWI. GTECH had its proposed on-line retailer terminal benchmarked during the Washington state site visit. That same model was also seen operating in a retail environment. Both vendors provided a demonstration of their proposed on-line and instant terminal functionality in a production environment at an active retailer site as required by Part II at 3.11.1, as well as met the requirements within that provision to demonstrate evidence of system performance in a test environment (benchmark) to include on-line and instant retail terminal functionality for terminal models proposed. During the Maryland site visit, as had been the experience in the Washington site visit, the evaluators had demonstrated for them the system take-over in a test environment from the host system to a duplex system and from a primary site to a secondary site. Although the back-up computer system which took over from the primary computer system in the failed take- over and recovery tests was not located in the immediate environs at the Maryland site visit, the evaluators were able to observe the test by the use of consoles at the Maryland location. The arrangements for the failed take-over and recovery tests in Maryland complied with the expectations set forth in Part II, at 3.11.1. AWI, subsidiary to VLT, requested that Richard Haddrill, President of VLT and Acting Senior Officer for AWI participate in the Maryland site visit. He did so by telephone conference with the evaluation members. His purpose was not to demonstrate AWI’s technical capabilities; rather his emphasis was to explain the relationship between AWI and EDS, substantial contractor to AWI. EDS is described in the AWI proposal as engaged in a strategic alliance with AWI to provide services to the AWI lottery customers. At the time that the proposal was submitted to the Lottery for Part II, it was anticipated that EDS would provide the majority of services and personnel to carry out the terms of any contract entered into between AWI and the Lottery. Before Mr. Haddrill spoke to the evaluation team on the occasion of the Maryland site visit, EDS had sued VLT/AWI for breach of the terms of a Master Services Agreement which formed the basis for EDS to support AWI in serving lottery operations where AWI had contracts with various governmental entities. The allegations in the complaint touched upon subjects related to the performance of AWI and EDS in their delivery of services to lotteries. The outcome of the suit could also have a bearing on the financial responsibility of AWI as a prospective vendor for the Lottery. In his remarks, Mr. Haddrill told the evaluation committee that EDS was continuing to work with AWI, that in the future, if EDS and AWI disengaged, his expectation would be that personnel who had been involved with serving the needs for AWI as EDS employees, and before that as AWI employees, would continue to serve AWI and its customers, whether those employees were working for EDS or not. The main emphasis by Mr. Haddrill was that in the event that EDS and AWI discontinued their relationship, the personnel who had been providing the services for AWI customers would continue to perform those duties. The basis for this belief was conversation between Mr. Haddrill and representatives of EDS, in which, according to him, the sentiment was expressed that services to the respective lotteries not be discontinued in view of the dispute between AWI and EDS. At the time Mr. Haddrill spoke to evaluation committee there was no written agreement for AWI to continue to use the EDS service personnel in the event that the EDS and AWI relationship could not be revitalized for the long term. The reason for drawing attention to the AWI relationship with EDS was Mr. Haddrill's belief that some of the evaluation committee members were aware of the termination of the Master Services Agreement between EDS and AWI and the associated law suit before he made his remarks. Mr. Haddrill mentioned that EDS had sued VLT/AWI for work that EDS had done for VLT/AWI. The basis for the suit being that VLT/AWI withheld payments from EDS for the services provided by EDS in the interest of AWI's lottery customers. The policy decision to allow technical updates to be demonstrated at the two site visits in Washington State and Maryland to take advantage of technical improvements in the vendor’s proposed systems did not offend any terms set forth in Part II. Indeed this choice is in furtherance of Subsection 3.1 which contemplates proposing technology offered to other lotteries. On the other hand, a considerable period of time had passed between December 15, 1995, and September 1996, when the evaluation committee commenced its assignment to address the proposals directed to Part II. For that reason interest was expressed within the committee to have the vendors update their proposals to reflect the current business experience of the vendors in the manner contemplated by Part II, Subsection 2.1. This request by Mr. William Hunter was not favorably considered by the Lottery administration. Mr. Columbo speaking for Lottery management stated that updating would create a problem in that "at some point you have to stop taking information". Therefore, it was decided that the evaluation would be conducted on the basis of information submitted by the vendors on December 15, 1995, contained within the proposals. Whatever reading is given Part II, Subsection 1.46, the Lottery was within its rights in exercising the discretion not to seek additional information that describes the circumstances as of December 15, 1995 or September, 1996, extraneous information which the Lottery executive staff received about AWI lottery operations in other states, and AWI's relationship with its subcontractor, EDS, notwithstanding. The issue of the proper treatment of that information as it relates to a change in the circumstance of AWI's business operations beyond December 15, 1995, is a separate, if somewhat related consideration of the propriety of the Lottery refusing to affirmatively request that both vendors be required to update their business experience or any other aspect of their proposals effective September, 1996. Concerning the information received about AWI's performance in other jurisdictions and the AWI relationship with EDS, this information can be and was considered at the hearing de novo related to the credibility of the information provided in the December 15, 1995 proposal for Part II, Section 2. The exception to this view is the AWI response to Section 4.6 at 4.6.1 and 4.6.2 which should be considered beyond December 15, 1995. This exception will subsequently be explained. Moreover, to the extent that any change in circumstances that may have occurred related to the business experience of the vendors would affect the financial responsibility, integrity or security of the respective vendors, the Lottery is called upon to continue to examine those issues throughout the competitive bidding process, negotiations for a contract and during the operative period of a contract. Otherwise the Lottery acted within its discretion in not pursuing information it was provided about AWI's performance beyond December 15, 1995. MORE ON EXECUTIVE DECISION NOT TO INFORM COMMITTEE CONCERNING CHANGE IN AWI STATUS Mr. Columbo, through information provided by VLT/AWI, was made aware that the contract between AWI and the Arizona lottery was being terminated. This knowledge was gained before the evaluators commenced their process of review and evaluation of the AWI proposal which described the AWI experience with the Arizona lottery consistent with requirements set forth in Part II, Section 2. This information received by Mr. Columbo and other senior members of the Lottery staff was provided subsequent to the submission of proposals on December 15, 1995. Some of the details related to events that transpired beyond December 15, 1995. Therefore, it was information beyond what was contemplated in Subsection 2.1 where it says to describe the experience of AWI and its substantial subcontractors over the past five years, or in some instances past two years, on the subject of contract performance in Lottery jurisdictions. To the extent that information which the Lottery senior staff received related to events beyond December 15, 1995 pertained to performance in those jurisdictions, and was unrelated to matters of financial responsibility, security and integrity, the Lottery was within its bounds when it decided not to share the information concerning the AWI performance in Arizona, with the evaluators. It would have been inappropriate to selectively provide that information without updates to the performance of AWI in other jurisdictions and GTECH in the jurisdictions where it continued to provide services beyond December 15, 1995. The decision was not contrary to the operative terms in Part II and has support in the interpretation that Subsection 1.46 addresses the possibility of updates but does not mandate that course. These findings are not intended to address whether the information which AWI provided concerning its experience in Arizona as of December 15, 1995 was truthful. That issue will be examined separately. Around July 15, 1996, VLT/AWI gave notice to the Lottery that its Master Services Agreement with EDS had been terminated, with an arrangement being made to substitute on a week to week basis the EDS services to AWI. In particular, the senior members of the Lottery staff were told of this development. A decision was made by the Lottery senior staff not to advise the evaluators concerning the dispute between VLT/AWI and EDS. Nonetheless, the evaluation committee became aware of the problems between VLT/AWI and EDS and held the conversation with Mr. Haddrill on that subject. Additionally, this hearing examined the implications of that problem as it would possibly influence AWI’s financial responsibility. For the same reasons that were given in discussing Part II, Subsection 2.1 as they relate to overall performance by AWI by history, the EDS contribution to that performance need not be updated beyond December 15, 1995. However, there is another problem that has not been adequately addressed based upon the decision by the policy makers within the Lottery to deprive the evaluators of the opportunity to examine more critically the events that transpired beyond December 15, 1995, through the hearing dates. That problem is in association with the need to comply with Part II, at 4.6.1 and 4.6.2, related to provision of a detailed description of the organizational structure and staff that would be responsible for carrying out the terms of a contract. The proposal by AWI describes in great detail the contribution which EDS would make to the fulfillment of the requirements of the contract. When the Lottery senior staff learned that problems existed between AWI and EDS it should have apprised the evaluation committee about those matters to assist the evaluators in examining the AWI proposal for 4.6.1 and 4.6.2, notwithstanding that the limited information that the senior staff had received indicated that EDS was still performing the services. The conversation between the evaluators and Mr. Haddrill was not a reasonable alternative to divulging the information which the lottery had received independent of Mr. Haddrill’s remarks. Subsequently, VLT/AWI and EDS resolved their suit by settlement. That resolution calls for a change in the affiliation of personnel who would provide the services under the contract. Those changes were made known during the hearing, to some extent. But the evaluators did not examine the outcome of that settlement in relation to personnel as it might influence their impression of the organizational structure and staff. The organizational structure and staff cannot be reasonably assessed without resort to an examination of the settlement as it influences organizational structure and staff as revealed in the hearing. This should be done as a means to decide the appropriate points to be assigned AWI for its proposal in response to Part II, Section 4. If this were done, this would overcome the impropriety of the Lottery failing to provide the intervening information between December 15, 1995, and the time of the settlement of the EDS suit and would assure the fairness of the competitive bid process related to this item. The fact that some of the evaluators deducted points from AWI based upon the problems it experienced with EDS, as they understood the problems to be, based upon the limited information that was made available to them, does not serve as a viable alternative to an evaluation based upon the most current and more comprehensive information about the relationship between AWI and EDS. CREDIBILITY OF INFORMATION IN AWI PROPOSAL GTECH complains that false or misleading information contained within the AWI proposal caused the evaluation committee to incorrectly score the AWI proposal. In response to Section 2: Management Requirements, AWI included, at page 2-10, information concerning its services to the Arizona Lottery. On that page is Table 2-2: ARIZONA LOTTERY FAST FACTS. That table reflects the on-line terminals and instant-only terminals in inventory on November 1, 1995. Page 2- 10 refers to the delivery and installation of the on-line terminals at start-up. As further explained on page 2-10 it is noted that the delivery and installation of the instant terminals was delayed a few days. Nothing in these remarks describes the performance of the terminals once installed. At page 2-10 the description is given that the two classes of terminals were currently in operation as of December 15, 1995, the date upon which the proposal was submitted. Table 2-2 also refers to sales prior to the conversion of the system to AWI related to the on-line terminal per week performance in the fiscal year 1995. None of this information is false or misleading. Reference to the Arizona Lottery, AWI, at page 2-11 in its proposal, states that: “AWI has not missed an operational deadline in Arizona.” That statement is contradicted by the problem that was explained on the prior page concerning delivery and installation of the instant terminals. Moreover, separate and apart from the experience of down-time reported by AWI in relation to its performance in Arizona, which AWI accounted for in its proposal, operational problems were experienced when 700 retailer terminals did not communicate with the central system in the first week of operation in Arizona and in excess of 500 of the retailer terminals were not communicating with the central system in the second week of operation in Arizona. However, the misleading information about operational deadlines is not deemed to be so material as to reject the AWI proposal as unresponsive to Part II, Section 2, when considered in the context of the overall information provided about AWI's prior experience in the Lottery business. Again referring to the information that AWI reported about its service to the Arizona Lottery, at page 2-12 there is a reference to what is referred to as “shared achievements.” There it is stated: On-Time System Launch-Despite prolonged protests filed by the out-going vendor, AWI was able to launch the entire MasterLink system, including both on-line and instant game processing, on the designated start-up date of November 1, 1995. This was the industry’s first simultaneously launch of on- line and instant game processing, and is even more significant because the two services are integrated into a single system. This statement is contradictory in that the instant game processing was not launched on November 1, 1995, as evidenced by the previous comments that the delivery and installation of the instant terminals was delayed a few days. This contradictory statement about the on time system launch constitutes misleading information. The significance of this misstatement concerning the system launch does not rise to the level of a material deviation causing the AWI proposal to be declared unresponsive when considered in the context of the overall proposal concerning AWI’s experience. At page 2-55 of the AWI proposal is found Table 2-13: System Down-time. This Table reports the system down-time in Arizona among other jurisdictions where AWI delivered services. The report of system down-time is in response to the requirements at Subsection 2.1 and in accordance with the definition at Subsection 1.47 which defines system down-time. The information about Arizona comports with the provisions of Part II. Within the AWI proposal is information provided in response to Subsection 3.4 TERMINAL REQUIREMENTS. In particular reference is made to 3.4.1 which AWI characterizes as 3.4.1.1 New and Current Technology. At page 3-131 within that section of the proposal AWI states: Industry - leading engineering and high- quality manufacturing combined to ensure that the terminals delivered to the Florida Lottery are in top working condition. During the Arizona implementation, 96% of the terminals operated perfectly directly out of the box; the remaining 4% required only minor fine-tuning prior to installation. . . . This statement is neither false nor misleading. It refers to the circumstances of this equipment prior to installation at retailer sites. Finally, GTECH complains about the alleged false and misleading nature of information which AWI provided in response to 3.11.1 Technical Support, as that requirement deals with the need to demonstrate the vendors equipment and software. AWI in response at page 3-441 of its proposal has a section entitled Demonstrability of Equipment and Software: AWI proposes the use of two sites for the purpose of fulfilling all of the demonstration requirements identified in the RFP: the Arizona Lottery, our newest production environment, in Phoenix, Arizona, and our systems development facility in Hackensack, New Jersey. Every critical software requirement specified in the Florida Lottery RFP is currently operational for the Arizona Lottery, where Release 2.0 of the MasterLinkTM system, including the Instant Game Module and the latest on-line and instant ticket retailer terminal software, has been in operation since the November 1, 1995, startup. Further, the IBM RISC system platform serving Arizona's needs is similar to that proposed for Florida, and more than 2,300 OvationTM Retailer Terminals are currently installed there. Other than the fact that the instant ticket retailer software was not in operation since November 1, 1995, as previously explained, the information contained on page 3-441 that is referred to is not false or misleading. The misstatement about the operation of instant ticket retailer terminal software from the inception of the service to Arizona is not so material as to declare the AWI proposal unresponsive when considered in the context of the overall proposal. Especially when one considers that the purpose of page 3-441 is to identify prospectively the place at which AWI would demonstrate its equipment and software and the nature of equipment and software to be made available, in which instance the evaluators from Florida would have the opportunity for personal examination of those items. The fact that the site visit was held in Maryland does not change the impression of these facts. On balance the inaccuracies that have been identified in the AWI proposal did not compromise the ability of the evaluators to perform a fair and impartial assessment in comparing the competitors’ proposals. AWI CERTIFIED MINORITY BUSINESS ENTERPRISE GTECH disputes the award of five bonus points to AWI representing proposed CMBE utilization of twenty percent. Consistent with the requirement to identify the amount projected to be paid each CMBE to meet the minimum ten percent obligation, AWI proposes the use of Flamingo Graphics, and states the amount of the price in a manner to ensure that the overall price proposal by AWI cannot be deduced by calculation from the details in the minimum CMBE utilization plan. Thus, AWI complied with Section 6, to that extent. Section 6 segregates the additional ten percent commitment opportunity for the vendors, for which they may be awarded up to five bonus points, from the requirement to describe the minimum utilization for the first ten percent commitment. The information that must be provided by the vendor to earn the five bonus points requires the vendor to state the additional percentage above the required ten percent and to identify the names and addresses of the CMBEs that the vendor will use and the types of services to be performed by those vendors. Attachment “C” does not call for the establishment of the amount to be paid those CMBEs who make up the additional ten percent for which the bonus is requested. The AWI Attachment “C” proposes to provide an additional ten percent compensation to CMBEs above the minimum ten percent and gives the names and addresses and services to be performed by CMBEs without mentioning price. This complies with Section 6 and the Lottery was correct in awarding AWI the bonus points. PRICING GTECH was right to complain that it had been misled concerning the manner in which the price proposals by the vendors would be evaluated. Both vendors should have been informed when the Lottery decided to examine the initial five-year term of the contract and the renewal options, totaling 9 years. That choice was in substitution for the choice to evaluate only the base 5- year term of the contract that had been explained to the vendors before the vendors prepared their proposals. The percentage of on-line net sales that AWI used remained constant for the full 9 years at 1.8%. By contrast, GTECH offered 2.1% of sales for the initial five year term of the contract adjusted to 2.31% for the remaining 4 years. Although GTECH complains that it was treated unfairly and hypothesizes that it might have responded differently had it known that it could take advantage of a full 9 year period in stating its price proposal, at the hearing it did not explain those adjustments. Absent such explanation there is not a factual basis to rectify the problem consistent with its request. As matters stand, the GTECH percentage quote exceeds AWI's quote, no matter what point in time was chosen for performing the price scoring calculation. Even if the approach contemplated by the explanation given to the vendors was applied and the calculation