The Issue Whether the Department of Children and Family Services' (FDCF) notice of intent to award the contract for RFP No. MF650TH was contrary to the agency's rules or policies, or the proposal specifications and whether the Petitioner established that FDCF's decision was clearly erroneous, contrary to competition, arbitrary or capricious.
Findings Of Fact 1. The parties' Joint Prehearing Stipulation specified, in pertinent part, as follows: ADMITTED FACTS The following facts are admitted by all parties and will require no proof at hearing: On or about January 23, 1998, the Department issued RFP No. MF650TH ("the RFP"), Automated Fingerprint Identification System (AFIS). The purpose of the RFP was to solicit proposals from qualified proposers to design, develop and implement an automated fingerprint identification system, or AFIS, and to procure a statewide fingerprint identification capability for applicants and recipients of public assistance. The RFP was subsequently amended by Addendums 1, 2, 3, and 4 dated February 18, February 26, March 9, and March 16, 1998, respectively. Two vendors, Lockheed Martin and Sagem Morpho, submitted proposals in response to the RFP on March 23, 1998. The Department posted notice of its intent to award the contract described in the RFP to Morpho on April 17, 1998. On April 22, 1998, Lockheed Martin timely submitted a notice of intent to protest the proposed award to Sagem Morpho, pursuant to the terms of the RFP and Section 120.57(3), Florida Statutes. On May 1, 1998, Lockheed Martin filed its Formal Written Protest and Petition for Formal Administrative Proceeding. Jayne Paris served as Procurement Manager for the AFIS RFP. Connie Reinhardt served as Project Manager for the AFIS project. AGREED UPON ISSUES OF LAW The parties have agreed on the following issues of law: The Administrative Law Judge shall conduct a hearing pursuant to Section 120.57(3), Florida Statutes. All parties have standing to participate in this proceeding. ISSUES OF FACT WHICH REMAIN TO BE LITIGATED. The following issues of fact remain to be litigated: Whether Morpho's AFIS proposal was responsive to the RFP. Whether Lockheed Martin's AFIS proposal was responsive to the RFP. Lockheed Martin contends that the following additional facts remain to be litigated: What the Department's policy is with respect to evaluation of cost proposals on RFPs. Whether and when the Department altered its method of evaluating the AFIS cost proposals. The reason the Department decided not to use the cost proposal ranking and fatal criteria checklist which had been previously prepared. Whether the addenda to the RFP provided supplemental RFP instructions and incorporated clarifications in response to questions submitted by potential proposers. ISSUES OF LAW WHICH REMAIN FOR DETERMINATION BY THE JUDGE The following issues of law remain for determination by the Court: Whether Morpho's AFIS proposal was materially responsive to the RFP. Whether Lockheed Martin's AFIS proposal was materially responsive to the RFP. Lockheed Martin contends that the following additional issues of law remain for determination by the Judge: Whether any minor irregularities waived by the Department in evaluating and scoring the AFIS proposals met the definition of a "minor irregularity" under Rule 60A- 1.002(16), F.A.C. Whether the Department may alter its proposal evaluation methods after proposals have been received by it. Whether the Department's proposed award of the AFIS contract to Morpho is contrary to the Department's governing statutes, rules, or policies, or the AFIS RFP specifications. Whether the Administrative Law Judge shall conduct a de novo proceeding pursuant to Section 120.57(3), Florida Statutes, to determine whether the Department's proposed action is contrary to its governing statutes, rules, or policies, or the AFIS RFP specifications. Lockheed's unilateral statements of issues do not bind the parties or the undersigned but are included so that the pending Motion to Strike may be addressed in the Conclusions of Law, infra. At formal hearing, Petitioner Lockheed contended that Morpho's proposal was not responsive to the RFP and that Lockheed should be awarded the contract. Intervenor Morpho contended that its proposal was responsive and that Lockheed's proposal was not responsive. FDCF contended that both proposals were responsive and that the proposed final agency action to award the contract to Morpho should be carried out. The RFP solicited proposals from qualified proposers to design, develop and implement an Automated Fingerprint Identification System (AFIS) and to procure a statewide fingerprint identification capability for applicants and recipients of public assistance. (Agreed Facts). AFIS is intended to support the client certification process for the benefit programs delivered through the Department's electronic Benefits Transfer program (EBT). The current EBT programs include Food Stamps, Temporary Assistance to Needy Families -- Work and Gain Economic Self-Sufficiency (TANF-WAGES), and the Refuge Assistance (RA) programs. The Department had determined that AFIS is the only acceptable biometric technology. The RFP included the following pertinent provisions: General Provisions – The procurement process will provide for the evaluation of proposals and selection of the winning proposals according to applicable state and federal laws and administrative regulations. All responses received by the closing deadline, unless determined to be non-responsive will be evaluated by an evaluation team. (Exhibit P-1. pp. 66-67). Statement of Purpose The objective of this Request for Proposals (RFP) is to obtain proposals from qualified proposers to design, develop and implement the AFIS in accordance with the requirements defined in Section B of this RFP. FDCF intends to procure a statewide fingerprint identification capability for applicants and recipients of public assistance programs as stated above. Through this competitive solicitation, the FDCF desires to obtain a comprehensive identification service which represents the best value for the state, and which provides all hardware, (with the exception of existing administrative terminals as discussed in RFP Section B, subsection 6), software, communications networks, central site operations, terminal operations training, system administration training, operational support, maintenance, and other services. State personnel will be utilized to operate the system's imaging, fraud investigation, and administrative workstations located at state facilities. The system will include a central identification system to maintain fingerprint and photographic identification records and perform duplicate fingerprint record search and verification. It will also include workstations for creation of the fingerprint and photo identification records and for support of administrative and fraud investigation activities. Evaluation of Technical Proposals Part A Fatal Criteria Failure to comply with all Fatal Criteria will render a proposal non-responsive and ineligible for further evaluation. For a list of Fatal Criteria, see Appendix XIX. Any technical proposal that is incomplete, non-responsive, contains cost or pricing data, or in which there are significant inconsistencies or inaccuracies will be rejected by the FDCF. No points will be awarded for complying with the Fatal Criteria. 1.7 Acceptance of Proposals . . . Untimely proposals will be rejected as unresponsive. * * * All responsive proposals timely submitted will be evaluated. No proposed changes to the terms and conditions set out in this RFP, its appendices and any addenda will be accepted and submission of a proposal which purports to do so will make the proposal non- responsive. The FDCF may waive minor irregularities, but need not do so. Where the FDCF waives minor irregularities, such waiver shall in no way modify the RFP requirements or excuse the proposer from full compliance with the RFP specifications and other contract requirements if the proposer is awarded the contract. * * * The FDCF reserves the right to reject any or all proposals, cancel the RFP, or waive minor irregularities when to do so would be in the best interest of the State of Florida. Minor irregularities are those which will not, in the opinion of the contact person, have significant adverse effect on overall competition, cost or performance. 2. Proposal Format * * * The proposal should be prepared concisely and economically, providing a straightforward description of services to be provided and capabilities to satisfy the requirements of this RFP. Emphasis should be on completeness and clarity of content. In order to expedite the evaluation of proposals, it is essential that proposers follow the format and instructions contained herein. For purposes of this section, the terms "shall, will and must" are intended to identify items that are required to be submitted as part of the proposal. Failure to comply with all such requirements will result in the proposal being rejected as non-responsive. 3.3 Tab 3. Transmittal Letter Each copy of the proposal must include a transmittal letter in the form of a standard business letter and must be signed by an individual authorized to legally bind the proposer. It shall include at a minimum: * * * A statement indicating that the proposer and any proposed subcontractors are corporations or other legal entities and that each satisfied all licensing requirements of state or federal law and that they are authorized to do business within the State of Florida. All subcontractors must be identified. A statement indicating the percentage of work to be done by the proposer and by each subcontractor as measured by the percentage of total proposed price. A statement identifying the proposer's and any proposed subcontractor's federal tax identification number(s). 3.12 Tab 11. Technical Proposal: Corporate Qualifications . . . This section must also identify and describe the corporate capabilities of any proposed subcontractors and must include three (3) references for each subcontractor including names, addresses, and telephone numbers, and a description of the services which are being provided. Subcontractors not identified in the proposal will not be permitted to perform any work under any contract which results from the RFP. Cost Proposed Format The following information is intended to provide proposers with instructions and a format for submitting cost quotations. Cost quotations must be submitted using the provided pricing schedules. Responses that do not provide cost proposals in the required format will be rejected. Unless otherwise noted, the costs quoted shall apply for the entire term of the contact. Proposers are encouraged to identify means to reduce the cost of AFIS services in Florida. As part of the cost proposal, proposers should identify cost reduction factors, the rationale for costs savings, and any options in service that would produce such cost savings. In order to assess FDCF options, proposers are requested to submit AFIS system costs in two ways—as a bundled price per add transaction and as an unbundled price. The selection of the contract pricing method— either bundled or unbundled—shall be at the sole discretion of the FDCF. The FDCF will not make any corrections to arithmetic or other errors in the cost proposal. All numbers submitted will be assumed by the FDCF to be accurate even if an error appears likely. Proposers are cautioned to assure the accuracy of any amounts submitted because they will be held to the amounts which appear in the cost proposal throughout the term of any contract which results from this RFP as well as any extension or renewals of that contract. The RFP provided blank pricing schedules in the required format for submitting bundled and unbundled proposals. The RFP required proposers to submit prices based on alternative bundled and unbundled methods. Under the first method, proposers were to provide one lump sum price per record added to the AFIS database. An "add" is the function by which a fingerprint image is programmed into the computer and no match is found, indicating that fingerprint is not already in the system. Under that method, the provider was to be paid based on the number of fingerprints added to the database. (Schedules 1A and 1B). Under the second method, proposers were to provide a price per add, a price per inquiry (when the system searches the existing database), and prices for all hardware, broken down by type of hardware. This is called unbundled pricing. (Schedules 2A and 2B). As to unbundled pricing, the RFP specifically provided: Proposers must also provide unbundled pricing under the two communications network assumptions. Unbundled pricing includes a unit price per record added to the database, a unit price per workstation, and a unit price per printer. The cost of system development, implementation and operations must be reflected in the unit prices per add or inquiry. Schedule 3 applied to a POS Verification Study. The RFP also required a way to resolve smudged print identifications: 5.3.7. Identification Searching c) Workstations must provide the capability to launch identification search transactions using selected client records with or without minutiae editing. The RFP also required proposers to submit a thumb print option: Option to Add Thumb Prints . . . The department is also considering the option of capturing and storing both thumb prints, in addition to both index fingers, for each applicant household member required to comply. In order to help the department assess this option, the proposer shall provide an incremental price per record added to the database. . . There is no guarantee that the department will exercise the option to capture and store thumb prints. However, should the department decide to exercise this option, the successful proposer's system must be capable of supporting this option. The proposer was to provide the incremental price to capture and store thumb prints in Schedule 4. The RFP required proposers to submit a technical proposal and a separate sealed cost proposal. The RFP contemplated FDCF doing a completeness review against the "Fatal Criteria" provided in the RFP before the agency technically evaluated the proposals. The RFP presumed that those proposals which failed the completeness review would not be technically evaluated. No points were to be assigned via the completeness review. The RFP also contemplated that the cost proposals would remain sealed unless, and until, a proposer had passed the technical evaluation with at least 400 points. The evaluation system set out in the RFP provided for ranking proposals based on 600 possible points for the technical proposals and 400 possible points for the cost proposals. Any score less than 400 points on the technical proposal would mean the proposer could not be evaluated for cost. On March 23, 1998, the day of submittal, the technical responses were opened by Jayne Paris. She was FDCF's Procurement Manager and contact person for this RFP. In doing the completeness review, Ms. Paris compared the technical proposals with the Fatal Criteria checklist for completeness. She also reviewed each proposer's Supplemental Proposal Sheet for completeness and to be sure each proposer had promised compliance with all RFP requirements. She also reviewed each proposer's transmittal letter to be sure neither proposer intended to deviate from the RFP requirements. This completeness review was witnessed by Project Director, Connie Reinhardt, to assure the integrity and accuracy of the process. Although a consultant's checklist geared to federal contract review of cost proposal compliance was in the contract file which FDCF is required to maintain on every project, this checklist was only a suggestion which FDCF had rejected and had not included in the RFP. Ms. Paris did not apply it. Both Morpho and Lockheed used conditional language in their respective transmittal letters. Morpho's transmittal letter stated, "In the event that these stated requirements and assumptions are subsequently altered by the issuing agency, or are proved [sic] to be invalid due to actual experience, Sagem Morpho, Inc. reserves the right to make appropriate modifications to its scheduling or pricing." Lockheed asserts that by this language Morpho attempted to change the terms of the RFP, condition Morpho's prices, and include "pricing information" contrary to the RFP. The RFP required that each proposer identify in its transmittal letter all proposed subcontractors by name, corporate status, eligibility through licensure for state projects, the percentage of subcontract work each subcontractor would be doing, and federal tax identification number, and also provide three references for each contractor. It also provided that any subcontractors not identified by the proposer could not work on the contract. Lockheed's transmittal letter did not propose any subcontractors. It merely stated that Lockheed anticipated the need for a maintenance subcontractor beginning in June 1999, approximately 13 months after the start of the contract, and that Lockheed anticipated submitting a request for approval of a subcontractor by March 1999. Lockheed stated as its reason for the absence of subcontractor information that waiting until June 1999 would result in selection of a subcontractor that would provide the service levels demanded by Lockheed and FDCF. FDCF concedes that if a proposer intended to deviate from the RFP requirements, i.e. if the transmittal letter created a significant variance from the RFP specifications, that variance would have rendered that proposal substantively unresponsive at the completeness review, and no further evaluation of that proposal should have taken place. (TR-133; Exhibits P-2; P-3; DCF's PRO at page 7) However, in her initial completeness review of the respective proposals for the Fatal Criteria, signed management summary material checklist, and transmittal letter, Ms. Paris, in fact, only considered whether all necessary parts of each proposer's response were included. The Fatal Criteria only applied to the technical response. Ms. Paris deferred consideration of the content or effect of each proposer's "extraneous language" related in Findings of Fact 18-20 to the subsequent technical and cost evaluations. Therefore, Lockheed and Morpho were treated equally at the completeness review, because neither was disqualified as non-responsive nor docked any points on the basis of their respective transmittal letters. Ms. Paris' reason for not finding the transmittal letters unresponsive was apparently based at that stage on Section 1.7 of the RFP, which would hold the proposer to the RFP specifications despite waivers of irregularities. The next day, March 24, 1998, Ms. Paris provided the technical evaluation team with Sections I and III of an Evaluation Manual, which included the introduction and the substantive Evaluation Criteria Parts C-K. Ms. Paris also conducted a training session during which she provided a briefing on the evaluation process and instructions to the evaluation team members. The evaluation team was to evaluate only the technical merit of each proposal. Sections II and IV of the Evaluation Manual, which had been prepared for FDCF by outside consultants, were removed before the manual was distributed to the evaluation team on the basis that these sections were cost-related and the technical evaluation team members, whose duties did not include consideration of cost, were not to use them. The technical evaluation team members individually and independently evaluated the technical portion of each proposal and scored each technical response using a scale of 0 to 4 points, as instructed in Part I of the Evaluation Manual. With the exception of questions requiring a "yes" or "no" answer, scores were assigned as follows: 0 = no value; proposer demonstrated no capability to satisfy the Department's needs, ignored this area, or has so poorly described the proposal for this criteria that understanding it is not possible. 1 = poor; proposer demonstrated little or no direct capability to satisfy the Department's needs, or has not covered this area, but there is some indication of marginal capability. 2 = acceptable; proposer demonstrated adequate capability to satisfy the department's needs 3 = good; proposer demonstrated more than just adequate capability and good approach to satisfy the Department's needs. 