made on a five year term, instead of the 20 points that AWI received on the 9 year basis and the approximately 17 points that GTECH received on the 9 year basis, this would bring about a result that awarded 20 points to AWI and something in excess of 17 points for GTECH. Based upon the record as its stands, the decision to use the 9 year planning horizon for calculating the price scoring does not constitute a significant departure from the requirements of fairness in its results. The decision, while unfair, was not material in its import. EVALUATION COMMITTEE MEMBERS The Secretary of the Lottery, Dr. Marcia Mann, notified the evaluation committee members of their selection and appointment to the evaluation committee. Those individuals selected were Robert Estevez, Barbara Goltz, George Banks, Robert Hunter, William Hunter and Gerald Bailey. By the appointment letter Dr. Mann advised the committee members, except Mr. Bailey, that they would be briefed on the evaluation procedures and reminded the members to maintain the confidentiality of the materials under review. Mr. Estevez is the Lottery’s Director of Games Management and has experience in field operations and knowledge of the existing on-line gaming system. Ms. Goltz is the Assistant Secretary for Finance and Administration with the Lottery. This position is comparable to a Chief Financial Officer in private business. In addition to her background in accounting, Ms. Goltz is familiar with the overall operations of the Lottery. Ms. Goltz was appointed chairperson of the evaluation committee. Another Lottery employee who served on the evaluation committee is William Hunter, Director of Information Resource Management, who has acquired expertise in computer systems and computer technology in relation to operations in the Lottery. Outside committee members included George Banks, State of Florida, Department of Management Services, Director of the Division of Purchasing, who has considerable knowledge of the state procurement process. Robert Hunter was an attorney with the United States General Accounting Office, with long-standing experience in evaluating government procurements, to include federal, state and local government purchases. Gerald Bailey, State of Florida, Department of Law Enforcement, Director of Performance Management, has basic familiarity with computer systems and experience concerning research and development. Committee Evaluation and Scoring for Part II BARBARA GOLTZ Sec. GTECH AWI 2.0 13 13.5 3.0 34 36.5 4.0 13 13.5 5.0 9 9 In performing her evaluation Ms. Goltz paid particular attention to features proposed by the vendors that would benefit the retailer in the interest of greater sales and efficiency. The idea of efficiency was in association with what she described as “user friendly.” In the event that subsections within Section 3.0 specifically described the criteria that must be met to comply with the RFP requirements, if the vendor demonstrated the ability to meet those criteria, that was deemed acceptable and no further evaluation was made to differentiate between the solutions proposed by the vendors. By contrast, Ms. Goltz gave as example the telecommunications network in which she described the RFP requirements as being explained as “no more or less to what could be proposed. . . It was wide open . . .” Therefore, this would lend itself to a comparison between the vendor’s solutions in her mind. Within Section 3 there are instances where the requirements are defined in some detail with a caveat that those details must be provided “at a minimum.” An example is Part II at 3.2.6 System Performance. Here it is expected pursuant to Subsection 3.1 that any additional or alternative capacity, features or capabilities that are proposed by the vendors beyond the minimum requirements must be assessed on their merits and to the extent that they provide useful value to the Lottery, credited in the scoring process in the manner already described. Other similar language which contemplates review of more than minimum compliance were the requirements set forth in the RFP where details are described with the caveat that the proposal is “not limited to” the required items. When the quoted language is found a uniform approach to assessing additional information to decide its value to the Lottery is called for. An example is Part II at Subsection 3.3.2 Design Requirements related to the telecommunications network. Another example of the occasion upon which more information may be provided than is mandated is found at 3.4.1 Retailer Terminals where the proposals must comply with an extensive list of requirements but also are to describe “any additional features which are available.” Those additional features should be assessed for their value and credit given in the instance where the additional features are found to be useful. To the extent that other sections reviewed by the evaluation committee contain similar language that the evaluators had the same responsibility in assessing the additional as well as alternative capacity, features or capabilities to determine the value of those items with credit being given for useful extras or alternates. Even in the instance where there is no qualifying language it would not be safe to assume that Part II, Section 3 requires the evaluators to limit their assessment to whether the proposals are responsive to the mandatory terms of the RFP. An example is Part II, at 3.4.3 On-Line Management Terminal Functions and Reports (A. Game Controls). The evaluators would be expected to examine additions and alternative approaches in the format already described. Where the instructions within the RFP create broad latitude for the vendors to suggest the solution in response to general parameters described in the RFP, such as Part II, at 3.2.1 General System Requirements, the evaluators needed to assess and value the proposals in arriving at the scores to be assigned the competitors. Ms. Goltz and other evaluators did not always follow this process called for in Part II, Subsection 3.1. The failure to adhere to the requirements was a material departure from the RFP. In performing her evaluation, Ms. Goltz scored Sections 2 and 5 as single units, whereas Sections 3 and 4 were analyzed in their subparts with greater emphasis placed on matters which she considered to be more important. The beginning point for her scoring was what she described as the “outstanding companies” in the competition; however, she did not believe that any company was entitled to a perfect score in relation to a given section. Ms. Goltz under Subsection 2.1 Experience of Respondent awarded a point to AWI because AWI has individuals who currently work in providing services to the Lottery under the existing contract. Nothing in Subsection 2.1 contemplates rewarding the incumbent merely because it has employees with whom the Lottery is familiar. The point should be deducted. Given that the Lottery had chosen to limit its consideration of a vendor's performance in accordance with Subsection 2.1 to the period ending December 15, 1995, and the nature of the instructions set forth in Subsection 2.1, it was not appropriate to deduct half a point from AWI for its problems with EDS as known by Ms. Goltz when she evaluated the proposals. The half point should be reinstated. It is acceptable for the fact finder in this proceeding to add and subtract points in the event that there is no basis in the RFP to award points or deduct points, as contrasted with taking issue with an evaluator in the instance where there is authority to assign points but there is some question about the amount of points to be assigned. The fact finder is not expected to reevaluate the proposals in this highly technical RFP. Ms. Goltz had a differentiation in scores between AWI which received 5.5 points for its telecommunications network and GTECH which received 4.5 points for its telecommunications network. This decision was based upon the stated intention by GTECH to serve as many as 24 percent of its retailers through wireless technology, as contrasted with a more limited number of retailers served by AWI through wireless technology. This was a decision which had no reasonable basis in fact. This gross differentiation ignores the need for a more specific analysis of the proposals and the explanations in the record concerning the technologies proposed by the vendors to provide for telecommunications requested by the Lottery. Absent a more thorough evaluation of the specific telecommunications proposals by the vendors, it does not suffice to distinguish between those proposals based solely on the number of retailers served by wireless technology. This discussion is in relation to Part II, Subsection 3.3. ROBERT HUNTER Sec. GTECH AWI 2.0 14 15 3.0 32 35 4.0 11 13 5.0 8 8 In evaluating Part II, Section 2, Robert Hunter scored AWI higher because it was the incumbent vendor. Again, there is no basis in Section 2 to provide greater recognition to the incumbent. This choice constituted the sole distinction between the two vendors in Mr. Hunter’s assessment. The result of the decision was a one point differential between AWI and GTECH. That point should not be upheld. In evaluating Subsection 3.2 System Configuration Requirements, Mr. Hunter, with the exception of 3.2.4 Remote Logging, determined that the vendors met minimum requirements in the RFP and ended his assessment. Mr. Hunter was required to assess the value of the proposed solutions by the vendors with greater particularity as a means to satisfy the Lottery's needs. Likewise, Subsection 3.9 Software Quality Requirements, contemplated the need to evaluate proposed solutions concerning their relative merit. Mr. Hunter failed to do this in contravention of the requirements of the RFP. In connection with Subsection 3.3 Communications Network Requirements, Mr. Hunter in his comparison and evaluation noted that as much as 24 percent of the telecommunications proposed by GTECH was wireless and that in his estimation was less dependable than AWI’s use of technology similar to what is used under the current contract between AWI and the Lottery. To Mr. Hunter, the potential problems inherent in the GTECH solution related to the fact that the satellite down-link hub-center in Rhode Island had a redundant capacity, another back-up down-link, but that there was no other available back-up in a different geographic location than Rhode Island gave him concern. In his evaluation Mr. Hunter noted the possibility of degraded service due to weather. He noted that radio wireless communication in metropolitan areas might be problematic. In his evaluation Mr. Hunter took the view that the better choice for the Lottery was to adopt a telecommunications solution that was closer to the technology that had been used in the past. That technology was associated with telephone lines. He did not believe that it was the best course to try something that he believed was a new technology: satellite technology. To him the use of extensive satellite technology was not as desirable. In performing his evaluation, Mr. Hunter paid attention to the vendors’ assertions that their respective telecommunications networks were superior to other technologies. Again, as with Ms. Goltz, Mr. Hunter dealt in generalities in contrasting the telecommunications solutions presented by the vendors in their proposals. This in contrast to a more thorough examination of the proposals and their relative merit. In candor, Mr. Hunter admitted that he did not perform an engineering analysis of the telecommunications proposals because he did not feel he was qualified to do that. Nonetheless, the RFP contemplates that the Lottery will sufficiently educate the evaluators concerning the details of the telecommunications proposals to allow an informed judgment to be made about the proposals to determine the better solution. To this end the Lottery has the advantage of the record in the de novo hearing in addition to any information that had been imparted to the evaluators prior to the hearing to assist the evaluators in performing their task. For the most part, the Lottery ignored that information. Neither Mr. Hunter nor his colleagues on the evaluation team made a sufficiently meaningful assessment of the telecommunications proposals by the vendors prior to hearing or as a product of the information presented in the hearing record. This lack of specific understanding of the proposed solutions for telecommunications skewed the result in Mr. Hunter’s scoring in Section 3. In particular Mr. Hunter and other evaluators failed to sufficiently analyze the telecommunications proposal by GTECH. GERALD BAILEY Sec. GTECH AWI 2.0 15 11.25 3.0 30 40 4.0 11.25 15 5.0 10 10 204. In responding to the AWI proposal for Section 2: Management Requirements, Mr. Bailey deducted 25 percent of the value based upon what he termed the EDS issue. That refers to the problems between EDS and AWI that he was made aware of in the course of the overall evaluation process. It was not appropriate to deduct these points bearing in mind that proposal requirements of Section 2 ended December 15, 1995. In Subsection 3.2 System Configuration Requirements, Mr. Bailey used an approach common to Mr. Robert Hunter and other evaluators where the relative value of the solutions in the context of comparison to the competitors solutions was not completely considered. This oversight was contrary to the expectations set forth in the RFP. Mr. Bailey took issue with the technology proposed by GTECH for telecommunications as referred to in Subsection 3.3 Communications Network Requirements. The more extensive reliance on radio technology, and more specifically, satellite technology, was found to be a liability. Mr. Bailey perceived the AWI technology to be “more conservative” and “more reliable.” Mr. Bailey was so troubled by GTECH’s proposed telecommunications technology in using satellite that he deducted 10 points of the possible 40 points to be assigned for Section 3.0 leaving GTECH with 30 points. Of the information which Mr. Bailey received concerning the telecommunications proposals by the vendors, he was especially impressed with the Washington State lottery staffs’ comment that they had experienced difficulties with the satellite portion of their telecommunications system. For reasons previously described, Mr. Bailey’s treatment of the telecommunications proposals, particularly the GTECH telecommunications proposal, was insufficient. WILLIAM HUNTER Sec. GTECH AWI 2.0 13 13 3.0 29 3 4.0 10 13 5.0 7 8 In performing his evaluation Mr. William Hunter looked through his notes, listened to the discussion by the committee, thought in terms of the site visits, did a comparative analysis in his mind as to the relative weight of the two vendors for meeting the prescribed sections within Part II and then compared the higher of those vendors to what would be an appropriate score and scored the vendors following that comparison. Anything that Mr. Hunter observed in the proposals that was particularly positive would influence the scoring. Anything that was especially negative would also influence the scoring. The assignment of points based upon the positive or negative findings did not result in the addition or deduction of points on a uniform basis. Under Subsection 2.1 EXPERIENCE OF RESPONDENT, Mr. Hunter improperly gave consideration to AWI because of its incumbency with the Lottery. Similarly, it was inappropriate for Mr. Hunter to deduct from the GTECH score because it was unfamiliar with Florida. Under Subsection 2.1, Mr. Hunter inappropriately scored the GTECH proposal down based upon less flexibility in changing to meet the Lottery requirements. On that subject, subsection 2.1 does not contemplate the use of anecdotal information gained from the GTECH proposal related to other sections within Part II and remarks made at the Washington State site visit, as a means to score the statement of experience called for in Subsection 2.1. In his actions Mr. Hunter violated the terms of Subsection 2.1 in this instance. Subsection 2.1 relates to historical experience in providing services similar to those required by the RFP up to and including December 15, 1995, not information that responds to other sections within Part II prospectively, to include demonstration of equipment and software at a site visit. In evaluating Subsection 2.1 Mr. Hunter related his view of the overall proposal by GTECH in response to Part II to the extent that GTECH did not know how the Lottery operated. Subsection 2.1 did not contemplate the necessity to demonstrate that the vendor understood how Florida operated at present. It contemplated the provision of specific information about a vendor's history in providing lottery services worldwide. Under Subsection 2.1 Mr. Hunter scored AWI negatively because of the EDS relationship. For reasons previously described this negative score was not justified. When Mr. Hunter performed his evaluation of 3.2.6 System Performance, he did not find any advantage to a vendor's equipment being able to perform at levels in excess of the performance levels mandated. Therefore, a vendor would not be entitled to have its score enhanced by virtue of greater performance. In association with Subsection 3.3 Communications Network Requirement, Mr. Hunter downgraded GTECH for the use of wireless VSAT, the satellite. He also felt uncomfortable with AWI's use of radio in its telecommunications proposal. But he did not compare the reliability of AWI's radio component to the components within the GTECH telecommunications proposal. He did not assess the reliability of both systems, one against the other. He did not specifically inform himself concerning the reliability of the GTECH telecommunications proposal. Instead he observed that the AWI telecommunications system had less components. He should have compared the specific proposals in all respects. While Mr. Hunter indicated that he was mindful of the details set forth in the GTECH proposal for telecommunications to include the wireless component of its solution, his assessment ignores the evidence de novo concerning the GTECH tele- communications proposal and its wireless component. There is a need for Mr. Hunter and other committee members to evaluate the overall record concerning the GTECH telecommunications proposal in comparison to the AWI telecommunications proposal and the needs of the Lottery as described in Part II. In scoring the GTECH proposal Part II at 3.5.12 Dual Security Number, Mr. Hunter gave GTECH a negative score for offering an alternative solution that caused the sign-on number to be remotely logged and stored in the dual security system through a process that involves vendor access. GTECH had also indicated its willingness to do what was required by 3.5.12 should the lottery reject the suggested alternative solution. It was inappropriate to assign a negative score for offering the alternative while agreeing to provide the suggested solution. Mr. Hunter took a similar view concerning the GTECH proposal for Part II at 3.5.13 Ticket Stock Location. For the same reason, it was inappropriate to give a negative score to GTECH for a suggested alternative proposal while agreeing to comply with the requirements. Mr. Hunter need not have credited GTECH for its alternatives if he did not find them valuable, but he could not discredit GTECH. To do so was contrary to Subsection 3.1, which called upon the vendors to offer alternatives, especially if in production in other lottery jurisdictions. ROBERT ESTEVEZ Sec. GTECH AWI 2.0 13 13 3.0 32 38 4.0 8 12 5.0 8 10 In carrying out his evaluation Mr. Estevez had expectations born out by his nine years experience with the Lottery. Based upon that experience he had different expectations depending on the section being considered. He utilized the scoring range for the individual sections related to percentages for outstanding, good, fair and poor. In reference to Subsection 3.2 System Configuration Requirements, Mr. Estevez recognized that GTECH had the more advanced solution but did not feel that there was a significant difference between the solution proposed by GTECH when compared to the AWI solution. If the solutions were completely examined and compared by the method that has been identified, that would not be an unreasonable outcome. In evaluating the proposed solutions for Subsection 3.2 System Configuration Requirements, Mr. Estevez was mindful of the minimum performance expectations described at 3.2.6 System Performance. In consideration of his experience with the Lottery as a means to evaluate the proposals, implicit in his scoring, Mr. Estevez was not persuaded that the extra performance capability of the GTECH equipment was valuable to the Lottery. In evaluating the proposals pursuant to Subsection 3.3 Communications Network Requirements, at 3.3.4 Communications Technologies, Mr. Estevez noted that the GTECH proposal contained as much as 24 percent wireless which caused him concern about points of failure in that system. By comparison, he perceived that AWI in its digital network was more secure and reliable. He particularly had concerns about the wireless equipment whether involving a tower in the middle of a field or a satellite dish placed somewhere in the open. Telephone facilities, to him, seemed to be more secure and not open to people going up to those facilities. In contrasting the security of the telephone company facility with a tower in the middle of a field, Mr. Estevez acknowledged that the belief that the tower was more susceptible to compromise was just his own unprofessional opinion. As with other evaluators, Mr. Estevez’s evaluation of the satellite/radio telecommunications proposal by GTECH tends to overlook the details in the proposal and does not take into consideration the explanations at hearing concerning the viability of the specific solution offered by GTECH in the use of that technology. To arrive at a proper understanding of the GTECH and AWI telecommunications proposals as a means to compare the respective solutions, Mr. Estevez and other evaluators need to reassess the written proposals, the impressions gained at the site visit and the technical explanations provided at the hearing. Absent that analysis, the decision to score GTECH negatively and AWI positively in the telecommunications area is inappropriate. Mr. Estevez recalls that during the Washington site visit staff for the Washington lottery were asked by the evaluators if the Washington lottery had experienced problems with the satellite component to its telecommunications by virtue of a hurricane on the East coast. The answer was yes. Mr. Estevez does not recall whether the Washington lottery staff told the evaluators about the number of terminals in the Washington system that were affected by this event. In relation to 3.5.12 Dual Security Number, Mr. Estevez gave GTECH a negative score. Again, the basis for that decision concerned the GTECH alternative proposal which did not coincide with the requirements in the RFP, in a setting where GTECH committed to provide the solution called for by the Lottery and was allowed to suggest an alternative. There was no legitimate basis for scoring GTECH down for offering the alternative solution. Mr. Estevez had become familiar with the controversy between AWI and the Arizona lottery. As a consequence he determined not to consider the information in the AWI proposal that referred to the Arizona experience when performing his evaluation. That decision was inappropriate. Mr. Estevez was obligated to examine the information about Arizona, up to and including December 15, 1995, the date that proposals were submitted in response to Part II of the RFP. GEORGE BANKS Sec. GTECH AWI 2.0 15 15 3.0 36 38.5 4.0 15 15 5.0 9 10 When Mr. Banks evaluated Section 3: Technical Requirements, he observed that there were ten subsections. He assigned weights of four points maximum for each subsection. He then examined the line items within the subsections and did a “benchmark” of GTECH’s proposal compared to AWI’s proposal to determine which vendor should get the full complement of four points for each subsection as opposed to some lesser number. However, in some instances when scoring the proposals Mr. Banks reduced the score of both proposals, as opposed to awarding maximum points to the superior proposal. It is concluded that the term “benchmark” refers to a comparison of the proposed solutions. In scoring Subsection 2.1 Experience of Respondent, Mr. Banks noted AWI’s incumbency. As explained before, nothing in that subsection contemplates crediting the incumbent merely because it is the incumbent. The subsection contemplates a description of the experience in all jurisdictions to be evaluated on the merits of that experience, whether in Florida or other locations. To the extent that the AWI incumbency influenced Mr. Banks in arriving at the score assigned for Section 2: Management Requirements, it was inappropriate to credit the incumbent. In association with Subsection 3.3 Communications Network Requirements, at 3.3.4 Communications Technologies, Mr. Banks commented that GTECH proposed as much as 24 percent wireless. This led him to score GTECH at three points of a maximum four points in his grading system. By contrast, AWI was assigned four points for the subsection. In scoring this subsection, Mr. Banks did not perceive that wireless telecommunications through the use of satellite and radio frequency was non-reliable. He stated that he had a sense of comfort and confidence in the digital land line system because from the standpoint of maturity that it was already deployed in the current operating telecommunications of the Lottery. He commented that his attempt was to reconcile whether you put all the confidence in betting on satellite technology and risk the Lottery, or go with proven and what is known to work and is being deployed in the state, that being digital land line. In his evaluation Mr. Banks posed the question to himself to what extent the opportunity for failure was greater with satellite than with digital land line. The fact that GTECH would have as many as 24 percent of its retailers hooked up to wireless telecommunications through radio frequency or satellite as opposed to what he describes as seven percent of wireless for AWI represented the bigger risk. The overall percentage of wireless was the prime factor for down-grading the GTECH telecommunications proposal, with particular emphasis on the proposed use of satellite. Mr. Banks, in his view of wireless radio communications, believed that the signal could be obstructed by high-rise buildings. Mr. Banks believed that the wireless radio communications proposed by both vendors would be used in rural areas. While Mr. Banks took note of the reliability of the specific telecommunications proposed by GTECH as set out in the proposal and as explained in the Washington State site visit he was persuaded that there were more opportunities for points of failure in the satellite system. The possibility of a second GTECH hub-center in Austin, Texas, had not been realized at the time of the site visit to Washington State as Mr. Banks understood it. It can be inferred that Mr. Banks would have felt more comfortable with the advent of the Austin, Texas hub-center. In making his judgments Mr. Banks understood that there were no empirical studies or statistics that the evaluators were familiar with and tried to use as a means to make a judgment about telecommunications proposals. As with other evaluators Mr. Banks was not provided the opportunity to examine the testimony at hearing of experts concerning the reliability of wireless communications via satellite and radio based upon engineering principles. That opportunity is necessary to insure a fair and comprehensive treatment of the proposals. Related to Part II at 3.5.12 Dual Security Number, Mr. Banks entered a minus in his scoring for the GTECH proposal which was stated in the alternative, one method complying with the RFP requirement and the other not. As described before, while GTECH suggested a solution contrary to the RFP, it committed itself to comply with the RFP, and was encouraged by Subsection 3.1 to offer an alternative. Therefore, it was inappropriate to down- grade the score for GTECH in relation to this requirement. EXPERT WITNESSES IN TELECOMMUNICATIONS AND RELATED TECHNOLOGIES The following witnesses provided testimony concerning the telecommunications proposals and related technology by the vendors, which testimony should be taken into account before scoring the proposals in formulating the final agency action. Richard Desjardins, Director of Special Projects for GTECH, provided testimony concerning the GTECH telecommunications proposal related to radio and satellite. James A. Stratigos, President and CEO of Media Four, Incorporated, is an expert in the design and implementation of telecommunications networks, including the use of digital radio and satellite. He testified about the use of radio and satellite as it would impact this project. Donald L. Stanford, Senior Vice President and Chief Technical Officer for GTECH, who is expert in lottery technologies and systems testified concerning the GTECH telecommunications proposal. Paul Lowenwirth, EDS employee serving the account of AWI, testified. He had the overall responsibility for developing the telecommunications network proposed by AWI. He is an expert in the development and implementation of telecommunications networks. Andrew Bruce Greenspan, an EDS employee, who is expert in central systems testified concerning system configuration requirements. Barry Ankersen, who works for IBM and is an expert in central systems processors, testified. Bridgett Garnsey, Vice President for Product Development and Technical Sales for AWI, an expert in systems development and application support, testified. Edward John Hinkel, an EDS employee, who has a background in computer terminal technologies (software) testified concerning the AWI proposal for terminals. Steve Beason, Vice President of software for GTECH, testified concerning system configuration proposals by the vendors. David Isaacson, GTECH Manager of Product Marketing, with a background in computer science engineering, testified by deposition concerning AWI's central system processor. Paul Pinto, GTECH Technical Services Director II, with a background in computer technology software development and quality assurance, testified by deposition concerning a comparison of the proposed central systems of the vendors. Generally stated the above-witnesses provided information concerning the proposed technology offered by the vendors in response to Section 3: Technical Requirements. In formulating the agency decision this de novo evidence needs to be examined and utilized in assisting the evaluators in assigning scores to Section 3. The agency should not ignore that record in favor of the opinions held at the conclusion of the evaluation process in October 1996. If the agency fails to consider this evidence, the fact finder cannot ultimately determine whether the agency’s action was appropriate, and is without the authority to determine the proper course of action by performing an independent evaluation of the technical proposals based upon the record de novo. AWI FINANCIAL RESPONSIBILITY Based upon its interpretation of Section 24.111(2), Florida Statutes, and subsection 1.19, the Lottery examined the financial responsibility of the vendors through the time of the hearing. As contemplated by Section 24.111(2)(g), Florida Statutes, and required by subsection 1.35, the vendors are called upon to advise the Lottery should a vendor experience a material adverse change in financial condition prior to the award of the contract. The meaning of the terms "financial responsibility" and "material adverse change in financial condition," as perceived by the Lottery, take into account the specifics of a vendor's financial position. There is no exact definition of the terms in the statutes, rules or policies of the Lottery. Nonetheless, the Lottery has made an effort to inform itself concerning the financial issues described in this paragraph. Relevant to this inquiry is the question of the financial responsibility and any material adverse change in the financial condition of AWI. Within the context of the matter of financial responsibility and possible material adverse change in the financial condition, Mr. Doyal as Inspector General for the Lottery and a CPA has examined certain financial information to establish the Lottery's policy position concerning the financial viability of AWI as a competing vendor in this procurement. As spokesperson for the Lottery, Mr. Doyal expressed the policy position of the agency concerning AWI's financial responsibility and view on the subject of whether AWI has experienced a material adverse change in financial condition. In behalf of the Lottery he has concluded that AWI is financially responsible and has not experienced a material adverse change in financial condition. His insights concerning the issue of financial responsibility extend beyond the Lottery's unchallenged decision in Part I of the RFP where the Lottery was specifically charged with determining the financial responsibility of the vendors. After the decision in Part I, Mr. Doyal continued to monitor the issue of financial responsibility for all periods including the hearing dates. He also looked at the related question of the possible experience of material adverse change in financial condition. As a means to inform himself concerning the financial position of AWI, Mr. Doyal mainly relied upon quarterly reports filed with the Securities and Exchange Commission through copies provided to the Lottery based upon the fact that AWI is the incumbent vendor. The reports are referred to as Form 10-Q's. They are associated with the business of the parent corporation, VLT, and its subsidiaries, to include AWI. Those reports are for the quarterly periods ending March 31, 1996, June 30, 1996 and September 30, 1996. To arrive at his opinion concerning the financial viability of AWI Mr. Doyal also examined terms of a settlement of the court action between VLT/AWI and its subcontractor EDS, together with consideration of the testimony of other experts who testified concerning the implications of the settlement as that might influence the financial health of AWI. Mr. Doyal's decision to rely upon the credibility of the information in the 10-Qs and to monitor the outcome of the events described and to take action only upon the occasion when he became convinced that AWI was no longer financially responsible or had experienced a material adverse change in financial condition was acceptable. There was no obligation to undertake an independent investigation absent the belief that the AWI financial position had degraded to the point where that became necessary. Those matters set forth in the quarterly 10-Qs adequately form the basis for examining AWI's financial responsibility and the issue of any material adverse change in financial condition experienced by AWI. The Lottery decision through Mr. Doyal to utilize that body of information for the purpose of examining financial responsibility and the issue of the possible material adverse change in financial condition was within the agency discretion as a policy matter. The parties were entitled in the hearing de novo to produce and did produce collateral evidence that would more completely or more correctly explain the information set forth in the 10-Qs and the ability to update that information in the 10-Qs as a means of examining the question of financial responsibility and the related issue of any experience of material of adverse change in the AWI financial condition. An example of collateral evidence would be the information provided concerning the settlement of the suit between VLT/AWI and EDS. Beyond those opportunities, GTECH was not allowed to advance its claim that the Lottery's failure to pursue a more extensive investigation in the first instance, to look to sources of information outside what was contained within the 10-Q's, constituted an act of arbitrariness. The de novo opportunity to expand upon or clarify the details set forth in the 10-Qs allowed the other parties to offer a more comprehensive explanation of the financial condition of AWI, if that was their choice. In particular, the parties were given the opportunity to produce expert witnesses who could examine and contest the material relied upon by Mr. Doyal and his opinion and offer any supplemental material and contrary opinion to assist the trier of fact in deciding the issue of financial responsibility and the related matter of any material adverse change in financial condition experienced by AWI. In examining the question of financial responsibility and the issue of material adverse change in financial condition, to determine if AWI is a responsible bidder, it is recognized that the hearing de novo is not intended to examine the ability of AWI to provide the required fidelity and performance bonds consistent with Part II, Subsection 2.2. The inquiry directed to the AWI financial responsibility and whether AWI has experienced a material adverse change in financial condition does not include reference to the specific ability of AWI to fund its participation in a contract to provide the services envisioned in the RFP. The vendors were told that consideration of the ability to fund would not be part of the evaluation process in determining the best proposal when that issue was broached by GTECH prior to the submission of proposals. Specifically, GTECH in its questions posed to the Lottery prior to submission of proposals asked the following: "Will the financial stability of a vendor be evaluated in connection with its ability to fund the provision of a new system to the Lottery?" The Lottery answered: "Section 24.111(2), Fla. Stat, specifies the information that will be used in determining the financial responsibility . . . of the Respondents." That section within the Florida Statutes does not make it incumbent upon the Lottery to examine the financial ability to fund the project as part of the evaluation. In summary, the ability to fund the project is not part of the consideration of financial responsibility and the question of any experience of a material adverse change in financial condition. Part II, Subsection 1.3 does contemplate that a vendor be fully capable of providing the services when taking into account the vendor's financial condition as a general observation unrelated to specific funding requirements for this project. A vendor unable to meet those terms would be deemed unresponsible and its proposal would be rejected pursuant to Subsection 1.19. The 10-Qs for the several quarters in 1996 reveal a great deal about the financial condition of VLT/AWI. Contrary to the impression of the GTECH's expert, Neil Hochberg, CPA, the 10- Qs are adequate to form an impression concerning financial responsibility and any material adverse change in the financial condition of AWI from May 7, 1996 through the period covered by the 10-Qs. The 10-Qs are supplemented by the details of the settlement of the suit between VLT/AWI and EDS. AWI remains obligated to inform the Lottery concerning any experience of material adverse change in financial conditions prior to the award of the contract or after that award should it succeed in the competition. The failure to disclose that information consistent with Part II, Subsection 1.35 would justify denial of the award of the contract or constitute a breach of the contract between AWI and the Lottery. To the extent that GTECH expresses concern that the period between September 30, 1996 and the hearing date is inadequately explained in the record concerning the financial viability of AWI, it bore the burden to prove de novo that AWI is not financially responsible or has experienced a material adverse change in its financial condition. It could not speculate without proof. Significantly, the financial difficulties that are explained in the 10-Qs concerning AWI's performance in providing services to other Lottery jurisdictions and its dispute with EDS have been resolved for the most part. This allows conclusions to be reached concerning the implications of those events. In addition to the explanations found in the 10-Qs, other evidence was presented to augment that proof which further clarified the impression of AWI's financial position. The remarks by Mr. Doyal and the financial experts presented by AWI lead to the conclusion that sufficient information was available to examine the financial health of AWI. The 10-Qs describe the dispute that existed between AWI and the Arizona Lottery. Reference is also made to a dispute with the Minnesota Lottery that was served by AWI. Eventually, the Arizona dispute was settled with an eight million dollar payment made to the State of Arizona. AWI contributed approximately 1.1 million to the settlement, with additional monies being paid by EDS, as subcontractor to AWI in Arizona, and by insurance carriers. As part of the settlement AWI received a payment of 1.3 million from the State of Arizona. On balance AWI realized a small net financial gain but lost the contract to its competitor. It was not shown that the settlement of the dispute with Arizona in which AWI was terminated as the vendor compromised AWI's financial responsibility and constituted a material adverse change in financial condition. Notwithstanding the payment of the Arizona claim, AWI was successful in renewing its technology errors and omissions insurance policy in the amount of 25 million dollars for 1997 without any significant increase in the cost of the policy. Concerning the State of Minnesota, it had been reported in the 10-Qs that the State of Minnesota assessed its vendor AWI approximately 1 million dollars in penalties by way of liquidated damages for late delivery of software. This assessment was offset by revenues otherwise owed to AWI. Another 3.5 million dollar payment to AWI under an existing contract was withheld by Minnesota based upon a dispute over delivery of another software item. Additionally, the State of Minnesota decided not to renew AWI's contract for reasons of convenience and in 1996 advertised for bids for the future services related to the on-line game. AWI was selected as the lowest bidder under the new solicitation. As part of that process, it has been reported that AWI was technically compliant with the requirements in the solicitation and financially responsible. Negotiations are underway to conclude the new contract. It has not been shown that any of the circumstances between AWI and the State of Minnesota compromise the financial responsibility of AWI or constitute a material adverse change in the financial condition of AWI. In the 10-Qs, reference is made to the AWI relationship with the Kentucky lottery. AWI successfully bid on the contract. However, it withdrew from negotiations based upon the disclosure that AWI might be sold and the pendency of the financial dispute between VLT/AWI and EDS. Those circumstances would not allow AWI to negotiate with Kentucky upon terms that the state deemed acceptable. As with the situation in Arizona the loss of the Kentucky contract deprived AWI of a revenue source, but it has not been shown that the loss of the Kentucky contract compromises AWI's financial responsibility or constitutes a material adverse change in its financial condition. It was disclosed in the 10-Qs that difficulties were experienced in trying to obtain the renewal of a 30 million dollar performance bond to satisfy requirements in the contract held with the State of Maryland. EDS was a subcontractor in Maryland. EDS gave notice to its surety that it would no longer guarantee AWI's obligations to the bonding company. AWI was noticed by the surety that the bond would not be renewed. There ensued negotiations in an attempt to gain substitute collateral for the EDS guaranty. In the third quarter 10-Q AWI had reported that "no assurance" could be given that the bonding issue would be satisfactorily resolved. AWI did resolve it satisfactorily by re-negotiating the bonding program and arranging for the renewal of the 30 million dollar performance bond without a lapse in coverage. As substitute for the EDS guaranty, AWI posted three one-million dollar cash-backed letters of credit. AWI has also renewed its performance bond in Florida for the existing contract. That performance bond for the period for 1997 is in the amount of 12 million dollars. In the final analysis, GTECH has not shown that AWI is unable to obtain performance bonds and that the issue concerning bonds is an indication of