4 = superior; proposer demonstrated excellent capability and an outstanding approach to satisfy the Department's needs. This scoring concept comports with the RFP, pp 67-68. A proposer had to receive a minimum score of 400 technical points before FDCF would open, review, and rank that proposer's cost proposal. FDCF determined that both Petitioner and Intervenor met this requirement. Morpho received 582.99 points out of a possible 600 points. Lockheed received 559.88 points. Under the scoring system, neither the Fatal Criteria nor the management summary were entitled to any points, so neither proposer was scored any points on those bases during the technical evaluation. "Minutiae editing" is the process of correcting misinformation details in an original fingerprint image which is smudged. Under Section 5.3.7 of the RFP, the system's workstations were required to have the capability to launch identification searches of fingerprint images "with or without minutiae editing." Morpho's system as proposed can launch a search and find a match after minituae editing. Lockheed's system could search, but its proposal candidly admitted that the Lockheed system could not match prints after minutiae editing. FDCF waived this technical problem with Lockheed's proposed system as an "immaterial irregularity" because the RFP expressly provided that proposers would be bound by the terms of the RFP. The RFP required submittal of a thumb print option but reserved the right of FDCF to unilaterally exercise the option. Lockheed submitted Schedule 4, providing for the thumb print identification option, quoting a cost of $0. However, Lockheed conditioned that $0 quote on FDCF accepting Lockheed's proposal at the time of the initial contract. Morpho did not submit any Schedule 4, and Morpho's technical proposal shows this omission was probably inadvertent. FDCF waived as "immaterial" Lockheed's extraneous language conditioning the thumb print option in its proposal and likewise waived Morpho's complete failure to submit a Schedule 4 for the thumb print option pursuant to the RFP. The optional thumb print function had no impact on ultimate scoring of the respective proposals because no value was assigned to it. FDCF has taken the position that since the technical evaluation team did not consider either proposal to be technically "nonresponsive," then all flaws or omissions were properly waived. The cost proposals remained sealed until after the technical proposals were scored by the technical evaluation team. At formal hearing, FDCF personnel testified that it was never FDCF's intent to enter into a contract for the thumb print option at the time of the initial contract and that the thumb print option was purely for future informational purposes. The RFP used mandatory language to ensure that cost proposals would be submitted in two ways -- a bundled price and an unbundled price. The bundled and unbundled pricing schedules were mutually exclusive, and the point system set up in the RFP assigned equal weight to the scoring of the bundled and unbundled price schedules. FDCF reserved the unilateral right to select either bundled or unbundled pricing as its procurement method. Cost proposals were to be scored using a formula which compared each proposer's price to the lowest price proposal. Of the 400 points possible for cost proposals, 195 points were allocated by the RFP to the bundled pricing schedules (Schedules 1A and 1B), 195 points were allocated to the unbundled pricing schedules (Schedules 2A and 2B), and 10 points were allocated to the POS Verification Study (Schedule 3). The RFP clearly indicated that both bundled and unbundled prices were required to be submitted on the provided Schedule format "in order to assess FDCF options." FDCF did not decide until after scoring the cost proposals and immediately before it was ready to post the Notice of Intent to Award to Morpho, that it would elect to contract based on the bundled cost proposals. Up until that moment, the bundled and unbundled price schedules had some significance to FDCF, if only for flexibility in procurement. The RFP specified that FDCF would not own any of the equipment (hardware) for which it was seeking single unit prices in the unbundled schedules. Nonetheless, on the unbundled pricing schedules provided in the RFP, proposers were required to provide an unbundled unit price per workstation and unit price per printer. On Schedules 2A and 2B, "Unbundled Pricing," Morpho did not provide an entry in dollars and cents for fraud workstation printers or administrative workstation printers. Rather, Morpho's schedule inserted in those spaces, "included in w/s (workstation) price" or "included above." Lockheed also had some extraneous language on one of its schedules as opposed to just a dollar amount, but cost breakout was clear. Morpho considered the printers part of the imaging and fraud investigation workstations because the RFP required a dedicated printer for each workstation and the RFP specified FDCF would not own or maintain any hardware. Ms. Paris reviewed each cost proposal for compliance with Section C of the RFP. She was concerned about whether Morpho's "unbundled" schedules complied with the RFP. The RFP defined waiveable "minor irregularities" as "those which will not, in the opinion of the contact person, have significant adverse effect on the overall competition, cost or performance." Upon advice of her supervisor, Connie Reinhardt, and FDCF's General Counsel, Ms. Paris determined both proposals to be responsive, and substituted a price of "zero" in the questionable spaces on Morpho's "unbundled" schedules, despite the absence of a pricing break-out between the fraud workstations and printers or between the administrative workstations and printers on Morpho's "unbundled" schedules. Ms. Paris conceded that she was never referred to Rule 68-1.001(16) Florida Administrative Code,1 which defines "minor irregularity" in terms of effect on cost. Ms. Paris was told that only items which had an effect on the overall scores of the responding proposers' cost proposals could not be waived. The cost proposals were not evaluated and scored subjectively as the technical proposals had been. No Fatal Criteria applied to this third review phase. Scoring was to be based on a purely mathematical formula devised prior to distributing the RFP. The RFP drafters had contemplated ranking the respective cost proposals by simply inserting the dollar values each proposer placed on the unbundled unit price list into a computer program. Ms. Paris attempted to rank the cost proposals. To assure the integrity of the process, Chris Haggard, Automation Specialist, physically entered cost proposal figures into the computer program. Ms. Paris instructed him to ignore any "extraneous language" on the schedules of both proposers. The computer program would not accept the "zeros" inserted by FDCF. Without any substitutions by Ms. Paris, Morpho had bid "zero" in the space indicating there would be no charge for the unbundled unit price per inquiry, thereby intending to signify that there would be no charge for this function. The record does not suggest that this proper use of "zero" had any effect on the computer program. Ms. Reinhardt viewed the problem with FDCF's imputed zero components as a purely technical problem with the computer program and not an "irregularity" under the RFP. The computer program was adjusted to accommodate the imputed zeroes and produce a spreadsheet. On unbundled Item 14, FDCF ranked Morpho with a score of one and Lockheed with 15, the maximum. On Item 15, the fraud workstation color printer, Morpho was ranked 15 and Lockheed was ranked zero. On Item 16, the administration workstation, Morpho was ranked three; Lockheed was ranked 15. On Item 17, the administration workstation printer, Morpho was ranked 15 and Lockheed was ranked zero. Pursuant to the adjusted spreadsheet, Morpho received a score of 343 for its cost proposal, and Lockheed received a score of 240. Even if Morpho had received zero points for the printers and work stations (lines 14-17 of the Unbundled Schedules), and if Lockheed had received the maximum number of points available on these items, Morpho still would have received the higher score for its cost proposal. At the disputed fact hearing, FDCF gave as its justification for imputing "zero" for bundling language in Morpho's "unbundled" schedules the following reasoning: because FDCF had requested unbundled prices purely for future contracts, not the contract to arise out of this RFP, for informational purposes, or for a cost benefit analysis for state budget purposes; because the RFP specified that FDCF would neither own nor maintain any of the hardware proposed for this RFP; because Morpho's failure to conform to the unbundled price format was not "irregular" if Morpho did not sell printers independently and Morpho used the unbundled schedules in a manner consistent with Morpho's offer; because the zero imputed by FDCF reflected accurately the integrated costs in effect; because Morpho was not charging separately for the printers; because FDCF's insertion of "zero" constituted no unfair economic advantage to Morpho; and finally, because having chosen the bundled option, FDCF believed the Morpho proposal will save a great deal of money and "represent the best value for the state."2 The RFP specified that the successful proposer would be responsible for the "cost of system development, implementation, and operations" for the contract term as well as any extensions and include that cost in either the unbundled unit price per record added (per add) or the price per inquiry (per inquiry) in Schedules 2A and 2B. There is no RFP requirement that the maintenance portion be "unbundled" further. "Cost of . . . operations" meant "cost of maintenance." According to Richard Woodard, who was responsible for the Morpho cost proposal, including Item 9, Morpho's price per add of $6.70 on Schedule 2A included $.80 for maintenance. However, at formal hearing, Lockheed elicited from Ms. Paris testimony that even though Morpho had indicated that maintenance was not included in its unbundled schedules, FDCF had decided to hold Morpho to the prices shown in their per add or per inquiry line item (TR-61), and that because of Morpho's own extra schedule attached to the bottom of unbundled pricing Schedule 2A, Morpho's maintenance price over 5 years could be calculated on current maintenance prices. (TR-62) When the prices are calculated mathematically over the life of the contract they do not correspond to the $.80 per add testified to by Mr. Woodard.3 Morpho's maintenance cost schedule and the provisions within Morpho's "Comments on Unbundled Pricing" indicated that only 12 months of warranty were included with the equipment identified in Morpho's unbundled pricing schedules and that after 12 months, maintenance contracts would be negotiated. FDCF ignored this as "extraneous language," and did not consider it to be a material irregularity. The Morpho bundled cost proposal was calculated on an average of 2.2 persons per file who would require finger imaging and matching. Morpho asserted that these calculations had been made on a "worst case scenario" based on RFP Addendum 3's specification that an actual number cannot be provided. It is expected that less than 2.2 persons per case will be printed. Lockheed selected a number less than 2.2 per file, and asserted that Morpho's "worst case" scenario is, in effect, a "best case" scenario because the higher the number of prints, the less Morpho can afford to charge per add; that by selecting the 2.2, Morpho has materially failed to comply with the RFP specification which estimated less than 2.2 persons per file, and that because Morpho also inserted the extraneous language in its transmittal letter as set out in Finding of Fact 19, supra., Morpho's proposal not only varied the express terms of the RFP by the use of "2.2" but also included "pricing information" in its transmittal letter and conditioned its prices on the potentially false assumptions stated or on a figure greater than a figure "less than 2.2," as required by the RFP.
Recommendation Upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Florida Department of Children and Family Services enter a final order rejecting all proposals. DONE AND ENTERED this 21st day of December, 1998, in Tallahassee, Leon County, Florida. ELLA JANE P. DAVIS 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 Filed with the Clerk of the Division of Administrative Hearings this 21st day of December, 1998.
Findings Of Fact The Respondent, Charles H. Butler, Jr., was for all periods relevant to this case a certified building contractor with the State of Florida, holding license number CB CA13872. It is officially recognized that on September 17, 1987, the administrative complaint that is the subject of this case was filed against Charles H. Butler, Jr. It is further officially recognized that the administrative complaint charges the Respondent with only two violations: Exhibiting "financial mismanagement, misconduct, or diversion, in violation of 489.129(1)(h) and (m)." Failing "to properly supervise the finances on said job, in violation of 489.129(1)(m), (j); 489.119; 489.105(4)." In April, 1986, Charles H. Butler, Jr., entered into a contract with Albert R. Harrelson to construct a commercial building for $144,000. R. Ex. 20, P. Ex. 6. Article 1 of the contract provides that "this contract includes by reference the following: 1) contract agreement form, 2) specifications, 3) material lists, and 4) approved plans." (E.S.) Article 3 of the contract stated that the "required plans and engineering to obtain a building permit are provided by the owner at his cost." The specifications, material lists, and approved plans are not in evidence. Pursuant to Article 7 of the contract, there was to have been a draw schedule for payments. The parties never agreed to a draw schedule as a part of their contract. A large portion of the loan for the construction was provided by Sun Bank of Tampa Bay. Sun Bank established a draw schedule for disbursement of the loan to the contractor, Mr. Butler, as progress was made in construction. Mr. Butler was not consulted regarding this draw schedule, and had not agreed to it. Mr. Harrelson apparently did not either since he testified that he got a copy of the Bank's draw schedule several months after entering into the contract with Mr. Butler. It is concluded that the draw schedule used by the Bank was imposed by the Bank, and was not a part of the contract between Mr. Butler and Mr. Harrelson. Sun Bank hired Inspection Service, Inc., to conduct inspections of the progress of the construction and in that manner to verify that construction had been completed, stage by stage, to justify disbursement of installments under the draw schedule. Sun Bank required Mr. Harrelson to approve loan disbursements as disbursements were made. In reliance upon progress reports of its inspector and Mr. Harrelson, Sun Bank made a total of $107,000 in disbursements under the loan. P. Ex. 9. Sun Bank had disbursed about $88,000 of this amount by February or March, 1987. P. Ex. 9. The amount disbursed by Sun Bank was never intended to cover the entire cost of construction. Mr. Harrelson was required to come up with his own funds to meet the total contract price. Mr. Harrelson refused to make payments to Mr. Butler outside the draw schedule imposed by the Bank. Mr. Harrelson discharged Mr. Butler for alleged breach of contract in March, 1987. Mr. Harrelson testified at length concerning defects that he perceived in the construction of the project and resultant extra financial cost to himself. While Mr. Harrelson testified as to his perception of mistakes made by Mr. Butler, Mr. Harrelson's testimony did not clearly explain the exact scope of the contract. There is no evidence that Mr. Harrelson has any training in the construction of commercial buildings. Mr. Butler testified at length about the delays and inadequacies in receipt of payments under the draw schedule, as well as disagreements he had with Mr. Harrelson concerning what was required by the contract. From the testimony of Mr. Harrelson and Mr. Butler it is concluded that there were changes made in the original plans, changes made in the scope of the work, changes made during the construction due to problems encountered, and that these changes were by attempted oral agreement. For example, neither party could agree as to who was to submit plans, although the written contract clearly says that the owner is responsible. The plans were never placed in evidence. Mr. Butler insists that the contract had an addendum. R. Ex. 20. Mr. Harrelson was not recalled to confirm or deny this testimony, but the contract submitted by the Petitioner, P. Ex. 6, has no addendum. There was to have been a draw schedule, but none was ever agreed to by the parties. Thus, the testimony is too fragmented, confused, and unclear to make a finding as to the exact scope and schedule of the contract. There was no testimony by the person who made the progress inspections for Sun Bank. There was no testimony from any expert in the field of contracting. During the formal administrative hearing, the Petitioner sought to voluntarily dismiss the charge of diversion of funds. The dismissal was sought without prejudice to refiling that charge at another date. The basis of the motion was that the witness from Sun Bank of Tampa did not bring files to answer questions from counsel, and was unprepared to answer from memory. It appeared during the course of the examination of the witness that counsel was not familiar with the documents in the possession of the witness, and that the witness was not prepared to present evidence. The motion was denied.
Recommendation It is therefore recommended that the Department of professional Regulation, Construction Industry Licensing Board, enter its final order dismissing the administrative complaint against Charles H. Butler, Jr. DONE and RECOMMENDED this 23rd day of March, 1988, in Tallahassee, Florida. WILLIAM C. SHERRILL, JR. 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 23rd day of March, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-5041 The following are rulings upon proposed findings of fact which have either been rejected or which have been adopted by reference. The numbers used are the numbers used correspond to the numbered and unnumbered paragraphs and sentences in the findings of fact proposed by the Petitioner. (All paragraphs after paragraph 3 have been deemed to be numbered sequentially thereafter.) Findings of fact proposed by the Petitioner: 3. The first sentence is subordinate to findings of fact that have been adopted. It is true, however, and is adopted by reference. Since the entire contract was never proven by clear and convincing evidence, the relevance of this proposed finding of fact is unknown. It is impossible to conclude that the Respondent caused a "self made deficit of $25,000" since the contract itself was never proven by clear and convincing evidence. The administrative complaint did not charge Mr. Butler with failure to supervise the construction of the building. It charged him with financial mismanagement and failure to supervise finances. Moreover, the relevance of evidence concerning Mr. Butler's presence on the job site was never tied into the charge of financial mismanagement. No finding can be made on this record as to the percentage of completion on any date since the contract was never proven. With respect to the remainder of this proposed finding (the list of construction defects), the administrative complaint did not charge Mr. Butler with incompetence in the construction of the building. It charged him with financial mismanagement and failure to supervise finances. Since the entire contract, including changes and alleged defects, was never proven by clear and convincing evidence, it is impossible to conclude that Mr. Harrelson paid more than the contract price. The last two sentences are not relevant to the charge of financial mismanagement. The first sentence is not supported by the evidence. With respect to the next sentence of this proposed finding (the list of construction defects), the administrative complaint did not charge Mr. Butler with incompetence in the construction of the building. It charged him with financial mismanagement and failure to supervise finances. The last sentence is true, and adopted by reference. Since the entire contract was never proven by clear and convincing evidence, the relevance of this proposed finding of fact is unknown. No finding can be made on this record as to the percentage of completion on any date since the contract was never proven. Findings of fact proposed by the Respondent: None. COPIES FURNISHED: Lee Sims, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 Charles H. Butler, Jr., Pro Se 8917 Maislin Drive Tampa, Florida 33610 Fred Seely, Executive Director Construction Industry Licensing Board Post Office Box 2 Jacksonville, Florida 32201 Tom GallagherSecretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 William O'Neil, General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750
The Issue The issues in these consolidated cases are: (1) whether the decision by Respondent, Department of Transportation, to reject all bids for the contract at issue was illegal, arbitrary, dishonest, or fraudulent; and (2) if so, whether Respondent's actions in cancelling the notice of intent to award the contract at issue to Cyriacks Environmental Consulting Services, Inc., ("CECOS") and requiring the submittal of new price proposals were clearly erroneous, contrary to competition, arbitrary, or capricious.2/
Findings Of Fact The Parties Respondent is the state agency that issued the RFP to procure the Contract for Respondent's District IV. CECOS is an environmental consulting and services firm that submitted a response to the RFP, seeking award of the Contract. DB is an environmental consulting and services firm that submitted a response to the RFP, seeking award of the Contract. DB was granted party status to DOAH Case No. 16-0769 by Order dated February 29, 2016, and by Order dated March 9, 2016, was determined to have standing in that case as a party whose substantial interests were affected by Respondent's decision to reject all proposals. Overview of the Procurement Process for the Contract Respondent issued the RFP on or about October 1, 2015. The RFP sought to obtain support services related to environmental impacts review for projects in Respondent's District IV work program; wetland mitigation design; construction, monitoring, and maintenance; permitting of mitigation sites; exotic vegetation control and removal in specified locations; relocation of threatened, endangered, or rare flora and fauna; permit compliance monitoring; and other services specified in the RFP. The RFP stated Respondent's intent to award the Contract to the responsive and responsible proposing vendor6/ whose proposal is determined to be most advantageous to Respondent. The responses to the RFP were scored on two components: a technical proposal, worth a total of 60 points, that addressed the proposing vendor's experience, qualifications, and capabilities to provide high-quality desired services; and a price proposal, worth a total of 40 points, that addressed the proposed price without evaluation of the separate cost components and proposed profit of the proposing vendor, compared with that proposed by other vendors. The price proposal evaluation was based on the following formula: (Low Price/Proposer's Price) X Price Points = Proposer's Awarded Points. The Special Conditions section of the Advertisement portion of the RFP, paragraph 3, stated in pertinent part: In accordance with section 287.057(23), Florida Statutes, respondents to this solicitation or persons acting on their behalf may not contact, between the release of the solicitation and the end of the 72- hour period following the agency posting the notice of intended award, . . . any employee or officer of the executive or legislative branch concerning any aspect of this solicitation, except in writing to the procurement officer or as provided in the solicitation documents. Violation of this provision may be grounds for rejecting a response. The period between the release of the solicitation and the 72-hour period after posting of the intended award is commonly referred to as the "cone of silence." The Special Conditions section of the Advertisement portion of the RFP, paragraph 19, informed vendors that Respondent reserved the right to reject any or all proposals it received. Exhibit B to the RFP, addressing compensation, limited compensation for all authorizations for work performed under the Contract to a total of $5,000,000. Exhibit B stated that the schedule of rates listed in the Price Proposal Form C (i.e., the rates submitted for the sections comprising Exhibit C to the RFP) would be used for establishing compensation. On October 7, 2015, Respondent issued Addendum 1 to the advertised RFP. Addendum 1 revised Exhibit A to the RFP, the Scope of Services; and also revised Exhibit C to the RFP, the Bid Sheet, to provide it in Excel format. As revised by Addendum 1, Exhibit C consists of an Excel spreadsheet comprised of six sections, each of which was to be used by the responding vendors to propose their rates for the specified services being procured in each section of the Bid Sheet. Section 6 of the Excel spreadsheet, titled "Trees, Schrubs [sic], and Ground Cover, consists of eight columns and 258 rows, each row constituting a plant item on which a price proposal was to be submitted. The columns are titled, from left to right: No.; Scientific Name; Common Name; Unit; Estimated of [sic] number of Unites [sic]; Rate; Extension (Unit X Rate); and Multiplier 2.5 (Price X 2.5). Each row of the spreadsheet in Section 6 identified, as a fixed requirement for this portion of the proposal, the specified type of plant, unit (i.e., plant size), and estimated number of units (i.e., number of plants). For each row of the Section 6 spreadsheet, only the cells under the "Rate" column could be manipulated. Vendors were to insert in the "Rate" cell, for each row, the proposed rate for each plant item. The cells under all other columns for each row were locked, and the RFP stated that any alteration of the locked cells would disqualify the vendor and render its proposal non-responsive. The instructions to Exhibit C, Section 67/ stated: Trees, Schrubs [sic], and Ground Cover Price of plants shall include project management, field supervision, invoicing, installation, mobilization of traffic, water throughout the warranty period, fertilizer and [sic] six (6) month and demobilization, minor maintenance guarantee. Installation of plant material shall be per the Scope of Services. All planting costs shall include the cost to restore area to pre-existing conditions (i.e., dirt, sod, etc.). On October 20, 2015, Respondent issued Addendum 2, and on October 29, 2015, Respondent issued Addendum 3. Both addenda changed Respondent's schedule for reading the technical proposal scores, opening the sealed price proposals, and posting the intended awards. Addenda 1, 2, and 3 were not challenged. However, a key dispute in these consolidated