the lack of financial responsibility and evidence of a material adverse change in financial condition. The 10-Qs make reference to the termination of the Master Services Agreement between VLT/AWI and EDS. In particular, reference is made to this event as constituting a default under a loan agreement between AWI and its principal lender First Bank, NA. As reported within a 10-Q that default was waived subject to an amendment to the loan agreement. AWI and First Bank entered into a fourth amendment to the loan agreement waiving default, the importance of which is that the line of credit extended from the bank was reduced from 20 million to 17.5 million. These circumstances were not shown to constitute a material adverse change in the financial condition of AWI nor to constitute a compromise in AWI's financial responsibility. In the 10-Qs frequent reference is made to the dispute between AWI and EDS in which AWI had withheld payments to EDS for alleged problems with the EDS performance in providing services to the Arizona and Minnesota lotteries. This led to the termination of the Master Services Agreement and the suit by EDS calling for payment for the services it had rendered in those states. In the 10-Qs AWI continues to insist that it is not responsible for the claims by EDS. Nonetheless, during the second quarter 10-Q, VLT/AWI acknowledged that the circumstances as they existed within the lottery jurisdictions and the dispute with EDS could possibly led VLT/AWI to experience a material adverse change. The circumstances that existed between AWI and the lotteries have been explained leading to the conclusion that no material adverse changes occurred in the final analysis. Likewise, the EDS dispute was resolved by a settlement in the court action. That resolution was not shown to have undermined the financial responsibility of AWI, nor constituted a material adverse change in the financial condition of AWI. EDS had claimed 39 million dollars for its services. By the agreement between VLT/AWI and EDS, VLT/AWI will pay a 27 million dollar note to EDS secured by AWI assets, such as its plant, equipment, software, terminal inventory and VLT stock with a current market value of nine million dollars which had been transferred to VLT/AWI as part of the settlement. VLT/AWI also receives equipment and consumables with an approximate value of seven million dollars. The 27 million dollar note is a long-term instrument. Through the settlement EDS will no longer act as a strategic partner for VLT/AWI, and VLT/AWI will lose the indemnity provided by EDS. The settlement contemplates that several hundred employees who work for EDS will become employees of AWI. The settlement has a short term benefit for VLT/AWI. Long term implications are not clear. For now, the settlement does not compromise AWI's financial responsibility nor constitute a material adverse change in AWI's financial condition. This settlement has profound implications on the future organizational structure of the persons responsible for performing services under a contract. The information by AWI in response to subsection 4.6 changes dramatically. The associated financial statements within the 10-Qs detail the difficulties experienced by VLT/AWI in those reporting periods. Those difficulties were in great measure in relation to the VLT/AWI lottery operations previously described and the EDS controversy. Taking into account the testimony by the financial experts concerning the financial statements, together with the outcome of the EDS suit, it has not been shown that AWI is lacking in financial responsibility. Nor has it been shown that AWI has experienced a material adverse change in its financial condition. OTHER ISSUES Contrary to the allegation in the petition, it was not shown that AWI failed to meet the requirements of Part II at 3.2.6 by using non-conforming tickets in its site demonstration, thus rendering benchmark tests invalid. Contrary to the allegations in the petition, Part II, Subsection 3.3 COMMUNICATIONS NETWORK REQUIREMENTS, does not call upon the vendors to name the Interlata communications carrier for the digital backbone of the proposed communications network to have their proposals evaluated. Contrary to the allegations in the petition, the retailer terminals proposed by AWI comply with the minimum requirements set forth in Part II at 3.4.1 Retailer Terminals. Contrary to the allegations in the petition, the management terminals proposed by AWI meet the requirements of Part II at 3.4.2 MANAGEMENT TERMINALS. Contrary to the allegations in the petition, AWI's proposed retailer terminals can communicate through the existing system. More generally described, AWI has not misrepresented the benefits of its conversion plan in its proposal. Part II, Subsection 5.1 MARKETING SUPPORT calls upon the vendor to describe the type of support it would provide the Lottery, such as game ideas, etc. The petition alleges that AWI in its marketing proposal focused on schemes that were not viable options for the Lottery. At hearing it was revealed that this refers to the question of the legality of some of the proposals by AWI in its marketing solution. To conclude that the marketing requirements in the RFP contemplate proposal of illegal practices is an unreasonable construction. However, it has not been shown that any of the marketing proposals by AWI that fit that category unduly influenced the evaluators. Consequently, those aspects of the AWI marketing proposal, if illegal, are immaterial.
Recommendation Based upon the findings of fact and the conclusions of law, it is, RECOMMENDED: That a final order be entered that, Consistent with the fact finding and conclusions of law: Reconvenes the evaluation committee. Requires the committee to reevaluate and rescore Section 2 taking into account only those items that have been discussed in the recommended order as they influence the overall scores for that section. Requires the committee members to review Section 3 to the RFP, the proposals for Section 3, their notes on that section from all occasions, the expert testimony in the hearing transcript and by deposition about which they have not had exposure, and consistent with the methodology set forth in the recommended order requires the evaluators to rescore the proposals for Section 3. Requires AWI to amend its proposal for Subsection 4.6 consistent with the hearing record in relation to the EDS settlement. Requires the evaluators to rescore the AWI response to Subsection 4.6 at 4.6.1 and 4.6.2 taking into account the amendment. Requires the evaluators and in turn the Lottery to adjust the overall scores assigned the vendors under Part II based upon the outcome of the limited reevaluation. After engaging in the process, the results of the rankings should be posted and the vendors given the further opportunity to challenge the proposed agency action limited to the matters involved in the reevaluation. Section 120.57(3), Florida Statutes (1996 Supp.). Dismisses all other allegations by GTECH in the present case. DONE and ENTERED this 5th day of May, 1997, in Tallahassee, Florida. CHARLES C. ADAMS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 5th day of May, 1997. COPIES FURNISHED: Thomas F. Panza, Esquire Mark A. Emanuele, Esquire PANZA, MAURER, MAYNARD & NEEL, P.A. 214 South Monroe Street, Suite 320 Tallahassee, FL 32301 Thomas F. Panza, Esquire Mark A. Emanuele, Esquire PANZA, MAURER, MAYNARD & NEEL, P.A. 3600 North Federal Highway Third Floor, NationsBank Building Fort Lauderdale, FL 33308 William H. Roberts, Esquire Susan P. Stephens, Esquire Department of Legal Affairs The Capitol Tallahassee, FL 32399-1050 Martha Harrell Chumbler, Esquire Michael P. Donaldson, Esquire Post Office Box 190 Tallahassee, FL 32302 Kevin E. O'Malley, Esquire GALLAGHER AND KENNEDY 2600 North Central Avenue Phoenix, AZ 85004 Kenneth H. Hart, General Counsel Lousia H. Warren, Esquire Department of Lottery 250 Marriott Drive Tallahassee, FL 32301 William R. Murray, Esquire WILLIAMS AND CONNELLY 725 12th Street Northeast Washington, DC 20005 Dr. Marcia Mann Secretary Department of Lottery 250 Marriott Drive Tallahassee, FL 32301
The Issue Whether Leroy Smith and/or Alice Longwood are entitled to the $5,000.00 prize for a winning lottery ticket presented by Leroy Smith to the Lottery for collection?
Findings Of Fact On March 7, 1988, Mr. Smith completed a Lottery Winner Claim Form (hereinafter referred to as the "Form") and submitted the Form and a Cool Million instant-winning lottery ticket (hereinafter referred to as the "Ticket"), number 02-114569-303, good for a prize of $5,000.00 for collection. On the back of the Ticket Mr. Smith listed his name and address on the spaces provided for the person claiming the prize and signed the Ticket. The space on the back of the Ticket where the first name of the person claiming the prize was to be listed had been covered with a "white-out" material and "Leroy" written in. At the bottom of the Form Mr. Smith indicates that this was done to replace his first name for a nickname that had previously been entered on the ticket. Mr. Smith also listed his name, Social Security Number, address and phone number on the Form. Mr. Smith signed the Form as the "Claimant." In a letter dated March 8, 1988, DHRS notified the Lottery that Mr. Smith owed $7,478.20 in Title IV-D child support arrearages and $150.00 in court-ordered costs, a total of $7,628.20, as of March 8, 1988. By letter dated March 18, 1988, Mr. Smith was notified that the $5,000.00 prize for the Ticket he submitted was being transferred to the Comptroller for possible payment of his Title IV-D child support arrearages and court costs. The $5,000.00 prize was forwarded from the Lottery to the Comptroller on March 22, 1988. Mr. Smith was notified by the Comptroller by letter dated March 23, 1988, that the Comptroller intended to apply the $5,000.00 prize toward his unpaid obligation. Mr. Smith requested a hearing to contest the proposed action of the Comptroller. The Title IV-D child support arrearages and court costs owed by Mr. Smith are related to two child support cases involving Mr. Smith. First, on December 1, 1981, Mr. Smith was ordered to pay child support to Deidah Brown in an Order of Dependency and Support issued by the Circuit Court, Seventh Judicial Circuit, in and for Flagler County, Florida. On November 6, 1984, Mr. Smith was ordered to pay child support to Patti Victoria Smith by the same court. Mr. Smith's total obligation as of the date of the formal hearing was $7,348.20: $3,578.20 in public assistance arrearage, $3,620.00 in non-public assistance arrearage and $150.00 in court-ordered costs.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, It is RECOMMENDED that a final order be Issued providing for payment of the $5,000.00 prize attributable to the Ticket to DHRS. DONE and ENTERED this 22nd day of November, 1988, in Tallahassee, Florida. LARRY J. SARTIN Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of November, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-1743 The Petitioners have submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted. The Petitioners' Proposed Findings of Fact Proposed Finding Paragraph number in Recommended Order of Fact Number of Acceptance or Reason for Rejection 1-2 1. 3 1-4. 4 5. 5 6. 6 7-8. 7 10. 8 Statement of law COPIES FURNISHED: Jo Ann Levin Senior Attorney Office of the Comptroller The Capitol, Suite 1302 Tallahassee, Florida 32399-0350 Leroy Smith Post Office Box 1465 Bunnell, Florida 32010 Patrick Loebig, Esquire Department of Health and Rehabilitative Services 1317 Winewood Boulevard Tallahassee, Florida 32399-0700 Louisa Hargrett, Esquire Department of the Lottery 250 Marriott Drive Tallahassee, Florida 32301 Alice Longwood Post Office Box 1753 Bunnell, Florida 32010 Rebecca Paul, Secretary Department of the Lottery 250 Marriott Drive Tallahassee, Florida 32301 Tom Bell, General Counsel Department of the Lottery 250 Marriott Drive Tallahassee, Florida 32301
Findings Of Fact THE RFP On April 25, 1991 the Department issued RFP No. 91-1011-LOT/TEN/P soliciting sealed proposals from qualified vendors to provide Instant Game Ticket printing and related services. In accordance with Section 1.8 of the RFP questions that were pertinent to an understanding of the RFP or that would be needed to clarify its terms could be addressed in writing to the Issuing Officer for the Department. Per Section 1.9 questions must have been received by 12:00 noon on May 1, 1991 for the prospective proposer to be entitled to answers to the questions. That section to the RFP obligated the Department to give written responses to any questions timely received. There were timely questions. The answers to questions that had been posed by the prospective vendors which included Dittler, Scientific, Webcraft and British American Banknote (BABN) were provided by the deadline of May 3, 1991 which is set forth in Section 1.9 to the RFP. Those questions and answers led to the amendments number 1 and 2 to the RFP issued on May 6 and 9, 1991, respectively. The RFP as amended and questions and answers formed the basis for the prospective proposers' understanding of the RFP and its terms, conditions and specifications. For purposes here, the relevant change in amendment number 1 was associated with the paper weight of recyclable ticket stock in categories of ticket samples to be submitted with the proposals. The second amendment deleted the category of sample known as recyclable coated ticket stock. None of the questions during the opportunity presented to improve the understanding or clarify the terms, conditions and specifications, found in the RFP were directed to the procedures set forth in the RFP describing the process of evaluation of proposals and entry into a contract with the best responsive vendor. Nor did any vendor take advantage of the opportunity within 72 hours of the availability of answers to questions that had been posed by the respective vendors and is provided in Section 1.9 to the RFP to challenge the terms, conditions and specifications of the RFP, especially as they would relate to the process of evaluation of responses to the RFP leading to the selection of the best responsive vendor and entry into a contract. As contemplated by Section 1.9 to the RFP sealed proposals were received from the four vendors by the deadline of 2:00 p.m., May 13, 1991. Section 1.9 called for technical proposals within the responses to the RFP to be opened by 2:00 p.m. on May 13, 1991 with the evaluation of those proposals to begin immediately following the opening. The cost proposals were to be separately opened following completion of the evaluation of technical proposals. The submissions by the vendors were to be ranked in order of preference based upon the evaluation of the technical and cost proposals in accordance with criteria set out in the RFP, followed by Notice of Intent to Negotiate with the higher ranked vendor posted at the Department's headquarters in Tallahassee, Florida. If the negotiations with the higher ranked or best responsive vendor did not prove successful, Section 1.9 called for the Department to negotiate with the other listed firms in descending order of their rank. Following the successful conclusion of negotiations with a responding vendor, a Notice of Award of Contract would be posted at the Department headquarters. The contract would be awarded and executed as soon as lawfully possible after the posting of the Notice of Award of Contract. On May 13, 1991, the ticket samples that were part of the submissions by the vendors were turned over to the Department's security employees and kept in a secure place pending forensic testing called for in the RFP. The members of the evaluation committee who were selected to exercise the evaluation criteria were not afforded immediate access to those tickets pending the forensic testing and a presentation concerning the test results which was to be made to the Evaluation Committee by Department employees who were familiar with test procedures. This presentation of the test results was made on May 16, 1991. Of the vendors who submitted proposals, Dittler had not been qualified by the Secretary of State to do business in Florida at the time it submitted its proposal on May 13, 1991, however, no mention was made of this when the Department made its preliminary agency decision finding Dittler a responsive vendor and ranking its proposal. Concerning the work to be done by the Evaluation Committee, Section 5.3 sets out the Proposal Evaluation criteria where it states: Proposals will be evaluated based on the following criteria: The overall qualifications, experience, abilities of the firm, its participating staff members, and subcontractors, if any, to timely provide the requested commodities and services, and the extent of minority participation. This includes the relative thoroughness and overall professional quality of the firm's proposed plan for providing the requested commodities and services. Value: Not to exceed 20 points The quality and appropriateness of the marketing plan. Value: Not to Exceed 15 points The quality and appropriateness of the Quality Control Plan. Value: Not to Exceed 15 points The overall security plan, including facility and procedures, with respect to whether the production of the game, manufacture of tickets, operation of the game, prize validation, etc., meet the security needs of the Florida Lottery and offer minimum possibilities of fraud, tampering, theft, counterfeiting, ticket alteration, or other security compromises. Value: Not to Exceed 25 points Proposed Compensation. Value: Not to Exceed 25 The proposed compensation for providing the goods and services requested herein shall be evaluated as follows: Column C of Attachment E of the prices bid for aluminized uncoated white ticket stock (10 point or heavier) will be totaled and divided by 200,000 to give an average cost per thousand tickets for this ticket stock. The average cost per thousand tickets for aluminized un-coated white ticket stock will be the price used in the cost comparison. The maximum number of cost evaluation points (M in the formulas below) shall be one-third of the highest cumulative score (H in the formula below) awarded to a Respondent for the criteria set forth in A through D. The lowest average cost per thousand tickets (L in the formula below) as derived in paragraph 1 above shall be awarded the maximum number of cost evaluation points as determined in paragraph 2 above. All other Respondents shall be awarded points based on the ratio of their average cost per thousand tickets (R in the formula) to the lowest average cost per thousand tickets. Maximum Cost Evaluation Points (M) = 1/3 x H Cost Evaluation Points = L/R x M The total value of points is equal to 100. These criteria are associated with the overall Evaluation Review Process identified at Section 5.4 where it states: The Secretary shall appoint an Evaluation Committee which shall prepare technical scores for all Responsive Proposals. The cost proposal will thereafter be publicly opened and evaluated in accordance with the formula set forth in Section 5.3 E above. Based on the technical and cost proposals, the Evaluation Committee shall rank, in order of preference, the Respondents deemed to be most highly qualified to perform the requested services. The Department reserves the right to make site visits at its own expense to the Respondent's facilities before or after the proposals have been ranked in order of preference. Thereafter, the Secretary shall commence negotiations with the most highly ranked firm. Should the Lottery be unable to negotiate a satisfactory Contract with that firm at a price the Lottery deems to be fair, competitive, and reasonable, negotiations with that firm shall be terminated. The Lottery shall then undertake negotiations with the second most highly ranked firm. Failing accord with that firm, the Lottery shall undertake negotiations with the third most highly ranked firm. Should the Lottery be unable to negotiate a satisfactory Contract with that firm, additional firms may be selected to participate in this negotiation process or negotiations may be reinstated following the original order or priority. Negotiations shall continue until an agreement is reached or all proposals are rejected. The Lottery reserves the right to reject all proposals at any time during negotiations. An initial review was made of the responses to the RFP to determine facial compliance or responsiveness. This was done on May 13 and 14, 1991 by Cristina Brochin, counsel to the Department. She discussed her findings with Louisa Warren, a more senior attorney for the Department. In the mind of Ms. Brochin the Dittler proposal was sufficient, while the Scientific proposal had a potential problem in that it did not set forth the amount of bond to be provided to insure performance under the contract called for in the RFP. This refers to the requirement in Section 6.5 of the RFP to give adequate evidence of the ability to post a performance bond. Ms. Brochin thought Scientific had failed to provide a notice on public entity crimes for its subcontractors. This was not a requirement of the RFP. Ms. Brochin found that Webcraft had failed to list its subcontractors, and likewise had failed to provide public entity crime affidavits for its subcontractors and had failed to provide a time line for limiting the ability to compromise its tickets. The Evaluation Committee was convened at the Department on the morning of May 15, 1991. It consisted of Robert McKnight, Assistant Secretary of the Department; Bernie Edwards, Deputy Secretary of Marketing; Don Pribbenow, Questions and Document Examiner for the Florida Department of Law Enforcement; Dr. Arvid Mukes, Assistant Director of Graphic Arts at the Florida A & M University; Frank Carter, Director of Security for the Department and Brian Woods, Vice President of Marketing of Blockbuster Video. Mr. Woods withdrew from the Committee based upon a concern of a potential conflict of interest associated with a business relationship with one of the vendors. No contest was offered to the make up of the Evaluation Committee. On this date the remaining members of the Evaluation Committee were given general instructions by the Department's staff that they were not to talk to other committee members except in public meetings, that they were to read the proposals, to keep notes about the proposals, to make their own individual evaluations and to not score the proposals until the Evaluation Committee public meeting had been completed. An explanation was made concerning the scoring criteria set forth in the RFP and an overview given of the schedule of events associated with the review process. The evaluators were then given the opportunity to review the responses alone. The best part of May 15, 1991 into the evening was devoted to that task. The evaluators took notes as they went forward with that process. On May 16, 1991 the Evaluation Committee met at the Department headquarters and undertook a discussion in a public setting relating to the marketing and overall qualification sections of the proposals. This was followed by a confidential review outside public scrutiny concerning quality control and security measures set forth in the proposals. Although the evaluators had reviewed the BABN materials on May 15, 1991, the BABN proposal was found nonresponsive by the evaluators in the public meeting of May 16, 1991 and did not undergo further consideration. BABN did not challenge the decision finding it nonresponsive. The reason why the BABN proposal was declared nonresponsive was the failure to submit samples of 10 point uncoated aluminized ticket stock. By contrast the Evaluation Committee found the proposals of Dittler, Scientific and Webcraft to be responsive. In doing so, with the knowledge of the impression of counsel Louisa Warren concerning deficiencies found in each proposal, the Evaluation Committee did not deem the Webcraft omission of a statement of time necessary to compromise its tickets; the Dittler omission of its ink product numbers, and Scientific's omission of the bond dollar amount in its bond commitment letter to be material deviations from the terms of the RFP and as such not subject to correction. Deeming these items to be minor irregularities the Department's staff contacted the vendors to clarify that information and the vendors cooperated in that endeavor. There is a Section 4 to the RFP pertaining to Mandatory Requirements in which 4.1 to that Section is entitled Terms and states: the Lottery has established certain mandatory requirements which must be included as part of any proposal. The use of the term "shall" "must" or "will" (except to indicate simple futurity) in this RFP indicate a mandatory requirement or condition. The words "should" or "may" in this RFP indicate desirable attributes or conditions but are permissive in nature. Deviation from, or omission of, such a desirable feature will not by itself cause rejection of a proposal. In Section 1.2 of the Glossary of Terms a responsive proposal is defined as, "means a proposal submitted by a responsive and responsible, or qualified offerer which conforms in all material respects to the Request for Proposals." Section 4 goes on at 4.2 to describe what is meant by nonresponsive proposal where it states: Proposals which do not meet all material requirements of the RFP or which fail to provide all required information, documents, or materials will be rejected as non- responsive. Material requirements of the RFP are those set forth in Section 3.1 and without which an adequate analysis and comparisons of proposals is impossible. The Lottery reserves the right to determine which proposals meet the material requirements of the RFP and to accept proposals which deviate from the requirements of the RFP in a minor or technical fashion as determined by the Lottery. Section 3, within which is found 3.1 entitled General Instructions, identifies information required by the vendors Respondent where it states: General Instructions. Respondents must reference their proposals to the section numbers in this RFP. Respondents must state their agreement with the contractual requirements contained in this RFP. Any additional terms and conditions proposed by a Respondent will be viewed by the Lottery as an exception to the RFP and may cause rejection of the proposal without further evaluation or consideration. Proposals must include the following information and be presented in the following sequence: Identification of Respondent per Section of RFP. Respondent's Affidavit (Attachment A). Sworn Statement on Public Entity Crime (Attachment B). Vendor Information Form (Attachment C). Vendor Information Addendum (Attachment D). List of sub-contractors (if applicable). Statement from vendor saying they will abide by the Code of Ethics Rule 53ER88-79(3), F.A.C. The statement required by Section 1.24. Evidence of ability to provide a performance bond or other security required by Section 6.5. All of the items required in Section 2. All material or information required to be submitted as part of the Cost Proposal enclosed in a separate sealed envelope per Section 1.10 of the RFP. Any other material or information required by this RFP which is not specifically enumerated above. Any other information the Respondent desires to submit to further substantiate its qualifications for providing the goods and services. Another reminder concerning requirements is set forth in Section 5.2, entitled REVIEW CRITERIA which says in relevant part: Any proposal which does not meet all the mandatory material requirements set forth in Section 3.1 will be rejected by the Lottery as non-responsive. As alluded to before, Lawrence Herb, the Department's forensic document examiner and Colin Benton, Chief of Investigations presented the Evaluation Committee with sample tickets that had been tested and the results of those tests. Following this presentation the individual Committee members assigned scores for each vendor in all categories other than the cost proposal, referred to at Section 5.3 as proposed compensation. It was the impression of the committee members that Scientific was the highest ranked responsive vendor in the technical proposal phase. Consequently, by averaging the aggregate scores unrelated to cost proposals Scientific received the most points while Dittler was second and Webcraft third. On the next day, May 17, 1991, the cost proposals were opened by Department staff and the cost scoring accomplished by use of the mathematical formula contemplated by the RFP. The cost formula was based on the prices quoted for aluminized uncoated white ticket stock of 10 points or heavier weight. The technical and cost scores were then added together to determine the final ranking of the vendors. The compiled scores for the vendors were: Dittler: Technical 56.80 Cost 23.13 Total 79.93 Scientific: Technical 69.40 Cost 19.12 Total 88.52 Webcraft: Technical 53.00 Cost 19.55 Total 72.55 Based upon the results achieved in the scoring the Department on May 17, 1991, posted a Notice of Intent to Negotiate with Scientific, being the highest ranked proposer, and identifying that Dittler was running second and Webcraft third. The formal written protest of Dittler mentioned in the Preliminary Statement ensued. THE RESPONSIVENESS OF SCIENTIFIC'S PROPOSAL BOND COMMITMENT LETTER According to Section 3.1(d)9. evidence of the ability of the vendor to provide a performance bond or other security as described in Section 6.5 is a mandatory material requirement. Section 6.5 states: The successful Respondent shall be required, at the time of executing the Contract with the Lottery, to post an appropriate performance bond or other security acceptable to the Lottery in the amount of $1,000,000. The other acceptable forms of security are: irrevocable letter of credit; Certificate of Deposit assigned to the Lottery (which must be obtained from a financial institution having its principal place of business in the State of Florida); U.S. savings bonds, notes and bills; general obligation bonds and notes of any political subdivision of the State of Florida; or corporate bonds of any corporation that is not an affiliate or subsidiary of the Contractor. The aggregate fair market value of securities pursuant to this clause must always exceed the amount stated above. Failure to post an additional bond or security within seven (7) days after notice of an increased Contract value, or notice that the market value of the securities is inadequate, shall be grounds for immediate termination for cause. Respondents must submit with their proposal evidence that they will be able to provide the performance bond or other acceptable security. Such evidence may include, but is not limited to, a letter from an authorized agent of a bonding company or other entity committing to provide the performance bond or other acceptable security or indicating that the bond underwriter or other entity is processing a request to provide the bond or security and stating unequivocally that the bond or security will be available upon execution of the contract. In response to this requirement Scientific submitted a letter from Rollins Burdick Hunter of Illinois, Inc. together with a power of attorney for an amount of up to $20,000,000 bond coverage. This letter from Rollins Burdick Hunter is dated May 13, 1991, the date upon which Scientific submitted its proposal with the letter. In pertinent part the letter states: "RE: THE PRINTING OF INSTANT LOTTERY GAME TICKETS AND RELATED SERVICES FOR THE FLORIDA LOTTERY- Florida Instant RFP (Bid No. 91-011-LOT/TEN/P BID DATE: MAY 13, 1991 OBLIGEE: FLORIDA DEPARTMENT OF THE LOTTERY Letter of Intent We understand that bids are to be taken May 13, 1991 for this project. Please be advised that, subject to our underwriting requirements being met, if Scientific Games, Inc. is the successful bidder on this project and is awarded a contract and enters into said contract, we as surety will write an annual bond for the prosecution of the contract. This Letter of Intent is valid for one hundred eighty (180) days from the bid date, May 13, 1991, and we assume no liability to you if we decide not to issue the referenced bonds beyond this one hundred eighty (180) day period. You understand of course that the relationship between Scientific Games, Inc. and Continental Insurance Company is private, and we assume no liability to you if for any reason we decide not to issue the referenced bond(s). On May 8, 1991 Ken Taylor of Scientific sent the RFP to Rollins Burdick Hunter, the bond broker for Scientific, in the interest of obtaining the letter of May 13, 1991 which letter has been described. The power of attorney for $20,000,000 that was submitted with the proposal by Scientific was from Continental Insurance Company and counsel to Continental Insurance Company James E. Lee signed the Letter of Intent of May 13, 1991 together with William G. Malloy, President and CEO of Scientific. Having considered the evidence presented concerning the adequacy of the bond commitment, the Letter of Intent complies with the requirements stated in Section 6.5 pertaining to a performance bond as the ability to provide that performance bond. The Letter of Intent is not perceived as equivocal. It is not only consistent with the requirement set forth in Section 6.5 to the RFP, it coincides with what the Department has found to be acceptable in a previous RFP related to advertising which had a similar requirement for a statement of commitment to provide a performance bond at the appropriate juncture. In the instance of the advertising RFP certain bond letters by vendors who responded to the advertising RFP failed to state the dollar amount of the bond in the letter of commitment and those vendors were given permission to submit clarifying letters as to the exact amount without a declaration that those vendors were non-responsive. The letter clarifying the bond amount which was submitted by Scientific on May 16, 1991 with permission from the Department is consistent with the prior practice by the Department. This clarification by vendors in the advertising RFP solicitation and in the present solicitation is a minor correction. It is a minor correction which does not afford unfair advantage to Scientific and does not inconvenience the Department. Moreover a strict reading does not lead to the conclusion that the bond commitment letter needed to restate the bond amount of one million dollars. It must only make it evident that the bond commitment letter is addressing the requirement for a one million dollar performance bond. The Scientific Letter of Intent provides ample evidence on that point. The language set forth in the Letter of Intent reminding the reader that the commitment is subject to underwriting requirements being met and the further comment that the commitment does not create liability to the Department if the bond contract is not completed between the private entities does not undermine the fundamental promise to write the bond. It is an adequate response because the RFP did not contemplate a bid bond being provided with the submission of a proposal. It contemplated a commitment to write a performance bond in the future to be available at the place in time where a contract was executed between the vendor and the Department. LOBBYIST DISCLOSURE According to Section 3.1(d)8., which refers to the need to include information concerning Section 1.24, that latter section pertaining to conflict of interest and disclosure and more particularly to the revelation of the affiliation of executive branch lobbyists, as defined by statute or activities by the lobbyist designed to influence the actions of the Department in connection with the RFP, the failure to disclose an executive branch lobbyist would be considered a breach of a mandatory material requirement to the RFP. The consequence would be to cause the submission by a vendor to be declared non- responsive. Dittler alleges that Scientific failed to reveal the name of Barry Horenbein when filling out its proposal in response to Section 1.24 to the RFP. According to Dittler, Barry Horenbein was an executive branch lobbyist for Scientific in the relevant timeframe. That perception is incorrect. The language is Section 1.24 concerning Conflict of Interest and Disclosure states: The award hereunder is subject to the provisions of Chapters 24 and 112, Fla. Stat. Respondents must disclose with their proposals whether any officers, directors, employees or agents are also an officer or an employee of the Lottery, State of Florida, or any of its agencies. All firms must disclose the name of any state officer or employee who owns, directly or indirectly, an interest of five percent (5%) or more in the Respondent's firm or any of its branches or affiliates. All Respondents must also disclose the name of any employee, agent, lobbyist, or other person who has received or in the future will receive compensation of any kind for services related to this RFP, who is a previous employee of the Lottery, or who has or is required to register under Section 112.3215, Fla. Stat., in seeking to influence the actions of the Lottery in connection with this procurement. Respondents must also disclose the amount of compensation paid or to be paid in the future to any person who seeks to influence the actions of the Lottery in connection with this procurement. Respondents must also disclose the existence of any contingency agreements whereby any person will be compensated in any amount or form and the compensation is in any respect dependent on the outcome of this procurement. Each Respondent which has no disclosure to make under Section 1.24 must state affirmatively in its Proposal that it has no such disclosures to make. Failure to make any of the disclosure required by this section, or to make the affirmation required above, will result in rejection of the Proposal. Scientific met the disclosure requirements by listing David Bausch, a former Department employee. Barry Horenbein owns Florida Consultants, Inc. which provides lobbying services. Scientific at relevant times was his client. From December 10, 1986 until November 30, 1990 Horenbein had served as a legislative and executive branch lobbyist for Scientific under a yearly contract. This arrangement was pursuant to the proposal by Horenbein of November 25, 1986 on behalf of his company, Florida Consultants, Inc. in which he offered the services to Scientific in the area of legislative and administrative representation of Scientific as a lobbyist. On December 10, 1986 Gray Bethea, General Counsel to Scientific, confirmed the understanding between Horenbein and Scientific as to services that had been described in the offer of Horenbein dated November 25, 1986. For his work Horenbein received compensation of $5,000.00 per month for the period beginning in 1988 and as recent as November 1, 1991, and, consistently used the same invoice identification of his services as being related to "governmental consulting and lobbying in the State of Florida". Although there was no written documentation which would state any modification or termination of the business relationship between Horenbein and Scientific, there was a change in the position by oral agreement after November 30, 1990. The contract was for month to month to handle legislative lobbying matters for Scientific but not executive branch lobbying. The change in status for Horenbein came about after a November 29, 1990, letter from Horenbein to the president of Scientific explaining that the consulting contract would expire on November 30, 1990. In the course of that correspondence Horenbein pointed out the expected changes that he perceived given the outcome of the gubernatorial elections in which the incumbent lost and a new governor came in. This correspondence of November 29, 1990 expressed the desire by Horenbein to continue on the basis of $5,000.00 a month fee as outlined in Gray Bethea's letter of January 5, 1990, which letter from Bethea spoke of a relationship on the same terms and conditions as the original suggestion of the relationship between the two parties which had been set out on December 10, 1986 by Gray Bethea. The response to this November 29, 1990 letter was the oral agreement to allow representation in the area of legislative branch lobbying. The agreement between Scientific and Horenbein was not renewed in its entirety to include executive branch activities. The reason that Scientific decided to change the duties of Horenbein in representing its interests was based upon the perception that the close association which Horenbein had with the outgoing Governor Martinez and his administration might be harmful to Scientific in the future in that the new administration of Governor Chiles was coming in and Scientific did not wish to have Horenbein continue contact with the Department or the executive branch in connection with Scientific's business in Florida. In 1991, Horenbein registered in Florida as a legislative lobbyist but not as an executive branch lobbyist. Horenbein did provide some services concerning lottery activities to the extent of sending newspaper clippings to Bethea about activities within the Department during the year 1991. This was a continuation of information to include Horenbein's speculation as to the possibility of the change of the head of the Department and the name of a potential candidate to be the Department head discussed in his correspondence of November 29, 1990. On December 24, 1990 the Chairman of the Board of Scientific wrote to Dr. Marcia Mann, the new Department head, expressing, among other things, the common interest which Dr. Mann and the Chairman had in the University of South Florida. A copy of that letter was provided to Horenbein. Related to the letter from the Chairman to Dr. Mann, that letter was prepared based in part on information that had been provided by Horenbein to Scientific. The correspondence from the Chairman to Dr. Mann was prepared not only on newspaper clippings which Horenbein had submitted but on conversations which Horenbein had with his client Scientific. Horenbein provided information to Scientific about the new leadership at the Department with the advent of the Chiles administration to include remarks about Secretary Marcia Mann and Assistant Secretary McKnight. Horenbein considered provision of information as part of consulting services for which he was paid a fee. Although Horenbein had not seen the details of the subject RFP he advised Scientific that Scientific should "sharpen its pencils" and come in with a bid as low as they felt they could to get the contract. Horenbein told top officials within Scientific that he thought that the pricing in the RFP was going to be very important. He related this information in the same manner as he would have to any client under similar circumstances. This was considered by Horenbein to be part of his consulting relationship with his client Scientific. Horenbein was made aware that certain representatives from Scientific were to come to Tallahassee for a meeting with Senator McKnight or Dr. Mann. Horenbein did not attend a meeting between those persons. Horenbein saw Senator McKnight in a Tallahassee restaurant and welcomed him to Tallahassee and chatted with him. He also spoke to Senator McKnight the day the bid in this came out in this procurement. On April 3, 1991 Horenbein attended a Lottery Commission Meeting at the Department headquarters. He was there for his own curiosity to see the new Department administration of Dr. Mann function but acknowledges that it was also an attendance associated with his work for Scientific. Scientific had not asked him to attend this meeting. The topic of the meeting was not related to the present RFP. At the meeting he met Dr. Mann for the first time. Horenbein also saw Senator McKnight at the meeting and spoke with him. The topic of the RFP was not discussed with Dr. Mann or Senator McKnight on this occasion. In fact, Horenbein never discussed the subject RFP with any Department official or employee, nor sought to influence them in connection with the procurement for the advantage of his client Scientific. In his conversation with Senator McKnight on April 3, 1991 Horenbein complemented Senator McKnight concerning the Senator's legislative service in saying that he was "happy to see somebody of my integrity in the administration", referring to Senator McKnight's service in the Department. Following the technical evaluation Scientific asked Horenbein to attend the cost bid opening on May 17, 1991, a session that all vendors were invited to attend. The