proceedings is whether the Addendum 1 Bid Sheet in Section 6 and the instructions for completing that Bid Sheet were ambiguous, or whether Respondent reasonably believed them to be ambiguous. The vendors were to submit their responses to the RFP, consisting of their technical proposals and price proposals, by October 16, 2015. CECOS, DB, and four other vendors timely submitted responses to the RFP. On November 2, 2015, the scores for the technical proposals submitted by the vendors were presented to the Selection Committee ("SC") at a noticed meeting. DB received the highest number of points on the technical proposal portion of the RFP. The SC met again on November 3, 2015. At that time, Respondent's Procurement Officer, Jessica Rubio, read the total awarded points for each vendor's price proposal, as well as each vendor's total combined points——i.e., total points for technical proposal and price proposal. CECOS received the highest number of points for the price proposal portion of the RFP, and also received the highest total combined points. Respondent recommended, and the SC concurred, that Respondent should award the Contract to CECOS. At 10:00 a.m. on November 3, 2015, Respondent posted the Proposal Tabulation, constituting its notice of intent that CECOS would be awarded the Contract.8/ CECOS submitted a price proposal of $4,237,603.70. DB submitted a price proposal of $9,083,042.50. The other four vendors' price proposals ranged between $4,540,512.90 and $5,237,598.55. The "cone of silence" commenced upon Respondent's posting of the Proposal Tabulation, and ended 72 hours later, on November 6, 2015, at 10:00 a.m. As discussed in greater detail below, after the Proposal Tabulation was posted, Respondent discovered an apparent ambiguity in Exhibit C, Section 6, regarding the instructions to that section and the inclusion of the "2.5 Multiplier" column on the Bid Sheet. After an internal investigation, Respondent decided to cancel its intent to award the Contract to CECOS. On November 5, 2015, Respondent posted a notice that it was cancelling the intent to award the Contract to CECOS. On November 5, 2015, DB filed a Notice of Protest, stating its intent to challenge the award of the Contract to CECOS. Thereafter, on November 9, 2015, DB contacted Respondent by electronic mail ("email") to withdraw its Notice of Protest.9/ Due to the apparent ambiguity in Exhibit C, Section 6, on November 9, 2015, Respondent issued Addendum 4 to the RFP. Addendum 4 required the responding vendors to submit new price proposals for all sections (i.e., sections 1 through 6) of Exhibit C to the RFP. Addendum 4 also established a new timeline for a mandatory pre-bid conference to be held on November 12, 2016; set a sealed price proposal due date of November 19, 2016; and identified new dates for opening the price proposals and posting the Notice of Intended Award of the Contract. On November 12, 2015, Respondent conducted a mandatory pre-bid conference to address Addendum 4. The participating vendors expressed confusion and posed numerous questions regarding the submittal of new price proposals and their technical proposals. Immediately following the pre-bid conference, Respondent issued Addendum 5, which consisted of a revised Exhibit A, Scope of Services; revised Exhibit C, Bid Sheet in Excel format for all six sections; and responses to the questions posed at the pre-bid conference.10/ The Addendum 5 Bid Sheet comprising Exhibit C, Section 6, was substantially amended from the version that was published in Addendum 1. Specifically, the column previously titled "Rate" was changed to "Rate Per Unit"; the "Extension (Unit X Rate)" and "Multiplier 2.5" columns were deleted; and a new column titled "Proposed Cost (Rate per Unit X Est. No. of Units)" was added. Additionally, the instructions for Section 6 were substantially amended to read: "'Rate Per Unit' must include all costs associated with the purchase, installation, watering, fertilization, project management, field supervision, travel, invoicing, labor, maintenance of traffic, mobilization and demobilization, staking and guying, maintenance of planting site throughout the 180[-]day plant warranty." These amendments were intended to clarify that the proposed rate for each plant unit was to include all overhead costs associated with performance of the Contract with respect to that particular unit. On November 13, 2015, CECOS filed a Notice of Protest to Respondent's issuance of Addendum 4, requiring the vendors to submit new price proposals. Thereafter, on November 23, 2015, CECOS filed the First Petition challenging Respondent's decision, announced in Addendum 4, to require the responding vendors to submit new proposals for the price proposal portion of the RFP, and its decision to cancel the notice of intent to award the Contract to CECOS.11/ Once CECOS filed its Notice of Protest on November 13, 2015, Respondent ceased all procurement activity directed toward awarding the Contract. On December 17, 2015, Respondent posted notice that it was rejecting all proposals and that the Contract would be re- advertised through issuance of a new RFP. On December 22, 2015, CECOS filed a Notice of Protest, and on January 4, 2016, filed its Second Petition challenging Respondent's decision to reject all proposals and re-advertise the Contract. Bases for Respondent's Actions Shortly after Respondent posted the Proposal Tabulation noticing its intent to award the Contract to CECOS, Christine Perretta, owner and president of DB, sent an email to Respondent, then called Rubio to inquire about Respondent's decision to award the Contract to CECOS. The evidence shows that these contacts occurred sometime on or around November 3, 2016.12/ In her telephone discussion with Rubio, Perretta inquired about how to file a notice of protest13/ and also asked whether Respondent had reviewed the vendors' price proposals for correctness or accuracy, or had simply chosen the lowest price proposal. In the course of the discussion, Perretta informed Rubio that DB had submitted a "loaded" rate for each plant unit ——meaning that DB's rate proposed for each plant item in the "Rate" column on the Section 6 Bid Sheet consisted not only of the cost of the plant item, but also the cost for all associated overhead services listed in the instructions to Section 6 and in the RFP Advertisement, paragraph 18(v), plus compensation.14/ Rubio could not clearly recall whether, in the course of their discussion, Perretta had inquired about the use of the 2.5 multiplier, and there is conflicting evidence as to whether Perretta related her view that CECOS may not be able to perform the Contract based on the price proposal it had submitted. In any event, as a result of Rubio's discussion with Perretta, Rubio determined that she needed to review Exhibit C, Section 6. In the course of her investigation, Rubio called Wendy Cyriaks, owner and president of CECOS.15/ Cyriaks confirmed that CECOS had submitted an "unloaded" rate for each plant item—— meaning that it had included only the cost of each plant item in the "Rate" column on the Section 6 Bid Sheet, and had not included, in the proposed rate for each plant item, the cost of the associated overhead services listed in the instructions to Section 6 or RFP Advertisement, paragraph 18(v), or compensation. Cyriaks told Rubio that CECOS expected that its overhead costs and compensation for each item would be covered through use of the 2.5 multiplier. Also in the course of her investigation, Rubio asked Bogardus whether he had intended the 2.5 multiplier to be used to cover all costs, including vendor compensation, associated with obtaining, installing, and maintaining the plant items listed in Section 6. Bogardus initially confirmed that his intent in including the 2.5 multiplier on the Section 6 Bid Sheet was to cover all of the overhead costs and compensation. However, the persuasive evidence establishes that Bogardus subsequently agreed with Rubio that the 2.5 multiplier should not have been included in Section 6. Pursuant to her discussions with Perretta and Cyriaks, Rubio realized that the wide discrepancy between DB's and CECOS' price proposals was due to their differing interpretations of the instructions in Section 6 regarding plant item rates and the inclusion of the "2.5 Multiplier" column in the Section 6 Bid Sheet. Rubio testified, persuasively, that the inclusion of the "2.5 Multiplier" column rendered Exhibit C, Section 6, of the RFP ambiguous. To that point, the RFP does not contain any instructions or discussion on the use of the 2.5 multiplier. Therefore, to the extent the multiplier was intended to be used by the vendors to build overhead costs and compensation into their price proposals, the RFP fails to explain that extremely important intended use——leaving the significance and use of the multiplier open to speculation and subject to assumption by the vendors in preparing their price proposals. Rubio reasonably viewed DB's and CECOS' divergent interpretations of the instructions and the inconsistent use of the 2.5 multiplier as further indication that Section 6 was ambiguous. She explained that in order for Respondent to ensure that it is procuring the most advantageous proposal for the State, it is vitally important that the RFP be clear so that responding vendors clearly understand the type of information the RFP is requesting, and where and how to provide that information in their price proposals. Rubio persuasively testified that in her view, the instructions in Section 6 had, in fact, called for a loaded rate, but that CECOS had erroneously assumed, based on the inclusion of the "2.5 Multiplier" column in the Section 6 Bid Sheet, that overhead and compensation for each plant item would be covered through use of the 2.5 multiplier, and that as a consequence, CECOS incorrectly proposed unloaded rates for the plant items. In Rubio's view, CECOS' error was due to the ambiguity created by the unexplained and unsupported inclusion of the 2.5 multiplier in Section 6. Rubio testified that CECOS had been awarded the Contract because it had submitted the lowest price proposal, but that its proposal was based on an unloaded rate for the plant items, contrary to the instructions for Section 6. In Rubio's view, CECOS' price proposal was unresponsive, and CECOS should not have been awarded the Contract. Rubio also testified, credibly and persuasively, that the use of the 2.5 multiplier in Section 6 for compensation purposes rendered the RFP arbitrary. Respondent's District IV historically has not used a 2.5 multiplier for compensation purposes for commodities contracts, and no data or analyses exist to support such use of a 2.5 multiplier.16/ This rendered the RFP both arbitrary and unverifiable with respect to whether it was structured to obtain the most advantageous proposal for the State. To this point, Rubio credibly explained that Respondent's existing environmental mitigation services contract with Stantec was procured through the "Invitation to Negotiate" ("ITN") process. In that procurement, Respondent negotiated to obtain the best value for the State. The ITN bid sheet contained a 2.5 multiplier that was used only for weighting purposes to evaluate and determine which firms would be "short- listed" for purposes of being invited to negotiate with Respondent for award of the contract. Importantly——and in contrast to the RFP at issue in this case——the multiplier in the ITN was not used to determine the final prices, including compensation, to install trees, shrubs, and ground cover under that contract. Rubio also testified, credibly, that the Bid Sheet was structurally flawed because it did not allow the vendor to clearly indicate the "unit price" inclusive of all overhead costs, and that this defect would result in Respondent being unable to issue letters of authorization to pay invoices for the cost of installing the plant items or compensating for work performed. For these reasons, Respondent determined that it needed to cancel the intent to award the Contract to CECOS. As noted above, Respondent posted the cancellation of the intent to award the Contract on November 5, 2015. At a meeting of the SC conducted on November 9, 2015, Respondent's procurement staff explained that the intent to award the Contract had been cancelled due to ambiguity in the instructions and the Bid Sheet for Exhibit C, Section 6. Ultimately, the SC concurred with Respondent's cancellation of the intent to award the Contract to CECOS and agreed that the vendors should be required to submit new price proposals. Thereafter, on November 9, 2015, Respondent issued Addendum 4, announcing its decision to solicit new price proposals from the responding vendors. Respondent conducted a pre-bid meeting with the vendors on November 12, 2015, and immediately thereafter, issued Addendum 5, consisting of a revised Scope of Services and a substantially revised Bid Sheet for all six sections of Exhibit C. As previously discussed, the Section 6 Bid Sheet issued in Addendum 5 was revised to, among other things, delete the "2.5 Multiplier" column and the column previously titled "Rate" was changed to "Rate Per Unit." Also as discussed above, the instructions to Section 6 were revised to clarify that the "Rate Per Unit" provided for each plant unit must contain all costs associated with the purchase, installation, watering, fertilization, project management, field supervision, invoicing, labor, maintenance of traffic, and other costs specified in the instructions——i.e, constitute a loaded rate. All of these changes were made in an effort to clarify, for the benefit of all vendors, the specific information that Respondent needed to be provided in the price proposals. Rubio testified, credibly, that in requiring the vendors to submit new price proposals pursuant to revised Exhibit C, Respondent did not give, or intend to give, any vendor a competitive advantage over any of the other vendors, nor did Respondent place, or intend to place, CECOS at a competitive disadvantage by requiring the vendors to submit new price proposals pursuant to revised Exhibit C. As noted above, once CECOS filed its Notice of Protest, Respondent ceased all procurement activity directed toward awarding the Contract. Consequently, the vendors did not submit new price proposals and the scheduled meetings at which the new price proposals would be opened and the intended awardee announced were cancelled. On December 17, 2015, Rubio briefed the SC regarding the problems with the RFP and described her concerns about proceeding with the procurement. She explained that Respondent's procurement staff was of the view that the instructions in Section 6, as previously published in Addendum 1, were ambiguous because they did not clearly provide direction on how to complete the Bid Sheet for that section. Additionally, the Section 6 Bid Sheet, as structured in Addendum 1, did not allow the vendors to provide a plant unit rate that was inclusive of all overhead costs. To this point, she noted that unless the vendors provided a loaded rate——i.e., one that included all overhead costs——Respondent would not be able to issue work orders for any plant items in Section 6.17/ She explained that these flaws constituted the bases for Respondent's decision, announced on November 9, 2015, to require the submittal of new price proposals. Rubio further explained that in Respondent's rush to issue a revised Scope of Services as part of Addendum 5, mistakes had been made18/ and Respondent's Environmental Office needed more time to carefully review the Scope of Services and Bid Sheet, to ensure the RFP was correctly drafted and structured so that the Contract could be accurately solicited and procured. Additionally, the vendors——including Mark Clark of CECOS——had expressed confusion regarding the revised Bid Sheet and submitting new price proposals, and some vendors had inquired about submitting new technical proposals. Further, under the revised procurement schedule issued as part of Addendum 4 on November 9, 2015, the vendors had a very compressed timeframe in which to prepare and submit their new price proposals, heightening the potential for mistakes to be made. Because of these substantial problems and concerns with the RFP, Rubio recommended that Addendum 5 be rescinded, that all vendor proposals (both technical and price) be rejected, and that the entire procurement process be re-started. The SC concurred with her recommendation. As noted above, on December 17, 2015, Respondent rejected all proposals and announced that the Contract would be re-solicited in the future through issuance of another RFP. CECOS' Position CECOS takes the position that the RFP and the Section 6 Bid Sheet published in Addendum 1 were not ambiguous. Specifically, CECOS contends that the use of the 2.5 multiplier in Section 6 clearly indicated that Respondent was seeking an unloaded rate for the plant items listed on the Section 6 Bid Sheet. In support of this position, CECOS notes that all of the vendors other than DB had submitted unloaded rates for the plant items in Section 6. CECOS contends that this shows that Section 6 was not ambiguous, and that DB simply did not follow the RFP instructions——of which it was fully aware——in preparing and submitting its price proposal.19/ CECOS also contends that Rubio's failure to contact the other vendors to determine if they found the instructions or use of the 2.5 multiplier in Section 6 ambiguous evidences that Rubio's conclusion that Section 6 was ambiguous lacked any factual basis, so was itself arbitrary. CECOS asserts that Bogardus' intent to use a 2.5 multiplier for compensation purposes was evidenced by its inclusion on the Section 6 Bid Sheet, that its use on the Section 6 Bid Sheet did not render the RFP flawed, and that Bogardus' intent to compensate using the multiplier should control the structure of compensation paid under Section 6.20/ CECOS also notes that the use of the 2.5 multiplier on the Section 6 Bid Sheet mirrors the 2.5 multiplier in the existing environmental mitigation support services contract with the current contractor.21/ CECOs further contends that there was no material difference, with respect to structuring compensation for the plant items, between the ITN process used for procuring the existing contract and the RFP process used to procure this Contract. As additional support for its argument that the use of the 2.5 multiplier in Section 6 was valid, CECOS points to a request for proposal for environmental mitigation services issued by Respondent's District VI. In that contract, a 2.5 multiplier was used for compensation purposes, albeit for specific plant items that were not contained in the original list of specific plant items for which rate proposals had been solicited in the request for proposal. CECOS further contends that Respondent——and, most particularly, Rubio——did not conduct a thorough investigation into the historic use of 2.5 multipliers in Respondent's commodities contracts. CECOS argues that as a consequence, Respondent's determination that the use of the 2.5 multiplier rendered the Section 6 Bid Sheet structurally flawed and arbitrary was unsupported by facts, so was itself arbitrary and capricious. CECOS asserts that cancelling the notice of intent to award the Contract to CECOS and requiring the vendors to submit new price proposals placed CECOS at a competitive disadvantage and was contrary to competition because once the Proposal Tabulation was posted, the other vendors were informed of the price that CECOS had bid, so knew the price they had to beat when the Contract was re-solicited. CECOS also points to what it contends are procedural irregularities with respect to Respondent's treatment of, and communication with, CECOS and DB once Respondent decided to cancel the notice of intent to award the Contract to CECOS. Specifically, CECOS contends that Respondent did not respond to its calls or email asking why the intent to award the Contract to CECOS had been cancelled. CECOS also contends that Respondent communicated with DB on substantive matters during the "cone of silence." CECOS further notes that Respondent did not convene a resolution meeting within the statutorily- established seven-day period after CECOS filed its First Petition, but instead held the meeting over 60 days later, on January 28, 2015, and that even then, Respondent did not engage in good faith negotiation to resolve the challenge. Finally, CECOS contends that Respondent's decision to reject all proposals and start the procurement process anew was predicated on a series of arbitrary and erroneous decisions (discussed above) that created confusion, so that Respondent's ultimate decision to reject all proposals was itself arbitrary and capricious. CECOS asserts that it followed the instructions in the RFP in preparing its price proposal, submitted the lowest price proposal, and is ready, willing, and able to perform the Contract at the rates it proposed in its response for Section 6. On that basis, CECOS contends that it is entitled to the award of the Contract. Findings of Ultimate Fact CECOS bears the burden in this proceeding to prove that Respondent's decision to reject all proposals was arbitrary, illegal, dishonest, or fraudulent.22/ Even if CECOS were to meet this burden, in order to prevail it also must demonstrate that Respondent's actions in cancelling the intent to award the Contract and requiring the submittal of new price proposals were clearly erroneous, arbitrary, capricious, or contrary to competition. For the reasons discussed herein, it is determined that CECOS did not meet either of these burdens. The Multiplier Rendered Section 6 Ambiguous, Arbitrary, and Structurally Flawed As discussed in detail above, Respondent decided to cancel the intent to award the Contract to CECOS and to require the submittal of new price proposals by the vendors only after it had conducted an extensive investigation that included a careful review of numerous provisions in the RFP and the instructions to Section 6 and had analyzed the structure of Section 6 in relation to other provisions in the RFP. That investigation showed that nowhere in the RFP was the use of the 2.5 multiplier in Exhibit C, Section 6, discussed or explained. Thus, to the extent the multiplier was to be used in determining reimbursement for overhead costs and compensation, the RFP failed to explain this extremely important point, leaving the multiplier's purpose, use, and significance open to speculation and assumption by the vendors in submitting their price proposals. This rendered the multiplier's use in Section 6 ambiguous. This ambiguity is further evidenced by DB's and CECOS's widely divergent price proposals for Section 6, and the credible testimony of Perretta and Cyriaks regarding their differing views of the purpose of the 2.5 multiplier. The credible, persuasive evidence establishes that the ambiguity in Section 6 caused the vendors to have differing interpretations of the manner in which they were to propose plant unit rates in Section 6; that the vendors submitted plant price proposals predicated on differing assumptions; and that this resulted in Respondent being unable to fairly compare the price proposals for purposes of obtaining the most advantageous proposal for the State. On these bases, Respondent reasonably concluded23/ that the inclusion of the 2.5 multiplier in Section 6, rendered that portion of the RFP ambiguous. As extensively discussed above, the credible, persuasive evidence also establishes that Respondent concluded, based on its investigation and review of Section 6, that inclusion of the 2.5 multiplier rendered Section 6 both arbitrary and structurally flawed.24/ The credible, persuasive evidence further establishes that Rubio investigated Respondent's use of multipliers in commodities procurements and contracts to the extent necessary and