reason Scientific asked Horenbein to attend was because of the short notice of the cost bid opening and having no other personnel available to Scientific to attend that session. The vendors had been advised of the cost bid opening by one day notice. All evaluations on the technical aspects had been scored prior to the cost bid opening and the scores in the cost bid opening were pursuant to a formula. As part of his attendance at the cost bid opening Horenbein picked up copies of Webcraft and Dittler's proposals and looked at them concerning the bottom line financial quotations by those vendors. He considered this part of his function as a lobbyist for Scientific. Because the petition by Dittler alluded to Horenbein and his activities, Horenbein was provided a copy of material that Scientific had obtained from the Department under a public records request on or about May 24, 1991. The material also included the cost quotes which Horenbein spoke of and evaluators score sheets and the evaluation summary. The decision to send the materials that had been obtained by a request for public information was made by counsel to Scientific, Bethea. In addition to Senator McKnight, one of the other evaluators, Edwards, knew Horenbein before the advent of the RFP, but as stated before, had not discussed the RFP with him. Neither did Edwards nor McKnight know that Horenbein was a lobbyist for Scientific at the time of the RFP. Horenbein did not know the other evaluators Dr. Mukes, Carter or Pribbenow. Horenbein had a conversation with Jack Peeples, an independent contractor to the Governor's office while at a restaurant in Tallahassee. This conversation was not at the instigation of the client Scientific. Peeples held a contract with the Governor's office from February 1, 1991 to June 30, 1991 as advisor to the governor. He was not a state employee as such. In this conversation Horenbein stated that he thought it was, "sinful for Sonny Holtzman to be representing a lottery company in the position he was in" to which Peeples is said to have replied "You're probably right Barry, it shouldn't happen". Sonny Holtzman is mentioned as having an affiliation with Webcraft. Horenbein further stated to Peeples that the RFP disclosure requirement associated with the present case and that of the advertising RFP, as Horenbein stated, "I thought it was ridiculous because I had heard in the RFP that they were supposed to name the lobbyist and how much they made and I told Jack Peeples, I said 'Jack, you know you're going to be in business very shortly, would you want everybody in the world to know how much you were making on a particular client?'" The knowledge which Horenbein had of the disclosure requirements in the advertising and subject RFP came to him through comments from other lobbyists. Horenbein also discussed with Peeples the possibility of the two of them getting together and doing some lobbying. The reason which Horenbein had in mind for opposing the disclosure requirements, especially related to the revelation of compensation was for his own purpose and not that of the client Scientific. Horenbein's specific objection to the RFP disclosure requirement was that he did not want clients to find out how much he was billing each of his clients and that he didn't think it was proper to put such a requirement in a RFP. He told Peeples that the disclosure provision should be changed. This remark was made in the Spring of 1991. When he made the comment Horenbein thought that Peeples was one of the close campaign people to Governor Chiles. He commented to Peeples because he thought that Peeples had substantial influence in the Governor's office. When he had this conversation Horenbein did not know whether the lobbyist disclosure provision was going to be placed in the advertising RFP or the present RFP. He did not know the details of Peeples' payment by the Governor's office as an independent contractor. Horenbein did not discuss the present RFP per se in his conversation with Peeples. Peeples' affiliation with the Governor's office under the terms of his contract was not that of representative of the Governor's office or other department's of state government. Peeples was special counsel to the Governor for legal services. His duties included legal advise to the Governor, working in conjunction with designated staff, agency heads and other persons making available Peeples' full professional knowledge and opinions. He reported to the Governor in this capacity. Senator McKnight established that when he was hired as the Assistant Secretary of the Department by Governor Chiles he had conversation with the Governor's Chief of Staff concerning Senator McKnight's duties as Assistant Secretary. Senator McKnight identified one occasion in which he had a meeting in the Governor's office to discuss the administration's views of the Department. His recollection is that this was held in the office of the Chief of Staff Mr. Krog, with Peeples in attendance. Senator McKnight only knew of Mr. Peeples as being a close, personal friend and advisor to the Governor, to Senator McKnight's understanding of that association. During this meeting in the Governor's office the issue of lobbyist disclosure was emphasized by the Governor's office to Senator McKnight and he was advised that it would mean no contact whatsoever between lobbyists and members of this lottery staff from the point of view of the Governor. Senator McKnight was told that the Lottery operation had to be "squeaky clean". The Governor's office did not discuss the RFP nor influence the drafting of the RFP beyond this conversation with Senator McKnight. Notwithstanding the protestation by Horenbein to Peeples, Section 1.24 to the present RFP contained the disclosure requirements that Horenbein had complained about. FINANCIAL DISCLOSURE AND PENDING LITIGATION As identified in Section 1.1, the project in question is a major procurement as defined in Section 24.103, Florida Statutes. As such, the requirements set forth in Section 24.111(2), Florida Statutes, were incumbent upon the vendors. The RFP also speaks to the matters of financial disclosure at Section 3.1(d). Scientific did the things necessary to comply with those requirements when it submitted its proposal on May 13, 1991. (In this connection Section 1.19 pertaining to the assignment of the contract, if one is entered into, and Section 1.34 pertaining to change of financial conditions which are material adverse circumstances which occur between the time of the submission of the proposal and the award of a contract and continuing during the life of the contract are not items to be considered in this dispute. They are issues which potentially might have to be resolved between the vendor that the Department attempts to contract with and the Department.) Scientific when it submitted its proposal on May 13, 1991, by cover letter, alerted the Department to a potential change in its financial condition and ownership when it alluded to an asset purchase agreement between Scientific and a company formed by members of Scientific's senior management and the firm Centre Capital Investors L.P., an affiliate of Lazard Freres & Co. That asset purchase agreement date is from April 30, 1991. Scientific had this to say about that agreement in its transmittal letter: "On April 30, 1991, a company formed by members of Scientific Games' senior management and Centre Capital Investors L.P., an affiliate of Lazard Freres & Co., entered into an Asset Purchase Agreement with Bally Manufacturing Corporation, Scientific Games, In., and Scientific Games of California, Inc., for the purchase of the instant ticket and video lottery business of Scientific Games. The closing of the transaction is anticipated to take place within several months and is subject to the consents of various state governments and other customary closing conditions. No change in the operation or name of Scientific Games is expected and no interruption of services to customers will occur. As further details become available, Scientific Games will provide information to the Florida Lottery. Notwithstanding the pending asset purchase agreement, it is the Scientific group that submitted the proposal who must comply with the financial disclosure requirements. That is the respondent referred to in the definitional section of the RFP at 1.2 under Glossary of Terms. It is the vendor that is defined in Section 24.104, Florida Statutes. It is the group that submitted the proposal as defined in Section 24.111(2), Florida Statutes. Scientific was not expected under the terms of the RFP and associated requirements of law to submit vendor information forms on the purchasing group. That purchase was not consummated until a closing held on October 1, 1991. At the time that the proposal was submitted by Scientific the purchasers did not control by direct or indirect means the entity Scientific which submitted the proposal. Scientific and the purchaser had different boards of directors. Scientific was controlled by Bally Manufacturing Corporation and the purchasing group was controlled by Centre Capital Investors, L.P. Section 24.111(2), Florida Statutes, requires the Department to investigate the financial responsibility of the vendors who responded. That financial investigation took place to a degree not especially evident when examining the record. Details are sketchy. However, the requirement was responded to. More significantly Section 24.111(2), Florida Statutes, and the RFP present the necessary opportunity to evaluate the implications of the asset purchase before contracting with Scientific. Section 24.111(2)(f), Florida Statutes, makes it necessary for a vendor to provide: a disclosure of the details of any bankruptcy, insolvency, reorganization, or any pending litigation of the vendor. The asset purchase agreement is not such an event. In particular it does not constitute the form of reorganization spoken to in that section. Concerning pending litigation, Scientific did not reveal the existence of the case of Toon Construction Company v. Scientific Games Inc. On May 7, 1991 the parties dismissed an interlocutory appeal before the Supreme Court of the State of Georgia involving that litigation. The litigation had been settled by the parties as of May 13, 1991 when the proposal by Scientific was submitted in response to the RFP. The attorneys for the parties had not dismissed the associated case between those litigants in the Superior Court of the State of Georgia. That dismissal took place on May 14, 1991. Under the circumstances Scientific has not failed to comply with the provision in Section 24.111(2)(f), Florida Statutes, for revealing pending litigation. It did make the Department aware of two other pieces of pending litigation. EVALUATION COMMITTEE AND PROCESS Other than the reference in Section 5.4 to the RFP wherein the Secretary of the Department is required to appoint an Evaluation Committee, no requirement is stated concerning the composition of the Committee or the credentials of its members. The Evaluation Committee was chaired by Robert McKnight, Assistant Secretary of the Department. Committee Member Edwards had been the person most responsible for policy decisions in the development of the RFP document, with assistance in the drafting and in the processing of proposals given by the attorneys Louisa Warren and Cristina Brochin and with assistance by Robert Fiero, then Director of Administrative Services for the Department. In preparing for their participation in the full Committee activities involved in the evaluation process, having considered the criticisms of the amount of time available spoken to by witnesses for Dittler and the remarks of the Committee members concerning the opportunity to review the materials in preparation to carry out the assignment of scores, the evaluators are found to have had an adequate opportunity to prepare themselves to carry forth their duties as Committee members. The committee members indicated that they had sufficient time to evaluate the proposals to the RFP. In this connection Committee Chairman, Senator McKnight, made it clear that the committee members could take as much time as they needed to conclude the evaluation session which all members attended on May 16, 1991. He also asked the committee members during that meeting if they had had enough time for review. Other committee members did not ask the Chairman for additional time to review the materials found within the proposals. ORAL PRESENTATIONS Section 1.1 to the RFP explains that the RFP in the activities which lead to the execution of a contract are associated with the Department policies set out in Rules 53ER87-10 through 53ER87-11, 53ER87-13 through 53ER87-19 and 53ER91-10, Florida Administrative Code together with Chapter 24, Florida Statutes. The vendors were provided copies of those materials. Dittler contends that the RFP by its term required compliance with Rule 53ER87-13(5)(i), Florida Administrative Code. That Section states: (i) When it is considered in the best interest of the State, the Department can acquire goods and services, including major procurement through a competitive negotiation process. A Formal Request for Proposal will be let stating general requirements to be met and that award of the contract will be through a competitive negotiation process. A selection committee appointed by the Secretary or a designee will review all of the proposals and shall select no less than three proposals as finalists deemed to be most highly qualified to perform the required services. The finalists will be notified that they are expected to make a formal presentation to the committee. Based on the presentations, the committee shall select no less than three, whenever possible, proposals in order of preference deemed to be the most highly qualified to perform the requested services. The Secretary or a designee shall negotiate a contract with the most highly qualified firm. Should the Secretary or a designee be unable to negotiate a satisfactory contract with the firm considered to be the most qualified at a price the Department determines to be fair, competitive, and reasonable, negotiations with that firm shall be terminated. The Secretary or a designee shall then undertake negotiations with the second-most qualified firm, the Secretary or a designee shall terminate negotiations with that firm and shall then undertake negotiations with the third-most qualified firm. Should the Secretary or a designee be unable to negotiate a satisfactory contract with any of the selected firms, additional firms may be selected in accordance with this rule, or negotiations may be reinstated following the original order of priority. Negotiations shall continue in accordance with this rule until an agreement is reached or all proposals are rejected. It is this formal presentation which Dittler equates with the need to have an oral presentation. While the RFP through its terms concerning the procedures for selecting a vendor appears to incorporate features under Section 53ER87- 13(5)(i), Florida Administrative Code especially the aforementioned subsections 4 and 5, it also tends to incorporate the alternative procedures for gaining a contract which are set forth in Rule 53ER87-13(5)(b)(c)(d) and (e), Florida Administrative Code, which describe a request for proposal evaluation process where a bid price is quoted when the proposal is submitted. This is as contrasted with subsection (i) where the price is arrived at through negotiations following the ranking of vendors based upon the presentation made to the Evaluation Committee wherein three finalist are selected. The process in this RFP, generally stated, calls for a price quotation, a ranking of vendors based upon a point system that includes points assigned for pricing together with other factors. It does not contemplate under sub (i) a formal presentation to the Evaluation Committee, also referred to as an oral presentation, before entering into a second phase in the process associated with an attempt to negotiate with the best responsive vendor at a price that the Department is satisfied with. Failing the ability to find an acceptable price from the best responsive vendor the Department then attempts to negotiate with the second ranked vendor and then if need be, the third. That corresponds in the hierarchy of rankings to negotiations first with Scientific and then with Dittler and Webcraft if necessary. This hybrid approach to the use of both alternative methods for arriving at a contract as set forth in Rule 53 ER 87-13(5), Florida Administrative Code, is spoken to in Sections 1.1, 1.9, 2.5, 3.1, 4.2, 5.2, 5.3 and 5.4 to the RFP. As stated before, the vendors did not take issue with the blending of concepts set forth in the various provisions of Rule 53 ER 87-13(5), Florida Administrative Code, which deleted any reference to the expectation of the formal presentation to the Committee called for in sub (i). By failing to challenge the procedures for assessment or evaluation within the time allowed in Section 1.25, the parties acquiesced in this arrangement. The process of evaluation described in the RFP is not ambiguous. It does not call for a formal presentation and that requirement may not be inferred. By not reminding the Department that the approach for evaluation employed selected portions from separate alternatives for conducting the process, an approach which the vender might consider contrary to the structure set forth in the rule, within the time frame available for filling a formal written protest, the vendor waived the right to direct the criticism in its petition. That protest should have been filed within 72 hours of the availability of the answers to questions propounded by the vendors to the Department under Section 1.9 to the RFP. That was not done and Dittler and the other vendors must accept the arrangement where formal presentations are not called for and need not be allowed. Concerning the request to present, James Cooney, the Dittler consultant/lobbyist, was aware of the requirements of the RFP when he attended the public session of the evaluation process which took place on May 16, 1991. He requested the opportunity to make an oral presentation from a staff member who was not part of the Evaluation Committee. Cooney was principally interested in being able to respond to the questionable provisions within the response by Dittler to the RFP brought up in discussion by the Evaluation Committee. He did not intend by that request to provide the type formal presentation contemplated by sub (i) to Rule 53 ER 87-13(5), Florida Administrative Code. Neither was Dittler in a position to make that formal presentation on May 16, 1991. Nor did the other vendors come to the evaluation session prepared to make a formal presentation, although Scientific in its cover letter transmitting its proposal stated its willingness to make an oral presentation if requested. Cooney was not allowed to advance his explanations concerning questions about the Dittler proposal. It would have been inappropriate to allow him to do so. The result would have been to give Dittler a competitive advantage. The appropriate arrangement for clarifying minor irregularities technical oversights was upon the impetus by the Department, not the vendors. In any event, these concerns which Cooney intended to address were not disqualifying items in the response to the RFP by Dittler. CONTACTS BETWEEN THE DEPARTMENT AND SCIENTIFIC OUTSIDE THE RFP WHICH MAY HAVE AFFECTED THE DEPARTMENT'S PERCEPTION OF THE RESPONSE BY SCIENTIFIC TO THE RFP. In its proposed fact finding Dittler argues that certain contacts set forth in its Paragraphs 88 through 91 constituted communications outside the RFP process which were improper and intended to disparage the impartiality of the procurement process at issue. That suggestion is not accepted. The contacts which were made did not impair the impartiality of the procurement process. REVIEW STANDARDS USED BY THE EVALUATION COMMITTEE In Paragraphs 92 through 104 of the Dittler proposed fact finding it is suggested that the method of assessment employed by the evaluators, to include the willingness by the Committee to allow the cost formula to be exercised independent of their participation, was not done in a manner consistent with the RFP and was thus unacceptable. The approaches taken were not illegal, dishonest, fraudulent, arbitrary, unreasonable, capricious or done in a manner which is designed to subvert or undermine the purposes and objectives of competitive bidding. Related to the cost proposal, that formula was a mechanical exercise. When the cost results were completed by staff they needed only to be added to the scores which had been assigned by the evaluators for features in the proposal outside the price quotations. The decision by the Committee to rely upon the staff to exercise the formula on cost and add in those scores with the scores arrived at by the evaluators on items other than cost did not violate the spirit and intent set forth in the RFP for assigning overall scores to include the cost component. In this connection the staff that served to support the Evaluation Committee in its activities acted appropriately. CLAIM OF THE USE OF UNARTICULATED CRITERIA PERTAINING TO THE "TIE-IN" OF THE EMPHASIS ON EDUCATION AS PART OF THE MARKETING PLAN Dittler claims that the evaluators acted arbitrarily and in a capricious manner in placing emphasis on an educational "tie-in" in the marketing plan. Dittler complains about giving credit to Scientific for such emphasis in a setting where the RFP did not contemplate the relationship between the educational purposes for which the Florida Lottery was created and the marketing plan prepared by the respective vendors. Dittler goes so far as to assert that this unspoken requirement to promote education in the marketing statement constitutes the use of unarticulated criteria in the evaluation process, in that those criteria concerning education are not found in the RFP. Under Section 2: SPECIFICATIONS, is found the statement of PURPOSE AND OVERVIEW. At Section 2.1 it states: In accordance with Chapter 24, Fla. Stat., the Florida Department of the Lottery has been charged with the responsibility "to operate the state lottery . . . so as to maximize revenues in a manner consonant with the dignity of the state and