appropriate for her to reasonably conclude that the use of the 2.5 multiplier in Section 6 rendered this portion of the RFP ambiguous, arbitrary, and structurally flawed.25/ In sum, the credible, persuasive evidence establishes that Respondent engaged in a thorough and thoughtful investigation before concluding, reasonably, that the inclusion of the 2.5 multiplier in Exhibit C, Section 6 rendered that portion of the RFP ambiguous. Respondent's Actions Were Not Contrary to Competition Although the evidence shows that CECOS may suffer some competitive disadvantage because competing vendors were informed of the lowest "bottom line" price they would have to beat, it does not support a determination that Respondent's decisions to cancel the intent to award the Contract to CECOS and require the vendors to submit new price proposals were contrary to competition. To that point, in Addendum 5, Respondent substantially restructured the Section 6 Bid Sheet and also amended the Bid Sheet comprising the other price proposal sections in Exhibit C, so that CECOS' and the other vendors' price proposals submitted in response to Addendum 5 may have substantially changed from those submitted in response to Addendum 1. In any event, it cannot be concluded that Respondent's decisions to cancel the intent to award the Contract to CECOS and require submittal of new price proposals are contrary to competition such that they should be overturned in this proceeding. Procedural Irregularities CECOS also points to certain procedural irregularities in Respondent's treatment of, and communication with, CECOS once Respondent decided to cancel the notice of intent to award the Contract to CECOS and require submittal of new price proposals. CECOS apparently raises these issues in an effort to show that Respondent's actions were clearly erroneous, contrary to competition, arbitrary, or capricious. The undisputed evidence establishes that Rubio communicated with both DB and CECOS during the "cone of silence" following the posting of its intent to award the Contract to CECOS. The undersigned determines that the "cone of silence" applied to Rubio and her communications with DB and CECOS within the 72-hour period following Respondent's posting of the intent to award the Contract. Specifically, she is an employee of Respondent's District IV Office, so is an employee of the executive branch of the State of Florida. Further, the evidence shows that her communications with both DB and CECOS during the "cone of silence" period dealt specifically with substantive, rather than "administrative" issues regarding the RFP and the vendors' price proposals. Accordingly, it is determined that these communications did, in fact, violate the "cone of silence." However, this does not require that Respondent's decision to cancel the intent to award the Contract to CECOS be overturned. The credible, persuasive evidence shows that while DB's conversation with Rubio may have spurred Rubio to decide she should investigate the Section 6 instructions and use of the 2.5 multiplier, it was not the reason why Respondent ultimately determined that the intent to award the Contract should be cancelled. Rather, Respondent's discovery of the ambiguity and structural flaws in Section 6, through Rubio's investigation, was the reason that Respondent determined that the intent to award the Contract to CECOS should be cancelled. In sum, the credible, persuasive evidence shows that notwithstanding Rubio's communications on substantive matters during the "cone of silence" with both DB and CECOS, the integrity of the procurement process was not undermined such that Respondent's decision to cancel the intent to award the Contract to CECOS was clearly erroneous, contrary to competition, arbitrary, or capricious. CECOS failed to present persuasive evidence establishing that other procedural irregularities rendered Respondent's actions in cancelling the intent to award the Contract to CECOS and requiring the vendors to submit new price proposals were clearly erroneous, contrary to competition, arbitrary, or capricious. Respondent's Decisions to Cancel Intent to Award the Contract and Require Submittal of New Price Proposals Based on the foregoing, it is determined that CECOS did not meet its burden to show that Respondent's decisions in cancelling the intent to award the Contract to CECOS and requiring the vendors to submit new price proposals were clearly erroneous, contrary to competition, arbitrary, or capricious. Respondent's Decision to Reject All Proposals As noted above, CECOS contends that Respondent's decision to reject all proposals and start the procurement process anew was predicated on a series of arbitrary and erroneous decisions that created confusion, so that Respondent's ultimate decision to reject all proposals was itself arbitrary and capricious. However, the credible, persuasive evidence shows that Respondent's ultimate decision to reject all bids was factually supported and was reasonable. As discussed above, Respondent initially decided to cancel the intent to award the Contract to CECOS and to require the vendors to submit new price proposals after it discovered the ambiguity and structural flaws resulting from the use of the 2.5 multiplier in Section 6. At that point, rather than rejecting all proposals, which would require the vendors to go to the time and expense of preparing completely new proposals, it decided to instead only require the vendors to submit new price proposals. Due to the interrelated nature of the six sections of Exhibit C comprising the complete price proposal for the RFP, Respondent determined revision of Section 6 would also require revision of the other five sections of Exhibit C, in order to ensure that they were internally consistent with each other. At the mandatory pre-bid meeting preceding the issuance of Addendum 5, the participating vendors had numerous questions about the sweeping revisions to all six sections of Exhibit C, and they expressed confusion about the revisions and their effect on preparation of new price proposals. Some vendors also expressed concern that they may have to change their personnel in order to be able to accurately prepare new price proposals, raising the question whether the technical proposals needed to be revised. As a result of vendor confusion and concern, and also because Respondent's Environmental Office needed additional time to carefully review and revise the RFP as needed, Respondent decided to reject all proposals and to start the procurement process anew. Respondent's decision to reject all bids was made after fully considering all of the pertinent information regarding the ambiguity and structural flaws in Section 6, vendor confusion and concern caused by Respondent's revisions to Exhibit C needed to address the ambiguity and flaws in Section 6, and Respondent's need for additional time to ensure that its RFP accurately and clearly solicited the needed environmental mitigation support services. Accordingly, Respondent did not act arbitrarily in deciding to reject all bids. Further, no persuasive evidence was presented to show that Respondent's decision to reject all bids was illegal, dishonest, or fraudulent.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department of Transportation: Issue a final order in Case No. 16-0769 finding that the rejection of all proposals in response to Request for Proposal RFP-DOT-15/16-4004PM was not illegal, arbitrary, dishonest, or fraudulent; and Issue a final order in Case No. 16-3530 finding that the decisions to cancel the award of the Contract for Request for Proposal RFP-DOT-15/16-4004PM to CECOS and to require the vendors to submit new price proposals for Request for Proposal RFP-DOT-15/16-4004PM were not clearly erroneous, contrary to competition, arbitrary, or capricious. DONE AND ENTERED this 30th day of December, 2016, in Tallahassee, Leon County, Florida. S CATHY M. SELLERS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 30th day of December, 2016.
The Issue Whether Respondent's intended award of the contract arising out of Request for Proposal No. 09L04FP4 to Intervenor is clearly erroneous, contrary to competition, arbitrary, or capricious.
Findings Of Fact Stipulated Facts In accordance with a 2001 legislative mandate, the Developmental Disabilities Program, formerly part of the Department of Children and Family Services and now within the Agency, established a requirement for prior service authorization (PSA) reviews for individuals enrolled in the Developmental Disabilities Home and Community Based Services waiver (waiver). Following a competitive procurement process, Maximus, Petitioner herein, was awarded a contract to provide PSA reviews for persons satisfying certain selection criteria, and related services. These PSA reviews ensure that services for which reimbursement is provided under the waiver are based on medical necessity. Currently only those cost plans that meet certain selection criteria are reviewed. A 2004 legislative mandate required the Developmental Disabilities program to expand the PSA program to review all support and cost plans for the waiver, including those that do not meet the selection criteria that trigger a PSA review under the Agency's existing contract with Maximus. On or about October 13, 2004, the Agency issued Request for Proposal No. 09L04FP4- Agency for Persons With Disabilities Prior Service Authorization Reviews (the APSAR contract). The RFP sought a vendor to serve as the contracted provider to conduct the additional reviews required by the 2004 legislative mandate (the ASPAR Contractor). The RFP proposals were to include responses to inquiries concerning the qualifications and capabilities of each proposer, as well as the proposed's vendor's proposal for providing the requested services (the technical proposal) and a separate proposal setting forth the proposed vendor's costs for providing such services (the cost proposal). Pursuant to the provisions of the RFP, the ASPAR Contractor will be responsible for reviewing these additional support plans and cost plans in order to ensure that individuals receiving waiver services receive medically necessary services to meet their identified needs. Pursuant to the provisions of the RFP, the ASPAR Contractor will be responsible for determining whether the Developmental Disabilities program is the appropriate funding source for the service(s) identified and shall recommend alternative funding mechanisms. The RFP set forth evaluation criteria and a scoring process in which a proposal could receive a maximum of 100 points, 25 of which are attributable to the cost proposal. The RFP states that "[t]he agency will attempt to contract with the prospective vendor attaining the highest total price." The deadline for submission of proposals in response to the RFP was November 2, 2004. The Agency received proposals from three prospective vendors: APS, Maximus, and First Health Services. On November 12, 2004, the Agency posted its Notice of Intended Award of the APSAR contract to APS. The Notice of Intended Award reflected the prospective vendors' scores as follows: APS, 86.45; Maximus, 82.06; and First Health, 71.52. Of its total score of 86.75, APS received 25 points for its cost proposal as the prospective vendor with the lowest total price. On November 16, 2004, Maximus timely filed a notice of intent to protest the Agency's intent to award the ASPAR contract to APS. Maximus timely filed its formal written protest, a Petition for Administrative Proceedings, with an accompanying bond which satisfied the applicable statutory and RFP requirements. Findings of Fact Based on the Evidence of the Record APS has standing to intervene in this proceeding. The APSAR contract being procured through the RFP is a fixed price contract. Lorena Fulcher is the Agency's procurement manager for the RFP. When the proposals were received, the Agency screened each of them for compliance with a list of fatal criteria set forth in Section 6.3.1 of the RFP. According to Ms. Fulcher, the purpose of the initial screening was to determine whether the proposals should go to a formal evaluation process. No scoring or points were associated with whether a vendor met the fatal criteria. The Agency determined that all three vendors met the fatal criteria. Therefore, the three proposals were sent to an evaluation committee which was responsible for evaluating the technical aspects of the proposals. Fatal Criteria Petitioner asserts that Intervenor did not satisfy one of the mandatory requirements of the RFP and, therefore, its proposal should not have been forwarded for further review and scoring by the evaluation committee. Section 5.4 of the RFP states that the mandatory requirements are described as "Fatal Criteria" on the RFP rating sheet and that failure to comply with all mandatory requirements will render a proposal non-responsive and ineligible for further evaluation. Section 6.3.1 of the RFP is entitled, "Fatal Criteria." One criterion reads as follows: "Did the proposal document and describe at least one year of experience in the developmental disabilities field and with Home and Community Based Services waivers?" According to Ms. Fulcher, the Agency looked at each proposal in its entirety to determine that there was prior experience with the sort of review that the Agency was trying to procure with the RFP. Ms. Fulcher referenced several pages of Intervenor's proposal relating to this criterion that the Agency reviewed in making its determination to send Intervenor's proposal to the evaluation committee. One such reference is contained on page 9 of Intervenor's proposal. That page references Intervenor's experience with Georgia Medicaid since 1999. On page 84 of Intervenor's proposal, that experience is further described as "Prior authorization and Concurrent Review for all Medicaid services under the Rehabilitation Option to individuals with mental health disorders and/or developmental disabilities. Specialized projects include technical assistance to HCBS Waiver providers." Intervenor was formed in the early 1990's and was acquired by APS Healthcare in 2002. Intervenor's proposal explains: "APS Midwest is a wholly owned subsidiary of APS Healthcare Bethesda, Inc. APS Midwest, formerly known as Innovative Resource Group, was acquired by APS in 2002." Petitioner argues that the Georgia experience should not have been counted because it was experience acquired prior to the 2002 acquisition of Intervenor. Specifically, Petitioner argues that since the Georgia project has been ongoing since 1999 and since Intervenor was not acquired by the APS parent company until 2002, that Intervenor could not have been the provider. APS Healthcare, and its subsidiaries, including Intervenor, are managed as a single entity and many of their services and resources are integrated. The evidence established that the resources of the APS family of companies are available in the performance of the contract. Moreover, the undersigned is not persuaded that Intervenor was prohibited in any way by the language of the RFP or otherwise, from referencing experience obtained by a parent or related corporate entity prior to the 2002 acquisition. Intervenor's proposal contained references to other experience which the Agency considered in determining that Intervenor's proposal met the one-year experience fatal criterion at issue. These included experience obtained in Pennsylvania, Idaho, and other states in the developmental disabilities field and with home and community based services waivers. The Agency's determination that Intervenor met the "one-year" experience fatal criterion is supported by the evidence of record. The Agency's decision to forward Intervenor's proposal to the evaluation committee was appropriate. Any evaluation or scoring of the content of Intervenor's representations was left to the evaluation committee. The Cost Proposals Section 4.4 of the RFP reads in pertinent part as follows: The prospective vendor shall clearly present in the cost proposal the total cost for each deliverable as described in Section 3.6, Task List. A pricing schedule must be presented that indicates a unit cost for each task to be performed, with all task amounts added for a grand total cost for each deliverable. The total cost of all deliverables will be presented as the proposed total contract amount. The cost proposal must be bound separately. The vendor must submit as supporting documentation, a detailed line-item budget that delineates and constitutes all costs contained in the proposed total contract amount. The line-item budget shall delineate the number and type of positions that will be required to complete the work identified for each major task, and discrete associated expenses. Further, Section 4.4 included a grid described as an "Example Format of the Pricing Schedule." The RFP does not state that a proposer must use the grid format provided in this section. The grid includes columns marked "Unit Cost," "Number of Units," "Amount for Year 1," "Amount for Year 2" and "Amount for Year 3." At the bottom of the grid, there is a line for a "Total per year" and there is a line for the "Grand Total." APS used the grid format as shown in Section 4.4 of the RFP. Below the grid, APS included a notation that reads: "Please note that costs are adjusted for years two and three accordingly." Following this notation are four "bullets" one of which reads: "Unit cost for PSA reviews slightly increase to reflect a 1-2% growth rate in years two and three. However, if the number of reviews significantly increase more than this amount, pricing would have to be adjusted accordingly." Petitioner argues that the language of the above referenced "bullet" constitutes a contingent price, as opposed to a fixed price as required by the RFP, and, therefore, Intervenor should have received a score of zero for its cost proposal. Section 6.3.3. of the RFP provides in pertinent part: "Evaluating Cost Proposals--The prospective vendor with the lowest total price shall be awarded 25 points or 25% of the maximum total score." Section 6.3.3 further provides that the other prospective vendors would be awarded points by dividing the lowest price by the prospective vendor's price and then dividing the resulting percentage by four. The Agency scored the cost proposal by the grand total stated in each proposal. That is, the points assigned for the cost proposals were based solely on the total price proposed. According to Ms. Fulcher, the Agency ignored the bullets for purposes of scoring the cost proposals because the RFP was for a fixed price contract. Petitioner Maximus submitted a total cost proposal in the amount of $10,259,131. Intervenor APS submitted a total cost proposal in the amount of $7,460,615. Accordingly, the Agency awarded Intervenor 25 points for submitting the proposal with the lowest grand total cost of the three vendors, and awarded Petitioner 18 points for its grand total cost. There is nothing in the referenced "bullet" in APS' proposal that implies that the grand total might increase. The "bullet" clearly references "unit costs" only. Moreover, Section 4.3 of the RFP states that payment method and pricing will be determined during negotiations. According to Ms. Fulcher, the cost information requested other than the total cost was to be used only for purposes of negotiating and drafting the contract. Petitioner argues that Intervenor's cost proposal contained mathematical errors that, if corrected, would increase the total cost proposed. The difference between the two proposals was $2,798,516. The evidence does not establish that if the mathematical errors were corrected, Intervenor's actual cost would have been higher than Petitioner's proposed total cost. Further, Petitioner offered testimony speculating how Intervenor's actual costs might be higher than those reflected in Intervenor's proposal. Petitioner's speculation in this regard is of no consequence. Moreover, the contract is clearly a fixed fee contract. The proposers, including Intervenor, are bound by the fixed total cost reflected in the respective proposals.2/ The Technical Proposals Petitioner asserts that the Agency erroneously scored its technical proposal, thereby depriving Petitioner of points that would have resulted in an award of the contract to Petitioner. The RFP required the vendors to submit sealed technical proposals separate from the cost proposals. In contrast to the cost proposals, the scoring formula for the technical proposals was not based on a ratio comparison of the best proposal to the other proposals. Rather, the formula for scoring the technical proposals provided that the total score of each technical proposal would be divided by 48 to arrive at a total percentage of 100 that was then converted into points. Thus the formula for scoring technical proposals is not based on a comparison of one vendor's proposal to the others, but is based on how well each vendor did within a possible score of 36. Section 6.3.4 of the RFP sets forth the formula for scoring the technical proposals: The prospective vendor with the highest rating in this section (36 points) shall be awarded 75% (75 points) of the maximum possible score. Other prospective vendors are awarded points using the following formula: The rating is divided by 48 to determine the points awarded (36/48=75%). Section 6.3.4 of the RFP also provided three examples applying the formula for awarding points to technical proposals, with each example showing a vendor's points divided by 48. The numerator of the above formula was derived by taking the average of the total points assigned by each of the four evaluators, which was then divided by 48. The average of the evaluators' scores for Petitioner's technical proposal was 30.75. The average of the evaluators' scores for the APS technical proposal was 29.5. Accordingly, when the formula was applied, Petitioner's technical proposal score was 64.06 (30.75/48=64.06%) and Intervenor's technical proposal score was 61.45 (29.5/48=61.45%). Petitioner argues that because it received the highest technical score of 30.75, it was entitled to 75 points for its technical proposal. Petitioner, nor any other vendor, received a score of 36, the highest possible score for the technical proposal. Because no vendor received the maximum possible technical rating of 36 points, no vendor was awarded the maximum possible score of 75 points for the technical proposals. The agency applied the formula to the three vendors in a consistent manner. While the wording of Section 6.3.4 is awkward, the Agency's interpretation of that section is a reasonable one that was applied equally to all vendors. Petitioner's Proposal Finally, Intervenor asserts that Petitioner's proposal was non-responsive because it is dependant upon Petitioner continuing to provide services under its existing contract with the Agency. Petitioner's proposal was prepared using a methodology that contemplated allocating some costs to its existing contract and some costs to the contract solicited by the RFP because Petitioner already has certain resources that can be employed to provide services in the solicited contract. There is no dispute that Petitioner holds a current related contract. The Agency's determination that Petitioner's proposal was responsive in this regard was reasonable. How the costs are to be allocated was subject to evaluation and scoring by the evaluation committee.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is RECOMMENDED: That the Agency for Persons with Disabilities enter a final order dismissing Petitioner's protest. DONE AND ENTERED this 15th day of March, 2005, in Tallahassee, Leon County, Florida. S BARBARA J. STAROS Administrative Law Judge Division of Administrative Hearings 1230 Apalachee Parkway The DeSoto Building 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 15th day of March, 2005.
Findings Of Fact Nine bids were received for Contract E4571, Project/Job No. 99004-3516 ("E4571"). Petitioner's bid was timely received. Respondent opened bids on December 13, 1991. Respondent posted its intent to award E4571 to J & D Tropical Landscape Design on December 20, 1991. Section 1.2 of the Bid Specifications for E4571, as modified by the Special Provisions, states: A contractor's bid shall be in the form of a unit price for each unit expected to be accomplished. The Special Provisions to E4571 require each bidder to submit a single unit price for each pay item called for in the Bid Price Proposal. Item 4 in the Special "Provisions provides: It shall be the responsibility of the Contractor to submit to the Department A SINGLE unit price for each pay item called for in the Bid Price Proposal. The Contractor shall be responsible for his/her method of averaging. Failure to comply shall result in the Contractor's Bid Proposal being declared "Irregular" and such Bid Proposals will be rejected. (emphasis added) Petitioner's Bid Proposal was properly declared irregular and rejected by Respondent. Petitioner failed to comply with the requirements of Item 4 in the Special Provisions by failing to submit a single unit price for each pay item, by failing to correctly average a unit price, and by failing to state the unit price in words. The Unit Price Sheet on page 23 of the Bid Proposals contains the following table listing item numbers A582- 2 through A584-4. Petitioner listed item number A583 as follows: ITEM PLAN ITEM DESCRIPTION AND UNIT PRICE $ AMOUNTS NUMBER QUANTITIES UNIT PRICE (IN FIGURES) (Exten- (IN WORDS) sion Price) 3/ A583 4 200.000 TREES (8' TO 20, 85 20400 PLANT ' HEIGHT OR CLEAR TRUNK) @ DOLLARS CENTS The actual extension price 4/ for 200 trees at $85 per unit is $17,000 rather than the $20,400 stated by Petitioner in the table on page 23. The "Contract Total" stated by Petitioner in the bottom right corner of the table is $37,013.20. The "Contract Total" that should have been stated if Petitioner intended the extension price of item number A583-4 to be $17,000 would have been $33,613. The "Contract Total" listed by a bidder on the Unit Price Sheet is the unverified contract price. The actual contract price is determined by Respondent pursuant to the formula given in Section 1.3 of the Bid Specifications. Section 1.3 of the Bid Specifications foil E4571 states: The contract price is defined as the sum of the unit bid price times the planned work for each item as shown on the Unit Price Sheet. Petitioner would have been the lowest successful bidder irrespective of whether Respondent had replaced the extension price for item number A583-4 and the "Contract Total" stated by Petitioner with the actual extension price for item number A583-4 and the actual "Contract Total" . However, Respondent is precluded from doing so by Section 3-1 of the Standard Specifications For Road ,and Bridge Construction ("Standard Specifications"), published by the Florida Department of Transportation (1991) and by the Special Provisions for E4571. Respondent follows "Section 3-1 of the Standard Specifications for the purpose of evaluating bid proposals. Section 3-1 is used, in part, to determine the extension price for item numbers listed on the Unit Price Sheet. Section 3- 1 provides in relevant part: In the event of any discrepancy in the three entries for the price of any item, the unit price as shown in words shall govern unless the extension and the unit price shown in figures are in agreement with each other, In which case they shall govern over the unit price shown in words. Petitioner did not show the unit price in words for any item number on the Unit Price Sheet, including item number A583-4. There is a discrepancy in the three entries for item number A583-4 on the Unit Price Sheet. Petitioner failed to show the unit price for item number A583-4 in words, and the unit price and extension price are not in agreement. Under such circumstances, Respondent interprets Section 3-1 of the Standard Specifications as requiring that Petitioner's bid be declared irregular and rejected. Respondent's interpretation of Section 3-1 of the Standard Specifications is reasonable and is consistent with the mandate in Item 4 of the Special Provisions for E4571. See Finding 4, supra. Furthermore, in practice, the correct unit price of a pay item is necessary to process payment under the contract and the contractor must submit invoices based upon the pay items and unit prices listed in its bid. The bid specifications for E4571 provide that a bidder is responsible for his or her own averaging of a stated unit price, and that if a bidder fails to provide a single unit price for each pay item on the Unit Price Sheet the bid shall be declared "Irregular" and will be rejected. The requirement to provide a single unit price for each pay item was emphasized by Respondent at the mandatory pre-bid meeting. Petitioner's representative attended the mandatory pre-bid meeting. No challenges were made to the bid specifications by any bidder.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a Final Order dismissing the protest filed by Petitioner. DONE AND ORDERED in Tallahassee, Leon County, Florida, this 20th day of February, 1992. DANIEL MANRY Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (964) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 20th day of February, 1992.
The Issue The issue for determination is whether Respondent's intent to award a contract for bridge-tending services (RFP DOT 92/93 2088 REBID) to Intervenor constitutes fraudulent, arbitrary, capricious, illegal or dishonest action.
Findings Of Fact The parties stipulated to findings of fact set forth in paragraphs 1.-12., below. Stipulated Facts Respondent issued the RFP for bridge-tending services on May 14, 1993. Proposals submitted in response to the RFP were opened on June 16, 1993. Proposals were submitted by five firms, including Petitioner and Intervenor. All proposals were determined at the time to be responsive. A Technical Review Committee (TRC) was appointed to review the technical portion of the proposals. The three members of the TRC were Alan Hyman, J. L. Gillis, and Yingyong Sujjavanich. The members reviewed the technical portion of the proposals on June 17, 1993. The evaluation forms completed by the TRC and a summary score sheet were delivered to Respondent's purchasing office on the morning of June 18, 1993. The price proposal was evaluated by Respondent's purchasing office. The price evaluation of each proposal was performed by applying a formula which compared the submitted price quotations. After the scores for the technical proposal and the cost proposals were totalled, it was determined that Intervenor's proposal had earned the highest number of points. This result was presented to Respondent's District 2 Executive Committee and a recommendation was communicated by the Purchasing Director to award the RFP to Intervenor. The Executive Committee accepted the recommendation and directed that the contract be awarded to Intervenor. On June 18, 1993, at 4 p.m., the bid tabs were posted noticing Respondent's intent to award the contract to Intervenor. On or about July 6, 1993, Petitioner requested a meeting with Respondent's representatives regarding the RFP. That meeting was held on July 9, 1993. At the meeting, Petitioner raised an issue regarding an arithmetic error in the scoring of the technical proposals. Intervenor remained the proposer with the highest number of points. However, another proposal formerly ranked as number two was lowered to number three status and Petitioner, previously ranked number three, was raised to number two rank. On July 12, 1993, Respondent posted an amended bid tab indicating its intent to award the contract to Intervenor. Other Facts Respondent chose to score the bid pricing, a non- subjective task, in Respondent's District 2 office. Technical portions of the proposals were reviewed by the TRC, comprised of members from Respondent's District 5 office. This unusual step was taken by Respondent in order to reduce prejudice to any proposal in view of previous accusations made against District 2 employees. Bud Rosier, Respondent's employee, has overall responsibility for bridge determination that District 5 employees chosen as committee members were qualified to evaluate the proposals. Each response to the RFP contained a technical proposal and a price proposal. Intervenor's technical proposal received 1.33 points less than Petitioner's technical proposal. The price proposals, as noted above, were scored in accordance with a mathematical formula that compares price proposals to each other and does not take any subjective factors into consideration. Intervenor was awarded 5.55 points, compared to Petitioner who received no points for a proposal more than $140,000 higher for the initial year of the contemplated contract. Although members of the TRC were not given any background information by Respondent regarding the competing proposals, beyond that contained in the submitted bid packages, no information was withheld from the committee. The members were given adequate time to review the proposals and do any desired independent background checking regarding past performance of any proposer, although no requirement in the RFP mandated such a background review. At least one of the TRC members, Sujjavanich, chose not to independently research past performance of the Intervenor. No evidence was offered at hearing with regard to whether the other two members independently researched any of the proposers' past performances. Even if review of past performance, apart from the materials submitted by the proposers, were required by provisions of the RFP, failure of the evaluators to accomplish that task would result only in the loss to Intervenor of the 3.66 points awarded for past performance and Intervenor, with a remaining total of 81.89 points, would remain the highest ranked proposer. In view of the objective process used to arrive at the results of the evaluation of the prices of the competing proposals, there was no need to provide this information to the members of the TRC who were doing the technical proposal evaluation. Although the RFP provided that the TRC would be given such results, the failure of Respondent's personnel to provide this information to the evaluators could not have made any difference in the final result since the committee, using the objective price evaluation criteria, would have arrived at the same result as the purchasing office on cost scores. The admitted failure to provide the superfluous cost information to the TRC is inadequate to show that such omission resulted in prejudice to the final scores of any of the competing proposals and must be considered to be only a minor variation from the RFP by Respondent. Contrary to Petitioner's allegations, there is no competent substantial evidence to support any finding that the members of the TRC (Hyman, Gillis, and Sujjavanich) did not possess required background, experience or professional credentials adequate for evaluating proposals for bridge-tending services. All three members of the TRC were familiar with the RFP, attachments to the RFP, bridge-tending procedures and bridge-tending qualification procedures. There is no competent substantial evidence to establish that Intervenor's proposal is not financially feasible. Proposed utilization of 72 bridge-tenders by Intervenor for a total price of $673,333.44 does not mean that 72 bridge-tender positions would be established or filled, or that the positions would be paid at the rate proposed by Petitioner of $8.40 per hour. The evidence establishes that a proposer would need an optimum number of bridge requirements.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that a Final Order be entered granting the award of the bid in RFP DOT 92/93 2088 Rebid to Intervenor. DONE AND ENTERED this 4th day of October, 1993, in Tallahassee, Leon County, Florida. DON W. DAVIS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 4th day of October, 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-4271BID The following constitutes my specific rulings, in accordance with Section 120.59, Florida Statutes, on findings of fact submitted by the parties. Petitioner's Proposed Findings. 1.-12. Accepted. 13.-16. Rejected, relevancy. 17. Accepted. 18.-19. Rejected, relevancy. 20.-25. Accepted. 26.-27. Rejected, cumulative. 28. Rejected, credibility. 29.-33. Rejected, relevancy. 34.-35. Accepted. 36.-37. Rejected, argumentative and mischaracterization. 38.-46. Rejected, subordinate to HO findings. 47.-51. Rejected, relevancy. Intervenor's Proposed Findings. 1.-2. Rejected, cumulative. 3.-4. Accepted. 5.-6. Rejected, unnecessary. Rejected, cumulative. Rejected, unnecessary. Rejected, argumentative. 10.-11. Rejected, unnecessary. 12.-13. Adopted by reference. 14.-16. Accepted, but not verbatim. 17.-22. Adopted by reference. 23. Rejected, unnecessary. 24.-30. Adopted, but not verbatim. 31. Rejected, narrative. 32.-35. Rejected, cumulative. Respondent's Proposed Findings. 1.-11. Adopted. 12. Rejected, unnecessary. 13.-17. Adopted, not verbatim. 18.-19. Rejected, cumulative. 20.-22. Adopted. 23. Rejected, recitation of RFP. 24.-26. Adopted. 27. Rejected, recitation of RFP. 28.-29. Adopted in substance. COPIES FURNISHED: Thomas Cassidy, III, Esquire. John O. Williams, Esquire Renaissance Square 1343 East Tennessee Street Tallahassee, Florida 32308 Carolyn S. Holifield, Esquire Mark D. Tucker, Esquire Department of Transportation Haydon Burns Building, Mail Station 58 605 Suwanee Street Tallahassee, Florida 32399-0458 Timothy G. Schoenwalder, Esquire 204-B South Monroe Street Tallahassee, Florida 32302-3068 Ben G. Watts, Secretary Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32399 Thornton J. Williams General Counsel Department of Transportation Haydon Burns Building # 562 605 Suwannee Street Tallahassee, Florida 32399
The Issue 1. Whether the proposals submitted by Consultec and EDS met the mandatory requirements of the Request for Proposals, and, if not, whether the proposal submitted by GTE met the mandatory requirements; (2) Whether the evaluation of the proposals by HRS was infected with substantial, material irregularities which resulted in an arbitrary scoring and evaluation process; (3) Whether GTE has standing to contest the award of the contract to Consultec; and (4) Whether GTE has waived any of the issues it has raised due to its failure to timely challenge the terms and conditions of the Request for Proposals.