the welfare of its citizens." The Contractor will support the Lottery in its mission by providing the requisite services identified in Section 2 of the RFP for the Lottery's instant ticket games. The lottery's objective for issuing the RFP is to enter into a Contract with the most highly qualified Respondent who will provide secure gaming products, maximize the sale of instant tickets, and develop game support services which are efficient and assure product knowledge and availability to all lottery retailers and lottery players of Florida. * * * The Lottery is committed to an aggressive marketing plan for instant tickets. It is essential that throughout the Contract period innovative game concepts be developed to assure the growth of instant ticket sales. Further explanations concerning the marketing plan are set forth in Section 2.4.B which states: Between July 1, 1990 and April 1, 1991, the Lottery has released the instant ticket games outlined in Attachment F. Using this information as guidance, Respondents shall provide a detailed strategy and plan for the production of tickets for the fiscal year ending June 30, 1992. This strategy must include projected revenues, game names, ticket quantities, duration, game play, prize structures, and a rationale and plans for advertising, promotion and market research. Respondents shall provide at least five (5) alternative game names for each game included in the plan. The game design and rationale proposed must be creative and directed toward meeting the Lottery's sales goal of $12 million per week with a prize structure of 50%. The plans must include specified methodology for determining game selection, the game break schedule, and supporting market research. The quality and the experience of the Respondent's marketing representative who will be assigned to the Lottery, and the Respondent's marketing, design, advertising and promotional experience with other state lotteries shall be clearly stated. Any offering or proposed feature that is considered by the Respondent as an extra cost item must be fully described as such in the proposal as such. The price for such extra cost items shall be provided separately in the sealed Cost Proposal under "Other Options". As described at 5.3.B the marketing plans were graded on their quality and appropriateness. While the requirement to "tie in" the educational purposes for which the lottery was created is not stated in exact terms, it was not inappropriate for Scientific to place that emphasis and for the evaluators to credit Scientific for its marketing idea. Nor was it inappropriate for the Dittler proposal to be less well received by the absence of such emphasis upon education in its marketing statement. Section 1.1 to the RFP made the vendors aware of that activities involved in the pursuit of a contract are conducted in accordance with Chapter 24, Florida Statutes, among other controlling legal requirements. Section 24.111(1), Florida Statutes, states in part: In all procurement decisions, the department shall take into account the particularly sensitive nature of the state lottery and shall consider the competence, quality of product, experience, and timely performance of the vendors in order to promote and ensure security, honesty, fairness, and integrity in the operation and administration of the lottery and the objective of raising net revenues for the benefit of the public purpose described in this act. Sections 24.102, 24.121 and 24.1215, Florida Statutes, also emphasize the public education purposes of the lottery. Scientific offered its marketing emphasis on education based upon the knowledge of Chapter 24, Florida Statutes, newspaper clippings commenting on the lottery's emphasis on education and past speeches of the Secretary of the Department which placed that emphasis. REQUIREMENTS FOR A MINORITY PROGRAM Section 2.4 A.2. describes the requirements for minority participation expected of vendors responding to the RFP. It states: The Lottery is committed to participation by minorities among its vendors and retailers. The Lottery encourages the use of Minority Business Enterprises as subcontractors whenever the use of such firms is reasonably feasible. Each Respondent should include with its proposal its plans for the use of Minority Business Enterprises as subcontractors, and should set forth any other plans which it has which will positively impact the minority business community. Respondents will receive consideration in the evaluation based on their meaningful use of Minority Business Enterprises. When the RFP calls for the inclusion of a plan for the use of a Minority Business Enterprises as subcontractors, it contemplates a more detailed explanation than was provided by Dittler in its proposal where it said: "As discussed above, Dittler has specific plans to include minority participation if awarded the contract." Dittler also stated concerning minority participation: Dittler is committed to and encourages minority participation in its contracts using Minority Female Loan and Small Businesses. We are proud of out track record and, if awarded this contract, intend to include MBE/WBE participants whereever possible. Concerning the exact intentions in this RFP it was stated: Dittler does not anticipate the use of a subcontractor for any of the date generation, production or support services by the Lottery. As Dittler concedes it did not have a detailed minority participation plan referring to the names of subcontractors it would use with minority ownership certification. Scientific Games and Webcraft's proposals did contain a listing of subcontractors who are minority certified who were proposed to be used if the contract was awarded to one of those vendors. Under the circumstances it was appropriate for the evaluators to mark down Dittler concerning its minority participation. Contrary to Dittler's assertion it was not enough to state the intention to use minority certification without a more detailed statement. Having failed to give a more detailed statement it was not arbitrary and capricious for the evaluators to deduct points from Dittler concerning the requirement for a minority participation plan in that the minority participation plan was part of the evaluation criteria set out at Section 5.3.A. STATEMENTS ON TICKET COMPROMISEABILITY Dittler in its fact proposals at Paragraphs 116 through 119 places emphasis on the misunderstanding by committee member Pribbenow as to distinctions between compromiseability and alterability concerning a statement on compromiseability contained in the Dittler proposal. Dittler also questions a willingness by the Committee to allow Webcraft to amend its proposal to include a statement on the length of time that the Webcraft tickets would withstand compromiseability while not allowing Dittler a chance to explain the statement in the Dittler proposal concerning compromiseability that concerned Pribbenow. Although these criticisms are legitimate they do not pertain to items of such magnitude to demonstrate illegality, dishonestly, fraudulent practice, arbitrariness, unreasonableness, capriciousness or that the actions were done in such a manner as to subvert or undermine the purposes and objectives in competitive bidding. ACCOUNT REPRESENTATIVE At Section 2.4A.1. concerning the vendors organization and credentials, in pertinent part it has this to say about the account representative: The Respondent shall identify the actual persons who will be assigned major roles in the fulfillment of the work obligations outlined on Section 2 herein. The responding firm shall state that each person is available to perform the work if the responding firm is awarded the Contract. In accessing information concerning the account representative that assessment is performed under the criteria set forth at Sections 5.3.A. and 5.4. In carrying out the evaluations concerning the account representative, the evaluators expressed concern that the Dittler account representative had duties in other jurisdictions which would unduly interfere with her ability to meet the needs of the Florida Lottery in servicing the account. It did not appear to have a similar concern about Scientific and its account representative. The Committee also commented on the amount of experience by the designated account representative as an item of concern. There were remarks about the relative placement of the account representative in her organizational hierarchy, that is to say the number of persons in the organizational chain between the account representative and the Chief Executive Officer. The action taken by the evaluation committee concerning the account representatives was not inappropriate. TICKET TESTING Section 2.2B. to the RFP, as amended, called for the submission of the following ticket samples: Aluminized uncoated white card stock, minimum the 10 point or heavier. Aluminized coated white card stock, minimum 10 point or heavier. Recyclable ticket stock, minimum 8 point or heavier. Pursuant to Section 2.4.D.4. . . . each respondent must submit one book of tickets of each type of ticket stock proposed. The tickets will be subjected to testing by the Evaluation Committee to determine whether they meet the criteria set forth in Section 2.3.A5(c). . . . In the question and answer phase of the process BABN had asked the question if the vendors sample tickets could deviate from the requirements for submission of samples and if the Department would extend the time for submitting samples. The answer alluded to the requirements as to types of tickets which were called for up to that point which included categories 1 and 2 under Section 2.2B. BABN was told that they would not be given additional time to submit samples. All vendors were made aware of the question and answer. Prior to the receipt of the proposals on May 13, 1991, a decision was made by the Department, by Evaluation Committee member Carter and one or more other persons employed by the Department to only test 10 point uncoated ticket stock samples. That decision was reached because that was the type of ticket stock currently in use by the Department and the Department was not intending to change the type of ticket stock in this procurement. Dittler submitted four samples of tickets. It had this to say about its uncoated 10 point ticket: A game produced over three years ago for the Vermont Lottery on uncoated 10 point foil. Since the time this game was produced, all of Dittler's customers have requested coded stock. The bar code on this ticket was the first use of a variable bar code for validation of instant tickets in the United States. We submit this particular sample to confirm for the Lottery that Dittler can produce instant tickets on uncoated stock, and not for security evaluations. Dittler made this choice to submit this 10 point uncoated ticket stock realizing that the tickets submitted would be subject to testing. Dittler was not entitled to condition the submission by stating that it was not offered for security evaluations. It was the only aluminized uncoated 10 point stock it submitted. Therefore it had to be offered for all purposes to include security testing. Having failed to meet the requirement to submit a ticket for security testing it was not in compliance with the technical requirements of the RFP. It constituted a failure to meet the requirements set out in Section 3.1(d)10 for providing all items required in Section 2. The failure to comply with the requirement for submission of the ticket for testing made the proposal not responsive under Sections 4.2 and 5.2A in that it failed to meet a mandatory material requirement. The Dittler lack of compliance was similar to the problem with BABN which failed to offer the category of required tickets for testing. Notwithstanding the fact that the RFP called for all categories of tickets submitted to be subjected for testing and only one category was tested, this does not excuse the noncompliance with the requirements of the RFP by Dittler. Under the facts here the decision to test only one category of tickets did not constitute an arbitrary and capricious act on the part of the Department where the RFP calls for the testing of all categories. Lawrence Herb a forensic specialist for the Department with considerable experience as a document examiner tested the tickets which he received on May 13, 1991. He tested only the one category ticket at the instruction of Carter. When Herb tested the one category of ticket he was unaware of the disclaimer in the Dittler proposal concerning its tickets where it was stated that the tickets were not for security purposes. After the decision was reached to test only one category of ticket, Carter did not make persons other than Herb and Colen Benton who were involved with ticket testing aware of that choice. In addition to having been told on May 13, 1991 to only test the 10 point uncoated ticket stock, Carter had told Herb Thursday or Friday the week before the Monday that the proposals were received that only the 10 point uncoated aluminized ticket stock would be tested. Carter did not receive the Dittler proposal for review as an evaluator until May 15, 1991. Consequently, he did not know of the disclaimer in the Dittler proposal concerning the 10 point uncoated ticket stock that Dittler submitted when Carter made the decision to only test that category of ticket and communicated that decision to the testors. None of the vendors were made aware that only the 10 point uncoated ticket stock would be tested before submitting their proposals. In conducting his tests on the 10 point uncoated ticket stock Herb utilized testing methods used by the Department, testing methods that he had seen employed by the current vendor Scientific in its California printing plant and other tests that were not required by the Department standards or the California operation of Scientific. The choice of testing methods, generally described, was not inappropriate nor designed to give advantage to Scientific. Although not in compliance with the requirement to provide tickets for security testing, Dittler's tickets were tested and scores assigned to the test results. The consequence was to treat the Dittler position on security testing of its tickets as being responsive. This was more advantageous treatment than Dittler was entitled to. The ticket testing began on 4:00 p.m. until approximately 10:00 or 11:00 p.m. on May 13, 1991. Work was done from 8:00 a.m. until approximately 11:00 p.m. on May 14, 1991, and on May 15, 1991, work was done from 8:00 a.m. until 11:00 p.m. Some of this time was devoted to generating written reports which were offered to the Evaluation Committee. No test took longer than 24 hours to conclude. Deference need not be paid to the criticisms by Dittler concerning the possibility of a more lengthy testing session. The same test were performed on each vendor's ticket samples. A detailed forensic report based upon the test results, together with a summary of that report commenting on the categories of marketability, compromisability, and alterability and general comments constituted the reporting. Each member received copies of the report and the summary to that report and the actual tickets were made available for examination by the committee members. Under general comments there was a discussion of the appearance of the tickets and other factors. Whether these comments concerning the appearance and associated factors are matters within the parameters of forensic ticket testing, this did not cause any significant disadvantage to Dittler in the criticisms directed under general comments concerned content of construction and security features, matters which Dittler had conceded in its disclaimer. On balance, as Dittler apparently had anticipated, its 10 point uncoated ticket did not perform well when subjected to testing. The other vendors' tickets in this category were acceptable. The presentation by the forensic examiner Herb did not include recommendations as to ranking or scoring and did not promote undue influence in the decision making by the committee members in dealing with security issues. It was appropriate for the evaluators to assign scores under Sections 5.3C and 5.3D of the RFP when taking into account the results of the forensic testing.
Recommendation Upon consideration of the facts found and the conclusions of law reached, it is, RECOMMENDED: That a Final Order be entered which finds that the Scientific proposal is responsive; That Scientific is the best responsive vendor in the hierarchy of ranking, followed by Dittler and Webcraft; That allows the process to proceed to the negotiation phase; and That dismisses the Dittler administrative petition. DONE and ENTERED this 9th day of March, 1992, in Tallahassee, Florida. CHARLES C. ADAMS, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9th day of March, 1992. APPENDIX Case No. 91-3481BID The following discussion is given concerning the proposed fact finding by the parties. Dittler's Facts: Paragraph 1 is subordinate to facts found. Paragraph 2 is not necessary to the resolution of the dispute. Paragraphs 3 and 4 are subordinate to facts found with the exception of suggesting that Horbein has been an executive branch lobbyist continuously. Paragraphs 5 through 9 are subordinate to facts found. Paragraph 10 is contrary to facts found. Paragraph 11 is recitation of legal argument. Paragraph 12 is subordinate to facts found. Paragraph 13 is a accurate portrayal of the testimony but does not lead to the conclusion that the activities by Hornbein beyond November 19, 1990 constituted any lobbying activities which required disclosure of his name nor did the facts suggested in Paragraphs 14 through 19 fall into that category. Paragraph 20 is subordinate to facts found. Paragraphs 21 and 22, see discussion of Paragraph 13. Paragraph 23, the reference to April 4 is corrected to be April 3, 1991. The second sentence is contrary to facts found. The remaining portion of Paragraph 23 is subordinate to facts found. Paragraphs 24 through 34 are subordinate to facts found. Paragraphs 35 and 36 are contrary to facts found. Paragraphs 37 and 38 are subordinate to facts found. Paragraph 39 is not necessary to the resolution of the dispute. Paragraph 40 is contrary to facts found as is Paragraph 41. Paragraphs 42 through 44 are not necessary to the resolution of the dispute. The first two sentences of Paragraph 45 are subordinate to facts found. The remaining sentences in Paragraph 45 and Paragraph 46 are contrary to facts found. Paragraphs 47 through 49 are subordinate to facts found. Paragraph 50 is subordinate to facts found with the exception of its suggestion that Scientific was undergoing a reorganization. Paragraphs 51 and 52 concerning the buy out as discussed by the evaluators is not considered to have influenced the decision on responsiveness of Scientific nor inappropriately influence the scores assigned to Scientific. Paragraph 53 is not relevant. Paragraph 54 constitutes legal argument. Paragraph 55 is contrary to facts found with the exception of the remarks attributable to evaluation committee members. Their impression did not influence the outcome and to the extent that they believe that the asset purchase was an adverse change, their opinion did not comport with the legal requirement for disclosure. Paragraph 56 is contrary to facts found. Paragraph 57 is not relevant information. Paragraphs 58 through 60 are contrary to facts found. Paragraph 61 is subordinate to facts found. Paragraphs 61 and 62 are subordinate to facts found. The discussion in Paragraphs 63 through 67 concerning the Webcraft proposal is not relevant to the extent that it was not plead and Webcraft has not offered a petition speaking to the relative merits of its proposal. Paragraphs 68 through 71 in its first two sentences are subordinate to facts found. The remainder of Paragraphs 71 through 72 are not necessary to the resolution of the dispute. Paragraphs 73 through 75 are subordinate to facts found. Paragraph 76 is rejected in that the process of review by the trier of fact does not call for an assessment in substitution of the witnesses who testified as to the length of time necessary to read the material. Paragraph 77 is contrary to facts found. Paragraph 78 constitutes recitation of legal argument. Paragraphs 79 and 80 are subordinate to facts found. Paragraph 81 is contrary to facts found in that there are other pertinent provisions of the administrative rule that play a role. Paragraphs 82 and 83 are subordinate to facts found. Paragraphs 84 and 85 are contrary to facts found. Paragraph 86 is subordinate to facts found. Paragraph 87 is contrary to facts found. Paragraphs 88 through 91 in the suggestion of impropriety in the contacts by Scientific with the Department is rejected. Paragraphs 92 through 104 in the suggestion that the evaluators acted inappropriately in their review standard is rejected. Paragraphs 105 through 109 are subordinate to facts found. Paragraph 110 is contrary to facts found. Paragraphs 111 and 112 are subordinate to facts found. Paragraph 113 is an incorrect portrayal by Dittler of the requirements of the RFP. Paragraph 114 is subordinate to facts found. Paragraph 115 is contrary to facts found. Paragraphs 116 through 124 are subordinate to facts found. Concerning paragraphs 125 and 126 the facts do tend to show that criticism was not directed to Scientific about its account representative as contrasted with criticisms of Dittler but this doesn't change the case outcome. Paragraphs 127 through the first sentence of Paragraph 130 are subordinate to facts found. The latter sentence to Paragraph 130 constitutes legal argument. Paragraph 131 is subordinate to facts found. The first sentence of Paragraph 132 is contrary to facts found. The latter sentence is subordinate to facts found. Paragraphs 133 and 134 are not necessary to the resolution of the dispute. Paragraphs 135 through the first sentence of Paragraph 139 are subordinate to facts found. The last sentence in Paragraph 139 and Paragraphs 140 through all sentences save the last sentence in Paragraph 141 are not necessary to the resolution of the dispute. Paragraph 141 in the last sentence is contrary to facts found. Paragraphs 142 through 144 are not necessary to the resolution of the dispute. As to Paragraph 145 it is not incumbent that those matters be