Findings Of Fact General Background of the RFP On January 6, 1987, HRS released a Request for Proposals for Florida Medicaid Program Fiscal Agent Services (RFP) for qualified organizations to implement and operate a certifiable Medicaid Management Information System (MMIS) for the Florida Medicaid Program. There were several reasons why HRS wanted a new MMIS system for the Florida Medicaid Program. First, the current system was more than ten years old and, although enhanced and modified numerous times, had been determined to be archaic. Second, the federal government indicated to HRS that it would not participate in future funding of the operation of the current system. Third, the federal government recommended that Florida purchase a new system. In February 1986, HRS began the process of preparing the RFP to be used in selecting the fiscal agent for the new MMIS. The process began with the development of an Advanced Planning Document (APD). Since the federal government pays for the large majority of Medicaid services, the federal Health Care Financing Administration (HCFA) of the Department of Health and Human Services (HHS) is very much involved in the various stages of the state procurement process. The purpose of the APD, which describes in detail the planned procurement process, is to obtain federal approval of the procurement process proposed by the state to ensure federal financial participation. The APD was submitted to and approved by HCFA. After approval of the APD, HRS contracted with Peat, Marwick, Mitchell and Company-Compass Consulting Group (PMM Compass) for consultant services regarding HRS's Medicaid fiscal agent procurement. PMM Compass is a nationally known consulting firm in Medicaid procurements. Its function was to review the proposed evaluation section of the RFP and to prepare a detailed evaluation plan, including written evaluation instruments and an evaluation manual, evaluation procedures, and evaluation training and materials, which would be used in evaluating the fiscal agent business and technical proposals. After the RFP was prepared, it was submitted to HCFA for approval. HCFA oversees federal financial participation in the Medicaid program and reviews state RFP's for MMIS systems to ensure that federal acquisition regulations have been met. The HCFA approved the RFP on November 28, 1986. On December 8, 1986, the Information Technology Resource Procurement Advisory Council of the Department of General Services approved the RFP. On January 6, 1987, the RFP was issued. Section 60.800 of the RFP provided that any party adversely affected by the bid solicitation must file a notice of protest within 72 hours after receipt of the RFP. No one filed a protest contesting any of the provisions of the RFP. On April 6, 1987, proposals were received from the following three offerors: Consultec, Inc. (Consultec), EDS Federal Corporation (EDS), and GTE Data Services, Inc. (GTE), subcontracting with The Computer Company (TCC). The RFP The RFP was issued for the procurement of fiscal agent services for the Florida Medicaid Program. The contractor chosen will serve as the HRS fiscal agent to administer the state's Medicaid program. The contractor must furnish all computer hardware, computer software, personnel, and other necessary resources to process approximately 24 million Medicaid claims each year and to keep current track of all Medicaid providers and recipients. The contractor must design and implement the computer and personnel systems to provide these services, must implement necessary changes to the system during the life of the contract, and must perform certain tasks to turn the system over to the state or to the new contractor at the end of the contract term. The total dollar amount paid during the contract will be approximately 45 to 50 million dollars. The RFP is a two-volume document containing approximately 500 pages, including the Appendix which is Volume II. The RFP consists of nine sections which are numbered 10, 20, 30, and so forth through 90. Section 10 provides an administrative overview; Section 20 provides a summary of the present system; Section 30 outlines the scope of the work required setting forth the responsibilities of the contractor and of the state; Section 40 sets forth the Florida MMIS System requirements; Section 50 contains the terms and conditions of the contract; Section 60 sets forth the procurement procedures; Section 70 contains the required contents of the technical proposal, which includes sections concerning corporate background and experience, project organization and staffing, project management and control, work plan and schedule, MMIS system description, and data processing; Section 80 sets forth the required content and format of the business proposal, which contains each offeror's price information; and Section 90 relates to the manner in which the proposals will be evaluated. The RFP provided that the proposal should be submitted in two parts: the technical proposal and the business proposal. The technical and business proposals had to be sealed separately, though submitted simultaneously, and would be open at different stages. The technical proposals were opened on April 6, 1987; the business proposals were opened on June 15, 1987, after scoring of the technical proposals was completed. Each technical proposal was several volumes in length. The Evaluation Process The evaluation process was conducted in accordance with the formal evaluation plan developed by the RFP Project Director, Tom Arnold, and PMM Compass. Section 90 of the RFP set forth the manner in which proposals would be evaluated. The evaluation was conducted in five phases: Phase 1, Evaluation of Mandatory Requirements of Technical Proposals; Phase 2, Evaluation of Technical Proposals; Phase 3, Evaluation of Mandatory Requirements of Business Proposals; Phase 4, Evaluation of Business Proposals; and Phase 5, Ranking of Proposals. The way in which the proposals would be evaluated in each of the five phases was described in Section 90 of the RFP. Phase 1 The first phase of the evaluation process was to review the technical proposals submitted by the offeror to ascertain whether the proposals complied with all the mandatory requirements of the RFP. The purpose of Phase 1, as stated in Section 90.200 of the RFP, was to determine whether each technical proposal was sufficiently responsive to the RFP to permit a complete evaluation. This phase of the evaluation was performed on a "pass-fail" basis and was conducted immediately following the proposal due date. Section 90.200 of the RFP lists the 27 questions that would be used to determine whether the technical proposals met the mandatory requirements of the RFP. HRS considered that an offeror met the mandatory requirements for the technical proposals if an affirmative answer could be given to all 27 questions. The 27 questions were divided into two categories, proposal submission and technical proposals. The questions under the proposal submission category were questions such as the following: Was the proposal received by HRS no later than 2:00 P.M. (Eastern Standard Time) on April 6, 1987? Did the vendor submit separate, sealed business and technical proposals and the required proposal bond? Is this the only proposal? (Alternate proposals not allowed). Are there fifteen (15) copies of the technical proposal? Does each copy of the technical proposal contain the required transmission letter? The questions under the technical proposal category were simply questions to ensure that each of the sections required to be included in the technical proposal had in fact been included. There were eight questions to correspond to the eight sections that were required. Each question was worded in the same manner, such as, "Is a Corporate Background and Experience section included? All three offerors submitted technical proposals that were determined to be sufficiently responsive to the RFP to permit a complete evaluation. Each offeror received a "pass" designation for all questions except GTE. GTE did not receive a pass on Question No. 4, which required that 15 copies of technical proposal be submitted. GTE submitted only 14 complete copies of its technical proposal by the deadline. However, HRS determined this was a minor irregularity, and GTE was allowed to submit the missing volume of its technical proposal the following day. In the appendix to the RFP a "minor irregularity is defined as follows: Minor irregularities are those exceptions which will not have an adverse effect on costs or performance. The first phase of the evaluation process was conducted by Tom Arnold, Tom Wallace, and Barbara Thrower of HRS. This phase was completed within 3 or 4 hours after the proposals had been opened. The mandatory requirements portion of the HRS evaluation manual was used in determining whether each offeror met the mandatory requirements. The same 27 questions listed in the RFP were contained in the evaluation manual. The evaluators were instructed in the manual to assign a "pass" score to each item for which their response to the question defined in the item is "yes." Phase 2 After determining that all of the technical proposals met the mandatory requirements and were sufficiently responsive to permit a complete evaluation, Phase 2 of the Evaluation Process was begun. The purpose of Phase 2 was to measure the individual merit of each technical proposal in each of several areas according to preestablished criteria. A maximum of 2,000 points could be received for each technical proposal. The basic categories evaluated and their maximum number of points were: Corporate Background and Experience 200 pts. Project Organization and Staffing 225 pts. Technical Approach 225 pts. Project Management and Control 150 pts. Work Plan and Schedule 200 pts. MMIS Description 800 pts. Data Processing 200 pts. Proposals were evaluated through four separate methods: (1) Review of the written response to the RFP; (2) Oral presentation; (3) Visits to sites where each offeror operated a baseline system; and (4) Reference checks. The RFP advised the offeror of the scoring system for the technical proposals and the ways in which information would be obtained. The offerors were advised by the RFP that detailed evaluation criteria had been developed for each of the categories listed. Further, for each of the categories listed, the RFP contained a paragraph which was meant to "describe generally the factors covered by the detailed criteria." Section 90.390 of the RFP set forth the manner in which points would be assigned to the technical proposal. Section 90.390 reads as follows: Scoring of the seven areas in each technical proposal shall be done using preestablished criteria and predefined scoring values. Each criterion within an area will be independently scored by evaluators. Indivi- dual raw scores from the evaluators, for each criterion, for each offeror's proposal, will be averaged then multiplied by a predetermined weight to get a weighted point value for that criterion. Scoring weights will not be available to the evaluation committee, but will be applied to raw scores by other designated staff. Weighted point values for all criteria in an offeror's proposal will then be tallied. The final technical score for each proposal is then calculated using the following methodology: A maximum of two thousand (2,000) weighted points will be assigned to the highest passing technical proposal. . . . The formula to be used to award all other offerors a proportional amount of points was also included. The formal evaluation and initial scoring of the technical and business proposals was performed by a Technical Evaluation Committee (Evaluation Committee) appointed by the Secretary of HRS. The Committee consisted of eleven members with backgrounds and experiences in MMIS program development, data processing, and financial analysis. While the members of the Evaluation Committee did not formulate the evaluation criteria which were used, they were well-qualified to apply the evaluation criteria provided. Further, on March 24-27, 1987, prior to the receipt of Proposals on April 6, HRS Sponsored a three and one- half day training session for the members of the Evaluation Committee. Judith Hansen, a consultant with PMM Compass, headed the training sessions. During the course of these training sessions, the evaluators went over each of the criteria on which proposals were to be judged to ensure that all of the evaluators understood the scoring criteria in the categories they would be scoring. Ten of the Evaluation Committee members were responsible for evaluating the technical proposals in Phase 2 of the evaluation process. The individuals were divided into subgroups representing each of the seven categories to be evaluated. Five of the categories had three evaluators. The MMIS Description category had six evaluators, and the Technical Approach category had five evaluators. None of the members of the Evaluation Committee was an evaluator in each of the seven categories; the most categories scored by any one evaluator was four. Each member of the Evaluation Committee scored each of the proposals in the categories to which they were assigned; however, to ensure that each proposal was judged solely by the detailed evaluation criteria provided rather than against each other, an evaluator was permitted to have only one proposal before him to score at a time. Evaluators were also instructed not to discuss their scoring with the other evaluators but to independently score each proposal. The Evaluation Committee began reviewing the technical proposals on April 7, 1987, the day after proposals were submitted. Proposals were evaluated by the committee members at the Government Employee's Credit Union, a location away from their normal work place. Each evaluator was given a technical proposal and was allotted two days simply to read the particular proposal and become familiar with it. They then began to evaluate the proposal in the categories assigned. When the evaluators had finished the first proposal, they turned in both the proposal they were reviewing and their scoring manual for that proposal and received another offeror's technical proposal to read and evaluate. Each evaluator was given a separate scoring manual for each of the offerors which contained the criteria to be used in scoring the proposal in the assigned categories. Each category had criteria to be scored. Different categories had a different number of criteria. For example, the Corporate Background and Experience category had fifteen criteria; the Project Management and Control had eight; and the MMIS Description had 49 criteria. Each criterion in every category was to be scored from zero to ten by the evaluator. A zero was to be given when the offeror had omitted the particular aspect of the area or did not establish the capability to perform it. One to three points was "poor," four to six points was "average," seven to nine points was "good," and ten points was excellent. The scoring manual was organized with the criterion to be scored, and matters that might be considered under that criterion, on the left-hand page. The scoring sheet for that criterion was on the right-hand page. The scoring sheet contained a space for the numerical points awarded and also provided space for comments to indicate the reason for the score given. All proposals were initially scored based on the information provided in the proposals. The scores were Subsequently reviewed and revised, if appropriate, as additional information became available through the reference checks, the oral presentations, and the on-site visits. The evaluations of the technical proposals took over two months to complete. Throughout this period, but after the initial scoring was completed, debriefing sessions were conducted with the evaluators to ensure that the evaluators neither misunderstood nor overlooked relevant information from the proposals, reference checks, oral presentations, or site visits. Reference checks were conducted to verify both the corporate capabilities of the offeror and the qualifications of proposed senior project personnel. The reference checks were conducted by two members of the Evaluation Committee, Diana Flagg and George Strickland. These two individuals were chosen to conduct the reference checking because of their skills and abilities--they both had experience in contract management functions and dealing with state agencies-- because their workload was such that they had the time available. Ms. Flagg and Mr. Strickland were given a reference check manual that had been prepared as part of the evaluation package which contained the questions to be asked; however, they were not told which references to call. After discussing the matter, they decided to contact three (3) different states as corporate references for each of the bidders. They used the following criteria to determine which states to contact: (a) whether the state used the same baseline system proposed by the offeror for Florida; (b) whether the state had recent experience with the offeror; and (c) whether the state had experience with the development and operations of MMIS systems that would be similar to Florida's. The term "baseline system" refers to the proposed subsections of a certifiable, operational MMIS. An MMIS is comprised of six to seven federally required general system design subsections. The RFP defined "Baseline System" as "[t]he basic systems code used for the FMMIS consisting of, at the minimum, the Claims Processing Subsystem, the Reference Subsystem and the MAR Subsystem." The RFP required offerors to propose a certifiable operational MMIS and stated that the baseline system had to be operational in some state. Therefore, contacting the states that had the same or a similar baseline system as that proposed for Florida was the important factor in choosing the states to be contacted. Based on the three criteria stated, HRS decided to contact Montana, Ohio and Washington for Consultec; Georgia, Tennessee and Virginia for GTE/TCC; and Arkansas, Kentucky and Georgia for EDS. The corporate reference checks were conducted in the following manner: After deciding the states to be contacted, Ms. Flagg and Mr. Strickland jointly called the person listed by the offeror as the corporate reference for that state. Upon reaching the listed person, Mr. Strickland asked the corporate reference the predetermined questions in the reference check manual regarding that state's experience with the offeror. The reference was asked to rate the offeror on a scale of 0 to 4 and to give comments supporting the score where appropriate. To insure accuracy, both Ms. Flagg and Mr. Strickland recorded both the scores and the comments given by the reference for each offeror. After each call was completed, they compared their notes to make sure the reference's scores and comments were accurately transcribed. The personnel reference checks were conducted by Ms. Flagg and Mr. Strickland in the same manner. The personnel references called were those listed as references in the proposal for the individual, except in one case the listed reference referred the evaluators to another individual who had worked more closely with the person being checked. After the corporate and personnel reference checks were completed, the reference check manual containing the information received was made available to all of the evaluators for use in scoring the proposals. Oral presentations by each offeror were held on May 26, 27, 28, 1987. The orals provided the offerors with a chance to present their proposals and provided the committee with an opportunity to obtain answers to questions developed during their initial review of the proposals, to observe the offerors in action, and to request clarification of an offeror's proposal. The offerors were advised at the beginning of the presentation that any answers given at the oral presentation would be considered part of the proposal. In addition to the oral presentation, six members of the Evaluation Committee, plus the project director and the evaluation oversight manager, made visits to one installation site where each offeror's baseline system was operational. The site visits gave the evaluators an opportunity to see the offerors in action and to speak with state personnel in person about the offeror. The following site visits were made: June 1-2 EDS Little Rock, Arkansas June 3-4 GTE Data Services/The Computer Company Nashville, Tennessee June 8-9 Consultec, Inc. Jefferson City, Missouri Columbus, Ohio For Consultec, two locations rather than one were visited because while Ohio utilizes the Consultec baseline system bid in Florida, Consultec does not-run the system. In Missouri, on the other hand, Consultec is operating an MMIS system originally designed by EDS. Thus, by visiting two locations, HRS was able to evaluate Consultec's baseline system and analyze Consultec's operations and capabilities as a fiscal agent. The information received as a result of the site visits was recorded in the Site Visits Manual for each offeror. The manual contained the questions to be asked at each site and was part of the evaluation package. As with the Reference Check Manual, the Site Visits Manual was made available to all of the evaluators. On June 15, 1987, after the scoring of the technical proposals was completed by the Evaluation Committee, the raw scores assigned by each evaluator for each criterion were transferred to a summary scoring document. The scores were averaged then multiplied by the weight factor assigned to that criterion. The weighted scores for each of the criteria in each category were then added together, providing a total score for category. The following are the weighted scores received by each offeror, rounded to the nearest whole number: Corporate Background Consultec EDS GTE and Experience 107 139 98 Project Organization and Staffing 128 115 112 Technical Approach 132 121 127 Project Management and Control 87 95 75 Work Plan & Schedule 88 118 80 MMIS Description 425 473 418 Data Processing 126 135 135 1093 1196 1045 34. Since EDS had the highest total points scored, it received 2,000 points for its technical proposal. The others received a comparable point value determined by dividing the offeror's score by EDS's score and multiplying the result by 2,000. Consultec received 1,828 points, and GTE received 1,747 points. The completed technical evaluation points were locked in a bank vault and were not disclosed. On June 15, 1987, the business proposals were publicly opened. Prior to that time the sealed business proposals had been kept in the vault. Thus, no one knew the contents of the business proposals while the technical proposals were being evaluated. At the public opening, the business proposal summary pricing schedules were read to all offerors and posted at HRS. Phase 3 Following the public opening of the business proposals, HRS reviewed the business proposals for compliance with the mandatory requirements for business proposals contained in the RFP. HRS conducted this "pass-fail review" of the business proposals by determining whether the business proposals submitted by each offeror complied with the requirements of Section 90.400 of the RFP. The first two paragraphs of this Section read: The purpose of this phase is to determine if the business proposal is sufficiently responsive to the RFP to permit a complete evaluation. The following items will be reviewed as mandatory requirements: Section 90.400 of the RFP then lists 19 questions regarding the business proposals submitted by offerors. HRS considered an offeror as having met the mandatory requirements for the business proposals if an affirmative answer could be given to all 19 questions contained in Section 90.400. All three offerors submitted business proposals which were determined to have met the mandatory requirements for business proposals contained in the RFP. Phase 4 The business proposals then underwent a more detailed review by three of the HRS evaluators, all of whom were accountants and two of whom were CPAs. This review was to determine whether the business proposal for each offeror was consistent with that offeror's technical proposal and whether the calculations in the pricing schedules contained in the business proposals were accurate. For each offeror, the overall business proposal was determined to be consistent with the technical proposal. Minor arithmetic errors and inconsistencies were noted by the evaluators on each of the business proposals. For example, GTE's installation task salaries appeared to be unreasonable compared to the effort required to complete the tasks proposed in the technical proposal. Although all three evaluators noted this problem, it was determined that the inconsistency was not significant enough, considering the entire project, to merit rejection of the bid. The evaluators noted that Consultec had combined the building and utility categories on the pricing schedules, but found this also to be insignificant Section 90.520 of the RFP provides as follows: "Any business proposal that is incomplete or in which there are significant inconsisten- cies or inaccuracies may be rejected by HRS. (e.s.) As specified in the RFP, points were awarded for the business proposal as follows: the lowest evaluated operational price, the total fixed price per claim for the five-year contract period, was awarded 850 points; the lowest total installation price, the sum of the planning, design and development, acceptance testing and implementation tasks, was awarded 50 points; the lowest systems personnel billing rate was awarded 50 points; the lowest total field representative price was awarded 25 points; and the lowest hourly cost of CPU time was awarded 25 points. The other offerors in each category were awarded a proportional share of the maximum points allowable. The price per claim category received 850 of the 1,000 possible points because this payment represents the most important work to be performed under the contract and because payment will occur during at least five years of the contract. The fixed price per claim is of vital importance to the state because it allows the risk of claims volume variance to be transferred to the contractor. A 10 million variance in annual claims volume, from 19 million to 29 million was established in the RFP, with provision for dealing with claims volume outside the range parameters. There is considerable risk for abnormal claims variance due to program changes that can occur during the life of the contract such as federal establishment of new eligibility groups, new services, or redefined claims definitions. The state legislature may require additional Medicaid services or additional eligibles. However, a fixed price per claim limits the cost of handling increased processing services. The following table displays the points awarded for the business proposals by offeror: Consultec EDS GTE Installation Price 23 43 50 ($7,439,321) ($4,030,129) ($3,433,822) Price Per Claim 850 620 689 ($.2652) ($.3637) ($.3270) Composite Hourly Rate 29 21 50 for Systems Personnel ($95/hr) ($134/hr) ($55/hr) Provider Field Reps 23 25 21 for Five years ($1,892,820) ($1,810,380) ($2,124,450) Price for CPU Time 25 13 4 ($1,100) ($3,625) ($400) TOTAL 951 722 814 Phase 5 After the proposals were rated by the Technical Evaluation Committee, points awarded to the business proposals were added to the technical points to determine the ranking and recommendation of the committee. The ranking and recommendation of the committee along with supporting materials were conveyed to the Steering Committee, composed of four HRS executives. The Proposal Evaluation Committee's Report to the Steering Committee provided a 116 page detailed summary of the overall evaluation results, concluding with the Evaluation Committee's ranking of proposals, which were as follows: Consultec EDS GTE Technical Proposal 1,828 2,000 1,747 Business Proposal 951 722 814 Total 2,779 2,722 2,561 Ranking 1 2 3 In addition to receiving the Evaluation Committee's report, the Steering Committee, through Mr. Moody, one of its members, became aware of a letter written by Senator Grant to the Secretary of HRS concerning the evaluation of the proposals. Attached to the letter was a position paper prepared by GTE which attempted to compare the business proposals submitted by Consultec and GTE by considering the "future value of funds" or "time value of money" based on interest that could be earned on the difference between Consultec's installation price and GTE's installation price. Mr. Moody, a CPA, had been assigned the task of responding to the letter and the position paper. Mr. Moody raised the topic with the Steering Committee and also explained the deficiencies in the GTE analysis. After a thorough review of the Evaluation Committee's report, the Steering Committee was satisfied with the evaluation process. The Steering Committee unanimously recommended the selection of Consultec as the contractor for fiscal agent services for the State of Florida. The Secretary of HRS concurred with the recommendation, and by letter dated July 9, 1987, the offerors were notified of the intent to award the contract to Consultec. GTE filed its notice of protest on July 15, 1987, and its Formal Written Protest on July 24, 1987. After announcing its decision to award the contract to Consultec, HRS informed HCFA of its choice and submitted to HCFA a revised APD reflecting the costs contained in Consultec's business proposal. After reviewing this document and, having previously approved the evaluation process used in selecting the successful offeror, HCFA informed HRS that it did not need any additional information in order to approve the contract award and that the initial review indicated that approval would be granted at the appropriate federal financial participation rate. However, HCFA cannot give the state final approval while the contract award is being disputed. DID THE PROPOSALS SUBMITTED BY CONSULTEC MEET THE MANDATORY REQUIREMENTS OF THE RFP? FINANCIAL STATEMENTS Among the several sections required in each technical proposal was one entitled "Corporate Background and Experience." The required contents of this section were set forth in Sections 70.400 through 70.440 of the RFP. Section 70.400 stated: The Corporate Background and Experience section shall include for the offeror and each sub-contractor (if any): details of the background of the company, its size and resources, details of corporate experience relevant to the proposed fiscal agent contract, financial statements, and a list of all current or recent Medicaid or related projects. The detailed requirements for each of the required elements listed in Section 70.400 was contained in the subsequent sections to the RFP. The requirement for financial statements was detailed in Section 70.420 as follows: Financial statements for the contracting entity shall be provided for each of the last three years, including at a minimum: balance sheets statement of income statements of changes in financial position auditors' reports notes to financial statements summary of significant accounting policies The word "shall" is defined in the Glossary of the RFP as "[i]ndicates a mandatory requirement or condition to be met." After the RFP was released but prior to the submission of bids, HRS provided an opportunity for all prospective offerors to submit written questions to HRS regarding the terms and conditions of the RFP. After receiving these questions, HRS sent all prospective offerors both the written questions submitted by the various prospective offerors and HRS' written responses to them. During this process, one bidder, EDS, submitted the following question to HRS: Since our parent corporation does not publish financial statements for each of its individual subsidiaries, will the financial statements for the parent company be satisfactory? In response, HRS provided all prospective bidders with the following answer: It is the department's intent to review the financial stability of each offeror. Offerors should present appropriate documen- tation to meet this requirement. From the answer given, it is apparent that HRS did not intend to preclude the submission of consolidated financial statements but did intend that each offeror should include "appropriate documentation" to allow HRS to review, and evaluate, the financial stability of the offeror. Like EDS's parent corporation, Consultec's parent, General American Life Insurance Company (General American), has a policy of not releasing the financial statements of its subsidiaries. Based on this policy and HRS' written response to the EDS question, Consultec submitted with its proposal the consolidated financial statements of its parent, General American. Consultec also submitted an annual report showing Consultec achieved a before tax income of $3.4 million in 1985. In its response to the RFP, Consultec indicated that the financial resources of General American backed any agreement Consultec entered into, as follows: The considerable resources of General American ensure Consultec's financial stability. Additionally, our access to the resources of our parent company (including manpower, data processing facilities, and financial support) ensures the successful performance of any contractual obligations. Because of this support, Consultec has greater capacity now than at any time in its corporate history to meet any and all contractual requirements and commitments. However, the General American consolidated, audited financial statements contained in the Consultec proposal contained no ascertainable information about the separate financial condition or financial performance of Consultec. Section 90 of the RFP explained how the technical proposals would be evaluated and specified what items would be considered "mandatory requirements." Technical proposal Mandatory Requirement No. 21 asks only the general question, "Is a Corporate Background and Experience section included? (Section 70.400)". A Corporate Background and Experience section was included in Consultec's submission. The detailed evaluation of criteria under the Corporate Background and Experience section occurred under the Phase 2 Evaluation of Technical Proposals. Oral presentations were considered a part of the technical proposal evaluation process. During Consultec's oral presentation, HRS asked Consultec to clarify its proposal by stating whether General American would be financially responsible for the Florida MMIS project. In a follow-up question, Mr. Tom Arnold asked Consultec if it would consider either submitting separate financial statements for Consultec or agreeing that General American would guarantee Consultec's performance if Consultec were awarded the contract. Consultec responded to this request by submitting a letter to HRS wherein Consultec stated that General American was willing to guarantee Consultec's performance under the contract. This letter was signed by Richard Martz, Senior Vice President of Consultec. RFP specifically stated that the state reserved the right to request amendments to the proposals or to waive minor irregularities. The purpose of the oral presentations was to clarify any information provided in the technical proposals. Further, the financial statements were considered in scoring only one criterion in the Corporate Background and Experience section which was worth a total of 10 points. Finally, GTE included in its proposal the financial statements of its parent, GTE Corporation, and all three evaluators considered the financial strength of GTE's parent in award points for that criterion. GTE also scored more points in this area than Consultec. Consultec received no material advantage over other offerors by submitting consolidated financial statements. If Consultec's failure to include its own financial statements in the technical proposal can be considered a deviation at all from the requirements of the RFP, in light of HRS's clarification of those requirements, it certainly cannot be considered a deviation that would require the rejection of its proposal. CONSISTENCY OF THE BUSINESS AND TECHNICAL PROPOSALS Sections 90.500 and 90.510 of the RFP provide: 90.500.--Each business proposal successfully meeting the mandatory requirements reviewed in Phase 3 will be examined to determine if the business proposal is consistent with the technical proposal and its calculations are accurate. 9O.510--Any business proposal that is incomplete or in which there are significant inconsistencies or inaccuracies may be rejected by HRS. The state reserves the right to reject all proposals. In its Formal Protest, GTE alleged that Consultec's business and technical proposals were not consistent because Consultec "front-end loaded" its proposal. "Front-end loading" means moving a cost from the later part of a contract to the front or charging for a cost that will not be incurred until later in the contract. Section 80 of the RFP describes the RFP's requirements for the business proposals. In the business proposal, each offeror sets forth the costs of its proposed FMMIS. The RFP directs each offeror to include in its business proposal "a firm fixed price for each of the requirements contained on the pricing schedule. . . ." One of the five requirements is installation costs. Section 81.210 of the RFP states that Pricing Schedule B of the business proposal summarizes the four major tasks involved in the installation phase of the Florida MMIS system as described in the RFP. Those four major tasks are described in the RFP at Sections 30.120 through 30.450. The offeror is directed to "schedule the fees for each of these tasks on the detailed Schedules B-1 through B-4" and is told that "[t]hese fees will form the basis from which the installation price is determined." Section 80.120 similarly states that "the installation price will be calculated as the combined sums of the prices of the Planning Task, Design and Development Task, Acceptance Testing Task and the Implementation Task." As required by the RFP, Consultec submitted a business proposal including Pricing Schedule B, which set out the price components of its installation price by task. One line item of the price components is labeled "computer resources." GTE's argument is that the cost of certain computer equipment (computer hardware and software) which Consultec included in the installation price under "computer resources," should have been allocated over the life of the contract and included in the operational price. Consultec's total price bid for the installation phase was $7,439,321, as compared to $4,030,129 for EDS and $3,433,822 for GTE. These differences are largely explained by differences in the cost item, "computer resources." These costs total $3,049,809 for Consultec, $1,130,856 for EDS, and $608,493 for GTE. The treatment of the acquisition price of the computer equipment to be purchased by Consultec is not consistent with generally accepted accounting practices. Proper accounting practices would distribute the cost of the equipment over its useful life rather than charging the entire purchase price as an initial cost in the installation period. Nevertheless, nothing in the RFP required the use of "generally accepted accounting practices" in allocating costs. Nothing in the RFP required that the costs of purchasing the computer equipment be made a part of the operations costs, by allocation over the life of the contract, as opposed to being charged as an installation cost at the time of purchase. Section 30.220 specifically states that it is the contractor's responsibility in carrying out the Design and Development Task, described as part of the installation phase, to [a]cquire the equipment to be used for the design, development, implementation, and operation of the new system." GTE has failed to show how Consultec's business proposal was inconsistent with its technical proposal. The purpose of requiring consistency between the two proposals, generally, is to ensure that each bidder has sufficient funds in its business proposal to perform the tasks required in the technical proposal. If computer hardware to be used during the life of the contract is purchased during the installation phase, the expense is incurred and paid for at that time, and inclusion of such cost as an installation cost is appropriate. GTE also argues that Consultec's business and technical proposals are inconsistent because Consultec has failed to provide sufficient data entry operators in their proposal. GTE attempted to establish this shortage through the testimony of Ms. Clark. However, there were discrepancies in her calculations and she was confused in her testimony. Further, her testimony was based on several assumptions that Consultec did not necessarily make or have to make. Finally, Ms. Clark's calculations indicated that Consultec was short 10 data entry operators in the first year of operation, yet Consultec provided 49 data entry operators the first year--the same number provided by both EDS and GTE in their proposals. In short, there was no competent evidence presented to show that Consultec's proposal provided for an insufficient number of data entry operators. After HRS announced its intent to award the contract to Consultec, HCFA reviewed Consultec's technical and business proposals to determine whether they were consistent with one another. After conducting this consistency review, it was HCFA's conclusion that Consultec's technical and business proposals were consistent. PRICING SCHEDULES - CORPORATE REGISTRATION In its formal protest, GTE alleged that Consultec "modified several of the pricing schedules in its proposals so that the cost categories submitted were different from those required." This was not included as an issue in respondent GTE's prehearing statement, and at the hearing, GTE presented no evidence that any such modifications were material or gave Consultec an advantage. In its formal protest GTE alleged that the corporate charter number provided by Consultec in its transmission letter was for a corporation named "General American Consultec, Inc." This was not included as an issue in GTE's prehearing statement, and there was no evidence presented to support this allegation. WAS THE EVALUATION OF THE PROPOSALS BY HRS INFECTED WITH SUBSTANTIAL, MATERIAL IRREGULARITIES? CRITERIA USED IN THE TECHNICAL EVALUATION. In evaluating the technical proposals, the HRS evaluators used an evaluation or scoring manual which contained the criteria to be used in scoring the technical proposal in each of the seven sections or categories. In its Formal Protest, GTE alleged that the scoring manual used by the HRS evaluators contained criteria and tests which were materially different from those set forth in RFP. The RFP evaluation criteria for the "Corporate Background and Experience" section of the proposal included, among others: (a) large scale data processing development and implementation experience, (b) medical claims processing experience, and (c) medicaid and MMIS experience. The RFP evaluation criteria for the "Data Processing" section of the proposal included, among others: (a) telecommunications network support, and (b) telecommunications experience. GTE has no previous MMIS contracts, but is the country's fourth-largest data processing company. It designed and submitted its proposal expecting to be graded on large-scale data processing experience, telecommunications network support and telecommunications network experience. Mr. Brandenburg, a Medicaid project director for GTE, testified that he felt HRS' scoring manual did not give any weight to an offeror's large scale data processing experience or telecommunications network experience even though these were listed as items HRS would consider in the RFP. However, several of the scoring criteria reference communication links, telecommunications network support, telecommunications network experience and number of persons engaged in claims processing operations. Further, in scoring GTE on criteria 8, 13 and 5 under the Data Processing section, the evaluators referred to GTE's section on telecommunciation experience and support. Section 90 of the RFP made it quite clear that proposals would be evaluated based on preestablished criteria that had been developed for each of the various sections of the technical proposals. The RFP stated that paragraphs 90.320 - 90.380 described "generally" the factors covered by the criteria. In essence, because "large-scale data processing development and implementation experience" was listed as one of the factors that would be covered by the criteria under Corporate Management and Experience, GTE assumed that it would be accorded more weight than it was in the evaluation criteria. Mr. Brandenburg felt that too much consideration was given to MMIS experience in the evaluation process and not enough to experience outside the MMIS industry. However, section 90.310 of the RFP provides: Offerors should note that the entire evaluation will place considerable emphasis on demonstrated experience directly applicable to MMIS transfer or replacement, modification development, and Medicaid fiscal agent operations. In summary, there was no competent evidence presented to support GTE's allegation that the scoring manual used to evaluate the proposals contained criteria that was materially different than those set forth in the RFP. THE EVALUATION PROCESS AND REFERENCE CHECKS Although the RFP set forth generally the criteria to be used in evaluating the technical proposal, the specific criteria used in evaluating the proposal were not included in the RFP. However, the RFP made it clear to offerors that there were predetermined criteria that would be used. The RFP indicated that information would be obtained from reference checks, from the proposal itself, from site visits, and from oral presentations. The RFP specified that the raw scores from the evaluators for each criterion would be averaged and then multiplied by a predetermined weight to get the point value for each criterion. None of the offerors protested the method of evaluating the proposals. Further, there was no evidence presented to suggest that the use of undisclosed weights was irregular. The initial recommended weights from the evaluation expert, PMM Compass, were modified by the Issuing Officer to reflect the areas most important to Florida, then reviewed with and approved by HCFA officials. Mr. Larry Platt of HCFA confirmed that the use of non-disclosed weights is very typical. Indeed, he had not been involved in any procurements in which weights were disclosed to offerors. He also confirmed that it was customary not to include the detailed evaluation criteria in the RFP. GTE also challenged the manner in which corporate reference checks were conducted. In this regard, Dr. Elton Scott testified that it would have been better if the HRS evaluators had contacted all the states where the offerors had certifiable MMIS systems even though this would result in as many as 18 states being contacted for one offeror and as few as 3 for another. Dr. Scott admitted, however, that if, due to time restraints or other reasons, less than all of the listed references could be contacted, it was reasonable to contact those states which used a baseline system similar to the offeror's proposed system for Florida, to contact states with recent experience with the offeror, and to contact states with experience similar to Florida's. Larry Platt has had extensive experience with state RFPs in his position with HCFA and his testimony is accepted. He testified that it was important that an equal number of references be contacted for each offeror and that a state's decision to contact three corporate references for each offeror was reasonable. He further testified that contacting states with recent experience with the offeror and states with the same baseline system were the criteria normally used in determining which states should be contacted as references. In support of its contention that the corporate reference checks were unreliable due to the number of references contacted, GTE introduced into evidence the depositions of Joel Schnedler, Jeff Harriott, Helen Condry, Ruth Fisher, and Robert Kelly, to show that, had additional references been contacted, GTE's corporate reference checks would have been better. However, with one exception, these individuals are Medicaid officials in states purposefully not contacted by HRS as corporate references. Mr. Schnedler is employed by the State of Missouri, which was not contacted because the baseline system operated by Consultec in Missouri was designed and installed by EDS. Ms. Condry is employed by the State of West Virginia, which was not contacted as a corporate reference for GTE/TCC because TCC's responsibilities in West Virginia are limited--TCC does not perform many of the provider relations and some of the other operations. Ms. Fisher is employed by the State of Delaware, which was not contacted as a corporate reference for GTE/TCC because the baseline system used in Delaware has not been certified by the federal government, a requirement for the baseline system proposed for Florida. Robert Kelly is an employee of the State of Pennsylvania, which was not contacted as a corporate reference for GTE/TCC because the baseline system operated in Pennsylvania was not developed, designed or installed by GTE or TCC. GTE contended that it received lower scores on the corporate background and experience questions dealing with MMIS experience solely because the experience shown in its proposal for that area was that of a subcontractor, TCC. In fact, the evaluators did not penalize GTE's proposal in this or any other manner. If the evaluators had not considered the MMIS experience of TCC in evaluating GTE's proposal, GTE would have received zero points in this area for the simple reason that GTE had no previous MMIS experience. Although Ms. Flagg testified that her scoring might have been different if GTE's and TCC's roles were reversed, it does not mean GTE did not receive proper credit for TCC's experience. If their roles were reversed, GTE and TCC would be performing different functions, and thus the scoring would very likely be different. The evaluation of the technical proposals in this case may not have been perfect; however, a review of the entire evaluation package and the evaluation manuals completed by the individual evaluators reveals that the evaluation was thorough and fair. The evaluation package was reviewed by HCFA section by section to determine whether the evaluation process ensured open and free competition. The evaluation package was approved by HCFA. Mr. Platt felt that the evaluation manual was "a very thorough job." Mr. Platt reviewed the evaluation itself after it was completed to ensure that the evaluation plan had been followed. He was satisfied with the process. The completed evaluation manuals show that the evaluators performed their tasks conscientiously and were well-informed. The analyses performed by Dr. McClave revealed high consistency among evaluators and good inter-evaluator reliability. These results support the conclusion that the evaluation procedure was reliable. There was no evidence to suggest that scores were assigned arbitrarily or that the evaluation process was infected with substantial material irregularities. PRESENT VALUE EVALUATION: As stated previously, the RFP provided that business proposals would be scored according to a preestablish point system for the five different types of costs required to be bid. The various categories of costs and the maximum number of points to be awarded to the low bidder for each category were: Max. Pts. Available Installation Price 50 Price Per Claim 850 Hourly Rate for Systems Personnel 50 Provider Field Representatives 25 Price for CPU Time 25 From the above scoring system contained in the RFP, prospective offerors knew or should have known that the State did not propose to evaluate bids on a present value basis. At the time that the RFP was developed, Mr. Arnold was aware of Section 287.0572, Florida Statutes, which requires the use of present value methodology to evaluate the cost of contracts "which require the payment of money for more than 1 year and include provisions for unequal payment streams or unequal time payment periods." Mr. Arnold did not believe that the statute applied to this RFP, and therefore did not change the scoring system. Merrill Moody is the Assistant Secretary for Administration. In that capacity, Mr. Moody oversees personnel, budget, finance, accounting, staff development and training, revenue enhancements, contracting, purchasing, leasing, management systems, audit, and quality control for HRS. Mr. Moody is a CPA, has been employed by HRS for nine years, and oversees a 60 million dollar budget. Like Mr. Arnold, Mr. Moody had considered whether Section 287.0572, Florida Statutes, applied to this procurement prior to the issue being raised by GTE. It was Mr. Moody's considered opinion that the statute did not apply because the contract does not call for an uneven payment stream. Dr. McClave, an expert in econometrics, testified that there is not enough certainty in this RFP to say whether or not there are unequal payment streams, and, accordingly, whether or not the statute applies. He also explained why the application of the statute would be an exercise in futility. First, the only part of the contract arguably subject to present value analysis is the installation phase. This takes place within the first year of the contract and, accordingly, makes it practically impossible to do a useful present value analysis. Furthermore, even if the installation phase payments could be construed as an unequal payment stream within the meaning of the statute, the statute does not require a present value analysis to be applied to unequal payment streams which are to take place under a contract whose duration is less than one year. To apply a present value analysis to the installation phase price would be counterproductive. During the installation phase, the contractor is to be paid at certain points during the first year at which milestones or tasks are completed. At such points, the contractor is to be paid a certain percentage of the total installation price. If a present value analysis were performed, the proposal most highly valued would be that in which all tasks would be finished on the last day of the contract, clearly not a result in the state's best interest. The application of present value analysis to the remaining four fixed price components of the bids is simply not necessary. Each one of the remaining categories called for a fixed price for a certain unit of services to be delivered to HRS by the contractor. There is clearly not an unequal payment stream or unequal time payment periods for these items. Where there is a fixed price for a unit of service, there is obviously no need to apply a present value analysis. If, for example, HRS knows that it will be charged $.2652 per claim by Consultec as opposed to $.3270 per claim by GTE, Consultec's price will always be lower regardless of claim volume. To apply a present value analysis to the cost per claim, systems personnel hourly rate, and CPU hourly rate would create uncertainty in the cost evaluation. This is because the RFP did not specify the number of claims or hours involved. The RFP contained an estimate of between nineteen and twenty-nine million Medicaid claims per year, a ten million claim difference. Likewise, the number of hours of systems personnel time and CPU time is not specified. To conduct a present value analysis assumptions would have to be made. If the assumptions prove wrong, the lowest present value cost bid could become the most costly contract. Dr. James E. Pitts, an expert in the field of economics, agreed with Dr. McClave's conclusion that given the range of possible volumes on the number of claims as well as in systems personnel and computer time, a present value analysis would provide a "horrendous" range of possible present values and the analysis would be extremely sensitive to the assumptions that would be made. Although a present value analysis of the cost of the proposal would require certain assumptions to be made, and thus swould provide a comparison of costs that is not as accurate as comparing the fixed rate costs, a present value analysis can be performed using reasonable assumptions. However, the present value analyses of both GTE and HRS show that Consultec's business proposal yields the lowest present value. Accordingly, had a present value analysis been performed, Consultec would remain the lowest bidder. GTE's expert Dr. Scott, HRS' expert Dr. McClave, and Consultec's expert Dr. Pitts all agreed that even when a present value analysis was used, Consultec's bid remained less than GTE's. THE EDS BID GTE alleged that the proposal submitted by EDS did not comply with the mandatory requirements of the RFP in two respects: (1) It submitted consolidated financial statements; (2) it proposed to supply one element of the FMMIS by using a subcontractor's "propriety" software. The first allegation has been previously discussed in reference to the Consultec proposal. The submission of consolidated financial statements did not make EDS's proposal unresponsive. The financial statements were used as a source of information from which the financial stability and corporate background of the offeror could be evaluated. As to the second allegation, GTE has simply failed to show how EDS's proposal materially deviated from the requirements of the RFP. EDS's transmittal letter stated that EDS would use Health Information Designs (HID) as a subcontractor to produce Drug Utilization Review Reports, thus subcontracting out a total of .78 percent of the work as measured by total contract price. The letter from HID stated that it would not "convey access to or title in any of HID's proprietary DURbase software or system documentation." When EDS was questioned at the oral presentation about how it would comply with Section 50.900, which would be part of the contract to be entered into and requires that HRS shall receive "a royalty-free, nonexclusive, and irrevocable license to reproduce, publish, or otherwise use . . . all software . . . and documentation comprising the Florida MMIS", EDS responded that the purchase of DUR-based services was the procuring of services, not software. Further, if the subcontractor's statement in its letter is considered a deviation from the requirements of the RFP, then EDS complied with the requirements of Section 70.100 of the RFP by identifying and explaining the deviation in the transmittal letter. There was no evidence presented to show that the deviation was material or that the state could not accept the proposal with the deviation. Section 50.000 provides that modification of the contract can be made by mutual agreement of the state and contractor.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Health and Rehabilitative Services enter a Final Order awarding the contract for the Florida MMIS system to Consultec. DONE and ENTERED this 19th day of November, 1987, in Tallahassee, Florida. DIANE A. GRUBBS 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 19th day of November, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-3188BID GTE's proposed findings of fact 1-19. Accepted generally, though not with same wording or quotations. 20-21. Rejected due to contrary findings. 22-27. Accepted as true but not included in detail in RO because unnecessary. 28-33. Rejected as irrelevant, except to the degree these paragraphs reflect that Consultec intends to purchase computer equipment in the installation phase and charge the cost during the installation phase. Rejected - no competent substantial evidence (CSE) that Florida will pay for costs not attributable to this contract. Accepted in part; rejected in part by contrary finding. 36-40. Rejected as unnecessary. Rejected as not supported by CSE. Accepted. Rejected as not supported by CSE. 44-45. Accepted. 46-53. Rejected as unnecessary. Accepted. Rejected as unnecessary. First sentence accepted, second rejected. Rejected. 58-59. Rejected as irrelevant. Accepted to the degree relevant. Accepted generally. Rejected as unnecessary. Accepted generally. Accepted generally. Rejected. 66-70. Accepted to the degree relevant. 71. Rejected. 72-73. Accepted, except for last sentence which is rejected as not supported by CSE. 74-77. Accepted generally. 78. Rejected as irrelevant, there was no evidence of bias in scoring. 79-81. Rejected generally by contrary finding. Rejected as unnecessary, last part of last sentence rejected for lack of CSE. Accepted generally. 84-85. Rejected by contrary findings. HRS's proposed findings of fact 1-26. Accepted generally. 27-34. Accepted to the degree that Dr. McClave's analyses support the conclusion that the evaluation process was reliable. Accepted generally. Rejected, not supported by cited reference. Though criterion 2 related to the prime contractor, the criterion also related to financial resources not MMIS experience. Last part of paragraph accepted. 37-39. Accepted generally. Accepted generally; however, first sentence rejected because the evaluation manuals of all three evaluators reflect that the guarantee was factor in scoring. However, the comments also reflect that it was not the only consideration. Accepted in part. Part relating to GTE rejected as unnecessary. Last sentence rejected in that letter is not in the exhibit cited. 42-51. Accepted generally. 52. Rejected as unnecessary. 53-54. Accepted generally that Consultec had computer equipment costs in installation phase. Unnecessary. Accepted generally. Unnecessary. Unnecessary. 59-60. Accepted generally. 61-80. Accepted generally. 81-82. Unnecessary. Consultec's proposed findings of fact 1-18. Accepted. 19. Accepted, except as to date and when scoring was begun. 20-38. Accepted generally. 39. Accepted generally, except third from last sentence. 40-42. Accepted generally. Rejected, in that was not reflected in information known at time of evaluation. Accepted generally. Rejected as unnecessary, but accepted as true. 46-55. Accepted to the degree necessary considering Ms. Clark's testimony was not credible. 56-98. Accepted generally but included in order only to the degree necessary. COPIES FURNISHED: Douglas L. Mannheimer, Esquire M. Stephen Turner, Esquire BROAD AND CASSEL 300 E. Park Avenue Post Office Drawer 11300 Tallahassee, Florida 32302 C. Gary Williams, Esquire Jann Johnson, Esquire Steven C. Emmanuel, Esquire AUSLEY, McMULLEN, McGEHEE CAROTHERS AND PROCTOR Post Office Box 391 Tallahassee, Florida 32302 H. Michael Madsen, Esquire James Hauser, Esquire MESSER, VICKERS, CAPARELLO, FRENCH AND MADSEN First Florida Bank Building Suite 701 215 South Monroe Street P. O. Box 1876 Tallahassee, Florida 32302-1876 Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Sam Power, Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700
The Issue The issue in these cases is whether the Department of Juvenile Justice's (Department) proposed award of certain contracts to Bay Area Youth Services, Inc. (BAYS), based on evaluations of proposals submitted in response to a Request for Proposals is clearly erroneous, contrary to competition, arbitrary, or capricious.