attended that are suggested in the first sentence. The second sentence is contrary to facts found. Paragraph 146 is not necessary to the resolution of the dispute. Paragraphs 147 through 149 are subordinate to facts found. Paragraphs 150 through 153 with the exception of the last sentence of Paragraph 153 are not necessary to the resolution of the dispute. The last sentence in Paragraph 153 is contrary to facts found. Paragraphs 154 and 155 are subordinate to facts found as is Paragraph 156 in its first sentence. The last sentence in Paragraph 156 is contrary to facts found. Paragraph 157 is subordinate to facts found as is Paragraph 158 in its first sentence. The last two sentences in Paragraph 158 are rejected in that the vendors are not able to substitute their judgment as to appropriate testing. Paragraph 159 is subordinate to facts found. Paragraphs 160 through 162 are not necessary to the resolution of the dispute. Paragraph 163 is subordinate to facts found. Department's Facts: Paragraphs 1 through 21 are subordinate to facts found. Paragraph 22 is not relevant. Paragraphs 23 through all sentences in Paragraph 28 with the exception of the last sentence are subordinate to facts found. The last sentence in Paragraph 28 is not necessary to the resolution of the dispute. Paragraphs 29 through 34 are subordinate to facts found. Paragraph 35 is not necessary to the resolution of the dispute. Paragraphs 36 through all sentences in Paragraph 51 with the exception of the last sentence are subordinate to facts found. The last sentence is not necessary to the resolution of the dispute. Paragraphs 52 through first sentence in Paragraph 55 are subordinate to facts found. The last sentence in Paragraph 55 is not necessary to the resolution of the dispute. Paragraphs 56 through the first sentence in Paragraph 57 are subordinate to facts found. The last sentence in that Paragraph is not necessary to the resolution of the dispute nor is Paragraph 58 nor the first two sentences of Paragraph 59. The remaining sentences in Paragraph 59 are subordinate to facts found. Paragraph 60 is not necessary to the resolution of the dispute. Paragraph 61 through 66 are subordinate to facts found. NOTE: Scientific employees were not involved in the appropriation of the RFP nor did not make attempts to influence the outcome of the appropriation. Paragraph 67 is not necessary to the resolution of the dispute. Paragraphs 68 through 70 are subordinate to facts found. Scientific's Facts: Paragraph 1 is not necessary to the resolution of the dispute. Paragraphs 2 through 19 are subordinate to facts found. Paragraphs 20 and 21 are not necessary to the resolution of the dispute. Paragraphs 22 through the first two sentences in Paragraph 39 are subordinate to facts found. The last sentence in Paragraph 39 is not necessary to the resolution of the dispute. The first sentence in Paragraph 40 is subordinate to facts found. The last sentence in Paragraph 40 constitutes legal argument. Paragraphs 41 through 48 are subordinate to facts found. Paragraph 49 is not necessary to the resolution of the dispute. Paragraphs 50 through 78 are subordinate to facts found. Paragraph 79 is not necessary to the resolution of the dispute. Paragraph 80 through all sentences in Paragraph 113 are subordinate to facts found with the exception of the last sentence which is not relevant in that it is not part of the proposal. Paragraphs 114 through 116 are subordinate to facts found. Paragraph 117 is not necessary to the resolution of the dispute. Paragraphs 118 through 122 are subordinate to facts found. Paragraph 123 is not relevant in that it was not set out in the proposal concerning use of minorities in other states. Paragraphs 124 through the first sentence in Paragraph 126 is subordinate to facts found. The last sentence in Paragraph 126 is not necessary to the resolution of the dispute. Paragraphs 127 through 135 are subordinate to facts found. Paragraphs 136 through 140 are not necessary to the resolution of the dispute. Paragraphs 141 through 143 are subordinate to facts found. Paragraphs 144 and 145 are contrary to facts found. Paragraph 146 is rejected in that it is not the opinion of the evaluator that matters but the language in the Section. Paragraphs 147 through 152 are subordinate to facts found. Paragraph 153 is not necessary to the resolution of the dispute. Paragraph 154 overlooks the unwillingness of the Department to allow additional time to produce a ticket given the response they made to BABN. Paragraph 155 is not necessary to the resolution of the dispute nor are Paragraphs 156 and 157. Paragraph 158 is subordinate to facts found. COPIES FURNISHED: Marcia Mann, Secretary Department of Lottery 250 Mariot Drive Tallahassee, FL 32301 Betty Steffens, Esquire Frank P. Ranier, Esquire McFarlin, Sternstein, Wiley & Cassedy Post Office Box 2174 Tallahassee, FL 32316-2174 Robert Scanlon, Esquire Department of Legal Affairs The Capitol Tallahassee, FL 32399-1050 Thomas K. Equels, Esquire Holtzman, Krinzman & Equels 1500 San Remo Avenue, Suite 200 Coral Gables, FL 33146 Clifford A. Schulman, Esquire Adrian L. Friesner, Esquire Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel 1221 Brickell Avenue Miami, FL 33131 Jim Trucks BABN Technologies Corporation 129 White Oak Drive Newnan, GA 30265
Findings Of Fact Petitioner Auburn Ford, Jr., was employed by Respondent as a Lottery Investigator from November 1987 until his demotion to the position of Security Officer on August 23, 1991. Respondent admits that Petitioner was the only black Lottery Investigator and that he was replaced by a white male. Petitioner's demotion, as a disciplinary action by Respondent, was detailed in a letter dated August 23, 1991, to Petitioner from Respondent's representative. In that letter, it was asserted that Petitioner's demotion was the result of his entry into a high security area without legitimate business reasons on July 14, 1991; his entry into a high security area through use of an access card of a subordinate Security Officer, as opposed to use of his own card; his untruthful response concerning use of a telephone in the high security area; and his inaccurate reporting of hours worked in the month of June, 1991. As a Lottery Investigator, Petitioner's duties included implementation of lottery procedures and policies; maintaining controlled access where appropriate; as well as providing training, guidance and supervision of lottery Security Officers. Lottery Investigators are sworn or certified law enforcement officers while Security Officers are unsworn. At the time of his demotion, Petitioner worked the 11 p.m. to 7 a.m. shift along with Linda Koss, another Lottery Investigator. Along with Koss, he jointly supervised the Lottery Security Officers assigned to that shift. The building housing the lottery department is a secure facility in that all persons entering the building must have access authority evidenced by an access badge. In the absence of an access badge, a temporary or visitor's badge allows access to the building in the company of an escort. Within the lottery building, there are areas which are subject to additional security. Access to these areas is limited to the individuals working in those areas and others who have a work-related need to be there. Each employee's access area is determined by the employee's supervisor. An employee's access badge is then programmed for that particular employee's approved access. Lottery Investigators and Security Officers have access to all areas within the building. Each employee is required to sign an access card receipt form upon receipt of the individual employee's access badge. The receipt states that access privileges accompanying the badge are to be used only by that particular employee and that improper or unauthorized use of the badge could subject the employee to termination or other disciplinary action. Security personnel, including Petitioner, signed such a receipt form and knew that exchanging access cards was a violation of security policies. Policies and procedures of Respondent governing access badges establish a comprehensive scheme designed to ensure lottery security through controlled access to the lottery building and areas within the building. Allen Dees was head of Respondent's Bureau of Security and supervisor of Lottery Investigators and Security Officers, during Petitioner's tenure as a Lottery Investigator. Dees orally instructed employees subject to his supervision to refrain from interfering with items on desks throughout the building. The instruction was repeated emphatically after an incident where the theft of personal employee items resulted in the resignation from employment by one Division of Security employee and termination of another's employment. Since Division of Security employees are alone in the lottery building after normal working hours, any unexplained interference with or use of employees' desks, equipment or property often results in the visitation of suspicion upon security employees. In the course of performing their duties, Lottery Investigators and Security Officers periodically conduct watch tours. These tours consist of walking through specified areas of the building to check for security or safety violations. A watch tour of the executive offices is appropriately called The Executive Watch Tour. This tour includes the entire second floor of the lottery building where the executive offices are located, as well as an area known as the On-Line Game area. Watch tours have a minimum and maximum length of time for completion. The length of allotted time for these tours is established to permit an unhurried but consistent inspection of the areas on the tour. Lottery Investigators and Security Officers conducting a tour are to proceed steadily during that activity and not dawdle. Within the On-Line Game area is located the computer system which runs and maintains the integrity of the on-line gaming system of the Lottery, as well as other sensitive and confidential information. Access to this area is controlled by an access card or badge reader which allows entry only to those persons involved in the gaming operation and to security personnel. Security personnel are instructed to use their access badges to enter the area and remain only long enough to permit a determination that there are no safety or security problems in the area. Entering and remaining in this high security area for reasons other than determining the existence of safety or security problems is unauthorized. On the night of July 14, 1991, Petitioner approached Ed Maxwell, a Security Officer subject to Petitioner's supervision, and demanded Maxwell's access badge. Maxwell, who was monitoring the security computer console at the time and saw that Petitioner's own badge was in Petitioner's shirt pocket, knew that allowing another person to use his access badge was a violation of security policy, but complied since Petitioner was his supervisor. Maxwell later observed from the computer console that his access badge was being used to open the access-controlled door to the On-Line Game Area. When Petitioner later returned his badge, Maxwell asked why Petitioner had not used his own badge. Petitioner simply responded that he was the supervisor and expected Maxwell to do what he requested. Maxwell reported the incident to Linda Koss, the other Lottery Investigator on duty in the building at the time and met later with security chief Dees on July 23, 1991. After the meeting, Maxwell filed a written report dated July 24, 1991, with Dees regarding the incident. On July 31, 1991, Frank Carter, Director of Respondent's Division of Security, wrote a memorandum to Petitioner. In the memorandum, Carter detailed several allegations of misconduct by Petitioner, including Petitioner's use of Security Officer Maxwell's card to the enter the On-Line Games Area and Petitioner's entry into the closed office of Respondent's Deputy Secretary of Marketing. Carter's memorandum requested a response from Petitioner. Petitioner's written response stated that the allegations were untrue. Petitioner's presence in the On-Line Game Area on the date in question was confirmed by a copy of a real-time print out of telephone calls made from that location. A telephone call lasting approximately 16 minutes had been made from the On-Line Game Area to Petitioner's home on July 14, 1992. On August 3, 1991, Maxwell again wrote a memorandum to Dees, complaining about what he perceived as harassment from Petitioner for reporting the previous badge borrowing incident. In the memorandum, Maxwell detailed altercations where Petitioner had called him a "dishonest honkey" and a "liar", as well as attempting to instigate a physical confrontation with Maxwell. Further, Maxwell related that Ford had called his home at midnight when Maxwell was out sick, demanding that Maxwell bring in a doctor's excuse or suffered a loss of pay for the sick time. On August 5, 1991, Koss wrote a memorandum to Dees in which she supported Maxwell's version of the events occurring on the midnight shift and voiced her concern that the effectiveness of the shift was deteriorating. On August 14, 1991, both Petitioner and Koss wrote memorandums to Dees. Each blamed the other for an escalating atmosphere of hostility between two factions on the midnight shift: One faction comprised of Koss and Maxwell, and the other faction comprised of Ford and two other Security Officers. On August 15, 1991, Carter, along with Respondent's Deputy Secretary of Operations and Director of Personnel Administration, met with the midnight shift personnel. During the course of the meeting, Petitioner admitted to use of Maxwell's card in entering the On-Line Game area as well as entry of the Deputy Secretary of Marketing's office. When asked directly if he had ever made a personal call from the On Line Game area, Petitioner stated that he had not. Later Petitioner conceded he had made the July 14, 1992 telephone call from the On-Line Game Area to his home. Petitioner began working the midnight shift in April of 1991. At that time, Koss was already working the midnight shift and was warned by another Lottery Investigator that Petitioner was not always accurate in his report of his hours worked. Koss began keeping track of Petitioner's attendance by noting his absences on her personal calendar. She had no knowledge of whether absences were approved or unauthorized. Koss observed Petitioner's June 1991 time sheet on the desk of an assistant and noticed that he reported having worked on June 12 and June 13, 1991. She had noted on her calendar that Petitioner had been absent on those days with the exception of four hours of excused absence to attend firearms training. She reported the discrepancy to Dees. Dees in turn consulted system computer records to determine if Petitioner had signed into the system on those days and determined that he had not. Consequently, it was determined that Petitioner had falsified his time sheet by recording his presence on both days. The exchange of access badges by Security Officers was a frequent occurrence even though it was known to be a security violation. The practice was frequent with the midnight shift and went unreported to the chief of security, who would have instituted disciplinary proceedings had he known of the practice. Testimony was presented by Randy Ringpfiel, a Security Officer, to the effect that the practice was also widespread among Lottery Investigators and known to management, but Ringpfiel's testimony is rejected in view of his demeanor and lack of credibility while testifying. Previously, in February of 1991, Petitioner accompanied a shipment of lottery tickets to an incinerator facility in Panama City, Florida, where lottery materials were to be destroyed in accordance with a contract between Respondent and the incinerator facility. An argument occurred with personnel at the incinerator. Petitioner perceived that the argument and disagreement with the incinerator workers resulted from the fact that they were white and he was black. Petitioner reported to Dees that the incinerator personnel were discriminating against him. A subsequent meeting was held between Respondent's management officials and management personnel from the incinerator facility. Respondent's management informed the incinerator management that racial discrimination toward its employees would not be tolerated. The attitude of incinerator personnel was not a result of racism. Instead, employees at the facility simply disliked dealing with shipments from Respondent since those shipments required special consideration in the process of destruction by burning. For instance, Respondent's security personnel were required to observe and oversee the actual destruction of all lottery materials. Often, the material from scratch off tickets complicated matters because the level of pollutants in these materials would exceed air quality and heat restrictions under which the facility was constrained to operate. Assured by incinerator management personnel that the altercations with Petitioner were not racial in nature, Respondent's management later transferred Petitioner, at his request, to the midnight shift which did not require performance of any duties associated with the incinerator facility. Carter, along with Respondent's Deputy Secretary of Operations and Respondent's General Counsel, met following the August 15, 1991 meeting with personnel of the midnight shift. The purpose of the meeting was to consider the appropriate disciplinary action to be imposed on Petitioner in view of the infractions committed by him. Since, in addition to violation of lottery security policies, the infractions involved dishonesty both in answering questions and in completing time sheets accurately, the options of termination and demotion were considered. Demotion to the position of Security Officer was determined to be the appropriate penalty after a review of Petitioner's past work performance and prior disciplinary actions. The consensus of management was that a great deal had been invested in the training of Petitioner and he had proven in the past that he could be a satisfactory employee, although not as a supervisor. It was felt that supervisors must be dependable and honest and permit upper level management to rely on their representations. This is particularly important with regard to security personnel assigned to supervisory positions on the night shift where there is no direct supervision beyond the Lottery Investigators on duty. In order to permit Petitioner to be considered for promotion back to the position of Lottery Investigator if his performance improved, the demotion of Petitioner from a sworn or certified law enforcement officer position to an unsworn position was not reported to the Florida Department of Law Enforcement. An action that very likely prevented an investigation and possible removal of Petitioner's law enforcement officer certification by that agency. Prior to his demotion, Petitioner received three performance evaluations. The first of these was an evaluation covering the period of November 13, 1987 to November 13, 1988, where Petitioner received an overall rating of "achieves standards". The evaluation included individual ratings in the categories of reliability, punctuality, and technical application which were "exceeds standards". Petitioner received a "below standards" rating in the category of communication skills. The second evaluation of Petitioner's performance covered the period November 13, 1988 to November 13, 1989. He again received an overall rating of "achieves standards." The evaluation showed that he exceeded standards in the area of technical application, and was deficient or below standards in the category of reliability and punctuality. Petitioner's third evaluation covered the period November 13, 1989 to November 13, 1990. Again, he achieved overall standards and exceeded standards in the area of technical application. He was deficient or below standards in the category of reliability and punctuality, as well as a category termed "other" where his attitude was noted to be poor regarding his work. His comments that he had no incentive were also documented in the evaluation. Petitioner was placed on a performance improvement plan from January 30, 1991, through April 30, 1991, which he satisfactorily completed. Respondent's discipline policy provides that discharge is an appropriate penalty for the first offense of a security policy violation. Penalties for the first offense of falsification of documents range from a written warning to discharge. There is no listed penalty for failing to truthfully answer questions posed by a superior.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that a Final Order be entered dismissing the Petition for Relief. DONE AND ENTERED this 10th day of November, 1992, in Tallahassee, Leon County, Florida. DON W.DAVIS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Fl 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 10th day of November, 1992. APPENDIX The following constitutes my specific rulings, in accordance with Section 120.59, Florida Statutes, on proposed findings of fact submitted by the parties. Petitioner's Proposed Findings Rejected to the extent that this proposed finding seeks to establish that management had prior knowledge of a generalized practice of violation of security procedures through the exchange of access badges by employees. Such a finding is not supported by weight of the evidence. Rejected, Petitioner's entry into a restricted area and use of a telephone for non-work related purposes is undisputed. Also, the evidence supports a finding that Petitioner was untruthful when questioned regarding the matter. 3.-4. Rejected, subordinate to Hearing Officer's findings on these matters. Respondent's Proposed Findings 1.-22. Accepted and addressed in major part, although not verbatim. COPIES FURNISHED: Auburn Ford, Jr. 727 Circle Drive Quincy, Florida 32351 Louisa H. Warren, Esquire Department of the Lottery Capitol Complex Tallahassee, Florida 32399-4011 Margaret Jones Clerk Florida Commission On Human Relations 325 John Knox Road Suite 240 / Building F Tallahassee, FL 32399-1925 Dana Baird, Esq. General Counsel Florida Commission on Human Relations 325 John Knox Road Suite 240 / Building F Tallahassee, FL 32399-1925