Findings Of Fact On July 2, 2003, the Department issued Request for Proposal (RFP) No. V6P01 for operation of IDDS programs in Judicial Circuits 1 through 20. The Department issued a single RFP and anticipated entering into 20 separate contracts, one for each circuit. Each contract was for a three-year period with the possibility of a renewal for an additional three-year period. The RFP was prepared based on a "contract initiation memo" generated within the Department and upon which the scope of services set forth in the RFP was based. The Department assigned one contract administrator to handle the procurement process. An addendum dated July 18, 2003, was issued to the RFP. As amended by the addendum, the RFP required submission of information in a tabbed format of three volumes. Volume I was the technical proposal. Volume II was the financial proposal. Volume III addressed past performance by the vendor. The addendum also allowed providers to submit some information in electronic format. The addendum requested, but did not require, that it be signed and returned with the submission. BAYS did not return a signed copy of the addendum in its proposal. Failure to sign and return the addendum was not fatal to the consideration of a proposal. The RFP set forth only two criteria for which noncompliance would be deemed "fatal" to a proposal. Failure to comply with a fatal criterion would have resulted in automatic elimination of a provider's response; otherwise, all responses submitted were evaluated. The proposals were opened on July 31, 2003. The contract administrator and staff reviewed the bids to ascertain whether required items were included, and noted the proposed costs on bid tabulation sheets. The first fatal criterion was failing to submit a properly executed "Attachment A" form to a submission. Attachment A is a bidder acknowledgment form. Both BAYS and JSP included a completed Attachment A in the responses at issue in this proceeding. The second fatal criterion was exceeding the Maximum Contract Dollar Amount. RFP Attachment B, Section XIII, provides in relevant part as follows: The Maximum Contract Dollar Amount will be the Annual Maximum Contract Dollar Amount multiplied by the number of years in the initial term of the Contract . . . . EXCEEDING THE ANNUAL MAXIMUM CONTRACT DOLLAR AMOUNT IS A FATAL CRITERION. ANY PROPOSAL WITH A COST EXCEEDING THE ANNUAL MAXIMUM CONTRACT DOLLAR AMOUNT WILL BE REJECTED. The information reviewed as to each provider's cost proposal was set forth in Volume II, Tab 1, which included RFP Attachment J. RFP Attachment J is a cost sheet where providers were required to set forth proposal costs identified as the "Maximum Payment" under their proposal. Attachment K to the RFP identifies the counties served in each circuit, number of available slots in each circuit, and the Annual Maximum Contract Dollar Amount for each circuit. JSP appears to have simply copied information from Attachment K onto Attachment J. The Department's contract administrator was the sole person assigned to review Volume II of the responses. Volume II included the cost proposal, the supplier evaluation report (SER), and the certified minority business enterprise (CMBE) subcontracting utilization plan. Neither BAYS nor JSP exceeded the Annual Maximum Contract Dollar Amount applicable to any circuit at issue in this proceeding. Both BAYS and JSP identified a Maximum Payment equal to the Annual Maximum Contract Dollar Amount as their proposal cost. Both BAYS and JSP received scores of 100 points for cost proposals in all responses at issue in this proceeding. JSP asserts that the instructions as to identification of the Annual Maximum Contract Dollar Amount were confusing and that its actual cost proposal was less than that set forth as the "Maximum Payment" on Attachment J. JSP asserts that it actually listed its cost proposal at the section identified on Attachment J as "renewal term dollar amount proposed." JSP asserts that the Department should have reviewed supporting budget information set forth in Attachment H to the RFP to determine JSP's cost proposal, and that the Department should have determined that JSP's actual cost proposal was less than that of BAYS. The Department did not review the budget information in Attachment H, but based its cost evaluation of the proposals on the total figures set forth on Attachment J. Nothing in the RFP suggests that underlying information as to cost proposals would be reviewed or evaluated. The evidence fails to establish that the Department's reliance on the information set forth on Attachment J was unreasonable or erroneous. The evidence fails to establish that the Department's scoring of the cost proposals was contrary to the RFP. The evidence fails to establish that JSP is entitled to have its cost proposal re-scored. One of the requirements of the RFP was submission of a "Supplier Evaluation Report" (SER) from Dunn & Bradstreet. The submission of the SER was worth 90 points. Dunn & Bradstreet transmitted most of the SERs directly to the Department, and the Department properly credited the providers for whom such reports were transmitted. The Department's contract administrator failed to examine BAYS submission for the SER, and BAYS did not receive credit for the SER included within its proposal. The failure to credit BAYS for the SERs was clearly erroneous. BAYS is entitled to additional credit as set forth herein. The RFP sought utilization of a CMBE in a provider's proposal. BAYS proposal included utilization of The Nelco Company, an employee leasing operation. The Nelco Company is a properly credentialed CMBE. Under the BAYS/Nelco arrangement, BAYS would retain responsibility for identification and recruitment of potential employees. BAYS performs the background screening and makes final employment decisions. BAYS retains the right to fire, transfer, and demote employees. The Nelco Company would process payroll and handle other fiscal human resource tasks including insurance matters. The Nelco Company invoices BAYS on a per payroll basis, and BAYS pays based on the Nelco invoice. JSP asserts that under the facts of this case, the participation of The Nelco Company fails to comply with the RFP's requirement for CMBE utilization. BAYS proposals also included utilization of other CMBEs. There is no credible evidence that BAYS utilization of The Nelco Company or of the other CMBEs included within the BAYS proposals fails to comply with the RFP's requirement for CMBE utilization. The Department assigned the responsibility for service proposal evaluation to employees located within each circuit. The contract administrator and staff distributed appropriate portions of Volume I of each proposal to the evaluators. The evidence establishes that the evaluators received the documents and evaluated the materials pursuant to written scoring instructions received from the Department. Some reviewers had more experience than others, but there is no evidence that a lack of experience resulted in an inappropriate review being performed. In two cases, the evaluators worked apart from one another. In one circuit, the evaluators processed the materials in the same room, but did not discuss their reviews with each other at any time. There is no evidence that evaluators were directed to reach any specific result in the evaluative process. JSP asserts that there was bias on the part of one evaluator who had knowledge of some unidentified incident related to JSP. The evidence fails to establish the facts of the incident and fails to establish that the incident, whatever it was, played any role in the evaluator's review of the JSP proposal. JSP also asserts that another evaluator had contact with JSP at some point prior to his evaluation of the RFP responses. There is no evidence that the contact was negative or was a factor either for or against JSP in the evaluation of the RFP responses. The RFP required that each provider's proposal include letters of intent from "local service resources" indicating a willingness to work with the provider and a letter of support from the State Attorney in the judicial circuit where the provider's program would operate. The RFP indicates that Volume I of a provider's response should contain five tabbed sections. The RFP provides that "information submitted in variance with these instructions may not be reviewed or evaluated." The RFP further provides that failure to provide information "shall result in no points being awarded for that element of the evaluation." JSP included letters of support in Tab 5 of Volume I. BAYS included letters of support in a tabbed section identified as Tab 6 of Volume I. JSP asserts that information included in Tab 6 of BAYS proposals should not have been evaluated and that no points should have been awarded based on the information included therein. The evidence fails to support the assertion. Based on the language of the RFP, submission of information in a format other than that prescribed is not fatal to a proposal. The Department reserved the authority to waive such defects and to evaluate the material. Here, the Department waived the variance as the RFP permitted, and reviewed the material submitted by BAYS. JSP asserts that BAYS proposal breached client confidentiality by inclusion of information regarding an individual who has allegedly received services through BAYS. Records regarding assessment or treatment of juveniles through the Department are deemed confidential pursuant Section 985.04, Florida Statutes (2003). The evidence fails to establish that an alleged violation of Section 985.04, Florida Statutes (2003), requires rejection of the BAYS proposals. There is no evidence that the information was released outside of the Department prior to the bid protest forming the basis of this proceeding. The evidence establishes that JSP misidentified the name of its contract manager in its transmittal letter. The evidence establishes that the misidentification was deemed immaterial to the Department, which went on to evaluate the JSP proposals. The results of the evaluations were returned to the contract administrator, who tabulated and posted the results of the process. On August 25, 2003, the Department posted a Notice of Intent to Award contacts based on the proposals submitted in response to the RFP. Insofar as is relevant to this proceeding, the Department proposed to award the contracts for Circuits 5, 6, and 20 to BAYS. The Department received four proposals from IDDS program providers in Circuit 5 (DOAH Case No. 03-3671BID). According to the Notice of Intended Contract Award, BAYS was the highest ranked bidder with 651.8 points. JSP was the second highest bidder with 642.6 points. White Foundation was the third highest bidder at 630.7 points, and MAD DADS was the fourth bidder at 442.8 points. The evidence establishes that BAYS included its SER in its Circuit 5 proposal. The Department neglected to examine BAYS submission for the SER, and BAYS did not receive credit for its SER. BAYS should have received an additional 90 points, bringing its total points to 741.8. The Department received two proposals from IDDS program providers in Circuit 6 (DOAH Case No. 03-3672BID). According to the Notice of Intended Contract Award, BAYS was the highest ranked bidder with 649.0 points. JSP was the second highest bidder with 648.8 points. The evidence establishes that BAYS included its SER in its Circuit 6 proposal. The Department neglected to examine BAYS submission for the SER, and BAYS did not receive credit for its SER. BAYS should have received an additional 90 points, bringing its total points to 739.0. The Department received two proposals from IDDS program providers in Circuit 20 (DOAH Case No. 03-3673BID). According to the Notice of Intended Contract Award, BAYS was the highest ranked bidder with 644.2 points. JSP was the second highest bidder with 620.6 points. The evidence establishes that BAYS included its SER in its Circuit 20 proposal. The Department neglected to examine BAYS submission for the SER, and BAYS did not receive credit for its SER. BAYS should have received an additional 90 points, bringing its total points to 734.2. MOTION TO DISMISS BAYS asserts that the Petitions for Hearing filed by JSP must be dismissed for failure to comply with Section 287.042(2)(c), Florida Statutes (2003), which requires that a protesting bidder post a bond or cash in an amount equal to one percent of the estimated contract amount by the time a formal written bid protest is filed. Item 8 of the RFP indicated that the bond or cash amount required was one percent of the total contract amount or $5,000, whichever was less. However, RFP Attachment "B," Section IX, indicates that it replaces RFP Item 8, and provides that the required bond or cash amount is one percent of the estimated contract amount. Pursuant to Section 120.57(3)(b), Florida Statutes (2003), JSP had 72 hours from the announcement of the bid award to file a Notice of Protest and an additional ten days to file a Formal Written Protest. The notice of intended bid award was posted on August 25, 2003. Accordingly, the written protest and appropriate deposits were due by September 8, 2003. The Department's Notice of Intended Award referenced the bond requirement and stated that failure to post the bond would constitute a waiver of proceedings. On September 8, 2003, JSP provided to the Department a cashier's check for $2,159.70 in relation to its protest of the award for Circuit 5. The contract amount was $647,910. One percent of the contract amount is $6,479.10. On September 8, 2003, JSP provided to the Department a cashier's check for $3,414.52 in relation to its protest of the award for Circuit 6. The contract amount was $1,025,857.50. One percent of the contract amount is $10,258.57. On September 8, 2003, JSP provided to the Department a cashier's check for $2,231.69 in relation to its protest of the award for Circuit 20. The contract amount was $669,507. One percent of the contract amount is $6,695.07. In response to JSP's insufficient cashier's checks, the Department, by letter of September 12, 2003, advised JSP of the underpayment and permitted JSP an additional ten days to provide additional funds sufficient to meet the requirements of the statute. JSP, apparently still relying on the superceded language in the RFP, forwarded only an amount sufficient to bring the deposited funds to $5,000 in each case. By letter dated September 25, 2003, the Department again advised JSP that the deposited funds were insufficient and provided yet another opportunity to JSP to deposit additional funds. On September 29, 2003, JSP forwarded additional funds to provide the appropriate deposits.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Juvenile Justice enter a Final Order as follows: Dismissing the Petition for Hearing filed by MAD DADS of Greater Ocala, Inc., in Case No. 03-3670BID based on the withdrawal of the Petition for Hearing. Dismissing the Petitions for Hearing filed by JSP for failure to comply with Section 287.042(2)(c), Florida Statutes (2003), and for the other reasons set forth herein. DONE AND ENTERED this 16th day of January, 2004, in Tallahassee, Leon County, Florida. S WILLIAM F. QUATTLEBAUM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 16th day of January, 2004. COPIES FURNISHED: James M. Barclay, Esquire Ruden, McClosky, Smith, Schuster & Russell, P.A. 215 South Monroe Street, Suite 815 Tallahassee, Florida 32301 Brian Berkowitz, Esquire Kimberly Sisko Ward, Esquire Department of Juvenile Justice Knight Building, Room 312V 2737 Centerview Drive Tallahassee, Florida 32399-3100 Larry K. Brown, Executive Director MAD DADS of Greater Ocala, Inc. 210 Northwest 12th Avenue Post Office Box 3704 Ocala, Florida 34478-3704 Andrea V. Nelson, Esquire The Nelson Law Firm, P.A. Post Office Box 6677 Tallahassee, Florida 32314 William G. Bankhead, Secretary Department of Juvenile Justice Knight Building 2737 Centerview Drive Tallahassee, Florida 32399-3100 Robert N. Sechen, General Counsel Department of Juvenile Justice Knight Building 2737 Centerview Drive Tallahassee, Florida 32399-3100
